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

                                   Form 10-KSB

(Mark One)

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

                                   For the fiscal year ended September 30, 2003

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

                                   For the transition period from________  to

                                   Commission file number 000-22849

                             Visual Data Corporation
                             -----------------------
                 (Name of small business issuer in its charter)

              Florida                                    65-0420146
-------------------------------------                    ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

       1291 SW 29 Avenue
       Pompano Beach, Florida                                  33069
---------------------------------------               -------------------------
(Address of principal executive offices)                     (Zip Code)

Issuer's telephone number   954-917-6655

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

Title of each class                Name of each exchange on which registered

        None                                                not applicable
----------------------
(Title of each class)

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

     common stock
 -------------------
  (Title of class)

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

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

         State issuer's revenues for its most recent fiscal year. $ 6,815,119
for the 12 months ended September 30, 2003.

         State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within the past 60 days. The aggregate market
value of the common equity held by non-affiliates computed at the closing price
of the registrant's common stock on December 17, 2003 is approximately $9.8
million.

         State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date. As of December 17, 2003,
4,112,939 shares of common stock are issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) of the Securities Act of 1933 ("Securities Act"). Not
Applicable.

         Transitional Small Business Disclosure Form (check one):
Yes    No X


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         Certain statements in this annual report on Form 10-KSB contain or may
contain forward-looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements were based on various factors and were derived
utilizing numerous assumptions and other factors that could cause our actual
results to differ materially from those in the forward-looking statements. These
factors include, but are not limited to, our ability to implement our strategic
initiatives, economic, political and market conditions and fluctuations,
government and industry regulation, interest rate risk, U.S. and global
competition, and other factors. Most of these factors are difficult to predict
accurately and are generally beyond our control. You should consider the areas
of risk described in connection with any forward-looking statements that may be
made herein. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of September 30, 2003. Readers
should carefully review this Form 10-KSB in its entirety, including but not
limited to our financial statements and the notes thereto and the risks
described in "Item 1. Business--Risk Factors." Except for our ongoing
obligations to disclose material information under the Federal securities laws,
we undertake no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the occurrence of
unanticipated events. For any forward-looking statements contained in any
document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.

         When used in this Annual Report, the terms the "Company", " we," "our,"
"us," "VDAT" and "Visual Data" refers to Visual Data Corporation, a Florida
corporation, and its subsidiaries.

         All share and per share data contained herein gives proforma effect to
the one for 15 reverse stock split of our common stock effected on June 24,
2003.

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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OUR BUSINESS, PRODUCTS AND SERVICES

         We are a business services provider, specializing in meeting the
webcasting needs of corporations, government agencies and a wide range of
organizations, as well as providing audio and video transport and collaboration
services for the entertainment, advertising and public relations industries. Our
operations are comprised in three operating groups, including:

         -        Visual Data Webcasting Group

         -        Visual Data Networking Solutions Group (EDNET)

         -        Visual Data Travel Group (includes HotelView and ResortView)

         Products and services provided by each of the groups are:

         VISUAL DATA WEBCASTING GROUP

         The Visual Data Webcasting Group provides an array of
corporate-oriented, web-based media services to the corporate market including
live audio and video webcasting, packaged corporate announcements, and
information distribution for any business, government or educational entity, and
can provide point-to-point audio and video transport worldwide.

         Our Webcasting Group was created to provide online webcasting services,
a cost effective means for corporations to broadcast analyst conference calls
live, making them available to the investing public, the media and to anyone
worldwide with Internet access. We market the webcasting products through a
direct sales force and through channel partners. Each webcast can be heard
and/or viewed live, and then archived for replay for an additional fee with an
option for accessing the archived material through a company's own web site.
Major corporations and small businesses are hiring us to produce live webcasts
and custom videos for the web to communicate corporate earnings announcements,
conference calls on the web, on-demand audio and video media, product launches,
internal training, corporate video news and profiles, crisis communications, and
basic online multimedia fulfillment.

         In February 2002 we acquired Media On Demand, Inc. ("MOD"), a
privately-held company which provided its customers with vertically integrated
streaming media solutions, from onsite production through delivery to end-users.
These solutions included original production, editing, and digital encoding of
audio and video content, Internet website design and development, and Internet
distribution and hosting. MOD's operations make up our Webcasting Group.

         Our Webcasting Group, which represented approximately 51.5% and 49.7%
of our revenues from continuing operations for the years ended September 30,
2003 and 2002, respectively, generates revenues through production and
distribution fees.

         VISUAL DATA NETWORKING SOLUTIONS GROUP

         Our Networking Solutions Group, which is comprised of our Entertainment
Digital Network, Inc. ("EDNET") subsidiary, provides connectivity within the
entertainment and advertising industries through its private network, which
encompasses production and post-production companies, advertisers, producers,
directors, and talent. The network enables high-speed exchange of high quality
audio, compressed video and multimedia data communications, utilizing long
distance carriers, regional phone companies, satellite operators, and major
Internet service providers. The Networking Solutions Group also provides systems

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integration and engineering services, application-specific technical advice,
audio equipment, proprietary and off-the-shelf codecs, video compression and
transport equipment, teleconferencing equipment, and other innovative products
to facilitate our broadcast and production applications.

         Based in San Francisco, EDNET develops and markets integrated systems
for the delivery, storage and management of professional quality digital
communications for media-based applications, including audio and video
production for the North American advertising and entertainment industries.
EDNET has established a private wide-area network (WAN) through strategic
alliances with long distance carriers, regional telephone companies, satellite
operators and independent fiber optic telecommunication providers, which enables
the collaborative exchange of high quality audio, or for compressed video and
multimedia data communications. EDNET also provides engineering services,
application-specific technical advice, and audio, video and networking hardware
and software as part of its business.

         Our Networking Solutions Group manages a global network of over 500
North American affiliates, and nearly 200 international associates, in cities
throughout the United States, Canada, Mexico, Europe, and the Pacific Rim. Our
Networking Solutions Group, which represented approximately 43% and 42.7% of our
revenues from continuing operations for the years ended September 30, 2003 and
2002, respectively, generates revenues from the sale, rental and installation of
equipment, network usage, distribution fees and other related fees.

         VISUAL DATA TRAVEL GROUP

         The Visual Data Travel Group produces Internet-based multi-media
streaming videos such as hotel, resort, golf facility, travel destination and
time-share productions designed to keep a high level of viewer interest. These
concise, broadband-enabled "vignettes" generally have running times from two to
four minutes. In addition to the high-end vignettes, we offer a commercial on
the web, which consists of a two minute narrated photo presentation of corporate
properties. We warehouse all of our travel content on our own on-line travel
portal Travelago.com.

         The Visual Data Travel Group, which represented approximately 5.5% and
7.6% of our revenues from continuing operations for the years ended September
30, 2003 and 2002, respectively, generates revenues from production and
distribution fees. We own or co-own virtually all the content we create, which
we believe provides us with desirable content for syndication.

SALES AND MARKETING

         We use a variety of marketing methods, including our internal sales
force and channel partners, to market our products and services. One key element
of our marketing strategy has been to enter into distribution agreements with
recognized leaders in each of the markets for our products and services. By
offering our products and services in conjunction with the distributors
products, we believe these distribution agreements enable us to take advantage
of the particular distributors' existing marketing programs, sales forces and
business relationships. Contracts with these distributors generally range from
one to two years. For the years ended September 30, 2003 and 2002, we provided
webcasting services to two significant customers. Revenue for these customers
totaled approximately $1,491,000 and $2,347,000 for the years ended September
30, 2003 and 2002, respectively. For the years ended September 30, 2003 and 2002
the sales to CCBN were approximately 17% and 9% of total revenue, respectively.
For the years ended September 30, 2003 and 2002 the sales to PR Newswire were
approximately 5% and 19% of total revenue, respectively. CCBN was a customer of
MOD therefore we did not have any revenues from this customer until the quarter
ended March 31, 2002. During the later part of fiscal 2002, PR Newswire created
an operating group, Multivu, to manage the large video events. In addition, PR
Newswire transitioned their audio only webcasting business to Thomson Financial.
The contract with either of these customers can be terminated upon a 30-day
notification. See Risk Factors below. Other than this agreement, no other
agreement with a customer has represented more than 10% of our revenues during
these periods.

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RECENT DEVELOPMENTS

         On October 22, 2003 we executed an agreement and plan of merger
agreement with privately held Onstream Media Corporation to acquire the
remaining 72% of Onstream Media that we do not presently own. In December 2001,
we acquired an initial 20% stake in and formed a strategic partnership with
Onstream Media. In March 2003, we increased our ownership in Onstream Media to
approximately 28%. Messrs. Randy S. Selman and Alan Saperstein, officers and
directors of Visual Data, became members of the board of directors of Onstream
Media.

         Under the terms of the agreement, each common share of Onstream Media
(other than shares owned by us) shall be converted into the right to receive
..1481 restricted common shares of our common stock. It is estimated that at the
time of the merger we will issue approximately 2 million shares of restricted
common stock to acquire the remaining interest in Onstream Media.

         The closing of the merger is subject to various conditions, including
approval by the shareholders of Visual Data and Onstream Media, as well as the
completion by us of a financing for a minimum of $6.5 million. Jesup & Lamont
Securities Corporation has issued a fairness opinion regarding this transaction
to our board of directors.

         In October 2003 we executed a redemption agreement with Palladin
Opportunity Fund, L.L.C. and Halifax Fund, L.P. (collectively as "Palladin")
with respect to a 6% convertible debenture due December 8, 2003 and a 6%
convertible debenture due May 24, 2004 held by Palladin. Under the terms of the
redemption agreement, we redeemed a portion of the 6% convertible debentures for
approximately $610,000 in cash and Palladin converted the balance of the
debentures into an aggregate of 300,000 shares of our common stock. These shares
have previously been registered by us under Section 12(g) of the Securities Act.

DISCONTINUED OPERATIONS

         During the fiscal year ended September 30, 2001 we had two additional
operating groups, the Visual Data Financial Solutions Group and the Visual Data
Golf, Leisure and Syndication Group. The Financial Solutions Group was
established in November 1999 to address the information needs of the financial
sector. The Golf, Leisure and Syndication Group was formed in December 2000 with
the acquisition of the Golf Society of the U.S., which was a membership business
that marketed to the golfing community. Its members were provided with the
opportunity to acquire equipment, greens fees, trips and various other benefits
at a discounted price. In December 2001 we decided to discontinue the operations
of the Financial Solutions Group and the Golf, Leisure and Syndication Group as
a result of their adverse impact on our financial condition and in keeping with
our overall strategic plan.

COMPETITION

         The market for Internet broadcast services and video content is
relatively new, rapidly evolving and highly competitive. We expect our
competition to intensify. We compete with:

-                 other web sites, Internet portals and Internet broadcasters to
                  acquire and provide content to attract users;

-                 video and audio conferencing companies and Internet business
                  service broadcasters;

-                 online services, other web site operators and advertising
                  networks; and

-                 traditional media, such as television, radio and print.

         Our webcasting products and services fall into two competitive areas:
live or archived financial and fair-disclosure related conferences, and all
other live or archived webcast productions for the

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corporate, financial, educational and government segments. In the conferences
area, we compete with Loudeye/Activate, Yahoo!, Akamai's Conference 5.0
platform, FDFN and others that offer live webcasts of quarterly earnings
conference calls. For other webcast production, we compete with Activate, Yahoo!
and other smaller geographically local entities. Our production services,
however, have been in demand by some of our competitors, and from time to time
we have provided services to these companies. The nature of the streaming media
sector of the Internet market is highly interdependent while being competitive

         Our Networking Solutions Group's competition in audio and video
networking services is based upon the ability to provide systems compatibility
and proprietary off-the-shelf codecs. Due to the difficulty and expense of
developing and maintaining private digital networks, bridging services,
engineering availability and service quality, we believe that the number of
audio networking competitors are, and will remain small. Our primary video
networking competitors are video appliance dealers that source video transport
hardware. This group's advantage is one that provides a total solution including
system design, broadband sourcing, and custom software connectivity applications
that include a comprehensive digital path for television commercial transport.

GOVERNMENT REGULATION

         Although there are currently few laws and regulations directly
applicable to the Internet, it is likely that new laws and regulations will be
adopted in the United States and elsewhere covering issues such as broadcast
license fees, copyrights, privacy, pricing, sales taxes and characteristics and
quality of Internet services. It is possible that governments will enact
legislation that may be applicable to us in areas such as content, network
security, encryption and the use of key escrow, data and privacy protection,
electronic authentication or "digital" signatures, illegal and harmful content,
access charges and retransmission activities. Moreover, the applicability to the
Internet of existing laws governing issues such as property ownership, content,
taxation, defamation and personal privacy is uncertain. The majority of such
laws were adopted before the widespread use and commercialization of the
Internet and, as a result, do not contemplate or address the unique issues of
the Internet and related technologies. Any such export or import restrictions,
new legislation or regulation or governmental enforcement of existing
regulations may limit the growth of the Internet, increase our cost of doing
business or increase our legal exposure, which could have a material adverse
effect on our business, financial condition and results of operations.

         By distributing content over the Internet, we face potential liability
for claims based on the nature and content of the materials that we distribute,
including claims for defamation, negligence or copyright, patent or trademark
infringement, which claims have been brought, and sometimes successfully
litigated, against Internet companies. To protect our company from such claims,
we maintain general liability insurance in the amount of $2 million. The general
liability insurance may not cover all potential claims of this type or may not
be adequate to indemnify us for any liability to which we may be exposed. Any
liability not covered by insurance or in excess of insurance coverage could have
a material adverse effect on our business, results of operations and financial
condition.

INTELLECTUAL PROPERTY

         Our success depends in part on our ability to protect our intellectual
property. To protect our proprietary rights, we rely generally on copyright,
trademark and trade secret laws, confidentiality agreements with employees and
third parties, and agreements with consultants, vendors and customers, although
we have not signed such agreements in every case. Despite such protections, a
third party could, without authorization, copy or otherwise obtain and use our
content. We can give no assurance that our agreements with employees,
consultants and others who participate in development activities will not be
breached, or that we will have adequate remedies for any breach, or that our
trade secrets will not otherwise become known or independently developed by
competitors.

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         We pursue the registration of certain of our trademarks and service
marks in the United States, although we have not secured registration of all our
marks. In addition, the laws of some foreign countries do not protect our
proprietary rights to the same extent as do the laws of the United States, and
effective copyright, trademark and trade secret protection may not be available
in such jurisdictions. In general, there can be no assurance that our efforts to
protect our intellectual property rights through copyright, trademark and trade
secret laws will be effective to prevent misappropriation of our content. Our
failure or inability to protect our proprietary rights could materially
adversely affect our business, financial condition and results of operations.

EMPLOYEES

         At November 30, 2003 we had 46 full time employees, of whom 23 were
design, production and technical personnel, 9 were sales and marketing personnel
and 14 were general, administrative and executive management personnel. None of
the employees are covered by a collective bargaining agreement and our
management considers relations with our personnel to be good.

GENERAL

         We were formed under the laws of the State of Florida in May 1993. Our
executive offices are located at 1291 SW 29th Avenue, Pompano Beach, Florida
33069. Our telephone number at that location is (954) 917-6655.

                                  RISK FACTORS

         Before you invest in our securities, you should be aware that there are
various risks. Additional risks and uncertainties not presently known to us or
that we currently believe to be immaterial may also adversely affect our
business. You should consider carefully these risk factors, together with all of
the other information included in or incorporated by reference into this
prospectus before you decide to purchase our securities. If any of the following
risks and uncertainties develop into actual events, our business, financial
condition or results of operations could be materially adversely affected.

WE HAVE AN ACCUMULATED DEFICIT AND WE ANTICIPATE CONTINUING LOSSES THAT WILL
RESULT IN SIGNIFICANT LIQUIDITY AND CASH FLOW PROBLEMS. THERE IS SIGNIFICANT
DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

         For the years ended September 30, 2003 and 2002, we incurred net losses
of $4,191,508 and $11,432,173, respectively. The report of our independent
accountants on our September 30, 2003 consolidated financial statements contains
an explanatory paragraph stating that we have incurred significant recurring
losses from operations since inception and have a working capital deficit which
raises substantial doubt about our ability to continue our business as a going
concern. Although our operating expenses have decreased we continue to incur
operating losses.

