<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

For the fiscal year ended December 31, 2001     Commission File Number 000-23734

                              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 NIS1.00 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 there is no 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, 2001 were
$16,304,000.


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 29, 2002 was $1,772,439.

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 29, 2002 there were
6,770,000 Ordinary Shares outstanding.

Transitional Small Business Disclosures

Yes _______         No     __X__


<PAGE>








                     SCANVEC-AMIABLE, LTD. AND SUBSIDIARIES

                            FORM 10-KSB ANNUAL REPORT

                                      INDEX

<TABLE>
<CAPTION>
Part I                                                                                                Page

<S>                 <C>                                                                                 <C>
     Item 1.      Description of Business........................................................................4

     Item 2.      Description of Properties......................................................................8

     Item 3.      Legal Proceedings..............................................................................9

     Item 4.      Submission of Matters to a Vote of Security Holders...........................................10

Part II

     Item 5.      Market for Registrant's Common Equity and Related Stockholder Matters.........................10

     Item 6.      Management's Discussion and Analysis of Financial Condition And Results of Operations.........13

     Item 7.      Financial Statements..........................................................................16

     Item 8.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.........41

Part III

     Item 9.      Directors and Executive Officers of the Registrant............................................42

     Item 10.     Executive Compensation........................................................................45

     Item 11.     Security Ownership of Certain Beneficial Owners and Management................................46

     Item 12.     Certain Relationships and Related Transactions................................................48

     Item 13.     Exhibits and Reports on Form 8-K..............................................................49

Signatures
</TABLE>






                                      -3-
<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 their flagship design program FlexiSIGN as well as Inspire and CASmate.
The Company also offers the PhotoPRINT product 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 two 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 make 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. In
2001, the Company reduced its operations in Israel and moved all corporate
functions to Philadelphia. Furthermore, the Company reduced its operations in
Germany during 2001 and closed its office in China. The Company opened a new
office in Belgium to serve the markets of Europe, the Middle East and Africa.
The Belgium entity was incorporated as Scanvec Amiable Europe.

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 fiscal year 2000. The
Company does meet the requirements to be considered a Small Business filer under
the SEC regulations and files Form 10-KSB as an annual report and Form 10-QSB on
a quarterly basis.






                                      -4-
<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 103 total and full-time employees at December 31, 2001.

Research and development costs were $3.991 million and $4.414 million in the
years of 2001 and 2000, respectively.

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) Hasmark, Inc ("Hasmark") the
Company's subsidiary ("SGS"), acquired certain assets of Hasmark, Inc.
("Hasmark"), including the technology for an inkjet plotter (patent pending)
developed by Hasmark. In exchange for the assets and technology, Hasmark
shareholders received approximately 26% of SGS's shares, cash payments of
$99,000 and SGS agreed to pay Hasmark a sum of $240,000 over a two year period
ending in September, 2002. SGS also assumed certain liabilities that
approximated $153,000. Hasmark is also due to receive a 4% royalty on any
plotters sold by SGS contingent on a patent being granted on the plotter.
$610,000 of the purchase price was allocated to the plotter technology.

As of December 31, 2001, the Company has paid all of the assumed liabilities and
owes $173,000 on the note payable to Hasmark Inc.

                                            PART I

FORWARD-LOOKING STATEMENTS

         This report on Form 10-K contains forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from
those discussed in the forward-looking statements as a result of certain
factors, including, but not limited to those set forth in Item 6 "Management's
Discussion and Analysis of Financial Condition and Results of Operations'" under
the heading "Certain Factors" below and elsewhere in this report on Form 10-K.
The following discussion should be read in conjunction with Part II of this Form
10-K and the Consolidated Financial Statements and notes to the Consolidated
Statements beginning on page F-1. As used in this annual report on Form 10-K,
unless the context otherwise requires, "we," "us," "our," or "Company," refers
to Scanvec Amiable, Inc.




                                      -5-
<PAGE>





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 2001,
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.

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 traditional 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.





                                      -6-
<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.





                                      -7-
<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.

Research and Development

See Item 6 - Management's Discussion and Analysis of Financial Condition and
Results of Operations - Research and Development Expenses.

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 $40,000. The space is utilized for the Company's
corporate offices. The lease term expires on December 31, 2002. In addition the
Company leases approximately 201 square meters in Tel Aviv, Israel, at a monthly
rental of approximately $2,300. The lease expires in September, 2003. This space
is utilized primarily for SGS' corporate offices. The Company leases
approximately 214 square meters in Zaventem, Belgium, at a monthly rental of
approximately $2,250. 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 a small amount of office space in San Juan Capistrano,
California and Hamburg, Germany. 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.





                                      -8-
<PAGE>





ITEM 3.  LEGAL PROCEEDINGS

In February 2002, the Company settled a lawsuit with a shareholder of SGS, a
majority-owned subsidiary. The plaintiff is an owner of Hasmark Inc. and
acquired shares in SGS in consideration of SGS's purchase of substantially all
of the assets of Hasmark in September, 2000. The Company entered into a
Settlement and Release Agreement with such shareholder pursuant to which the
parties agreed to reschedule $28,000 of the Note Payable to Hasmark (see note 16
of the Consolidated Financial Statements) to be paid evenly over seven months in
2003. The shareholder, as part of the Settlement and Release Agreement sold his
SGS Ordinary Shares to the Company, for $50,000, thereby increasing the
Company's ownership in SGS from 51.8% to 63.8%.

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.



                                      -9-
<PAGE>





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

         The Company held its Annual General Meeting of Shareholders on January
30, 2002 in Tel Aviv, Israel. At the meeting, the following persons were elected
as directors of the Company: Mr. Benjamin Givli, Dr. Ramon Harel, Mr. Yoav
Harel, Mr. Avi Levi, and Mr. Yoav Dopplet. The two independent directors' terms
had not expired and did not require a vote. They are Ms. Aliza Rotbard and Mr.
Gary Stock.

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

          1.  The election of five  directors. 4,198,918 Ordinary Shares voted
      in favor of each nominee for directors and zero Ordinary Shares voted
      against the election of each nominee and zero Ordinary Shares abstained.

          2. The appointment of Ernst & Young LLP as the independent auditors of
      the Company for the year ending December 31, 2001 and for the year ending
      December 31, 2002. 4,198,918 Ordinary Shares voted in favor, zero Ordinary
      Shares voted against and zero Ordinary Shares abstained.

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.








                                      -10-
<PAGE>







         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.


---------------------------------------------------------------------------
                                                                     QTR
         Quarter Ended                       HIGH         LOW       CLOSE
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        March 31, 2000                      $2.375       $.688      $1.563
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        June 30, 2000                       $1.250       $.875      $1.031
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        September 30, 2000                  $1.500       $.500      $ .500
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        December 31, 2000                   $1.000       $.406      $ .438
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        March 31, 2001                      $ .630       $.310      $ .500
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        June 30, 2001                       $ .630       $.280      $ .630
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        September 30, 2001                  $ .630       $.350      $ .400
---------------------------------------------------------------------------

---------------------------------------------------------------------------
        December 31, 2001                   $ .400       $.400      $ .400
---------------------------------------------------------------------------


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, there were approximately 14 record holders of
Ordinary Shares, one of which, Cede & Company, is holding 1,733,000 of the
6,770,000 Ordinary Shares outstanding in street names on behalf of an
indeterminable number of holders.







                                      -11-
<PAGE>





         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.

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.








                                      -12-
<PAGE>


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

                              Results of Operations


         Revenues. In 2001, total revenues decreased approximately 5.1% to
$16,304,000, from $17,171,000 in 2000. The decrease was the result of a general
economic slowdown, particularly in some markets outside of North America. Sales
to OEMs, accounted for approximately 37% of revenue, in 2001 and 2000. We
anticipate an increase in sales during 2002 due to the introduction of several
new products which will provide access to new markets.

Gross Profit. Cost of revenues consist 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 product development costs. Gross profit precentage
(i.e., gross profit as a percentage of revenues) can be affected by a number of
factors, including sales volume, product sales mix and overhead expenses.

The Company's gross profit decreased to $12,679,000 in 2001 from a gross profit
of $13,171,000 in 2000. Gross profit as a percentage of revenues increased in
2001 to 77.8% from 76.7% in 2000. This increase in gross margin percentage is
due to amortization of capitalized software development costs in the amount of
$200,000 for 2000 and $0 for 2001. The reduction in sales volume from 2000 to
2001 is responsible for the decrease in gross margin.

Research and Development Costs. Research and development costs consist primarily
of wages and benefits, and, to a lesser extent, costs of materials, depreciation
and other costs. Research and development costs are net of the amounts related
to (a) grants received from the OCS and (b) certain software development costs
capitalized by the Company.

Research and development expenses decreased approximately 9.6% to $3,991,000 in
2001 from $4,414,000 in 2000. In 2001, the Company capitalized $247,000 of new
product development costs. No development costs were capitalized in 2000. The
Company received no OCS grants in 2001 compared to $78,000 in 2000. Research and
development activities were curtailed on a certain projects resulting in
additional savings during 2001. As a percentage of sales, research and
development expenses decreased to 24.5 % in 2001, compared to approximately
25.7% in 2000.

The Company performs research and development activities in Philadelphia for
the signmaking and printing products. The Garment software products are
developed in Tel Aviv.


                                      -13-
<PAGE>






Selling and Marketing Expenses. Selling and marketing 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.

In 2001, selling and marketing expenses increased by 6.4% to $4,856,000 from
$4,566,000 in 2000. As a percentage of sales, selling expenses increased to
29.8% in 2001, compared to approximately 26.6% in 2000. The increase is
attributable to an expansion of the marketing staff in Philadelphia and an
increase in advertising expenditures during 2001. 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 increased approximately
1.5% to $3,523,000 in 2001, from $3,470,000 in 2000. As a percentage of sales,
general and administrative expenses represent approximately 21.6% of sales in
2001, compared to 20.2% of sales in 2000. Management expects a reduction in this
category of expenses in 2002 as a result of the reduction of its operations in
Israel, Germany and China, and certain other cost containment measures.

Other Income (Expense). Other income (expense) 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. Other income was
$17,000 in 2001 compared to other expense of $3,000 in 2000. Interest
contributed a net expense of $40,000 in 2001 compared to a net income of $32,000
in 2000. Exchange rate fluctuations contributed a net benefit of $57,000 in 2001
compared to a net expense of $35,000 in 2000.

Income taxes. The Company realized tax benefits of $413,000 in 2001 and had no
tax expense in 2000. The tax benefits resulted from the recognition of $425,000
in deferred tax assets less $12,000 in tax expense. The asset is the value of
expected future tax deductions to be realized.

Net Income. As a result of the foregoing, net income for 2001 was $739,000
compared to $718,000, in 2000. The net differences between 2001 and 2000 are:
$492,000 reduction in gross profit offset by $80,000 reduction in operating
expenses, a $20,000 increase in other income and a $413,000 tax benefit.





                                      -14-
<PAGE>




Liquidity and Sources of Capital

At December 31, 2001, the Company had $1,749,000 in cash and cash equivalents.

The Company has met its financial requirements primarily through cash provided
by operations which totaled $895,000 during 2001. Investing activities used
$384,000 of cash primarily for the purchase of computers and other office
equipment and the capitalization of computer software costs. Financing
activities used $257,000 of cash for payments of obligations under capital
leases and notes payable. Total cash and cash equivalents increased during 2001
by $239,000.

The ratio of current assets to current liabilities was 1.35 at the end of 2001
compared with 1.30 at the end of 2000. Current assets have decreased to
$5,071,000 at the end of 2001 from $5,243,000 at the end of 2000 with the
decrease due to trade accounts receivable and prepaid expenses.

The Company has $194,000 in long-term 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 cash flow 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.

Critical Accounting Policies

Management's Discussion and Analysis of Financial Condition and Results of
Operations discusses the Company's consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires management
to make estimates that affect the amounts reported in the financial statements
and accompanying notes. On an on-going basis, management evaluates its estimates
and judgments, including those related to bad debts, intangible assets, income
taxes, financing operations, and contingencies and litigation. Management bases
its estimates and judgments on historical experience ad on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

The following accounting policies are the most critical and could impact our
results of operations.

Revenue Recognition -- The Company recognizes revenue from software sales in
accordance with Statement of Position (SOP) 97-2, "Software Revenue
Recognition," as amended. This pronouncement requires among other things, that
the Company make judgments regarding when persuasive evidence of an agreement
exists, when delivery of the products has occurred, when no significant
obligations with regard to implementation remain, and when the fee is fixed or
determinable and collectibility is probable. Management reviews the contractual
terms of its agreements as well as the substance of the individual transactions
in making these judgments.

Deferred Taxes -- The Company maintains a valuation allowance with regard to its
deferred tax assets due to its history of losses and the uncertainty with regard
to the Company's ability to generate sufficient taxable income in the future to
realize the deferred tax assets.

Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Company's consolidated
financial statements set forth below under Item 7.

Statements that are not historical facts, including statements about the
Company's confidence, strategies, expectations about new or existing products,
technologies, opportunities, market demand or acceptance of new or existing
products are forward-looking statements that involve risks and uncertainties.
These uncertainties include, but are not limited to product demand and market
acceptance risk, impact of competitive products and prices, product
development, commercialization or technological delays or difficulties, and
trade, legal, social, financial and economic risks.