         At September 30, 2003, we had approximately $82,000 of cash and cash
equivalents. At September 30, 2003 we also had approximately $1,002,000 of cash
held in escrow to be drawn upon as needed with the approval of the lender. We do
not presently have any commitment for capital expenditures. Based upon our
current operations and anticipated acquisitions, we will need to raise
additional capital through debt or equity to provide for our operations for the
next 12 months. In order to service our existing indebtedness, we will need to
grow revenues, achieve cost savings or raise sufficient additional capital. In
addition, our ability to refinance existing indebtedness is subject to future
economic conditions, market conditions, business and other factors. We cannot
assure you that we will be able to raise additional working capital to fund
these anticipated deficits. If we are unable to significantly increase our
revenues or raise working capital when needed to fund our ongoing losses, the
viability of our future operations may be in question.

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WE WILL NEED ADDITIONAL FINANCING FOR OUR EXISTING OPERATIONS WHICH WE MAY NOT
BE ABLE TO OBTAIN ON ACCEPTABLE TERMS. OUR CONTINUED EXISTENCE IS DEPENDENT UPON
OUR ABILITY TO RAISE CAPITAL AND TO MARKET AND SELL OUR SERVICES SUCCESSFULLY.
IF WE FAIL IN ONE OR BOTH OF THESE EFFORTS, OUR CURRENT LEVEL OF OPERATIONS AS
WELL AS THE FUTURE GROWTH OF OUR BUSINESS AND OPERATIONS WILL BE SEVERELY
LIMITED.

         Historically, our operations have been financed primarily through the
issuance of debt and equity. Capital is typically needed not only for the
acquisition of additional companies, but also for the effective integration,
operation and expansion of these businesses. Capital is also necessary to fund
our ongoing operations. Our future capital requirements, however, depend on a
number of factors, including our ability to grow our revenues, manage our
business and control our expenses. We are constantly evaluating our cash needs
and existing burn rate. In addition, we have a plan whereby certain
non-essential personnel and administrative costs will continue to be reduced so
that we may continue to meet operating and financing obligations as they come
due. Our ability to grow revenues, achieve cost savings or raise sufficient
additional capital will also be necessary to service our existing indebtedness.
Our ability to refinance existing indebtedness is subject to future economic
conditions, market conditions, business conditions and other factors.

         Based upon an ongoing evaluation of our cash needs, absent a
significant increase in our revenues, we will need to raise additional capital
to fund our ongoing operations. We cannot assure you that we will be able to
raise additional working capital to fund these anticipated deficits. In our
capital raising efforts we may seek to raise additional capital through the sale
of equity and debt securities or a combination thereof. If we raise additional
capital through the issuance of debt, this will result in increased interest
expense. If we raise additional funds through the issuance of equity or
convertible debt securities, the percentage ownership of Visual Data held by
existing shareholders will be reduced and those shareholders may experience
significant dilution. In addition, new securities may contain certain rights,
preferences or privileges that are senior to those of our common stock.

         If we do not raise funds as needed, our ability to continue our
business and operations is in jeopardy. There are no assurances that even if
such additional capital is obtained or the planned cost reductions which are
implemented are successful, that we will achieve profitability or positive cash
flow.

WE NEED TO RAISE AN ADDITIONAL $6.5 MILLION OF CAPITAL TO CLOSE OUR TRANSACATION
WITH ONSTREAM MEDIA.

         As described elsewhere herein, the closing of our pending merger with
Onstream Media is subject to certain conditions precedent, including our raising
an additional $6.5 million in capital. If we do not raise these funds, we will
not close the merger. We cannot assure you that we will be successful in raising
these funds under terms and conditions acceptable to us, or at all. In that
event, it is not likely we will be able to proceed with the pending transaction
with Onstream Media.

OUR PRIMARY ASSETS SERVE AS COLLATERAL UNDER AN OUTSTANDING LOAN AGREEMENT. IF
WE WERE TO DEFAULT ON THIS LOAN, THE LENDER COULD FORECLOSE ON OUR ASSETS.

         On December 4, 2001 we entered into a private debt financing
transaction under which the lender agreed to lend us up to $3 million. On May 7,
2003 we restructured this loan pursuant to the terms of an Amended and Restated
Loan Agreement. The new loan is evidenced by a three year promissory note in the
principal amount of $3,000,000 and is collateralized by a blanket security
interest in our assets and a pledge of the stock of our subsidiaries. If we
should default under the repayment provisions of the secured promissory note,
the lender could seek to foreclose on our primary assets in an effort to seek
repayment under the note. If our lender was successful, we would be unable to
conduct our business as it is presently conducted and our ability to generate
revenues and fund our ongoing operations would be materially adversely affected.

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WE EXPECT TO CONTINUE TO EXPERIENCE VOLATILITY IN OUR STOCK PRICE.

         Historically, there has been volatility in the market price for our
common stock. Our quarterly operating results, changes in general conditions in
the economy, the financial markets or the marketing industry, or other
developments affecting us or our competitors, could cause the market price of
our common stock to fluctuate substantially. We expect to experience significant
fluctuations in our future quarterly operating results due to a variety of
factors. Factors that may adversely affect our quarterly operating results
include:

-                 the announcement or introduction of new services and products
                  by us and our competitors;

-                 our ability to upgrade and develop our systems in a timely and
                  effective manner;

-                 our ability to retain existing clients and attract new clients
                  at a steady rate, and maintain client satisfaction;

-                 the level of use of the Internet and online services and the
                  rate of market acceptance of the Internet and other online
                  services for transacting business;

-                 technical difficulties, system downtime, or Internet
                  brownouts;

-                 the amount and timing of operating costs and capital
                  expenditures relating to expansion of our business and
                  operations;

-                 government regulation; and

-                 general economic conditions and economic conditions specific
                  to the Internet.

         As a result of these factors, in one or more future quarters, our
operating results may fall below the expectations of securities analysts and
investors. In this event, the market price of our common stock would likely be
materially adversely affected. In addition, the stock market in general and the
market prices for Internet-related companies in particular, have experienced
extreme volatility that often has been unrelated to the operating performance of
those companies. These broad market and industry fluctuations may adversely
affect the price of our common stock, regardless of our operating performance.

WE ARE DEPENDENT ON CONTRACTS, SOME OF WHICH ARE SHORT TERM. IF THESE CONTRACTS
ARE TERMINATED, OUR RESULTS OF OPERATIONS WOULD BE MATERIALLY ADVERSELY
AFFECTED.

         We are dependent upon contracts and distribution agreements with our
strategic partners and clients, including CCBN and PR Newswire. For the year
ended September 30, 2003, sales to CCBN represented approximately 17% of our
revenue, and sales to PR Newswire represented approximately 5% of our revenue.
The contracts with these customers can be terminated upon a 30-day notification.
Because of the significant nature of the revenues from this contract to our
consolidated results of operations, the termination of any of this contract
could have a material adverse effect on our business operations and prospects.

THE EXERCISE OF OPTIONS AND WARRANTS AND THE CONVERSION OF SHARES OF OUR CLASS
A-8 CONVERTIBLE PREFERRED STOCK AND CLASS A-9 CONVERTIBLE PREFERRED STOCK WILL
BE DILUTIVE TO OUR EXISTING SHAREHOLDERS.

         As of November 30, 2003 we had outstanding options and warrants to
purchase a total of 1,024,870 shares of our common stock at prices ranging
between $2.65 and $257.82 per share. In addition, as of November 30, 2003 we had
232,750 shares of our Class A-8 Convertible Preferred Stock

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which is convertible into 310,334 shares of our common stock and 20,000 shares
of our Class A-9 Convertible Preferred Stock which is convertible into 66,668
shares of our common stock issued and outstanding. The conversion of the Class
A-8 Convertible Preferred Stock and/or the Class A-9 Convertible Preferred Stock
and the exercise of outstanding options and warrants may materially adversely
affect the market price of our common stock and will have a dilutive effect on
our existing shareholders.

THE NUMBER OF SHARES OF OUR COMMON STOCK ISSUABLE UPON CONVERSION OF THE CLASS
A-9 CONVERTIBLE PREFERRED CAN VARY BASED UPON THE MARKET PRICE OF OUR COMMON
STOCK.

         We have an aggregate of 232,750 shares of Class A-8 Convertible
Preferred Stock and 20,000 shares of our Class A-9 Convertible Preferred Stock
outstanding as of November 30, 2003. Each share of the Class A-8 Convertible
Preferred is convertible into 1.33334 shares of our common stock. The shares of
Class A-9 Convertible Preferred Stock are convertible, in whole or in part, into
shares of our common stock at any time at the option of the holder, or if not so
converted, at any time beginning two years from the date of issuance, the
holders of the Class A-9 Convertible Preferred Stock are obligated, upon notice
from us, to convert those shares into shares of our common stock. The conversion
price is presently $4.50 per share. The conversion feature of the Class A-9
Convertible Preferred Stock is subject to a one time reset to a lower price at
the end of two years equal to 90% of the 10 day average price of the underlying
shares of common stock, subject to a floor of $2.10 per share.

         Because the conversion price is not fixed, the ultimate number of
shares of common stock issuable upon conversion of the Class A-9 Convertible
Preferred Stock is unknown at this time. The following table sets forth:

         -        the number of shares of our common stock that would be
                  issuable upon conversion of the 20,000 shares of Class A-9
                  Convertible Preferred Stock based upon the current conversion
                  price of $4.50 per share, and

         -        the total number of shares of our common stock that would be
                  issuable upon the conversion of the 20,000 shares of Class A-9
                  Convertible Preferred Stock based upon the floor conversion
                  price of $2.10 per share.

<TABLE>
<CAPTION>
                        No. of Shares             % of
Conversion             of Common Stock         Issued and
  Price                    Issuable            Outstanding (1)
  -----                    --------            ---------------
<S>                    <C>                     <C>
$4.50                     66,668                   1.6%
$2.10                     142,858                  3.5%
</TABLE>

(1)      Based upon 4,108,772 shares of our common stock issued and outstanding
at November 30, 2003.

PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS MAY DELAY OR PREVENT A
TAKE-OVER WHICH MAY NOT BE IN THE BEST INTERESTS OF OUR SHAREHOLDERS.

         Provisions of our articles of incorporation and bylaws may be deemed to
have anti-takeover effects, which include when and by whom special meetings of
our shareholders may be called, and may delay, defer or prevent a takeover
attempt. In addition, certain provisions of the Florida Business Corporation Act
also may be deemed to have certain anti-takeover effects which include that
control of shares acquired in excess of certain specified thresholds will not
possess any voting rights unless these voting rights are approved by a majority
of a corporation's disinterested shareholders.

         In addition, our articles of incorporation authorize the issuance of up
to 5,000,000 shares of preferred stock with such rights and preferences as may
be determined from time to time by our board of

                                        8
<PAGE>

directors, of which 232,750 shares of our Class A-8 Convertible Preferred Stock
and 20,000 shares of our Class A-9 Convertible Preferred Stock were issued and
outstanding at November 30, 2003. Our board of directors may, without
shareholder approval, issue preferred stock with dividends, liquidation,
conversion, voting or other rights that could adversely affect the voting power
or other rights of the holders of our common stock.

ITEM 2.           DESCRIPTION OF PROPERTY

         In September 1997, we purchased from an unaffiliated third party a
25,000 square foot facility in Pompano Beach, Florida which now serves as our
corporate headquarters and houses all of our production, marketing and
distribution activities. In September 2002, we completed the sale and lease back
of our principal executive offices to an unaffiliated third party. The sale
price was $1,700,000 and we received net proceeds of approximately $721,000
after payment of current obligations due from the mortgage. In connection with
the agreement we entered into a five-year lease ending in September 2007. The
lease provides for one five-year renewal option. The monthly base rental is
approximately $11,000 plus our share of operating expenses with annual 3%
increases.

         EDNET'S principal business offices are located at One Union Street, in
San Francisco, California. This office is a 5,000 square foot facility that
operates as administrative headquarters and provides the centralized network hub
for electronically bridging affiliate studios, as well as overall network
management. In addition, the EDNET facility operates as a backup to Florida for
webcasting operations. EDNET entered into a lease agreement on July 1, 2003, on
a month-to-month basis, which provides for a monthly rental of $9,462.

         MOD's principal business office is located at 440 9th Street, New York,
New York. This office is approximately 2,000 square feet and serves as MOD's
administrative headquarters. MOD leases this space from an unaffiliated third
party under a lease expiring on December 31, 2004 for a monthly rental of
$5,000.

ITEM 3.           LEGAL PROCEEDINGS

         On April 30, 2002, we instituted an action in the Circuit Court for the
Fifteenth Judicial Circuit for Palm Beach County, Florida, entitled Visual Data
Corporation v. Golf Society International, Inc. ("GSI") and Howard Stern, in
which we are seeking damages in excess of $6.5 million for breach of contract,
fraud in the inducement, negligent misrepresentation and fraudulent
misrepresentation against the plaintiffs. In October 2002 we were awarded a
default judgment against the plaintiffs in the amount of $7,457,250. We
presently intend to pursue collection of this amount, although, we have fully
reserved the amount as a result of the financial condition of GSI and our belief
that collection of this default will be unlikely. During fiscal year 2002, we
fully reserved the amount of the debenture received from GSI as GSI has ceased
operations. The debenture was received pursuant to a January 10, 2002 Stock
Purchase Agreement from our sale of the Golf Society of the U.S. to GSI. Except
as set forth above, we are not engaged in any litigation that is material to our
operations or outside of the normal course of business.

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

         None.

                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is quoted on the Nasdaq SmallCap Market under the
symbol "VDAT." The following table sets forth the high and low closing sale
prices for our common stock as reported on the Nasdaq Stock Market and for the
period from October 1, 2001 through September 30, 2003. These prices

                                        9
<PAGE>

do not include retail mark-ups, markdowns or commissions, and may not
necessarily represent actual transactions.

<TABLE>
<CAPTION>
                                      High                      Low
<S>                                 <C>                        <C>
FISCAL YEAR 2002:

First Quarter                       $  15.30                   $ 9.60
Second Quarter                      $  13.05                   $ 8.55
Third Quarter                       $  12.00                   $ 3.60
Fourth Quarter                      $   4.05                   $ 2.40

FISCAL YEAR 2003:

First Quarter                       $   4.20                   $ 2.55
Second Quarter                      $   2.85                   $ 1.35
Third Quarter                       $   3.39                   $ 1.80
Fourth Quarter                      $   2.78                   $ 2.17
</TABLE>

         On December 17, 2003, the last reported sale prices of the common stock
on the Nasdaq SmallCap Market was $2.43. As of November 30, 2003 there were
approximately 550 shareholders of record of the common stock.

         DIVIDEND POLICY

         We have never declared or paid any cash dividends on our common stock.
We currently expect to retain future earnings, if any, to finance the growth and
development of our business.

         RECENT SALES OF UNREGISTERED SECURITIES

         On September 10, 2003, we declared a dividend on our shares of Class
A-7 Preferred Stock as prescribed in the designation of the shares of Class A-7
Preferred. The amount owed on the dividend at September 1, 2003 was
approximately $68,000, which was satisfied through the issuance of 28,250 shares
of common stock on September 10, 2003.

         During August and September 2003 holders of an aggregate of 86,832
shares of our Class A-7 Preferred converted those shares into an aggregate of
293,109 shares of common stock, which included shares issued as a payment on
dividends accrued on the shares of Class A-7 Preferred from September 2, 2003
through the conversion date.

         During the quarter ended September 30, 2003, we issued 56,368 shares of
common stock for consulting and financial advisory services. The services are
being provided over periods ranging from three months to one year.

         In September 2003, we issued 78,890 shares of common stock in full
payment of a promissory note and accrued interest of approximately $140,000.

         In September 2003, the holders of our Class A-9 Preferred converted the
30,000 outstanding shares into 214,286 shares of our common stock based upon a
conversion rate of $2.10 per share. In addition, we sold an additional 20,000
shares of our Class A-9 Preferred and four year warrants to purchase 40,000
shares of its common stock for $300,000 to two accredited investors in a private
placement. The four-year warrants are exercisable at $3.00 per share.

         We relied on exemptions available under Section 4(2) and Regulation D
of the Securities Act in connection with each of the foregoing transaction. In
each of the foregoing transactions, the recipients

                                       10
<PAGE>

were either accredited investors or non-accredited investors who had such
knowledge and experience in financial, investment and business matters that they
were capable of evaluating the merits and risks of the prospective investment in
our securities. No general solicitation or advertising was used in connection
with these transactions, the participants had access to business and financial
information concerning our company, and the certificates that were issued
representing these shares bore the appropriate legend restricting their transfer
absent registration of such shares under the Securities Act .

         SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The following table sets forth securities authorized for issuance under
equity compensation plans, including individual compensation arrangements, by us
under our 1996 Stock Option Plan and any compensation plans not previously
approved by our shareholders as of September 30, 2003.