                                      -15-



<PAGE>


Item 7.  Financial Statements


                      Scanvec Amiable Ltd. and Subsidiaries

                        Consolidated Financial Statements

                 For the years ended December 31, 2001 and 2000



                                    Contents


Report of Independent Auditors................................................17

Audited Consolidated Financial Statements

Consolidated Balance Sheets...................................................18
Consolidated Statements of Operations.........................................19
Consolidated Statements of Shareholders' Equity...............................20
Consolidated Statements of Cash Flows.........................................21
Notes to the Consolidated Financial Statements................................23














                                     -16-





<PAGE>




                         Report of Independent Auditors

To the Shareholders and Board of Directors
Scanvec Amiable Ltd. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Scanvec Amiable
Ltd. and subsidiaries as of December 31, 2000 and 2001, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the two years in the period ended December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Scanvec Amiable
Ltd. and subsidiaries at December 31, 2000 and 2001, and the consolidated
results of their operations and their cash flows for each of the two years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States.

                                                  /s/ Ernst & Young LLP


Philadelphia, PA
March 8, 2002




                                     -17-

                                                                               1
<PAGE>


                      Scanvec Amiable Ltd. and Subsidiaries

                           Consolidated Balance Sheets

            (Amounts in thousands except share and per share amounts)
<TABLE>
<CAPTION>
                                                                                  December 31
                                                                            2000              2001
                                                                      -------------------------------------
<S>                                                                    <C>                 <C>
Assets
Current assets:
   Cash and cash equivalents                                                $ 1,510        $   1,749
   Accounts receivables, net of allowance for doubtful
     accounts of $753 and $455 in 2000 and 2001,
     respectively                                                             2,882            2,672
   Other current assets                                                         510              283
   Inventories                                                                  341              367
                                                                      -------------------------------------
Total current assets                                                          5,243            5,071

Property and equipment, net                                                     949              724
Deferred tax asset, net                                                           -              425
Other assets                                                                    610              808
                                                                      -------------------------------------
Total assets                                                                $ 6,802        $   7,028
                                                                      =====================================

Liabilities and shareholders' equity
   Current liabilities:
   Accounts payable                                                         $ 1,331        $     911
   Accrued expenses                                                           1,279            1,325
   Other current liabilities                                                  1,340            1,370
   Current maturities of capital lease obligations                               88              154
                                                                      -------------------------------------
Total current liabilities                                                     4,038            3,760

Long-term note payable                                                          130                -
Capital lease obligations, net of current maturities                            173              194
Other long-term liabilities, net                                                329              218
                                                                      -------------------------------------
                                                                                632              412
Shareholders' equity:
   Share capital:
   Ordinary shares of NIS 1 par value:
   Authorized: 10,000,000 shares; issued and outstanding:
     6,770,000 shares                                                         1,523            1,523
   Additional paid-in capital                                                 8,531            8,531
   Accumulated other comprehensive income                                        15                -
   Accumulated deficit                                                       (7,937)          (7,198)
                                                                      -------------------------------------
Total shareholders' equity                                                    2,132            2,856
                                                                      -------------------------------------
Total liabilities and shareholders' equity                                  $ 6,802        $   7,028
                                                                      =====================================
</TABLE>


See accompanying notes.

                                                                              18
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

                      Consolidated Statements of Operations

            (Amounts in thousands except share and per share amounts)

<TABLE>
<CAPTION>
                                                                              Year ended December 31
                                                                              2000             2001
                                                                        -----------------------------------
<S>                                                                     <C>                <C>
Revenues:
   Software licenses and other                                            $      13,567    $      11,702
   Royalties                                                                      3,604            4,602
                                                                        -----------------------------------
Total revenues                                                                   17,171           16,304

Cost of revenues                                                                  4,000            3,625
                                                                        -----------------------------------
Gross profit                                                                     13,171           12,679
                                                                        -----------------------------------

Operating costs and expenses:
   Research and development costs                                                 4,414            3,991
   Selling and marketing expenses                                                 4,566            4,856
   General and administrative expenses                                            3,470            3,523
                                                                        -----------------------------------
Total operating expenses                                                          8,036            8,379
                                                                        -----------------------------------
Income from operations                                                              721              309

Other (expense) income:
   Interest income                                                                   60               15
   Interest expense                                                                 (28)             (55)
   Foreign currency (loss) gain                                                     (35)              57
                                                                        -----------------------------------
Total other (expense) income                                                         (3)              17
                                                                        -----------------------------------

Income before benefit for income taxes                                              718              326

Benefit for income taxes                                                              -              413
                                                                        -----------------------------------
Net income                                                                $         718    $         739
                                                                        ===================================

Net income per share--basic                                               $        0.11    $        0.11
                                                                        ===================================
Weighted average shares outstanding--basic                                    6,770,000        6,770,000
                                                                        ===================================

Net income per share--diluted                                             $        0.10    $        0.11
                                                                        ===================================
Weighted average shares outstanding--diluted                                  7,467,085        6,770,000
                                                                        ===================================
</TABLE>

See accompanying notes.

                                                                              19

<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

                 Consolidated Statements of Shareholders' Equity

                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                                Accumulated
                                                                 Additional         Other                         Total
                                                       Share      Paid-in       Comprehensive   Accumulated    Shareholders'
                                                      Capital     Capital          Income         Deficit         Equity
                                                      ----------------------------------------------------------------------
<S>                                                   <C>         <C>           <C>               <C>             <C>
Balance as of December 31, 1999                       $1,523      $8,397          $  68           $(8,655)        $1,333
Unrealized gain from the issuance of shares in a
   subsidiary                                                        134                                             134
Comprehensive income:
   Net income                                              -           -              -               718            718
   Foreign currency translation adjustments, net           -           -            (53)                -            (53)
                                                                                                                  ----------
   Comprehensive income--total                                                                                       665
                                                      ----------------------------------------------------------------------
Balance as of December 31, 2000                        1,523       8,531             15            (7,937)         2,132
Comprehensive income:
   Net income                                              -           -              -               739            739
   Foreign currency translation adjustments, net           -           -            (15)                -            (15)
                                                                                                                  ----------
   Comprehensive income--total                                                                                       724
                                                      ----------------------------------------------------------------------
Balance as of December 31, 2001                       $1,523      $8,531          $   -           $(7,198)        $2,856
                                                      ======================================================================
</TABLE>

See accompanying notes.



                                                                              20
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

                      Consolidated Statements of Cash Flows

                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                              Year ended December 31
                                                                              2000             2001
                                                                        -----------------------------------
<S>                                                                     <C>                   <C>
Cash flows from operating activities:
  Net income                                                               $     718          $   739
  Adjustments to reconcile net income
     to net cash provided by operating activities:
       Depreciation and amortization                                             723              525
       Deferred income taxes                                                       -             (425)
       Impairment of property and equipment                                       40              105
       Loss (gain) on sale of property and equipment                              16               (5)
       Changes in operating assets and liabilities:
         (Increase) decrease in accounts receivables                            (506)             210
         (Increase) decrease in other current assets                             (58)             227
         Decrease (increase) in inventories                                      138              (26)
         Increase (decrease) in accounts payable                                 545             (420)
         (Decrease) increase in accrued expenses                              (1,087)              46
         (Decrease) increase in other current liabilities                       (138)              30
         Decrease in other long-term liabilities                                (141)            (111)
                                                                        -----------------------------------
Net cash provided by operating activities                                        250              895
                                                                        -----------------------------------

Cash flows from investing activities:
  Proceeds from sale of property and equipment                                    60               30
  Purchase of property and equipment                                            (337)            (156)
  Capitalization of software costs                                                 -             (247)
  Cost of patent application-plotters                                              -              (11)
  Payment for acquisition of assets of Hasmark                                   (99)               -
                                                                        -----------------------------------
Net cash used in investing activities                                      $    (376)         $  (384)
                                                                        ===================================
</TABLE>

See accompanying notes.



                                                                              21
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

                Consolidated Statements of Cash Flows (continued)

                             (Amounts in thousands)
<TABLE>
<CAPTION>
                                                                              Year ended December 31
                                                                              2000             2001
                                                                        -----------------------------------
<S>                                                                      <C>                  <C>
Cash flows from financing activities:
  Repayment of capital lease obligations                                      $    (84)        $   (127)
  Principal payments on notes payable                                                -             (130)
                                                                        -----------------------------------
Net cash used in financing activities                                              (84)            (257)

Effect of exchange rate on cash and cash equivalents                               (53)             (15)
(Decrease) increase in cash and cash equivalents                                  (263)             239
Cash and cash equivalents at the beginning of the year                           1,773            1,510
                                                                        -----------------------------------
Cash and cash equivalents at the end of the year                              $  1,510         $  1,749
                                                                        ===================================

Supplementary disclosure of cash flows activities:
  Cash paid during the year for interest                                      $     21         $     40
                                                                        ===================================

Supplementary schedule of non-cash and financing activities:
     Acquisition of equipment through the issuance of capital
       lease obligations                                                      $    254         $    214
                                                                        ===================================
     Acquisition of assets of Hasmark through the assumption of
       liabilities and the issuance of notes payable                          $    393         $      -
                                                                        ===================================
</TABLE>


See accompanying notes.




                                                                              22
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

                   Notes to Consolidated Financial Statements

            (Amounts in thousands except share and per share amounts)

                     Years ended December 31, 2001 and 2000


1. Description of Business

Scanvec Amiable Ltd. and subsidiaries (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 sign making, graphic arts
industries, and for the textile industry. The principal markets of the Company
and its subsidiaries are in North America, Europe, and the Far East.

The Company sells its products primarily to the computer-aided sign industry
through a network of distributors, and also receives fees for the modification
of its existing software.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements of the Company include the
accounts of Scanvec Amiable Ltd. and its wholly owned subsidiaries, Scanvec
Amiable Inc.; Scanvec Inc.; Scanvec Germany GmbH; Scanvec Amiable Europe S.A.;
and its 51.8% interest in Scanvec Garment Systems Ltd. All significant
intercompany accounts and transactions have been eliminated in consolidation.
During 2000 and 2001, the Company consolidated 100% of the losses of Scanvec
Garment Systems Ltd. because it believes it is ultimately responsible to resolve
the entity's net liabilities.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that may affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.






                                                                              23
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


2. Summary of Significant Accounting Policies (continued)

Foreign Currency Translation

The financial statements of the Company's Belgian and German subsidiaries are
prepared in their functional currencies, which are the local currencies. Assets
and liabilities, except intercompany transactions, are translated at period-end
exchange rates. Shareholders' equity and intercompany transactions, which are
considered long-term investments, are translated at rates in effect when the
underlying transactions were originally recorded. Income and expense accounts
are translated at weighted average exchange rates prevailing during the period.
Translation adjustments are accumulated in a separate component of equity, which
was deminimus at December 31, 2001. Gains and losses resulting from foreign
currency transactions are included in the results from operations as incurred.

Cash Equivalents

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

Inventory

Inventory is composed of raw materials and finished goods and is stated at the
lower of cost or market determined on the first-in, first-out (FIFO) basis.
Inventory allowances are provided to cover risks arising from slow-moving items
or technological obsolescence.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation.
Depreciation is calculated using the straight-line method over the following
estimated useful lives:


        Computers and peripheral equipment            3 to 5 years
        Motor vehicles                                7 years
        Office furniture and equipment                7 to 15 years
        Leasehold improvements                        Over the term of the lease




                                                                              24
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)

2. Summary of Significant Accounting Policies (continued)

Other Assets

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

        Patent                                                      10 years
        Acquired technology                                          5 years

Capitalized Software Development Costs

The Company capitalizes software development costs after technological
feasibility of the software is established and through the product's
availability for general release to the Company's customers. Technological
feasibility of the Company's software development costs is determined when the
planning, designing, coding, and testing activities are completed and the
Company has established that the product can be produced to meet its design
specifications. All costs incurred in the research and development of new
software products and costs incurred prior to the establishment of technological
feasibility are expensed as incurred. During the year ended December 31, 2001,
$247 was capitalized as software development costs in connection with a new
product.

Amortization of software development costs will be calculated as the greater of
the amount computed using (i) the ratio that current gross revenues for a
product bear to the total of current and anticipated future gross revenues of
that product or (ii) the straight-line method over the remaining estimated
economic life of the product, including the period being reported on.
Amortization of such costs will commence when the software becomes available for
general release to customers, which is anticipated in 2002.

Impairment of Long-Lived and Intangible Assets

The Company reviews long-lived assets and intangible assets for impairment
whenever events or changes in business circumstances indicate that the carrying
amount of the assets may not be fully recoverable. If the estimated undiscounted
future cash flows are less than the carrying amounts of the assets, an
impairment exists and an impairment loss would be calculated and recorded. An
impairment loss is calculated based on the excess of the carrying amount over
the asset's fair value. Fair value is determined based on current market value
or discounted future cash flows.



                                                                              25
<PAGE>


                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)



2. Summary of Significant Accounting Policies (continued)

Impairment of Long-Lived and Intangible Assets (continued)

In 2000 and 2001, 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 amounts of $40 and $105 as of December 31, 2000 and
2001, respectively.

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 (FIN 44) 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 11.

Revenue Recognition

In December 1999, the SEC issued Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements (SAB 101) 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.

The Company derives 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.




                                                                              26
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


2. Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

The Company accounts for software sales in accordance with Statement of Position
97-2, Software Revenue Recognition (SOP 97-2), as amended. Revenues from
licensing software products that do not require significant production,
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 the sale of software products that require customization are
recognized as nonrecurring engineering service fees as customization is
completed, delivery has occurred, and all other criteria of SOP 97-2 are met.
The production, modification, or customization process is relatively short.