<TABLE>
<CAPTION>
                                               Number of              Weighted               Number of
                                            securities to be          average          securities remaining
                                             issued upon              exercise         available for future
                                             exercise of              price of         issuance under equity
                                             of outstanding          outstanding         compensation plans
                                            options, warrants          options,         (excluding securities
                                               and rights              warrants        reflected in column (a))
                                                                      and rights
Plan category                                     (a)                     (b)                  (c)
<S>                                         <C>                      <C>               <C>
1996 Stock Option Plan (1)                      281,774                $ 30.54               451,560

Equity compensation plans
not approved by shareholders                    681,375                $ 24.29                none
</TABLE>

(1)      Our 1996 Stock Option Plan has previously been approved by our
shareholders, and reflects the only such equity compensation plan for which we
have sought shareholder approval.

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following discussion should be read together with the information
contained in the Consolidated Financial Statements and related Notes included in
the annual report.

OVERVIEW

         We are a full service broadband media company that specializes in
webcasting, networking solutions for the entertainment industry and marketing
solutions for the travel industry. Our operations are comprised in three
operating groups, including:

         -        Visual Data Webcasting Group

         -        Visual Data Networking Solutions Group (EDNET)

         -        Visual Data Travel Group (includes HotelView, ResortView,
                  etc.)

REVENUE RECOGNITION

         Our Webcasting group recognizes revenue from live and on-demand
webcasts at the time an event is accessible for streaming over the Internet.
Revenue is recognized from the sale of equipment when the equipment is shipped.
For customer service projects, revenue is recognized when service is performed.
A significant component of our Network Solutions Group's revenue relates to the
sale of equipment, which is recognized when the equipment is installed or upon
signing of a contract after a free trial period. Our Network Solutions Group
recognizes revenues from equipment installation and bridging when service is
performed. Network usage revenue is recognized based on customers' monthly
usage.

                                       11
<PAGE>

Our Network Solutions Group leases some equipment to customers under
terms that are accounted for as operating leases. Rental revenue from leases is
recognized ratably over the life of the lease and the related equipment is
depreciated over its estimated useful life. All leases of the related equipment
contain fixed terms. Our Travel Group libraries recognize production revenue at
the time of completion of video production services. Per hit charges are
recognized when users watch a video on the Internet. Fixed monthly fees are
recognized on a monthly basis consistent with the terms of the contracts.
Commissions on bookings are recognized when the stays are completed.

RESULTS OF OPERATIONS

         The following table shows, for the periods presented, the percentage of
revenue represented by items on our consolidated statements of operations.

<TABLE>
<CAPTION>
                                                           PERCENTAGE OF REVENUE
                                                           Year Ended September 30,
                                                           2003             2002
                                                           ----             ----
<S>                                                        <C>              <C>
Revenue:
    Webcasting and related equipment sales                  51.5%            49.7%
    Network equipment sales and rentals                     11.0             12.7
    Network usage and services                              32.0             30.0
    Travel production and distribution                       5.5              7.6
                                                           -----           ------
                  Total revenue                            100.0%           100.0%

Operating expenses:
    Webcasting and related equipment costs                  17.6             17.8
    Network equipment sales and rentals                      5.7              6.9
    Network usage and services                              15.3             17.4
    Travel production and distribution                       0.1              1.2
General administrative:
    Compensation                                            54.0             60.7
    Professional fees                                       15.2             16.6
    Other                                                   18.3             18.9
Sales and marketing                                          0.3              2.3
Depreciation and amortization                               28.8             26.0
                                                           -----           ------
                  Total operating expenses                 155.3            167.8

Loss from operations                                       (55.3)           (67.8)

Other income (expense):
   Interest income                                           *                *
   Interest expense                                        (13.4)           (12.5)
   Reserve for intangible impairment                         -               (8.9)
   Loss on debentures                                        -              (43.5)
   Other income                                              7.2              2.9
                                                           -----            -----
                  Total other expense                       (6.2)           (62.0)

Loss from continuing operations                            (61.5)          (129.8)
Loss from discontinued operations                            -               (9.3)
                                                           -----           ------
Net loss                                                   (61.5)%         (139.1)%
                                                           =====           ======
</TABLE>

*  less than 1%

                                       12
<PAGE>

REVENUE

         We recognized revenue of approximately $6,815,000 from continuing
operations for the year ended September 30, 2003, representing a decrease of
approximately $1,399,000 (17%) over revenues of approximately $8,214,000 for the
same period last year.

         Revenues from webcasting accounted for approximately $3,512,000 for the
year ended September 30, 2003 as compared to approximately $4,084,000 for the
same period last year, which represents a decrease of approximately $572,000
(14%). Included in last year results were revenues from a one-time studio
construction project for approximately $368,000. In addition, as a result of
competition, we decreased our pricing on our standard on-demand audio only
conference calls, which resulted in a decline in revenues.

         Revenues from the network equipment sales and rentals accounted for
approximately $747,000 for the year ended September 30, 2003 as compared to
approximately $1,040,000 for the same period last year, which represents a
decrease of approximately $293,000 (28%). This decrease was due to cash
constraints on us that limited our ability to purchase inventory, and,
therefore, created a reduction in equipment sales and rentals.

         Revenues from network usage amounted to approximately $2,184,000 for
the year ended September 30, 2003 as compared to approximately $2,468,000 for
the same period last year, representing a decrease of approximately $284,000
(12%). This decrease is the result of fewer customers utilizing our network.
During fiscal year 2002 we transitioned the circuits for some of our customers
from our control to theirs. This decision was based upon the usage incurred by
these customers, the customer's payment history as well as the margin achieved
from these circuits. In addition, we experienced some churn of existing
customers who had decided to manage their own networks.

         Revenues from the travel production and distribution accounted for
approximately $372,000 for the year ended September 30, 2003 as compared to
approximately $604,000 for the same period last year, which represents a
decrease of approximately $232,000 (38%). The decrease is the result of the
production of fewer new customer vignettes. As part of our overall strategy to
become cash flow positive, we decided to minimize expenses and reduce the staff
to essential employees. The revenues from this division are sufficient to cover
the direct operating costs associated with it. While we do not anticipate an
increase in revenues in this division during fiscal 2004, the implementation of
these cost-cutting measures have enabled us to receive the benefit of the
revenues without adversely affecting our income.

OPERATING EXPENSES

         Webcasting and related equipment costs amounted to approximately
$1,197,000 for the year ended September 30, 2003 as compared to approximately
$1,461,000 for the same period last year representing a decrease of
approximately $264,000(18%). Cost of webcasting revenue decreased as a result of
a decrease in revenues and a low margin construction project that was incurred
last year, which was partially offset by an increase due to an expansion and
additional redundancy of our webcasting facilities including co-location and
bandwidth.

         Network equipment sales and rental costs decreased approximately
$182,000 (32%) from approximately $570,000 for the year ended September 30, 2002
to approximately $388,000 for the year ended September 30, 2003 primarily as a
result of a decrease in revenues.

         Network usage costs accounted for approximately $1,041,000 for the year
ended September 30, 2003 as compared to approximately $1,426,000 for the same
period last year, a decrease of approximately $385,000 (27%). This decrease is
primarily the result of a decrease in revenues and the decision to transition
less profitable circuits directly to customers.

                                       13
<PAGE>

         Travel production and distribution costs amounted to approximately
$9,000 for the year ended September 30, 2003 as compared to approximately
$103,000 for the same period last year. The decrease of approximately $94,000
(91%) is the result of a decrease in revenues as a result of fewer new vignettes
produced.

GENERAL AND ADMINISTRATIVE EXPENSES

         Compensation expense amounted to approximately $3,682,000 for the year
ended September 30, 2003 as compared to approximately $4,983,000 for the same
period last year representing an decrease of approximately $1,301,000 (26%).
This decrease was the result of cost containment measures adopted partially
offset by additional costs related to the acquisition of MOD. These cost
containment measures resulted in reductions to the overall number of employees.

         Professional fees decreased approximately $329,000 (24%) from
approximately $1,367,000 for the same period last year to approximately
$1,038,000 for the year ended September 30, 2003. This reduction is the result
of lower legal and consulting expenses.

         Other general and administrative expenses of approximately $1,248,000
for the year ended September 30, 2003 decreased approximately $303,000 (20%)
from approximately $1,551,000 for same period last year due to reduced costs
incurred as the result of cost containment measures adopted offset by additional
costs of MOD.

SALES AND MARKETING EXPENSES

         Sales and marketing expenses were approximately $18,000 during the year
ended September 30, 2003, representing a decrease of approximately $171,000
(90%) from approximately $189,000 for the same period last year. The decrease
was the result of reduced marketing costs as part of the cost containment
program.

DEPRECIATION AND AMORTIZATION

         Depreciation and amortization of approximately $1,965,000 for the year
ended September 30, 2003 decreased approximately $168,000 (8%) from
approximately $2,133,000 for the same period last year due to assets fully
depreciated, which was partially offset by the additional quarter of
depreciation of assets acquired from MOD and the amortization of the customer
list resulting from the MOD acquisition (effective date of the transaction was
January 1, 2002).

OTHER INCOME (EXPENSE)

         Other expense was approximately $420,000 for the year ended September
30, 2003 as compared to approximately $5,099,000 during the same period last
year. A loss on investment of approximately $3,573,000, net was recorded during
the fiscal year ended September 30, 2002 due to the company fully reserving
against the debenture received as proceeds from the sale of its Golf Society of
the U.S. subsidiary. We did not have a comparable expense during fiscal 2003.
Interest expense amounted to approximately $912,000 as compared to approximately
$1,028,000 for the same period last year representing a decrease of
approximately $116,000 (11%) primarily due to reduced interest on the
debentures, mortgage interest included last year on the building and the
settlement of the MOD capital lease obligations and notes payable, which was
partially offset by the expensing of the balance of the prepaid interest on the
prior shareholder loan and interest on the notes executed in the current year.
Interest income was approximately $3,000 during the years ended September 30,
2003 and 2002. Other income was approximately $489,000 for the year ended
September 30, 2003 as compared to approximately $226,000 for the same period
last year. Included in other income for the period ended September 30, 2003 are
gains recognized from settlements of existing obligations with creditors and
lenders. In addition, approximately $171,000 was recognized as a loss on the
investment in Onstream Media as a result of the equity method of accounting.

                                       14
<PAGE>

DISCONTINUED OPERATIONS

         Losses from discontinued operations amounted to approximately $763,000
for the year ended September 30, 2002. As a result of our decision in December
2001 to sell our interest in the Golf, Leisure and Syndication Group,
approximately $589,000 of operating losses are classified as discontinued
operations for the year ended September 30, 2002. In December 2001, we also
decided to cease operations in the Financial Solutions Group and have classified
approximately $174,000 as discontinued operations for the year ended September
30, 2002.

         During fiscal 2002, we fully reserved (net of approximately $3.2
million of unrealized gain on the related sale) the debenture investment as Golf
Society International, Inc. has ceased operations. On April 30, 2002, an action
was instituted by us in the Circuit Court for the Fifteenth Judicial Circuit for
Palm Beach County, Florida, styled Visual Data Corporation v. Golf Society
International, Inc. and Howard Stern. The complaint sought damages in excess of
$6.5 million for breach of contract, fraud in the inducement, negligent
misrepresentation and fraudulent misrepresentation against Golf Society
International, Inc. and Howard Stern. In October 2002, we were awarded a default
judgment against the plaintiffs in the amount of $7,457,250. We presently intend
to pursue collection of this amount, although, we have fully reserved the amount
as a result of the financial condition of GSI and our belief that collection of
this default will be unlikely.

LIQUIDITY AND CAPITAL RESOURCES

         Our working capital at September 30, 2003 was approximately $405,000 as
compared to a working capital deficit at September 30, 2002 of approximately
$2,003,000, an increase of $2,408,000. The change in working capital was
primarily attributable:

         -        an increase in restricted cash of approximately $1,002,000,

         -        an increase in prepaid expenses of approximately $522,000,

         -        an increase in due from shareholders of approximately
                  $300,000,

         -        a decrease in current notes payable of approximately
                  $1,129,000,

         -        a decrease in current capital leases of approximately
                  $325,000, and

         -        a decrease in accounts payable and accrued liabilities of
                  approximately $1,256,000.

These increases were partially offset by a decrease in accounts receivable of
approximately $476,000, a decrease in inventories of approximately $179,000 and
an increase in current convertible debentures of $1,543,000.

         Net cash used in operating activities for the year ended September 30,
2003 was approximately $1,246,000. The net loss of approximately $4,192,000 was
offset primarily by:

         -        depreciation and amortization of approximately $1,965,000,

         -        interest expense on notes payable of approximately $438,000,

         -        amortization of discount on notes payable of approximately
                  $203,000,

         -        amortization of deferred services of approximately $506,000,
                  and

         -        a decrease in accounts receivable of approximately $539,000.

These increases were partially offset by a gain from settlements of obligations
of approximately $651,000 and a decrease in accounts payable and accrued
liabilities of approximately $468,000.

         Net cash used in investing activities was approximately $1,308,000 for
the year ended September 30, 2003 primarily due to an increase in restricted
cash of $1,002,000 and the acquisition of equipment of approximately $317,000.
Net cash provided by financing activities for the year ended September 30, 2003
was approximately $2,576,000, which included advances from note payables of
approximately $2,296,000 and proceeds from the sale of preferred shares of
approximately $621,000, which was

                                       15
<PAGE>

partially offset by repayment of a note payable of approximately $95,000 and
payments on capital leases of approximately $232,000.

         For the year September 30, 2003, we had an operating loss from
continuing operations of approximately $4,192,000 and cash used in operations of
approximately $1,246,000. At September 30, 2003, we had approximately $82,000 of
cash and cash equivalents and approximately $1,002,000 of cash held in escrow to
be drawn upon as needed with the approval of the lender. We do not presently
have any commitment for capital expenditures. Based upon our current operations
and anticipated acquisitions, we will need to raise additional capital through
debt or equity to provide for our operations for the next 12 months. Our ability
to grow revenues, achieve cost savings or raise sufficient additional capital
will be necessary to service our existing indebtedness. In addition, our ability
to refinance existing indebtedness is subject to future economic conditions,
market conditions, business and other factors. We cannot assure you that we will
be able to raise additional working capital to fund these anticipated deficits.
If we are unable to significantly increase our revenues or raise working capital
when needed to fund ongoing losses, the viability of our future operations may
be in question.

ITEM 7.           FINANCIAL STATEMENTS

         Our financial statements are contained in pages F-1 through F-34 which
appear at the end of this annual report.

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

         None.

ITEM 8A.          CONTROLS AND PROCEDURES

         As required by Rule 13a-15 under the Securities Exchange Act of 1934,
as of the end of the period covered by the annual report, being September 30,
2003, we have carried out an evaluation of the effectiveness of the design and
operation of our company's disclosure controls and procedures. This evaluation
was carried out under the supervision and with the participation of our
company's management, including our company's President along with our company's
Chief Financial Officer. Based upon that evaluation, our company's President
along with our company's Chief Financial Officer concluded that our company's
disclosure controls and procedures are effective. There has been no significant
changes in our company's internal controls or in other factors, which could
significantly affect internal control subsequent to the date we carried out our
evaluation.

         Disclosure controls and procedures and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time period specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Securities Exchange Act of 1934 is accumulated and communicated to management
including our President and Chief Financial Officer as appropriate, to allow
timely decisions regarding required disclosure.

                                       16
<PAGE>

                                    PART III

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

EXECUTIVE OFFICERS AND DIRECTORS

         Our executive officers and directors, and their ages are as follows:

<TABLE>
<CAPTION>
         Name                       Age                             Position
         ----                       ---                             --------
<S>                                 <C>              <C>
Randy S. Selman (1)                 48               Chief Executive Officer, President and Chairman
Alan M. Saperstein                  45               Executive Vice President, Treasurer and Director
George Stemper                      49               Chief Operating Officer
Gail Babitt                         40               Chief Financial Officer
Benjamin Swirsky (1)(2)(3)(4)       61               Director
Robert J. Wussler (1)(2)(3)(4)      67               Director
Charles S. Johnston (1)(2)(3)(4)    69               Director
</TABLE>

(1)      Member of the Compensation Committee.

(2)      Member of the Audit Committee.

(3)      Member of the Governance and Nominating Committee.

(4)      Member of the Finance Committee.