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.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations
of credit risk, are primarily cash equivalents, accounts receivables, and other
current assets. The Company places its excess available funds in dollar and
dollar-linked instruments with major banks in Israel and the U.S. and by policy,
seeks to ensure both liquidity and security in principal. The policy also limits
investments to certain types of instruments issued by institutions with strong
investment grade credit ratings and places restrictions on their terms,
geographic origin, and concentrations by type and issuer.




                                                                              27
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


2. Summary of Significant Accounting Policies (continued)

Concentrations of Credit Risk (continued)

The Company's accounts receivable are unsecured and the Company is at risk to
the extent such amounts become uncollectible. The Company has historically not
experienced significant losses related to individual customers or groups of
customers.

The Company had revenues amounting to 28% of total revenues from two OEM's
during the year ended December 31, 2000. At December 31, 2000, 28% of the
Company's total accounts receivable were due from these OEM's. The Company had
revenues amounting to 32% of total revenues from two OEM's during the year ended
December 31, 2001. At December 31, 2001, 37% of the Company's total accounts
receivable were due from these OEM's.

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

Income Taxes

The Company accounts for income taxes under the liability method and,
accordingly, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and net operating loss and tax credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in operations in the period that includes the
enactment date.





                                                                              28
<PAGE>


                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)



2. Summary of Significant Accounting Policies (continued)

Royalty-Bearing Grants

Royalty-bearing grants from the Government of Israel are recognized at the time
the Company is entitled to such grants, on the basis of the related costs
incurred. The Company receives the grants in order to subsidize both its
research and development and marketing efforts. The Company records the grants
received as either a reduction of research and development expenses or as a
reduction of selling and marketing expenses, depending on the nature of the
grant.

Earnings per Share

Earnings per share (EPS) are computed in accordance with Financial Accounting
Standard No. 128, Earnings per Share (FAS 128). FAS 128 requires computing and
disclosing both basic and diluted EPS. Basic EPS is computed by dividing
consolidated net earnings by the weighted average number of common shares
outstanding. Diluted EPS is computed by dividing consolidated net earnings by
the sum of the weighted average number of common shares outstanding and the
weighted average number of potential common shares outstanding, assuming
conversion of all potentially dilutive stock options outstanding under the
Company's share option plan.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising expense for the
years ended December 31, 2000 and 2001 were approximately $716 and $845,
respectively.

Fair Value of Financial Instruments

The Company used the following methods and assumptions in preparing its fair
value disclosures for financial instruments:

The carrying amounts of cash and cash equivalents, accounts receivable and
accounts payable, reported in the consolidated balance sheets approximate their
fair values due to the short-term nature of the instruments.




                                                                              29
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


2. Summary of Significant Accounting Policies (continued)

Fair Value of Financial Instruments (continued)

The long-term note payable and capital lease obligations reported in the
consolidated balance sheets approximate their fair values due to the fact that
their interest rates approximate market rates of interest.

Shipping and Handling Costs

Shipping and handling costs include all costs to warehouse and deliver inventory
to customers. These costs were $606 and $656 for the years ended December 31,
2000 and 2001, respectively, and are included in costs of revenues.

3. Other Current Assets

Other current assets consists of the following:

                                                          December 31
                                                       2000         2001
                                                       -----------------

Employee receivables                                   $ 52         $  8
Prepaid expenses                                        320          233
Other                                                   138           42
                                                       -----------------
                                                       $510         $283
                                                       =================

4. Inventory

Inventory consists of the following:

                                                          December 31
                                                       2000         2001
                                                       -----------------

Raw materials and supplies                             $341         $310
Finished goods                                            -           57
                                                       -----------------
                                                       $341         $367
                                                       =================



                                                                              30

<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


4. Inventory (continued)

The Company provided allowances of $40 and $86 for obsolete inventory at
December 31, 2000 and 2001, respectively.

5. Property and Equipment

Property and equipment consists of the following:

                                                           December 31
                                                        2000          2001
                                                       ---------------------

Computers and peripheral equipment                     $ 2,983       $ 2,132
Office furniture and equipment                           1,629           619
Leasehold improvements                                     549           101
Motor vehicles                                             158           108
                                                       ---------------------
                                                         5,319         2,960
Accumulated depreciation                                (4,370)       (2,236)
                                                       ---------------------
Property and equipment, net                            $   949       $   724
                                                       =====================

Depreciation expense charged to operations was $513 and $570 for the years ended
December 31, 2000 and 2001, respectively. Depreciation expense during the year
ended December 31, 2001 includes a $105 impairment loss recorded on various
leasehold improvements.

Property and equipment includes equipment under capital leases, which are
primarily computers (see Note 10), for which the net book value was $69 and $143
at December 31, 2000 and 2001, respectively.









                                                                              31
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


6. Other Assets

Other assets consists of the following:

                                                           December 31
                                                        2000         2001
                                                      ---------------------

Capitalized software costs                            $ 1,426      $  1,673
Patent                                                      -            11
Acquired technology                                       610           610
Software rights                                           455           455
                                                      ---------------------
                                                        2,491         2,749
Accumulated amortization                               (1,881)       (1,941)
                                                      ---------------------
Other assets, net                                     $   610      $    808
                                                      =====================

Amortization expense was $210 and $60 for the years ended December 31, 2000 and
2001, respectively.

7. Accrued Expenses

Accrued expenses consists of the following:

                                                           December 31
                                                      2000             2001
                                                --------------------------------

Accrued royalties                                     $  934           $  781
Other accrued expenses                                   291              518
Accrued legal                                             54               26
                                                --------------------------------
                                                      $1,279           $1,325
                                                ================================





                                                                              32
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


8. Other Current Liabilities

Other current liabilities consists of the following:

                                                          December 31
                                                        2000        2001
                                                       -------------------------
Payroll accruals                                       $  703      $  582
Government authorities                                    539         615
Other                                                      98         173
                                                       -------------------------
                                                       $1,340      $1,370
                                                       =========================

9. Related-Party Transactions

The Company paid salaries and related benefits of $332 and $355 during the years
ended December 31, 2000 and 2001, respectively, to shareholders and their
relatives, who are employed by the Company and its subsidiaries.

10. Commitments and Contingencies

The Company leases certain office space under non-cancelable operating leases.
In addition, certain equipment leases are classified as capital leases. The
following is a schedule by year of the future minimum lease payments for leases
with initial terms in excess of one year at December 31, 2001:

                                                            Capital    Operating
                                                            Leases      Leases
                                                             -------------------
2002                                                         $199        $539
2003                                                          145          27
2004                                                           65          27
2005                                                           13          27
2006                                                            -          27
Thereafter                                                      -          74
                                                             -------------------
Total minimum lease payments                                  422        $721
                                                                         =======
Less amount representing interest                              74
                                                             ----
Present value of net minimum lease payments                  $348
                                                             ====




                                                                              33
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


10. Commitments and Contingencies (continued)

Rent expense included in the statement of operations was $602 and $682 in 2000
and 2001, respectively.

The Company entered into various agreements with the Chief Scientist of the
Government of Israel. The Company has 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, 2001, the Company and its subsidiary have a contingent obligation
to pay royalties in the amount of $2,576 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 $124 and $71 in 2000
and 2001, respectively.

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, 2001, the Company has a contingent obligation to
pay royalties in the amount of $902. 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.

In the ordinary course of its business, the Company becomes involved in lawsuits
and administrative proceedings. In some of these proceedings, plaintiffs may
seek to recover large and unspecified amounts and the matters may remain
unsolved for several months. On the basis of information furnished by legal
counsel, the Company does not believe that these matters, individually or in the
aggregate, will have a material adverse effect on its business or financial
condition.

11. Share Capital

The Company's Ordinary shares, which have a nominal value of NIS 1.00, are
traded on the Over The Counter Bulletin Board market in the United States. 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.




                                                                              34
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


11. Share Capital (continued)

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
Ordinary shares, respectively, were reserved for issuance upon the exercise of
options to be granted to employees of the Company. In October 2000, the Company
established another 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.
The options expire 10 years after the date of grant.

Following are the details of such plans:
<TABLE>
<CAPTION>
                                                                   Options Outstanding
                                                      ---------------------------------------------
                                                                                           Weighted
                                                                                           Average
                                    Available           Number           Exercise          Exercise
                                    for Grant         of Options          Price             Price
                                    ---------         ----------       -----------         ---------
   <S>                              <C>               <C>              <C>                 <C>
   Balance as of
     December 31, 1999               109,900           962,100         $1.20-$6.67           $2.34
   Options granted                  (100,000)          100,000             1.00               1.00
   Options forfeited                 496,000          (496,000)         1.20-3.50
                                    --------          --------         -----------           -----
   Balance as of
     December 31, 2000               505,900           566,100          1.00-6.67             2.19
   Options forfeited                  64,000           (64,000)         1.38-3.00             1.81
                                    --------          --------         -----------           -----
   Balance as of
     December 31, 2001               569,900           502,100         $1.00-$6.67           $2.28
                                    ========          ========         ===========           =====
</TABLE>




                                                                              35

<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


11. Share Capital (continued)

The options outstanding as of December 31, 2001, 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 Options
             Price            2001          Life (Years)      Price        Exercisable      Exercisable
         --------------  ----------------  --------------- -------------  ---------------  ---------------
         <S>             <C>               <C>             <C>            <C>              <C>
             $6.67             30,000            1.0           $6.67            30,000           $6.67
              3.63             20,000            1.5            3.63            20,000            3.63
              3.00             40,500            1.0            3.00            40,500            3.00
              2.75             37,600            1.0            2.75            37,600            2.75
              2.63             30,000            2.0            2.63            30,000            2.63
              2.50            100,000            2.0            2.50           100,000            2.50
              1.38            144,000            3.0            1.38            96,000            1.38
              1.00            100,000            4.0            1.00           100,000            1.00
                         ----------------  --------------- -------------  ---------------  ---------------
                              502,100            2.5           $2.28           454,100           $2.20
                         ================  =============== =============  ===============  ===============
</TABLE>

Pro forma information regarding net income and net income per share is required
by SFAS No. 123, and has been determined as if the Company had accounted for its
employee share 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: risk-free
interest rate of 5%, dividend yield of 0%, volatility factors of the expected
market price of the Company's common stock of 1.765, and weighted-average
expected life of the option of five years. There were no stock options granted
during the year ended December 31, 2001.





                                                                              36
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


11. Share Capital (continued)

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 share 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 share options. For purposes of pro forma
disclosures, the estimated fair value of the options is amortized to expense
over the options' vesting period.

Pro forma information is as follows:

                                                                    December 31
                                                                  2000      2001
                                                                 ---------------
            Net income as reported                               $ 718     $ 739
                                                                 ===============
            Pro forma net income                                 $ 605     $ 716
                                                                 ===============

            Pro forma net income per share--basic                $0.09     $0.11
                                                                 ===============
            Pro forma net income per share--diluted              $0.08     $0.11
                                                                 ===============

12. Retirement Plans

Scanvec Amiable Inc., a wholly owned subsidiary, has a defined contribution
retirement plan (401(k) Plan) for the benefit of eligible employees. The plan
provides for matching contributions by Scanvec Amiable Inc. up to a maximum of
30% of 6% of the employee's compensation. Retirement plan expenses for the years
ended December 31, 2000 and 2001 were $39 and $41, respectively.





                                                                              37
<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


13. Income Taxes

Income tax expense consists of a deferred income tax benefit of $425 offset by
current foreign and domestic tax expense of $12.

A reconciliation of the income tax benefit assuming all income is taxed at the
statutory rates and the actual benefit from income taxes is as follows:
<TABLE>
<CAPTION>
                                                                     Year ended December 31
                                                                     2000              2001
                                                               -----------------------------------
<S>                                                            <C>                    <C>
Tax expense computed at the
  statutory rate of 36% and 34%, respectively                         $ 258            $  111
Nondeductible expenses, net                                             100                 -
Decrease in valuation allowance                                        (150)             (524)
Effect of adjustment of the results for tax
  purposes to the Consumer Price Index and others                      (208)                -
                                                               -----------------------------------
Actual benefit from income taxes                                    $     -            $ (413)
                                                               ===================================
</TABLE>

Income before benefit for income taxes consisted of the following:
<TABLE>
<CAPTION>
                                                                  Year ended December 31
                                                                   2000             2001
                                                             ----------------------------------
<S>                                                          <C>                  <C>
Domestic                                                           $1,489          $ 1,650
Foreign                                                              (771)          (1,324)
                                                             ----------------------------------
                                                                  $   718         $    326
                                                             ==================================
</TABLE>


Deferred income tax balances consist of the following:
<TABLE>
<CAPTION>
                                                                       December 31
                                                                   2000             2001
                                                             ----------------------------------
<S>                                                          <C>                   <C>
Net operating loss carryforward                                    $ 3,906           $ 5,274
Reserves and allowances                                                550               314
                                                             ----------------------------------
Gross deferred tax assets                                            4,456             5,588
Accumulated amortization                                              (141)             (105)
                                                             ----------------------------------
Net deferred tax assets before valuation allowance                   4,315             5,483
Valuation allowance                                                 (4,315)           (5,058)
                                                             ----------------------------------
Net deferred tax assets                                         $        -          $    425
                                                             ==================================
</TABLE>


                                                                              38


<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


13. Income Taxes (continued)

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.