         RANDY S. SELMAN. Since our inception in May 1993, Mr. Selman has served
as our Chief Executive Officer, President, and a director and from September
1996 through June 1999, as our Chief Financial Officer. Mr. Selman is also the
chairman, a non-voting member, of the Compensation Committee of the board of
directors. From March 1985 through May 1993, Mr. Selman was Chairman of the
Board, President and Chief Executive Officer of SK Technologies Corporation (OTC
Bulletin Board: SKTC), a publicly-traded software development company. SKTC
develops and markets software for point-of-sale with complete back office
functions such as inventory, sales analysis and communications. Mr. Selman
founded SKTC in 1985 and was involved in their initial public offering in 1989.
Mr. Selman's responsibilities included management of SKTC, public and investor
relations, finance, high level sales and general overall administration.

         ALAN M. SAPERSTEIN. Mr. Saperstein has served as our Executive Vice
President, Treasurer and a director since our inception in May 1993. Mr.
Saperstein also serves as an alternate member of the Compensation Committee of
the board of directors. From March 1989 until May 1993, Mr. Saperstein was a
free-lance producer of video film projects. Mr. Saperstein has provided
consulting services for corporations that have set up their own sales and
training video departments. From 1983 through 1989, Mr. Saperstein was the
Executive Director/Entertainment Division of NFL Films where he was responsible
for supervision of all projects, budgets, screenings and staffing.

         GEORGE STEMPER. Mr. Stemper has served as our Chief Operating Officer
since September 2000. Mr. Stemper comes to us with 25 years in the computer,
Internet application and hospitality technology fields. He served as a Senior
Vice President and General Manager with Hospitality Solutions International
(HSI) from June, 1997 through July, 2000. From September, 1995 through June,
1997 Mr. Stemper served as the Chief Operating Officer and as Executive Vice
President for MCORP, an Edison, NJ based software developer and product
integrator of enterprise oriented solutions for businesses and the military.
From April, 1981 through September, 1995, Mr. Stemper was with Control
Transaction Corporation and served in key sales and marketing positions and as
the Executive Vice President. In July, 1976, Mr. Stemper began his professional
career with the Hyatt Hotels Corporation. Mr. Stemper has a B.S. degree from
Cornell University and MBA from Fairleigh Dickinson University.

                                       17
<PAGE>

         GAIL BABITT, CPA. Ms. Babitt has served as our Chief Financial Officer
since November 2000. From 1999 through October 2000 Ms. Babitt served as Vice
President of Finance, North America and Corporate Controller for TeleComputing
ASA. TeleComputing ASA is a leading application service provider. From 1997 to
1999 Ms. Babitt served as Manager-Transaction Services for
PricewaterhouseCoopers LLP. During 1997 Ms. Babitt served as Director of Finance
for ToppTelecom, Inc. Topp Telecom is a prepaid cellular company based in Miami.
From 1994 to 1997 Ms. Babitt worked in the audit group with
PricewaterhouseCoopers LLP (formerly Price Waterhouse LLP) and with Ernst &
Young LLP from 1992 to 1994. Ms. Babitt has received a MBA from Boston
University and a B.S. from Nova Southeastern University.

         BENJAMIN SWIRSKY. Mr. Swirsky has been a member of the board of
directors since July 1997 and serves on the Audit and Compensation Committees of
the board of directors. Mr. Swirsky is the owner of Beswir Properties Inc., an
investment capital company. From June 1993 until January 1998, Mr. Swirsky was
President and Chief Executive Officer of Slater Steel, Inc., a publicly-traded
company listed on the (Toronto Stock Exchange ("TSE"): SSI) with investments in
the steel, steel service, forging, pole-line hardware and trucking industries.
Mr. Swirsky was Chairman of P.C.Docs International, Inc., a Canadian
publicly-traded company (Nasdaq: DOCSF, TSE: DXX) from 1997-1999. Mr. Swirsky is
also a member of the board of directors of the Four Seasons Hotel Corp., a chain
of first class hotels located throughout the world, and serves on the Audit,
Compensation and Governance committees of the Board. Mr. Swirsky also sits on
the board of directors of a number of other companies, including (i) AMI
Campbell, Inc., a publicly-traded company -TSE, (ii) MigraTEC Inc., a
publicly-traded company (Nasdaq: MIGR) where he currently serves as Chairman,
(iii) Commercial Alcohols, Inc., in which he is also a principal shareholder,
(iv) Amica Matuse Lifestyles, Inc., a publicly-traded company -TSE and (v)
Alliance Financing Group, Inc., a publicly-traded company -TSE.

         ROBERT J. WUSSLER. Mr. Wussler has been a member of the board of
directors since July 1999. Mr. Wussler is currently the President of Ted Turner
Pictures LLC. Since June 1998 he has served as Chairman, Chief Executive Officer
and President of U.S. Digital Communications, Inc., a global satellite
communications firm that specializes in corporate applications. From June 1995
to May 1998, Mr. Wussler was President and Chief Executive Officer of Affiliate
Enterprises, Inc., the company formed by ABC Television affiliates to pursue new
business opportunities, including emerging technology applications. From 1989 to
1992, he was President and Chief Executive Officer of COMSAT Video Enterprises,
where he managed the acquisition of the NBA Denver Nuggets. Previously, from
1980 to 1990, he was Senior Vice President of Turner Broadcasting, where he
oversaw the launch of CNN, Headline News and TNT, in addition to serving as
President of SuperStation TBS, and from 1974 to 1978 he was the President of CBS
Television Network and CBS Sports.

         CHARLES S. JOHNSTON. Mr. Johnston has been a member of our board of
directors since April 2003 and serves on the Audit and Compensation Committees
of the Board. Mr. Johnston has been the Chairman of Ventex Technology, Inc., a
privately-held neon light transformer company, since July 1993. Mr. Johnston has
also served as Chairman of AFD Technologies, a private corporation since 1994
and J&C Resources a private corporation, a position that he has held since 1987.
Mr. Johnston is a member of the board of directors of AuthentiDate Holding
Company (Nasdaq National Market: ADAT), Internet Commerce Corporation (Nasdaq
National Market: ICCA) and McData Corporation (Nasdaq National Market: MCDT).
Mr. Johnston serves as a Trustee of Worcester Polytechnic Institute ("WPI") and
earned his B.S. degree from WPI in 1957.

         All members of our Audit Committee are independent within the meaning
of the listing standards of the Nasdaq SmallCap Market and are financial experts
within the meaning of Regulation S-B of the Securities Act.

         There is no family relationship between any of the executive officers
and directors. Each director is elected at our annual meeting of shareholders
and holds office until the next annual meeting of shareholders, or until his
successor is elected and qualified. At present, our bylaws provide for not less
than two directors. The bylaws permit the board of directors to fill any vacancy
and such director may serve until the next annual meeting of shareholders or
until his successor is elected and qualified. The board of directors elects
officers annually and their terms of office are at the discretion of the Board.
Our officers devote full time to our business.

                                       18
<PAGE>

DIRECTORS' COMPENSATION

         Directors who are not our employees received $3,750 per quarter as
compensation for serving on the board of directors, as well as reimbursement of
reasonable out-of-pocket expenses incurred in connection with their attendance
at board of directors' meetings. As of September 30, 2003, we had accrued board
fees of approximately $37,500, which have subsequently been paid.

         From time to time we issue the members of our board of directors
options to purchase shares of our common stock as compensation for their
services as directors. At September 30, 2003 members of our board of directors
hold outstanding options to purchase an aggregate of 189,136 shares of our
common stock at prices ranging from $7.50 to $257.82 per share.

CODE OF ETHICS

         Effective December 18, 2003, our board of directors adopted a Code of
Business Conduct and Ethics that applies to, among other persons, our company's
President (being our principal executive officer) and our company's Chief
Financial Officer (being our principal financial and accounting officer), as
well as persons performing similar functions. As adopted, our Code of Business
Conduct and Ethics sets forth written standards that are designed to deter
wrongdoing and to promote:

-        honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;

-        full, fair, accurate, timely, and understandable disclosure in reports
and documents that we file with, or submit to, the Securities and Exchange
Commission and in other public communications made by us;

-        compliance with applicable governmental laws, rules and regulations;

-        the prompt internal reporting of violations of the Code of Business
Conduct and Ethics to an appropriate person or persons identified in the Code of
Business Conduct and Ethics; and

-        accountability for adherence to the Code of Business Conduct and
Ethics.

         Our Code of Business Conduct and Ethics requires, among other things,
that all of our company's personnel shall be accorded full access to our
President and Chief Financial Officer with respect to any matter that may arise
relating to the Code of Business Conduct
and Ethics. Further, all of our company's personnel are to be accorded full
access to our company's board of directors if any such matter involves an
alleged breach of the Code of Business Conduct and Ethics by our President or
Chief Financial Officer.

         In addition, our Code of Business Conduct and Ethics emphasizes that
all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles, and federal,
provincial and state securities laws. Any employee who becomes aware of any
incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our company's President or
Chief Financial Officer. If the incident involves an alleged breach of the Code
of Business Conduct and Ethics by the President or Chief Financial Officer, the
incident must be reported to any member of our board of directors. Any failure
to report such inappropriate or irregular conduct of others is to be treated as
a severe disciplinary matter. It is against our company policy to retaliate
against any individual who reports in good faith the violation or potential
violation of our company's Code of Business Conduct and Ethics by another.

         Our Code of Business Conduct and Ethics is filed herewith with the
Securities and Exchange Commission as Exhibit 14 to this annual report. We will
provide a copy of the Code of Business Conduct

                                       19
<PAGE>
and Ethics to any person without charge, upon request. Requests can be sent to:
Visual Data Corporation, 1291 SW 29 Avenue, Pompano Beach, Florida 33069.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to us under Rule 16a-3(d) of the Securities Exchange Act of 1934, as
amended, during the fiscal year ended September 30, 2003 and Forms 5 and
amendments thereto furnished to us with respect to the fiscal year ended
September 30, 2003, as well as any written representation from a reporting
person that no Form 5 is required, the Company is not aware of any person that
failed to file on a timely basis, as disclosed in the aforementioned Forms,
reports required by Section 16(a) of the Securities Exchange Act of 1934 during
the fiscal year ended September 30, 2003.

ITEM 10.          EXECUTIVE COMPENSATION

         The following table sets forth certain information relating to the
compensation of (i) our Chief Executive Officer; and (ii) each of our executive
officers who earned more than $100,000 during the three most recent fiscal years
(collectively, the "Named Executive Officers.)

<TABLE>
<CAPTION>
                                 ANNUAL                                LONG-TERM
                              COMPENSATION                        COMPENSATION AWARDS
                              ------------                        -------------------
NAME, PRINCIPAL                                          OTHER ANNUAL    RESTRICTED OPTIONS    ALL OTHER
POSITION               YEAR      SALARY      BONUS       COMPENSATION    STOCK AWDS           COMPENSATION
--------               ----      ------      -----       ------------    ----------           ------------
<S>                    <C>      <C>          <C>         <C>             <C>                  <C>
Randy S. Selman        2003     $140,000      -0-          $ 17,126  (1)  -0-           -0-    -0-        -0-
  President, Chief     2002     $159,917(13)  -0-          $ 15,631  (2)  -0-           -0-    -0-        -0-
  Executive Officer    2001     $227,333(13)  -0-          $ 11,863  (3)  -0-           -0-    -0-        -0-
  and Director

Alan Saperstein        2003     $140,000      -0-          $ 20,462  (4)  -0-           -0-    -0-        -0-
  Vice President       2002     $159,917(13)  -0-          $ 19,199  (5)  -0-           -0-    -0-        -0-
  Treasurer and        2001     $227,333(13)  -0-          $ 14,178  (6)  -0-           -0-    -0-        -0-
  Director

George Stemper         2003     $140,000      -0-          $ 18,462  (7)  -0-           -0-    -0-        -0-
  Chief Operating      2002     $145,417      -0-          $ 16,199  (8)  -0-           -0-    -0-        -0-
  Officer              2001     $150,000      -0-         $   8,248  (9)  -0-           -0-    -0-        -0-

Gail Babitt            2003     $140,000      -0-          $ 10,877  (10) -0-           -0-    -0-        -0-
  Chief Financial      2002     $136,167      -0-          $ 12,631  (11) -0-           -0-    -0-        -0-
  Officer              2001     $115,761      -0-         $   7,068  (12) -0-           -0-    -0-        -0-
</TABLE>

(1)      Includes $5,126 for medical insurance and $12,000 automobile allowance.

(2)      Includes $4,381 for medical insurance and $11,250 automobile allowance.

(3)      Includes $2,863 for medical insurance and $9,000 automobile allowance.

(4)      Includes $9,462 for medical insurance and $12,000 automobile allowance.

(5)      Includes $7,949 for medical insurance and $11,250 automobile allowance.

(6)      Includes $5,178 for medical insurance and $9,000 automobile allowance.

(7)      Includes $9,462 for medical insurance and $9,000 automobile allowance.

(8)      Includes $7,949 for medical insurance and $8,250 automobile allowance.

(9)      Includes $1,998 for medical insurance and $6,250 automobile allowance.

(10)     Includes $1,877 for medical insurance and $9,000 automobile allowance.

(11)     Includes $4,381 for medical insurance and $8,250 automobile allowance.

(12)     Includes $1,651 for medical insurance and $5,417 automobile allowance.

(13)     Includes a $25,000 management fee paid by EDNET.

                                       20
<PAGE>

EMPLOYMENT AGREEMENTS

         Effective January 9, 1998, we entered into amended and restated
employment agreements with Randy S. Selman, our Chief Executive Officer,
President and a director, and with Alan Saperstein, our Executive Vice
President, Treasurer and a director. The agreements with each of Messrs. Selman
and Saperstein are substantially similar and superseded in their entirety
previous employment agreements with each of Messrs. Selman and Saperstein. The
term of the agreement is for three years from the effective date of the
agreements and is renewable for successive one-year terms unless terminated. The
annual salary under each of the agreements is $137,500, which amount will be
increased by 10% each year. Messrs. Selman and Saperstein are also each eligible
to receive an annual bonus in cash or stock equal to 2% of our earnings before
income tax, depreciation and amortization (EBITDA) on that portion of EBITDA
that has increased over the previous year's EBITDA.

         Additionally, each of Messrs. Selman and Saperstein were granted
options (which contain certain anti-dilution provisions) to purchase 25,000
shares of common stock at $31.88 per share, vesting 8,334 options on the first
anniversary and 8,333 on each anniversary thereafter. The options, which are
exercisable for a period of four years from the vesting date, automatically vest
upon the occurrence of certain events, including a change in control,
constructive termination (as defined in the agreements) of the employee, or the
termination of the employee other than for cause.

         The agreements were amended, effective September 1, 1999, to (i) extend
the term an additional two years, until January 9, 2003 (ii) increase the annual
salary under each agreement to $195,000, and (iii) grant an additional 16,667
options at $133.125 (the fair market value at the date of grant) per share to
each of Messrs. Selman and Saperstein, vesting 8,334 options on the first
anniversary and 8,333 on second anniversary of the effective date of the
additional two year term provided for under the amendment to the amended and
restated employment agreements.

         The agreements were amended, effective August 1, 2001, to (i) extend
the term an additional two years, until August 1, 2005 (ii) increase the annual
salary under each agreement to $250,000, and (iii) grant an additional 33,334
options at $22.50 (the fair market value at the date of grant) per share to each
of Messrs. Selman and Saperstein, vesting 3,333 options per year for the first
two years and 13,334 options per year for the next two years on each anniversary
date of the effective date of the term provided for under the amendment to the
amended and restated employment agreements. The EBITDA annual bonus has been
revised so that no bonus would be paid unless we have a positive Net Income (as
defined in the agreement), and, at such time, the EBITDA bonus will be paid only
up to an amount so that we maintain a positive Net Income.

         The agreements also provide, among other things, for (i) participation
in any profit-sharing or retirement plan and in other employee benefits
applicable to our employees and executives, (ii) an automobile allowance and
fringe benefits commensurate with the duties and responsibilities of Messrs.
Selman and Saperstein, (iii) benefits in the event of disability and (iv)
contain certain non-disclosure and non-competition provisions. Additionally,
Messrs. Selman and Saperstein may be granted certain bonus incentives by our
board of directors. Furthermore, we have agreed to indemnify each of them for
any obligations or guaranties that either of them may have undertaken on our
behalf.

         Under the terms of the agreements, we may terminate the employment of
Mr. Selman or Mr. Saperstein either with or without cause. If the agreements are
terminated by us without good cause, or by Mr. Selman or Mr. Saperstein with
good cause, as applicable, we would be obligated to pay that executive an amount
equal to three times that executive's current annual compensation (including
base salary and bonus), payable in semi-monthly installments (except in the case
of a termination upon a change in control wherein the executive may elect either
a lump sum payment, discounted to present market value or payment over a three
year period in semi-monthly installments). Additionally, the executive would be
entitled to participate in and accrue medical benefits for a period of two years
after the date of termination without cause (by us) or for good cause (by the
executive). To the extent that either Messrs. Selman or Saperstein are
terminated for cause, no severance benefits shall be paid.

                                       21
<PAGE>

         Effective January 1, 2002 we entered into employment agreements with
George Stemper, our Chief Operating Officer, and with Gail Babitt, our Chief
Financial Officer. The term of the agreement is for two years from the effective
date of the agreements and is renewable for successive one-year terms unless
terminated. The annual salary under each of the agreements is $175,000 for Mr.
Stemper and $155,000 for Ms. Babitt, which amount will be increased by 10% each
year. In December 2003 we renewed Ms. Babitt's agreement for an additional one
year term effective January 1, 2004.

         Additionally, each of Mr. Stemper and Ms. Babitt were granted options
(which contain certain anti-dilution provisions) to purchase 6,667 shares of
common stock at $11.25 per share, vesting 3,334 options on the first anniversary
and 3,333 options on second anniversary of the effective date of each of the
agreements. The options, which are exercisable for a period of four years from
the vesting date, automatically vest upon the occurrence of certain events,
including a change in control, constructive termination (as defined in the
agreements) of the employee, or the termination of the employee other than for
cause.

         The agreements also provide, among other things, for (i) participation
in any profit-sharing or retirement plan and in other employee benefits
applicable to our employees and executives, (ii) an automobile allowance and
fringe benefits commensurate with the duties and responsibilities of Mr. Stemper
and Ms. Babitt, (iii) benefits in the event of disability and (iv) contain
certain non-disclosure and non-competition provisions. Additionally, Mr. Stemper
and Ms. Babitt may be granted certain bonus incentives by our board of
directors. Furthermore, we have agreed to indemnify each of them for any
obligations or guaranties that either of them may have undertaken on our behalf.

         Under the terms of the agreements, we may terminate the employment of
Mr. Stemper or Ms. Babitt either with or without cause. If the Agreements are
terminated by us without good cause, or by Mr. Stemper or Ms. Babitt with good
cause, as applicable, we would be obligated to provide that executive three
months notice and then to pay current compensation and benefits for an
additional six month period.

STOCK OPTION INFORMATION

         The following table sets forth certain information with respect to
stock options granted in fiscal 2003 to the Named Executive Officers.

                 Option Grants in Year Ended September 30, 2003

<TABLE>
<CAPTION>
                                               INDIVIDUAL GRANTS
                                               -----------------
                        NO. OF SECURITIES      % OF TOTAL OPTIONS
                           UNDERLYING         GRANTED TO EMPLOYEES      EXERCISE       EXPIRATION
     NAME                OPTIONS GRANTED         IN FISCAL YEAR          PRICE            DATE
     ----                ---------------         --------------          -----            ----
<S>                     <C>                   <C>                        <C>           <C>
Randy S. Selman,
  President, Chief
  Executive Officer
  and Director                  -                    -                      -              -
Alan Saperstein,
  Executive Vice
  President and
  Director                      -                    -                      -              -
George Stemper,
  Chief Operating
  Officer                       -                    -                      -              -
Gail Babitt, Chief
  Financial Officer             -                    -                      -              -
</TABLE>

                                       22
<PAGE>

         The following table sets forth certain information regarding stock
options held as of September 30, 2003 by the Named Executive Officers.

           Aggregate Option Exercises in Year Ended September 30, 2003
                           and Year-End Option Values

<TABLE>
<CAPTION>
                                                    NO. OF SECURITIES
                                                  UNDERLYING UNEXERCISED           VALUE OF UNEXERCISED
                                                     OPTIONS AT                   IN-THE-MONEY OPTIONS AT
                      SHARES                     SEPTEMBER 30, 2003                SEPTEMBER 30, 2003(1)
                     ACQUIRED              -------------------------------      ---------------------------
                        ON        VALUE
       NAME          EXERCISE   REALIZED   EXERCISABLE       UNEXERCISABLE      EXERCISABLE    UNEXERCISABLE
       ----          --------   --------   -----------       -------------      -----------    -------------
<S>                  <C>        <C>        <C>               <C>                <C>            <C>
Randy S. Selman,
  President, Chief
  Executive Officer
  and Director           -      $      -    60,000(2)         13,334 (2)          $     -         $      -
Alan Saperstein,
  Executive Vice
  President and
  Director               -      $      -    60,000(2)         13,334 (2)          $     -         $      -
George Stemper,
  Chief Operating
  Officer                -      $      -    20,001(3)                 -           $     -         $      -
Gail Babitt,
  Chief Financial
  Officer                -      $      -    20,001(4)                 -           $     -         $      -
</TABLE>

(1)      The dollar value of the unexercised in-the-money options is calculated
         based upon the difference between the option exercise price and $2.58
         per share, being the last sale price of our common stock on October 1,
         2003 as reported by the Nasdaq SmallCap Market.

(2)      Of such exercisable options, at September 30, 2003, 20,000 were
         exercisable at $22.50, 23,334 options were exercisable at $30.00 per
         share and 16,666 options were exercisable at $31.88 per share. Of the
         unexercisable options, 13,334 have an exercise price of $22.50 per
         share at September 30, 2003.

(3)      Of such exercisable options, at September 30, 2003, 1,667 options were
         exercisable at $3.45 per share, 6,667 options were exercisable at
         $11.25 per share, 5,000 were exercisable at $30.00 per share and 6,667
         were exercisable at $62.82 per share.

(4)      Of such exercisable options, at September 30, 2003, 1,667 options were
         exercisable at $3.45 per share, 6,667 options were exercisable at
         $11.25 per share, 6,667 were exercisable at $30.00 per share and 5,000
         were exercisable at $30.47 per share.

1996 STOCK OPTION PLAN

         On February 9, 1997, the board of directors and a majority of our
shareholders adopted our 1996 Stock Option Plan (the "Plan"). Pursuant to an
amendment to the Plan ratified by shareholders on April 22, 2002, we have
reserved an aggregate of 733,334 shares of common stock for issuance pursuant to
options granted under the Plan ("Plan Options") or for restricted stock grants
("Stock Grants") made under the Plan. At November 30, 2003, we have options to
purchase 267,195 shares of our common stock outstanding under the Plan. Such
options were issued to our directors, employees and consultants at exercise
prices ranging from $2.65 to $257.82 per share.

                                       23
<PAGE>

         The stated purpose of the Plan is to increase our employees',
advisors', consultants' and non-employee directors' proprietary interest in the
company, and to align more closely their interests with the interests of the
Visual Data shareholders, as well as to enable us to attract and retain the
services of experienced and highly qualified employees and non-employee
directors. The Plan is administered by the Compensation Committee of our board
of directors (the "Committee"). The Committee determines, from time to time,
those of our officers, directors, employees and consultants to whom Stock Grants
and Plan Options will be granted, the terms and provisions of the respective
Grants and Plan Options, the dates such Plan Options will become exercisable,
the number of shares subject to each Plan Option, the purchase price of such
shares and the form of payment of such purchase price. Stock Grants may be
issued by Committee at up to a 10% discount to market at the time of grant. At
no time may the Committee issue Stock Grants to exceed, in the aggregate, 66,667
shares. All other questions relating to the administration of the Plan, and the
interpretation of the provisions thereof are to be resolved at the sole
discretion of the board of directors or the Committee.

         Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of common stock owned
by the eligible person and to receive a new Plan Option to purchase shares of
common stock equal in number to the tendered shares. Any Incentive Option
granted under the Plan must provide for an exercise price of not less than 100%
of the fair market value of the underlying shares on the date of such grant, but
the exercise price of any Incentive Option granted to an eligible employee
owning more than 10% of our common stock must be at least 110% of such fair
market value as determined on the date of the grant.

         The term of each Plan Option and the manner in which it may be
exercised is determined by the board of directors or the Committee, provided
that no Plan Option may be exercisable more than 10 years after the date of its
grant and, in the case of an Incentive Option granted to an eligible employee
owning more than 10% of our common stock, no more than five years after the date
of the grant. In any case, the exercise price of any stock option granted under
the Plan will not be less than 85% of the fair market value of the common stock
on the date of grant. The exercise price of Non-Qualified Options shall be
determined by the board of directors or the Committee.

         The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in our
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
Officers, directors and key employees of and consultants to us and our
subsidiaries will be eligible to receive Non-Qualified Options under the Plan.
Only our officers, directors and employees who are employed by us or by any of
our subsidiaries thereof are eligible to receive Incentive Options.

         All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution and, during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not our employee but is a member of our board of
directors and his service as a Director is terminated for any reason, other than
death or disability, the Plan Option granted may be exercised on the earlier of
the expiration date or 90 days following the date of termination. If the
optionee dies during the term of his employment, the Plan Option granted to him
shall lapse to the extent unexercised on the earlier of the expiration date of
the Plan Option or the date one year following the date of the optionee's death.
If the optionee is permanently and totally disabled within the meaning of
Section 22(c)(3) of the Code, the Plan Option granted to him lapses to the
extent unexercised on the earlier of the expiration date of the option or one
year following the date of such disability.

         The board of directors or the Committee may amend, suspend or terminate
the Plan at any time, except that no amendment shall be made which (i) increases
the total number of shares subject to the

                                       24
<PAGE>

Plan or changes the minimum purchase price therefore (except in either case in
the event of adjustments due to changes in our capitalization), (ii) affects
outstanding Plan Options or any exercise right thereunder, (iii) extends the
term of any Plan Option beyond ten years, or (iv) extends the termination date
of the Plan.

         Unless the Plan shall be earlier suspended or terminated by the board
of directors, the Plan shall terminate on approximately 10 years from the date
of the Plan's adoption. Any such termination of the Plan shall not affect the
validity of any Plan Options previously granted thereunder.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table contains information regarding beneficial ownership
of our common stock as of November 30, 2003 held by (i) persons who own
beneficially more than 5% of our outstanding common stock, (ii) our directors,
(iii) named executive officers and (iv) all of our directors and officers as a
group. The table also represents the same information as adjusted to reflect the
sale of shares offered hereby.

<TABLE>
<CAPTION>
                                                 SHARES OF COMMON
                                                 STOCK BENEFICIALLY
NAME AND ADDRESS OF                                  OWNED (2)--
OF BENEFICIAL OWNER(1)                        NUMBER            PERCENTAGE
<S>                                           <C>               <C>
Randy S. Selman(3)                             69,853               1.7%
Alan M. Saperstein(4)                          71,820               1.7%
George Stemper (5)                             22,204               *
Gail Babitt (6)                                21,513               *
Benjamin Swirsky(7)                            15,752               *
Robert Wussler(8)                              24,750               *
Frederick DeLuca(9)                           394,181               8.8%
Charles S. Johnston                            40,668               1.0%

All Directors and
  Officers (seven persons)(10)                266,560               6.2%
</TABLE>

* Less than 1%

(1)      Unless otherwise indicated, the address of each of the listed
         beneficial owners identified is c/o Visual Data Corporation, 1291
         Southwest 29th Avenue, Pompano Beach, Florida 33069. Unless otherwise
         noted, we believe that all persons named in the table have sole voting
         and investment power with respect to all shares of our common stock
         beneficially owned by them.

(2)      A person is deemed to be the beneficial owner of securities that can be
         acquired by such a person within 60 days from November 30, 2003 upon
         exercise of options, warrants or convertible securities. Each
         beneficial owner's percentage ownership is determined by assuming that
         options, warrants and convertible securities that are held by such a
         person (but not those held by any other person) and are exercisable
         within 60 days from November 30, 2003 have been exercised. As of
         November 30, 2003 there were 4,108,772 shares of common stock
         outstanding.

(3)      This amount includes options to acquire an aggregate of 20,000 shares
         of common stock at an exercise price of $22.50 per share, options to
         acquire an aggregate of 23,334 shares of common stock at an exercise
         price of $30.00 per share and options to acquire an aggregate of 25,000
         shares of common stock at an exercise price of $31.88 per share.
         Excludes options to purchase 13,334 shares of common stock at an
         exercise price of $22.50, which have not yet vested.

                                       25
<PAGE>

(4)      This amount includes options to acquire an aggregate of 20,000 shares
         of common stock at an exercise price of $22.50 per share, options to
         acquire an aggregate of 23,334 shares of common stock at an exercise
         price of $30.00 per share and options to acquire an aggregate of 25,000
         shares of common stock at an exercise price of $31.88 per share.
         Excludes options to purchase 13,334 shares of common stock at an
         exercise price of $22.50, which have not yet vested.

(5)      This amount includes options to acquire an aggregate of 1,667 shares of
         common stock at an exercise price of $3.45 per share, options to
         purchase 6,667 shares of common stock at an exercise price of $11.25
         per share, options to purchase 5,000 shares of common stock at an
         exercise price of $30.00 per share and options to purchase 6,667 shares
         of common stock at an exercise price of $62.82 per share.

(6)      This amount includes options to acquire an aggregate of 1,667 shares of
         common stock at an exercise price of $3.45 per share, options to
         purchase 6,667 shares of common stock at an exercise price of $11.25
         per share, options to purchase 5,000 shares of common stock at an
         exercise price of $30.47 per share and options to purchase 6,667 shares
         of common stock at an exercise price of $30.00 per share.

(7)      This amount includes options to acquire an aggregate of 6,667 shares of
         common stock at an exercise price of $11.25 per share, options to
         purchase 5,000 shares of common stock at an exercise price of $30.00
         per share and options to purchase 3,334 shares of common stock at an
         exercise price of $112.50 per share. Mr. Swirsky's address is 350
         Fairlawn Avenue, Toronto, Ontario, Canada.

(8)      This amount includes options to acquire an aggregate of 6,667 shares of
         common stock at an exercise price of $7.50 per share, options to
         purchase 10,000 shares of common stock at an exercise price of $11.25
         per share, options to purchase 5,000 shares of common stock at an
         exercise price of $30.00 per share, options to purchase 1,667 shares of
         common stock at an exercise price of $43.13 per share, options to
         purchase 800 shares of common stock at an exercise price of $150.00 per
         share and options to purchase 3,333 shares of common stock at an
         exercise price of $257.82 per share. Excludes options to acquire an
         aggregate of 3,333 shares of common stock at an exercise price of
         $11.25 per share, which have not yet vested.

(9)      This amount includes warrants to purchase 66,667 shares of common
         stock at an exercise price of $15.00 per share, options to purchase
         6,667 shares of common stock at an exercise price of $31.88 per share
         and 310,334 shares of common stock issuable upon the conversion of
         shares of Class A-8 Preferred Stock.

(10)     See notes (3)-(8) above.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On December 4, 2001 we entered into a private debt financing
transaction with Mr. Fred Deluca, a shareholder, pursuant to the terms and
conditions of a Loan Agreement, a Secured Promissory Note in the principal
amount of $3 million and a Security Agreement. Under the terms of the debt
financing transaction, we agreed to pay 12% annual interest on the loan. We
granted Mr. Deluca a security interest in substantially all of our tangible and
intangible assets, and issued him a warrant to purchase approximately 66,667
shares of our common stock at an exercise price of $15.00 per share.

         On May 7, 2003 we entered into an Amended and Restated Loan Agreement
with Mr. Deluca which restructured the original loan. Under the terms of the
Amended and Restated Loan Agreement, Mr. Deluca agreed to renew the outstanding
principal amount due under original loan and extend us a new loan in the amount
of $1,950,000. The new loan is evidenced by a three year promissory note in the
principal amount of $3,000,000, payable interest only on a quarterly basis
beginning in July 2003 at the rate of 5.25% per annum. This new loan is
collateralized by a blanket security interest in our assets and a pledge of the
stock of our subsidiaries.

         We issued Mr. Deluca 140,000 shares of our newly created Class A-8
Convertible Preferred Stock as consideration for entering into the Amended and
Restated Loan Agreement. He also exchanged approximately 123,667 shares of our
currently issued and outstanding common stock owned

                                       26
<PAGE>

by him for an additional 92,750 shares of our Class A-8 Convertible Preferred
Stock. The approximately 123,667 shares of common stock returned now have the
status of authorized but unissued shares. We granted Mr. Deluca demand and
piggy-back registration rights covering the shares of common stock issuable upon
the conversion of the Class A-8 Convertible Preferred Stock.