As of December 31, 2001, Scanvec Amiable Inc. and Scanvec Inc. had available tax
loss carryforwards of $4,454 expiring in various years between 2015 and 2020. As
of December 31, 2001, Scanvec Ltd. and S.G.S. have available carryforward tax
losses of $10,267 and $560, respectively, which may be carried forward and
offset against taxable income in the future for an indefinite period.

14. Segments, Customer and Geographic Information

The Company manages its business on a basis of one reportable operational
segment. 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.

The following presents total revenues and long-lived assets for the years ended
December 31:
<TABLE>
<CAPTION>
                                                    2000                       2001
                                        --------------------------------------------------------
                                                           Long-                      Long-
                                             Total         Lived         Total        Lived
                                           Revenues        Assets      Revenues      Assets
                                        --------------------------------------------------------
<S>                                     <C>                <C>         <C>           <C>
   North America                            $12,332         $  509       $11,980       $1,199
   Asia                                       4,241          1,031         2,081          715
   Europe                                       598             19         2,243           43
                                        --------------------------------------------------------
                                            $17,171         $1,559       $16,304       $1,957
                                        ========================================================
</TABLE>



                                                                              39



<PAGE>

                      Scanvec Amiable Ltd. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

            (Amounts in thousands except share and per share amounts)


14. Segments, Customer and Geographic Information (continued)

Revenues classified by geographical destinations of the end customers:
<TABLE>
<CAPTION>
                                                                   Year ended December 31
                                                                    2000            2001
                                                               --------------------------------
  <S>                                                          <C>                 <C>
  Israel                                                           $     494       $    560
  U.S.A.                                                               5,746          5,423
  Far East                                                             6,235          5,386
  North America (excluding U.S.A.)                                       775          1,006
  Europe                                                               3,214          3,365
  Others                                                                 707            564
                                                               --------------------------------
                                                                     $17,171        $16,304
                                                               ================================
</TABLE>


15. Acquisitions

In September 2000, S.G.S. acquired certain assets and assumed certain
liabilities of Hasmark Inc. (Hasmark). Hasmark is engaged in manufacturing the
OptiJet, a multi-noggle inkjet plotter. Total consideration of $626 consisted of
$99 in cash, 717 shares of SGS valued at $187 per share, a note payable of $240
and the assumption of certain liabilities that approximated $153. In addition,
Hasmark will be entitled to receive 4% of the total sales of this plotter. The
liabilities assumed include a note payable to Hasmark shareholders totaling $130
to be paid $7.5 each month. The purchase price was determined based on the fair
market value of the shares of SGS.

16. Subsequent Event

In February 2002, the Company settled a lawsuit with a shareholder of Scanvec
Garment Systems Ltd., a subsidiary. The Settlement and Release Agreement delayed
payment of $28 of the Note Payable to Hasmark from 2002 to 2003. The
shareholder, as part of the Settlement and Release Agreement sold his Scanvec
Garment Systems Ltd. Ordinary Shares to the Company for $50, thereby increasing
the Company's ownership in Scanvec Garment Systems Ltd. from 51.8% to 63.8%.





                                                                              40
<PAGE>



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

                 None.



                                      -41-
<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               81      Mr. Givli has served as the Chairman of the Company since
                                     June 1998. Mr. Givli is currently serving as Chairman of OpusDent
                                     Ltd. (a subsidiary of Lumenis Ltd.). Mr. Givli was chairman of the
                                     board of directors 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 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              72      Dr. Harel currently serves as the 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 also served as President of the Company from March,
                                     2000 to February 2002. 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.

Yoav Harel                   35      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.
</TABLE>




                                      -42-
<PAGE>


<TABLE>
<CAPTION>
<S>                          <C>     <C>
Avi Levy                     47      Mr. Levy has been a director of the Company since 1999.
                                     Mr. Levy has been Chief Financial Officer of the Ofer Brothers Group
                                     since 1982. He currently serves, in representation of the Ofer
                                     Brothers Group, on the Boards of Directors of several companies,
                                     including Israel Corporation Ltd. and Zim Israel Navigation Co. Ltd.
                                     Mr. Levy also serves as an active member in the Israeli Forum of
                                     Financial Officers (CFO, Forum of Chief Financial Officers) where he
                                     is the Chairman of the Committee for National Taxation Policy. Mr.
                                     Levy holds a B.A. in Economics from Haifa University and has
                                     completed his MBA studies at the Israeli extension of the Bradford
                                     University. He is a certified public accountant in Israel.


Yoav Doppelt                 33      Mr. Doppelt has been a director of the Company since the
                                     second quarter of 2000. Mr. Doppelt currently serves as the Vice
                                     President of business development of the technological division of
                                     the Ofer Brothers Group. Since 1996, Mr. Doppelt has held various
                                     positions in the Ofer Brothers Group such as Investment Manager and
                                     assistant to the CFO. Mr. Doppelt serves as a Director in several
                                     enterprises such as Tower Semiconductor, IMI and Israel Chemicals
                                     R&D institution. Mr. Doppelt holds a B.Sc. in industrial management
                                     from the Technion Institute of Technology and a MBA from Haifa
                                     University.

Garry Stock                  58      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.
</TABLE>




                                      -43-
<PAGE>


<TABLE>
<CAPTION>
<S>                         <C>      <C>
Aliza Rotbard               54       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.

David Daffner               47       Mr. Daffner currently serves as the President of the Company. Mr. Daffner
                                     joined the Company in February, 2002. He was Vice President at New Hermes, Inc.
                                     since 1990. Mr. Daffner holds a BA in social science from Boston University,
                                     an MS in social science from Michigan State University and a MBA with a
                                     Financial Concentration from Loyola University of Chicago.

Gerald J. Kochanski         48       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              56       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.

Section 16(a) Beneficial Ownership Reporting Compliance

During the last fiscal year, none of the directors, officers or beneficial
owners of more than 10 percent of the Company's Ordinary Shares filed reports
required by Section 16(a) of the Exchange Act.