         In December 2001, we acquired a 20% stake in and formed a strategic
partnership with Onstream Media Corporation, a privately-held development stage
company, in exchange for 200,000 shares of our common stock valued at $200,000.
In March 2003, we increased our ownership in Onstream Media to approximately 28%
though the issuance of an additional 62,500 shares of Class A-7 Convertible
Preferred Stock valued at $750,000. On October 22, 2003 we executed an agreement
and plan of merger agreement with Onstream Media to acquire the remaining 72% of
Onstream Media that we do not presently own. This transaction remains pending.
Messrs. Randy S. Selman and Alan Saperstein, officers and directors of Visual
Data, are members of the board of directors of Onstream Media.

                                     PART IV

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

         The following documents are filed as a part of this report or are
incorporated by reference to previous filings, if so indicated:

(a)      Exhibits

EXHIBIT NO.       DESCRIPTION

2(a)              Agreement and Plan of Merger dated as of October 22, 2003 by
                  and between Visual Data Corporation, OSM, Inc., a subsidiary
                  of Visual Data Corporation, and Onstream Media Corporation (9)

2(b)              Agreement and Plan of Merger dated June 4, 2001 among
                  Entertainment Digital Network, Inc., Visual Data Corporation
                  and Visual Data San Francisco, Inc. (11)

2(c)              Agreement and Plan of Reorganization between Visual Data
                  Corporation, Media on Demand, Inc. and Charles Saracino (12)

2(d)              Voting Agreement (12)

3(i)(a)           Articles of Incorporation(1)

3(i)(b)           Articles of Amendment dated July 26, 1993(1)

3(i)(c)           Articles of Amendment dated January 17, 1994(1)

3(i)(d)           Articles of Amendment dated October 11, 1994(1)

3(i)(e)           Articles of Amendment dated March 25, 1995(1)

3(i)(f)           Articles of Amendment dated October 31, 1995(1)

3(i)(g)           Articles of Amendment dated May 23, 1996(1)

3(i)(h)           Articles of Amendment dated May 5, 1998(2)

3(i)(i)           Articles of Amendment dated August 11, 1998(3)

3(i)(j)           Articles of Amendment dated June 13, 2000(6)

3(i)(k)           Articles of Amendment dated April 11, 2002(21)

3(i)(l)           Articles of Amendment dated June 24, 2003 (10)

3(i)(m)           Articles of Amendment dated June 20, 2003 (7)

3(ii)             By-laws(1)

4(a)              Specimen Common Stock Certificate (1)

10(a)             Form of Stock Option Plan and Amendment thereto (1)(8)

10(b)             Third Amended and Restated Employment Agreement between the
                  Company and Randy S. Selman (4)

10(c)             Third Amended and Restated Employment Agreement between the
                  Company and Alan Saperstein (4)

10(d)             Employment Agreement between Visual Data Corporation and Gail
                  Babitt (5)

                                       27
<PAGE>

10(e)    Employment Agreement between Visual Data Corporation and George Stemper
         (5)

10(f)    Securities Purchase Agreement (10)

10(g)    Employment Agreement between Visual Data Corporation and Gail Babitt

14       Code of Business Conduct and Ethics

21       Subsidiaries of the registrant (2)

23.1     Consent of Independent Certified Public Accountants

31(i)    Section 302 Certificate of Chief Executive Officer

31(ii)   Section 302 Certificate of Chief Financial Officer

32(i)    Section 906 Certificate of Chief Executive Officer

32(ii)   Section 906 Certificate of Chief Financial Officer

(1)      Incorporated by reference to the exhibit of the same number filed with
         the registrant's registration statement on Form SB-2, registration
         number 333-18819, as amended and declared effective by the SEC on July
         30, 1997.

(2)      Incorporated by reference to the registrant's Annual Report on Form
         10-KSB for the year ended September 30, 2000.

(3)      Incorporated by reference to the registrant's current report on Form
         8-K dated August 21, 1998.

(4)      Incorporated by reference to the exhibit of the same number filed with
         the registrant's registration statement on Form S-3, registration
         number 333-62071, as amended and declared effective by the SEC on
         November 3, 1998.

(5)      Incorporated by reference to the registrant's Annual Report on Form
         10-KSB for the year ended September 30, 2002.

(6)      Incorporated by reference to the registrant's Quarterly Report on Form
         10-QSB for the period ended June 30, 2000.

(7)      Incorporated by reference to the registrant's Quarterly Report on Form
         10-QSB for the period ended June 30, 2003.

(8)      Incorporated by reference to the registrant's Proxy Statement for the
         year ended September 30, 1998

(9)      Incorporated by reference to the registrant's current report on Form
         8-K filed October 28, 2003.

(10)     Incorporated by reference to the registrant's current report on Form
         8-K filed July 2, 2003.

(11)     Incorporated by reference to the registrant's current report on Form
         8-K filed on June 12, 2001.

(12)     Incorporated by reference to the registrant's current report on Form
         8-K filed on February 5, 2002.

(13)     incorporated by reference to exhibit 3.1 to the registrant's
         registration statement on Form S-3, file
         number 333-89042, declared effective on June 7, 2002.

                  (b)      Reports on Form 8-K

         We filed the following Reports on Form 8-K during the last quarter
covered by this annual report:

<TABLE>
<CAPTION>
 Date of Filing                             Items Report
---------------    -------------------------------------------------------------
<S>                <C>
July 2, 2003       Item 5. Sale of securities in a private transaction
August 14, 2003    Item 12. Press release regarding quarterly earnings
August 19, 2003    Item 5. Compliance with Nasdaq continued listing requirements
</TABLE>

ITEM 14.          PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

         The aggregate audit fees billed by Goldstein Lewin & Co. for
professional services rendered for the audit of our annual financial statements
included in our Annual Report on Form 10-KSB for the fiscal year ended September
30, 2003 and for the review of quarterly financial statements included in our
Quarterly Reports on Form 10-QSB for the quarters ending December 31, 2002, and
March 31 and June 30, 2003 were $97,000.

                                       28

<PAGE>

         The aggregate audit fees billed to Visual Data by Arthur Andersen LLP
for the fiscal year ended September 30, 2002, from the beginning of that fiscal
year through the date of Arthur Andersen LLP's termination, were approximately $
12,000. The aggregate audit fees billed to Visual Data by Goldstein Lewin & Co.
for the fiscal year ended September 30, 2002 and for the review of quarterly
financial statements included in our Quarterly Reports on Form 10-QSB for the
quarter ending March 31 and June 30, 2002 were approximately $105,000.

AUDIT RELATED FEES

         For the fiscal years ended September 30, 2003 and 2002, the aggregate
fees billed for assurance and related services by Goldstein, Lewin & Co.
relating to the performance of the audit of our financial statements which are
not reported under the caption "Audit Fees" above was $11,000 and $1,000,
respectively.


TAX FEES

         For the fiscal years ended September 30, 2003 and 2002 the aggregate
fees billed for tax compliance, tax advice and tax planning. Tax fees include
the preparation of federal and state corporate income tax returns. The aggregate
tax fees billed to Visual Data by Goldstein Lewin & Co. for the fiscal year
ended September 30, 2003 were approximately $16,000. Prior to the engagement of
Goldstein Lewin & Co. as our independent auditors, we had engaged that firm to
assist us in tax-related matters. The aggregate tax fees billed to Visual Data
by Goldstein Lewin & Co. for the fiscal year ended September 30, 2002 were
approximately $13,000.

ALL OTHER FEES

         Other than fees relating to the services described above under "Audit
Fees," "Audit-Related Fees" and "Tax Fees," there were no additional fees billed
by Goldstein Lewin & Co. for services rendered to Visual Data for the fiscal
years ended September 30, 2003 or 2002.

AUDIT COMMITTEE POLICIES

         Effective May 6, 2003, the Securities and Exchange Commission adopted
rules that require that before our independent auditor is engaged by us to
render any auditing or permitted non-audit related service, the engagement be:

  *      approved by our audit committee; or

  *      entered into pursuant to pre-approval policies and procedures
established by the audit committee, provided the policies and procedures are
detailed as to the particular service, the audit committee is informed of each
service, and such policies and procedures do not include delegation of the audit
committee's responsibilities to management.

         The audit committee pre-approves all services provided by our
independent auditors, including those set forth above. The audit committee has
considered the nature and amount of fees billed by Goldstein Lewin & Co. and
believes that the provision of services for activities unrelated to the audit is
compatible with maintaining Goldstein Lewin & Co.'s independence.

                                       29

<PAGE>

                                   SIGNATURES

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

                                            Visual Data Corporation

                                            By: /s/ Randy S. Selman
                                               ---------------------------------
                                               Randy S. Selman, President, Chief
                                               Executive Officer

                                            By: /s/ Gail Babitt
                                               ---------------------------------
                                               Gail Babitt, Chief Financial
                                               Officer

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

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

/s/ Randy S. Selman        Director, President,            December 17, 2003
-----------------------    Chief Executive Officer
Randy S. Selman

/s/ Gail Babitt            Chief Financial Officer and
-----------------------    Principal Accounting Officer    December 17, 2003
Gail Babitt

/s/ Alan Saperstein        Director and Executive          December 17, 2003
-----------------------    Vice President
Alan Saperstein

/s/ Benjamin Swirsky       Director                        December 17, 2003
-----------------------
Benjamin Swirsky

/s/ Robert J. Wussler      Director                        December 17, 2003
-----------------------
Robert J. Wussler

/s/ Charles S. Johnston    Director                        December 17, 2003
-----------------------
Charles S. Johnston
</TABLE>

                                       30
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Shareholders of Visual Data Corporation:

We have audited the accompanying consolidated balance sheets of Visual Data
Corporation and subsidiaries as of September 30, 2003 and 2002, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Visual Data
Corporation and subsidiaries as of September 30, 2003 and 2002, and the results
of their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As more fully described in
Note 1 to the financial statements, the Company has incurred significant
recurring losses from operations since inception. This condition raises
substantial doubt about its ability to continue as a going concern. The
Company's continued existence is dependent upon its ability to raise additional
capital and to successfully market and sell its services and or products.
Management's plans regarding these matters are described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

GOLDSTEIN LEWIN & CO.

Boca Raton, Florida
December 9, 2003

                                       F-1

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           SEPTEMBER 30, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                   2003         2002
                                                                ----------   ----------
<S>                                                             <C>          <C>
                            ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                    $   82,374   $   60,603
   Restricted cash                                               1,002,308            -
   Accounts receivable, net of allowance for
     doubtful accounts of $332,158 and $394,837, respectively      867,881    1,343,729
   Prepaid expenses                                                989,163      467,051
   Due from shareholders                                           300,000            -
   Inventories                                                     169,483      348,733
   Other                                                             3,042       18,407
                                                                ----------   ----------
                Total current assets                             3,414,251    2,238,523
PROPERTY AND EQUIPMENT, net                                        943,360    1,993,214
INTANGIBLE ASSETS, net                                           4,068,063    4,682,408
OTHER NON-CURRENT ASSETS                                           811,925      246,201
                                                                ----------   ----------
                Total assets                                    $9,237,599   $9,160,346
                                                                ==========   ==========
</TABLE>

                                   (Continued)

                                       F-2

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           SEPTEMBER 30, 2003 AND 2002

                                   (Continued)

<TABLE>
<CAPTION>
                                                                                   2003            2002
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable and accrued liabilities                                    $  1,414,020    $  2,670,111
   Deferred revenue                                                                  42,915         108,010
   Current portion of obligations under capital leases                                8,768         334,351
   Notes payable                                                                          -       1,129,047
   Convertible debentures                                                         1,543,384               -
                                                                               ------------    ------------
                Total current liabilities                                         3,009,087       4,241,519
                                                                               ------------    ------------
OBLIGATIONS UNDER CAPITAL LEASES, net of current portion                                  -          92,056
CONVERTIBLE DEBENTURES, net of current portion                                            -       1,461,587
NOTE PAYABLE                                                                      2,858,289               -

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred stock class A7, par value $.0001 per share, authorized 162,500
     shares, 0 and 11,832 issued and outstanding, respectively                            -               1
   Preferred stock class A8, par value $.0001 per share, authorized 300,000,
     shares, 257,750 and 0 issued and outstanding, respectively                          26               -
   Preferred stock class A9, par value $.0001 per share, authorized 100,000,
     shares, 20,000 and 0 issued and outstanding, respectively                            2               -
   Common stock, par value $.0001 per share; authorized 75,000,000 shares,
     3,246,443 and 2,117,478 issued and outstanding, respectively                       325             212
Additional paid-in capital                                                       58,829,927      54,520,473
Accumulated deficit                                                             (55,460,057)    (51,155,502)
                                                                               ------------    ------------
                Total stockholders' equity                                        3,370,223       3,365,184
                                                                               ------------    ------------

                Total liabilities and stockholders' equity                     $  9,237,599    $  9,160,346
                                                                               ============    ============
</TABLE>

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

                                       F-3

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED SEPTEMBER 30, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                     2003              2002
                                                                               ---------------    ---------------
<S>                                                                            <C>                <C>
REVENUE:
   Webcasting and related equipment sales                                      $     3,511,515    $     4,083,538
   Network equipment sales and rentals                                                 746,993          1,039,876
   Network usage and services                                                        2,184,214          2,467,796
   Travel production and distribution                                                  372,397            604,038
   Other                                                                                     -             18,413
                                                                               ---------------    ---------------
                Total revenue                                                        6,815,119          8,213,661
                                                                               ---------------    ---------------
OPERATING EXPENSES:
   Webcasting and related equipment costs                                            1,197,475          1,461,255
   Network equipment sales and rentals                                                 388,049            570,007
   Network usage and services                                                        1,041,007          1,426,233
   Travel production and distributio                                                     9,409            102,571
   Other                                                                                     -                783
   General and administrative:
     Compensation                                                                    3,681,576          4,983,267
     Professional fees                                                               1,038,294          1,367,065
     Other                                                                           1,247,710          1,550,624
   Sales and marketing                                                                  17,691            189,427
   Depreciation and amortization                                                     1,964,989          2,132,605
                                                                               ---------------    ---------------
                Total operating expenses                                            10,586,200         13,783,837
                                                                               ---------------    ---------------
Loss from operations                                                                (3,771,081)        (5,570,176)
                                                                               ---------------    ---------------
OTHER INCOME (EXPENSE):
   Interest income                                                                       2,846              3,485
   Interest expense                                                                   (911,919)        (1,027,532)
   Reserve for intangible impairment                                                         -           (728,485)
   Loss on debentures                                                                        -         (3,573,103)
   Other income                                                                        488,646            226,614
                                                                               ---------------    ---------------
                Total other expense, net                                              (420,427)        (5,099,021)
                                                                               ---------------    ---------------

Loss from continuing operations                                                     (4,191,508)       (10,669,197)
                                                                               ---------------    ---------------
DISCONTINUED OPERATIONS:
   Loss from golf leisure and syndication group                                              -           (588,760)
   Loss from financial solutions group                                                       -           (174,216)
                                                                               ---------------    ---------------
   Loss from discontinued operations                                                         -           (762,976)
                                                                               ---------------    ---------------
Net loss                                                                       $    (4,191,508)   $   (11,432,173)
                                                                               ===============    ===============
   Loss per share - - basic and diluted:
     Continuing operations                                                     $         (1.79)   $         (6.53)
     Discontinued operations                                                                 -              (0.47
                                                                               ---------------    ---------------)
   Net loss per share                                                          $         (1.79)   $         (7.00)
                                                                               ===============    ===============
   Weighted average shares of common stock outstanding - - basic and diluted         2,344,938          1,633,943
                                                                               ===============    ===============
</TABLE>

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

                                       F-4

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED SEPTEMBER 30, 2003 AND 2002

<TABLE>
<CAPTION>
                                              Preferred Stock                                Additional
                                   ------------------------------------  -----------------  -----------  -----------
                                   Class A7  Class A8  Class A9             Common Stock      Paid-in     Accumulated
                                   --------  --------  --------  ------  -----------------  -----------  ------------  -----------
                                    Shares    Shares    Shares   Amount   Shares    Amount    Capital       Deficit       Total
                                   --------  --------  --------  ------  ---------  ------  -----------  ------------  -----------
<S>                                <C>       <C>       <C>       <C>     <C>        <C>     <C>          <C>           <C>
Balance, September 30, 2001               -                   -  $    -  1,011,026  $  101  $47,110,037  $(39,723,329) $ 7,386,809