                                      -44-
<PAGE>


Item 10. Executive Compensation.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
               SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>                    <C>           <C>          <C>               <C>          <C>           <C>          <C>
                                              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
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
Mr. Benjamin Givli               2001        $ 24,500      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
Chairman                         2000        $123,855      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999
                                             $122,860
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Dr. Ramon Harel                  2001        $150,000      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
President/CEO                    2000        $118,384      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999        $      0
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Mr. Yacha Sutton                 2001        $      0      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
President/CEO                    2000        $ 19,200      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999        $171,190
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Mr. Efi Lebel                    2001        $      0      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
President/CEO                    2000        $180,400      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999        $ 49,630
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Mr. Jim Chang                    2001        $      0      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
President                        2000        $143,544      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999        $ 85,225
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Mr. Yuan Chang                   2001        $130,000      $     0           $    -
--------------------------------------------------------------------------------------------------------------------------------
Vice President                   2000        $114,423      $30,000           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999        $103,846
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Mr. Yu-Chung Chu                 2001        $      0      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
Vice President                   2000        $      0      $     -           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999        $ 93,889
--------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------
Mr. Gerald Kochanski             2001        $112,115      $                 $    -
--------------------------------------------------------------------------------------------------------------------------------
Vice President/CFO               2000        $107,308      $20,000           $    -
--------------------------------------------------------------------------------------------------------------------------------
                                 1999        $ 96,654
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                      -45-
<PAGE>


Item 11. Security Ownership of Certain Beneficial Owners and Management


The following table sets forth, as of March 31, 2002, 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.




Name and Address               Number of Shares Owned     Percent of Shares (%)
----------------               ----------------------     ---------------------


Jim Chang                                 1,171,000                  17.3%
12 Runningbrook
Irvine, California
92620

Dr. Ramon Harel                           1,102,000                  14.8%
1530 Locust Street
Philadelphia, Pennsylvania
19102(2)

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

Yu-Chung Chu                                585,500                   8.6%
11526 Seneca Woods Ct.
Great Falls, Virginia
22066

Yozma Venture Capital Ltd.                1,182,856                  17.5%
2 Hanamal Street
Haifa, Israel(1)

Benjamin Givli                              201,623                   2.5%
c/o Scanvec Amiable
Atidim Industrial Park
POB 58159
Tel Aviv, Israel(1)(2)

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



                                      -46-
<PAGE>


Name and Address               Number of Shares Owned     Percent of Shares (%)
----------------               ----------------------     ---------------------


Yoav Harel                                    -0-                      0%
c/o Scanvec Amiable Ltd.
Atidim Industrial Park
POB 58159
Tel Aviv, Israel


Avi Levy                                      -0-                      0%
c/o Scanvec Amiable Ltd.
Atidim Industrial Park
POB 58159
Tel Aviv, Israel

Yoav Doppelt                                  -0-                      0%
c/o Scanvec Amiable Ltd.
Atidim Industrial Park
POB 58159
Tel Aviv, Israel

Garry Stock                                  20,000                   .3%
c/o Scanvec Amiable Inc.
International Plaza Two
Suite 625
Philadelphia, PA 19113(2)

Aliza Rotbard                                 -0-                      0%
c/o Scanvec Amiable Inc.
International Plaza Two
Suite 625
Philadelphia, PA 19113

Gerald J. Kochanski                          20,000                   .1%
c/o Scanvec Amiable Inc.
International Plaza Two
Suite 625
Philadelphia, PA 19113(2)

All directors and executive officers      2,526,479                 37.3%
as a group (six 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, 2002



                                      -47-
<PAGE>





Item 12. Certain Relationships and Related Transactions.

The spouse of Jim Chang, a director of the Company, was employed as the
Company's sales manager for the China market. Mr. Chang resigned as a Director
in November, 2001 and Mrs. Chang resigned as an employee in the same month.







                                      -48-
<PAGE>


<TABLE>
<CAPTION>
Item 13(a)        Exhibits.

<S>      <C>      <C>
         3.1   Certificate of Incorporation(1)
         3.2   Articles of Association(1)
         10.1  Employment Contract of Dr. Ramon Harel, President/CEO dated September 5, 2000.(1)
         10.2  Employment Contract of G.J. Kochanski, Vice President/CFO dated October 26, 1999.(1)
         10.3  Lease for Office of Scanvec Amiable Inc. (formerly Amiable Technologies) with K/B FUND II dated January 27, 1998. (1)
         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.(1)
         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.(1)
         10.11 Letter extending Adobe agreement from February 7, 2000 to February 7, 2001.(1)
         10.12 Letter extending Adobe agreement from February 7, 2001 to February 7, 2002.(1)
         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)
         10.22 OEM Software Development and License Agreement between Hewlett-Packard Company and Scanvec Amiable Inc. dated
               March 30, 2001.(2)
         10.23 OEM Software Development and License Agreement between Hewlett-Packard Company and Scanvec Amiable Inc. dated
               December 14, 2001.(2)
         21.1  Subsidiaries of the registrant
         24.1  Form of Power of Attorney
</TABLE>

(1)      Incorporated by reference to ScanVec's Form 10-KSB for the year ended
         December 31, 2000, filed with the Commission on April 17, 2001.
(2)      Confidential treatment requested. Portions of this exhibit have been
         omitted pursuant to a request for confidential treatment.




                                      -49-

<PAGE>





Exhibit 21.1       Subsidiaries of registrant

Scanvec Amiable, Ltd. - Israel owns 100% of the following companies:

Scanvec Amiable Inc.- U.S. (formerly Amiable Technologies Inc.)
Scanvec Inc.-U.S. (combined with Scanvec Amiable Inc.)
Scanvec Germany GmbH-Germany (formerly Amiable GmbH)

Scanvec Amiable, Ltd. owns 5% and Scanvec Amiable Inc owns 95% of Scanvec
Amiable Europe S.A.-Belgium.

Scanvec Amiable, Ltd. owns 63.8% of  Scanvec Garment Systems  Ltd.-Israel

Scanvec Garment Systems Ltd. owns 100% of Motion Production Inc.-U.S.





                                      -50-
<PAGE>



Exhibit 24.1      Form of Power of Attorney


                                POWER OF ATTORNEY
                                -----------------


                  KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Dr. Ramon Harel, as his
attorney-in-fact, with full power of substitution, for him in any and all
capacities, to sign Form 10-KSB of Scanvec-Amiable, Ltd., and any and all
amendments thereto, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact, or any
substitute, may do or cause to be done by virtue hereof.

                  This Power of Attorney has been signed by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S>                                         <C>                                 <C>
Signature                                   Title                               Date
---------                                   -----                               ----


________________________                    Director                            March 31, 2002
Benjamin Givli


________________________                    Director                            March 31, 2002
Avi Levy


________________________                    Director                            March 31, 2002
Yoav Harel


________________________                    Director                            March 31, 2002
Yoav Doppelt


________________________                    Director                            March 31, 2002
Gary Stock


________________________                    Director                            March 31, 2002
Aliza Rotbard
</TABLE>







                                      -51-
<PAGE>



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

         None.




                                      -52-
<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, CEO



                                   /s/ Dr. Ramon Harel
                                   ---------------------------------------------
                                   Dr. Ramon Harel on behalf of himself as
                                   President, Chief Executive Officer and
                                   Director,  and  as attorney-in-fact for Eliza
                                   Rotbard, Yoav Harel, Benjamin S. Givli,
                                   Garry  Stock, Avi Levy and Yoav Doppelt,
                                   Directors



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


                                      -53-