Conversion of TFN stock for
   VDAT stock                             -                   -       -    104,533      10          (10)            -            -
Conversion of debentures and
   interest                               -                   -       -    105,780      11      858,159             -      858,170
Issuance of shares, warrants
   and options for services and
   incentives                         4,332                   -       -     83,576       8      876,498             -      876,506
Issuance of shares upon
   acquisition of MOD
   subsidiary                             -                   -       -    226,667      23    2,138,237             -    2,138,260
Issuance of shares and warrants
   for loan payments and
   interest                               -                   -       -     87,556       9      929,415             -      929,424
Issuance of shares for
   satisfaction of obligations            -                   -       -     77,131       8      505,780             -      505,788
Proceeds from sale of stock, net      7,500                   -       1    348,450      35    1,350,164             -    1,350,200
Issuance of shares for assets and
   investment                             -                   -       -     33,333       3      421,997             -      422,000
Exercise of options and
   warrants                               -                   -       -     39,015       4      330,196             -      330,200
Net loss                                  -         -         -       -          -       -            -   (11,432,173) (11,432,173)
                                   --------  --------  --------  ------  ---------  ------  -----------  ------------  -----------
Balance, September 30, 2002          11,832         -         -  $    1  2,117,478  $  212  $54,520,473  $(51,155,502) $ 3,365,184

Reverse stock split-fractional
   shares                                                                    1,597       -            -                          -
Proceeds from sale of stock, net     22,500         -    50,000       7     38,334       4      920,577                    920,588
Issuance of shares for assets and
   investment                        62,500                           6                         749,994                    750,000
Issuance of shares, warrants and
   options for services and
   incentives                         5,000    25,000         -       3    199,452      20      775,975                    775,998
Conversion of preferred stock for
   common stock                    (116,832)        -   (30,000)    (14)   586,284      58          (44)                         -
Conversion of common stock for
   preferred stock                   15,000    92,750                11   (163,667)    (16)           5                          -
Issuance of shares and warrants
   for loan payments and interest             140,000                14    293,544      29    1,499,829                  1,499,872
Issuance of shares for
   satisfaction of obligations                                             136,267      14      264,426                    264,440
Dividends paid                                                              37,154       4       98,692      (113,047)     (14,351)
Net loss                                  -         -         -       -          -       -            -    (4,191,508)  (4,191,508)
                                   --------  --------  --------  ------  ---------  ------  -----------  ------------  -----------

Balance, September 30, 2003               -   257,750    20,000  $   28  3,246,443  $  325  $58,829,927  $(55,460,057) $ 3,370,223
                                   ========  ========  ========  ======  =========  ======  ===========  ============  ===========

</TABLE>

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

                                       F-5
<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED SEPTEMBER 30, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                              2003             2002
                                                                                          ------------     ------------
<S>                                                                                       <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                               $ (4,191,508)    $(11,432,173)
   Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                         1,964,990        2,132,605
       Gain from settlements of obligations                                                   (651,227)               -
       Loss on equity basis investment in Onstream Media                                       171,172                -
       Gain on sale of building                                                                      -         (173,936)
       (Gain) loss on disposition of fixed assets                                               (5,850)          21,727
       Write off capitalized software                                                                -           28,186
       Provision for (reduction in) allowance for doubtful accounts                            (62,679)         176,597
       Reduction in allowance for inventory obsolescence                                             -         (242,000)
       Reserve for investment in Curaspan                                                            -          107,575
       Premium on redemption of debentures                                                           -          176,850
       Loss from discontinued operations                                                             -          762,976
       Reserve for impairment of intangibles                                                         -          728,485
       Interest expense on notes payable                                                       437,775          354,899
       Interest expense on convertible debentures                                               81,797          144,505
       Amortization of discount on notes payable                                               202,610           78,052
       Amortization of debt issue costs                                                         92,541           92,541
       Amortization of deferred services and incentives                                        506,094          730,902
       Changes in assets and liabilities:
         Decrease in accounts receivable                                                       538,527           25,405
         Decrease in prepaid expenses                                                            8,184          278,706
         Decrease in other current assets                                                       15,365           41,043
         Decrease in inventories                                                               179,250          431,354
         Decrease in net assets of discontinued operations                                           -        3,573,103
         Decrease in accounts payable and accrued expenses                                    (468,407)        (114,363)
         Decrease in deferred revenue                                                          (65,095)        (189,257)
                                                                                          ------------     ------------
              Net cash used in operating activities                                         (1,246,461)      (2,266,218)
                                                                                          ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisitions of property and equipment                                                     (316,748)        (223,682)
   Proceeds from sale of building, net                                                               -        1,589,941
   Proceeds from sale of fixed assets                                                           21,807           23,471
   (Increase) decrease in restricted cash                                                   (1,002,308)         182,189
   Acquisition of MOD subsidiary, net of cash received                                               -           90,271
   (Increase) decrease in other non-current assets                                             (10,257)          10,548
                                                                                          ------------     ------------
              Net cash (used in) provided by investing activities                           (1,307,506)       1,672,738
                                                                                          ------------     ------------
</TABLE>

                                   (Continued)

                                       F-6

<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED SEPTEMBER 30, 2003 AND 2002

                                   (Continued)

<TABLE>
<CAPTION>
                                                                                              2003             2002
                                                                                          ------------     ------------
<S>                                                                                       <C>              <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on mortgage note payable                                                      $          -     $   (850,923)
   Repayment of note payable                                                                   (94,800)      (2,127,700)
   Proceeds from note payable                                                                2,296,432        3,000,000
   Payments on capital leases                                                                 (232,128)        (227,218)
   Proceeds from exercise of warrants and options                                                    -          330,200
   Issuance of common stock, net of costs                                                            -          999,229
   Payment of dividends                                                                        (14,351)               -
   Redemption of debentures                                                                          -         (345,000)
   Proceeds from issuance of preferred shares and common stock                                 620,585          350,971
                                                                                          ------------     ------------
              Net cash provided by financing activities                                      2,575,738        1,129,559
                                                                                          ------------     ------------
CASH USED IN DISCONTINUED OPERATIONS:
   Operating activities                                                                              -         (527,637)
                                                                                          ------------     ------------
              Net cash used in discontinued operations                                               -         (527,637)
                                                                                          ------------     ------------
NET INCREASE IN CASH AND
   CASH EQUIVALENTS                                                                             21,771            8,442

CASH AND CASH EQUIVALENTS, beginning of year                                                    60,603           52,161
                                                                                          ------------     ------------
CASH AND CASH EQUIVALENTS, end of year                                                    $     82,374     $     60,603
                                                                                          ============     ============
SUPPLEMENTAL DISCLOSURES OF CASH
   FLOW INFORMATION:
     Cash payments for interest                                                           $     91,817     $    147,930
                                                                                          ============     ============
SUPPLEMENTAL SCHEDULE OF NON-CASH
   INVESTING AND FINANCING ACTIVITIES:
     Issuances of common shares for property and equipment                                $          -     $    222,000
     Issuance of shares, warrants and options for deferred
      services and incentives                                                             $    626,001     $    876,506
     Issuance of common stock for repayment of debt                                       $    628,355     $     66,500
     Issuance of warrants for note payable                                                $          -     $    257,805
     Investment in Onstream Media                                                         $    750,000     $    200,000
     Issuance of stock for prepaid interest                                               $    871,517     $    605,119
     Issuance of stock for payment of accounts payable                                    $    264,440     $    505,788
     Subscription receivable from issuances of preferred stock                            $    300,000     $          -
     Issuance of common stock for MOD acquisition                                         $          -     $  2,138,260
     Premium on redemption of debentures                                                  $          -     $    176,850
</TABLE>

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

                                       F-7

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Visual Data Corporation (the "Company" or "Visual Data" or "VDAT"), organized in
1993, is a full service broadband media company that specializes in webcasting,
networking solutions for the entertainment industry and marketing solutions for
the travel industry. VDAT is comprised of three operating groups including:
Visual Data Webcasting Group, Visual Data Networking Solutions Group (EDNET) and
Visual Data Travel Group (includes HotelView and ResortView).

The Visual Data Webcasting Group provides an array of corporate-oriented
web-based media services to the corporate market including live audio and video
webcasting, packaged corporate announcements, and rich media information storage
and distribution for any business entity. The Webcasting Group generates
revenues through production and distribution fees. On February 7, 2002,
MediaOnDemand.com, Inc. ("MOD") was merged with and into VDAT/MOD Acquisition
Corp., a Florida corporation and a wholly owned subsidiary of the Company. MOD
provided the Company with expanded capabilities and clients in the media video
webcasting segment.

Visual Data's Networking Solutions Group, which is comprised of our EDNET
subsidiary, provides connectivity within the entertainment and advertising
industries through its private network, which encompasses production and
post-production companies, advertisers, producers, directors, and talent. The
network enables high-speed exchange of high quality audio, compressed video and
multimedia data communications, utilizing long distance carriers, regional phone
companies, satellite operators, and major Internet Service Providers. The
Networking Solutions Group also provides systems integration and engineering
services, application-specific technical advice, audio equipment, proprietary
and off-the-shelf codecs, teleconferencing equipment, and other innovative
products to facilitate the Company's broadcast and production applications.

The Networking Solutions Group manages a global network of over 500 North
American affiliates, and nearly 200 international associates, in cities
throughout the United States, Canada, Mexico, Europe, and the Pacific Rim. The
Network Solutions Group generates revenues from the sale, rental and
installation of equipment, network usage, distribution fees and other related
fees.

The Visual Data Travel Group produces Internet-based multi-media streaming
videos such as hotel, resort, golf facility, travel destination and time-share
productions designed to keep a high level of viewer interest. These concise,
broadband-enabled "vignettes" generally have running times from 2-4 minutes. In
addition to the high-end vignettes, the Company offers a commercial on the web
("COW"), which consists of a 2 minute narrated photo presentation of corporate
properties. The Company warehouses all of its travel content on its own on-line
travel portal - Travelago.com ("Travelago").

The Visual Data Travel Group generates revenues from production and distribution
fees. The Company owns or co-owns virtually all the content created, which
provides content for syndication.

                                       F-8

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Nature of Business (Continued)

During the fiscal year ended September 30, 2002, the Company had two additional
operating groups, the Visual Data Financial Solutions Group and the Visual Data
Golf, Leisure and Syndication Group. The Visual Data Financial Solutions Group
was established in November 1999 to address the information needs of the
financial sector. The Golf, Leisure and Syndication Group was formed in December
2000 with the acquisition of the Golf Society of the U.S., which was a
membership business that markets to the golfing community. Its members were
provided with the opportunity to acquire equipment, greens fees, trips and
various other benefits at a discounted price. In December 2001 the Company
decided to discontinue the operations of both the Financial Solutions Group and
the Golf, Leisure and Syndication Group as a result of their adverse impact on
the Company's financial condition and in keeping with our overall strategic
plan.

Liquidity and Going Concern

The consolidated financial statements have been presented on the basis that the
Company is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
incurred losses since its inception, and has an accumulated deficit of
$55,460,057 as of September 30, 2003. The Company's operations have been
financed primarily through the issuance of equity and debt. The Company may be
required to seek additional capital to continue operations. As a result, there
is substantial doubt about the Company's ability to continue as a going concern.
For the year ended September 30, 2003, we had a net loss from continuing
operations of approximately $3,771,000 and cash used in operations of
approximately $1,246,000. The Company's forecast for fiscal year 2003
anticipates a reduction in cash used for operations. At September 30, 2003, the
Company had approximately $1,085,000 of cash and cash equivalents, including $1
million of restricted cash provided to the Company as a result of the financing
of long-term debt from a shareholder. See Note 5.

The Company is constantly evaluating its cash needs and existing burn rate. In
addition, the Company has a plan whereby certain non-essential personnel and
administrative costs will continue to be reduced so that we may continue to meet
operating and financing obligations as they come due. Based upon an ongoing
evaluation of the cash needs, the Company may seek to raise additional capital
through the sale of equity and debt securities to provide funding for ongoing
future operations. No assurances can be given that the Company will be
successful in obtaining additional capital, or that such capital will be
available on terms acceptable to the Company. The Company's ability to grow
revenues, achieve cost savings or raise sufficient additional capital will be
necessary to service existing indebtedness. The Company cannot assure you that
it will be able to raise additional working capital to fund these anticipated
deficits. Further, there can be no assurance that even if such additional
capital is obtained or the planned cost reductions are implemented, that the
Company will achieve profitability or positive cash flow. The Company's
continued existence is dependent upon its ability to raise capital and to market
and sell its services successfully. The financial statements do not include any
adjustments to reflect future effects on the recoverability and classification
of assets or amounts and classification of liabilities that may result from the
outcome of this uncertainty.

                                       F-9

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of
Visual Data and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. The Company uses the equity
method of accounting for investments where its ownership is between 20% and 50%.

Accounting 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 affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Estimates are used when accounting for allowances for doubtful accounts,
revenue reserves, inventory reserves, depreciation and amortization, taxes,
contingencies and impairment allowances. Such estimates are reviewed on an
on-going basis and actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents consists of all highly liquid investments with
original maturities of three months or less.

Restricted cash

Restricted cash consisted of amounts provided by a shareholder in conjunction
with a loan. The restricted cash is to be utilized by the Company at the
shareholders discretion. See Note 5.

Bad Debt Reserves

The Company evaluates the collectibility of its accounts receivable based on a
combination of factors. In cases where the Company is aware of circumstances
that may impair a specific customer's ability to meet its financial obligations
to the Company, the Company records a specific allowance against amounts due to
us, and thereby reduce the net recognized receivable to the amount the Company
reasonably believes will be collected. For all other customers, the Company
recognizes allowances for doubtful accounts based on the length of time the
receivables are past due, the current business environment and historical
experience. At September 30, 2003 and 2002, bad debt reserves were approximately
$332,000 and $395,000, respectively.

                                      F-10

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

    NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Inventories

Inventories are valued at the lower of cost (first-in, first-out method) or
market by analyzing market conditions, current sales prices, inventory costs,
and inventory balances. We evaluate inventory balances for excess quantities and
obsolescence on a regular basis by analyzing backlog, estimated demand,
inventory on hand, sales levels and other information. We write down excess and
obsolete inventory to the lower of cost or market based on the analysis.

Shipping Costs

The Company's shipping and handling costs are included under network equipment
sales and rentals' costs in the accompanying consolidated statements of
operations for all periods presented.

Property and Equipment

Property and equipment are recorded at cost. Property and equipment under
capital leases is stated at the lower of the present value of the minimum lease
payments at the beginning of the lease term or the fair value at the inception
of the lease. Depreciation is computed using the straight-line method over the
estimated useful lives of the related assets. Amortization expense on assets
acquired under capital leases is included with depreciation expense. The costs
of leasehold improvements are amortized over the lesser of the lease term or the
life of the improvement.

Software

Included in property and equipment is computer software developed for internal
use. Such amounts have been accounted for in accordance with Statement of
Position 98-1 "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." Such costs are amortized on a straight-line basis
over three years.

Goodwill

On July 1, 2001, the Company adopted SFAS 141, Business Combinations, which
eliminates the pooling of interests method of accounting for all business
combinations initiated after July 1, 2001 and addresses the initial recognition
and measurement of goodwill and other intangible assets acquired in a business
combination. Under SFAS 142, Goodwill and Other Intangible Assets, which the
Company adopted effective October 1, 2001, goodwill is no longer amortized but
is reviewed annually (or more frequently if impairment indicators arise) for
impairment.

                                      F-11

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Long-lived Assets (Other than Goodwill)

     General

     The Company reviews its long-lived assets (other than goodwill) for
     impairment whenever events or changes in circumstances indicate that the
     carrying amount of an asset may not be recoverable. The Company assesses
     the recoverability of the long-lived assets (other than goodwill) by
     comparing the estimated undiscounted cash flows associated with the related
     asset or group of assets against their respective carrying amounts. The
     amount of an impairment, if any, is calculated based on the excess of the
     carrying amount over the fair value of those assets.

     Intangible Assets Other than Goodwill

     At September 30, 2003 and 2002, the Company had Intangible Assets Other
     than Goodwill (Other Intangible Assets) with a carrying value of
     approximately $3.1 million, net of accumulated amortization of
     approximately $1,075,000 and $460,000, respectively. This was comprised of
     the customer list that resulted from the Company's acquisition of
     Mediaondemand.com (see Note 10).

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year
presentation.

Revenue Recognition

The Visual Data Webcasting Group recognizes revenue from live and on-demand
webcasts at the time an event is accessible for streaming over the Internet.
Revenue is recognized for the sale of equipment when the equipment is shipped.
For custom service projects, revenue is recognized when service is performed.

The Visual Data Networking Solutions Group generates revenues from the sale of
equipment, installation of equipment, performance of bridging services and usage
of bandwidth. Revenue is recognized for the sale of equipment when the equipment
is installed or upon signing of a contract after a free trial period. Revenue is
recognized from equipment installation and bridging when the service is
performed. Installation and training costs are expensed as incurred. Network
usage revenue is recognized based on the customers' monthly usage levels. The
Visual Data Networking Solutions Group leases some equipment to customers under
terms that are accounted for as operating leases. Rental revenue from leases is
recognized ratably over the life of the lease and the related equipment is
depreciated over its estimated useful life. All leases of the related equipment
contain fixed terms.

The Visual Data Travel Group recognizes a portion of their contract revenue at
the time of completion of video production services with the remaining revenue
recognized over the term of the contract. Per hit charges are recognized when
users watch a video on the Internet. Fixed monthly fees are recognized on a
monthly basis consistent with the terms of the contract. Commissions on bookings
are recognized when the stays are completed.

                                      F-12
<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Deferred Revenue

Deferred revenue represents cash received from customers for production services
that are in process or for future events in webcasting. As projects or events
are completed the revenue is recognized.

Advertising

Advertising costs are charged to operations as incurred. Advertising expenses
from continuing operations were $16,000 and $143,000 for the years ended
September 30, 2003 and 2002, respectively.

Comprehensive Income or Loss

The Company has no components of other comprehensive income or loss, and
accordingly, net loss equals comprehensive loss for all periods presented

Income Taxes

We account for income taxes in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." As part of the process of
preparing our consolidated financial statements, we are required to estimate our
income taxes in each of the jurisdictions in which we operate. This process
involves estimating our current tax exposure together with assessing temporary
differences resulting from differing treatment of items for tax and accounting
purposes. These differences result in deferred tax assets and liabilities, which
are included within our consolidated balance sheet. We must then assess the
likelihood that our deferred tax assets will be recovered from future taxable
income and to the extent we believe that recovery is not likely, we must
establish a valuation allowance. To the extent we establish a valuation
allowance or change this allowance in a period, we must include an expense or a
benefit within the tax provision in our statement of operations.

Significant judgment is required in determining our provision for income taxes,
our deferred tax assets and liabilities and any valuation allowance recorded
against our deferred tax assets. We have recorded a valuation allowance of $22.5
million as of September 30, 2003, due to the uncertainty of realizing the
benefits of certain tax credits and net operating loss carryforwards before they
expire. The valuation allowance is based on our historical taxable income and
our estimates of future taxable income in each jurisdiction in which we operate
and the period over which our deferred tax assets will be recoverable.
Management will continue to assess the likelihood that the deferred tax asset
will be realizable and the valuation allowance will be adjusted accordingly.

Reverse Stock Split

On June 24, 2003 the Company affected a one-for-fifteen reverse stock split. All
references in the consolidated financial statements referring to shares, share
prices, per share amounts and stock plans have been adjusted retroactively for
the one-for-fifteen reverse stock split. Additional information is presented at
Note 7.

                                      F-13

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Earnings Per Share

For the years ended September 30, 2003 and 2002, net loss per share is based on
the weighted average number of shares of common stock outstanding. Since the
effect of common stock equivalents was anti-dilutive, all such equivalents were
excluded from the calculation of net loss per share. The total outstanding
options and warrants, which have been excluded from the calculation of loss per
share, were 963,149 and 1,051,632 at September 30, 2003 and 2002, respectively.
In addition, the Company has 257,750 (Class A-8) and 20,000 (Class A-9) shares
of Convertible Preferred Stock, and approximately $1,543,000 in convertible
debentures outstanding at September 30, 2003, which can potentially convert into
343,668, 66,668 and 363,577 shares of our common stock, respectively. The
potential dilutive effects of the Class A-8 and A-9 Convertible Preferred Stock
and convertible debentures have been excluded from the calculation of net loss
per share.

Employee 401 (k) plan

The Company has a 401 (k) plan known as the Visual Data Corporation 401 (k)
Retirement Plan and Trust (the "Plan"). The Plan is available to all regular
employees and provides employees with tax deferred salary deductions and
alternative investment options (directly solely by the employees). Employees may
contribute up to 20% of their salary, subject to certain limitations. The
Company matches employees' contributions to the Plan at 25%, up to a maximum of
8% of eligible compensation, at an annual maximum of $12,000 for employees under
50 years of age and $14,000 for employees over 50 years of age. The Company
expensed approximately $10,000 and $36,000 in the fiscal years ended September
30, 2003 and 2002, respectively, for our contributions to the Plan. The
Company's contributions to the Plan vest at 25% per year after the first year.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, restricted cash, accounts
receivable, accounts payable, accrued expenses and notes payable approximate
fair value due to the short maturity of the instruments.

                                      F-14

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration of Credit Risk

The Company at times has cash in banks in excess of FDIC insurance limits and
places its temporary cash investments with high credit quality financial
institutions. The Company performs ongoing credit evaluations of its customers'
financial condition and does not require collateral from them. Reserves for
credit losses are maintained at levels considered adequate by management.
Revenue from CCBN represented approximately 17% and 9% of our consolidated
revenue for the years ended September 30, 2003 and 2002, respectively. See Note
9.

Stock compensation

The Company has a stock based compensation plan, which is described more fully
in Note 12. The Company has elected to continue using Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting
for employee stock options.

The following table summarizes the pro forma consolidated results of operations
of The Company as though the fair value based accounting method in "Accounting
for Stock-Based Compensation," ("SFAS 123") had been used in accounting for
stock options.

<TABLE>
<CAPTION>
                                                                    2003            2002
                                                               -------------   -------------
<S>                                                            <C>             <C>
Net loss, as reported                                          $  (4,191,508)  $ (11,432,173)
Total stock based employee compensation expense determined
  under fair value based method for all awards, net of tax          (729,585)     (1,584,702)
                                                               -------------   -------------

Pro forma net loss                                             $  (4,921,093)  $ (13,016,875)
                                                               =============   =============

Net loss per share - basic and diluted:
    Net loss per share, as reported                            $       (1.79)  $       (7.00)
    Net loss per share, pro forma                              $       (2.10)  $       (7.97)
</TABLE>

                                      F-15

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Effects of Recent Accounting Pronouncements

In April 2002, the FASB issued SFAS No. 145, which eliminates the requirement to
report material gains or losses from debt extinguishments as an extraordinary
item, net of any applicable income tax effect, in an entity's statement of
operations. SFAS No. 145 instead requires that a gain or loss recognized from a
debt extinguishment be classified as an extraordinary item only when the
extinguishment meets the criteria of both "unusual in nature" and "infrequent in
occurrence" as prescribed under APB No. 30. The provisions of SFAS No.145 are
effective for fiscal years beginning after May 15, 2002 with respect to the
rescission of SFAS No. 4 and for transactions occurring after May 15, 2002, with
respect to provisions related to SFAS No. 13. The Company adopted this standard
for the year ended September 30, 2003 and it did not have a material effect on
the Company's results of operations or its financial position.

In June 2002, the FASB issued Statement 146, Accounting for Costs Associated
with Exit or Disposal Activities. This statement requires entities to recognize
costs associated with exit or disposal activities when liabilities are incurred
rather than when the entity commits to an exit or disposal plan, as currently
required. Examples of costs covered by this guidance include one-time employee
termination benefits, costs to terminate contracts other than capital leases,
costs to consolidate facilities or relocate employees, and certain other exit or
disposal activities. This statement is effective for fiscal years beginning
after December 31, 2002, and will impact any exit or disposal activities the
Company initiates after that date.

In November 2002, the Emerging Issues Task Force reached a consensus opinion on
EITF 00-21, "Revenue Arrangements with Multiple Deliverables." The consensus
provides that revenue arrangements with multiple deliverables should be divided
into separate units of accounting if certain criteria are met. The consideration
for the arrangement should be allocated to the separate units of accounting
based on their relative fair values, with different provisions if the fair value
of all deliverables are not known or if the fair value is contingent on delivery
of specified items or performance conditions. Applicable revenue recognition
criteria should be considered separately for each separate unit of accounting.
EITF 00-21 is effective for revenue arrangements entered into in fiscal periods
beginning after June 15, 2003. Entities may elect to report the change as a
cumulative effect adjustment in accordance with APB Opinion 20, Accounting
Changes. The Company believes its revenue recognition policies are consistent
with this new standard.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others". FASB Interpretation No. 45 elaborates on
the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement
provisions of the interpretation are applicable on a prospective basis to
guarantees issued or modified after December 31, 2002. The disclosure
requirements are effective for financial statements of interim or annual periods
ending after December 15, 2002. The Company has not entered into arrangements or
guarantees that meet the criteria of this interpretation and does not expect the
adoption of this interpretation to have a material effect on its results of
operations or financial position.

                                      F-16

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Effects of Recent Accounting Pronouncements (Continued)

In December 2002, the FASB issued SFAS No. 148 which amends SFAS No. 123. SFAS
No. 148 provides alternative methods of transition for a voluntary change to the
fair-value-based method of accounting for stock-based employee compensation.
SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 and APB No.
28, "Interim Financial Reporting," to require disclosure in the summary of
significant accounting policies of the effects of an entity's accounting policy
with respect to stock-based employee compensation on reported net income (loss)
per share in annual and interim financial statements. While SFAS No. 148 does
not amend SFAS No. 123 to require companies to account for employee stock
options using the fair value method, the disclosure provisions of SFAS No. 148
are applicable to all companies with stock-based employee compensation,
regardless of whether they account for that compensation using the fair value
method of SFAS No. 123 or the intrinsic value method of APB No. 25. The
provisions of SFAS No. 148 are effective for fiscal years ending after December
15, 2002 with respect to the amendments of SFAS No. 123 and effective for
financial reports containing condensed financial statements for interim periods
beginning after December 15, 2002 with respect to the amendments of APB No. 28.
The Company implemented SFAS No. 148.


In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities and Interpretation of ARB No. 51" ("FIN 46"). FIN 46
addresses consolidation by business enterprises of variable interest entities. A
variable interest entity is defined as an entity in which the total equity
investment at risk is not sufficient to permit the entity to finance its
activities without additional subordinated financial support from other parties,
or as a group the holders of the equity investment at risk lack any one of the
following three characteristics of a controlling financial interest: (1) the
direct or indirect ability to make decisions about entity's activities through
voting rights or similar rights, (2) the obligation to absorb the expected
losses of the entity if they occur and (3) the right to receive the expected
residual returns of the entity if they occur. FIN 46 applies immediately to
variable interest entities created after January 31, 2003, and to variable
interest entities in which an enterprise obtains an interest after that date. It
applies in the first fiscal year or interim period beginning after June 15, 2003
to variable interest entities in which an enterprise holds a variable interest
that it acquired before February 1, 2003. The Company does not currently expect
the adoption of FIN 46 to have a material effect on the Company's consolidated
financial statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" ("SFAS No. 149"). SFAS No. 149
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under SFAS No. 133. In general, SFAS No.
149 is effective for contracts entered into or modified after June 30, 2003 and
for hedging relationships designated after June 30, 2003. The Company does not
currently expect the adoption of SFAS No. 149 to have a material effect on its
consolidated financial statements.

                                      F-17

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Effects of Recent Accounting Pronouncements (Continued)

In May 2003, the Financial Accounting Standards Board ("FASB") issued SFAS No.
150, "Accounting for Certain Financial Instruments with Characteristics of Both
Liabilities and Equity." SFAS No. 150 requires certain financial instruments
that embody obligations of the issuer and have characteristics of both
liabilities and equity to be classified as liabilities. Many of these
instruments previously were classified as equity or temporary equity and as
such, SFAS No. 150 represents a significant change in practice in the accounting
for a number of mandatorily redeemable equity instruments and certain equity
derivatives that frequently are used in connection with share repurchase
programs. SFAS No. 150 is effective for all financial instruments created or
modified after May 31, 2003, and to other instruments at the beginning of the
first interim period beginning after June 15, 2003. The adoption of SFAS No. 150
is not expected to have a material effect on the Company's results of
operations, liquidity, or financial condition.

NOTE 2: GOODWILL AND OTHER ACQUISITION-RELATED INTANGIBLE ASSETS

SFAS 142, Goodwill and Other Intangible Assets, which addresses the financial
accounting and reporting standards for goodwill and other intangible assets
subsequent to their acquisition requires that goodwill no longer be amortized,
and instead, be tested for impairment on a periodic basis. We completed our
annual goodwill impairment tests as of September 30, 2003 and 2002, and found no
impairment at September 30, 2003 and an impairment of approximately $728,000 at
September 30, 2002. At September 30, 2003 and 2002, we had goodwill with a
carrying value of approximately $2,071,000, associated with the acquisition of
EDNET. In addition, we also have intangible assets - customer list of $1,997,000
and 2,611,000 at September 30, 2003 and 2002, respectively, associated with the
acquisition of MOD (see Note 10). According to our analysis of the customer list
for the periods ended September 30, 2003 and 2002 there was no impairment.

Changes in the carrying amount of goodwill for the years ended September 30,
2003 and 2002, by reportable segment, are as follows:

<TABLE>
<CAPTION>
                                               Networking
                                                Solutions
<S>                                           <C>
Balance as of October 1, 2001                 $   2,799,000
  Reserve for impairment                           (728,000)
                                              -------------

Balance as of September 30, 2003 and 2002     $   2,071,000
                                              =============
</TABLE>

                                      F-18

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 2: GOODWILL AND OTHER ACQUISITION-RELATED INTANGIBLE ASSETS (Continued)

Information regarding the company's intangible assets is as follows:

<TABLE>
<CAPTION>
                               September 30, 2003                        September 30, 2002
                     ---------------------------------------   ---------------------------------------
                        Gross                                     Gross
                       Carrying    Accumulated                   Carrying    Accumulated
                        Amount    Amortization       Net          Amount     Amortization      Net
                     ----------- -------------   -----------   -----------   ------------  -----------
<S>                  <C>         <C>             <C>           <C>           <C>           <C>
Goodwill EDNET       $ 2,071,000 $           -   $ 2,071,000   $ 2,071,000   $         -   $ 2,071,000
Customer Lists MOD     3,072,000    (1,075,000)    1,997,000     3,072,000      (461,000)    2,611,000
                     ----------- -------------   -----------   -----------   -----------   -----------
                     $ 5,143,000 $  (1,075,000)  $ 4,068,000   $ 5,143,000   $  (461,000)  $ 4,682,000
                     =========== =============   ===========   ===========   ===========   ===========
</TABLE>

Amortization expense of intangible assets customer lists was $614,000 and
$461,000 for the years ended September 30, 2003 and 2002, respectively.

Estimated amortization expense for the fiscal years ending September 30, is as
follows:

<TABLE>
<S>            <C>
2004           $   614,000
2005               614,000
2006               614,000
2007               155,000
               -----------

               $ 1,997,000
               ===========
</TABLE>

NOTE 3: INVESTMENTS

The Company has an investment in Curaspan, Inc. for approximately $108,000. This
investment was accounted for under the cost method of accounting since we own a
minority interest in this business. The carrying value of this investment is
periodically evaluated by the Company to determine if any impairment has
occurred. The investment in Curaspan, Inc. was fully reserved at September 30,
2002 as a result of their losses from operations during the previous fiscal
years in addition to an existing burn rate which requires additional capital to
sustain the operation.

                                      F-19

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 3: INVESTMENTS (Continued)

On March 31, 2003, the Company increased its $200,000 investment in Onstream
Media by an additional $750,000 through the issuance of Class A-7 Convertible
Preferred Stock ("Class A-7 Preferred Stock "). See Note 7. Our board of
directors appointed Randy Selman and Alan Saperstein to represent the Company on
the board of directors of Onstream Media. There are currently 4 board members on
the Onstream Media board of directors. Onstream Media is a development stage
company that intends to provide a desktop solution for corporations to better
manage their digital rich media without the major capital expense for the
hardware, software and additional staff necessary to build their own digital
asset management solution. The Onstream system is being designed to digitize,
encode, index, transport and centralize all rich media content within an
organization and make it immediately available worldwide, with the expectation
that it will save companies valuable time and money. The system is being
designed and managed by SAIC, the country's foremost IT security firm, providing
services to all branches of the federal government as well as the worlds leading
corporations. Beginning April 1, 2003, the Company's investment is accounted for
under the equity method. The carrying value of this investment is periodically
evaluated by the Company to determine if any impairment has occurred based upon
a review of budgeted amounts compared with actual results. As of September 30,
2003, included in other income and expense is a loss of approximately $171,000,
which represents approximately 28% of the loss from Onstream Media for the six
months ended September 30, 2003. See Note 7.

These investments are included in the caption entitled other non-current assets
in the accompanying consolidated balance sheets.

NOTE 4: PROPERTY AND EQUIPMENT

Property and equipment, including equipment acquired under capital leases,
consists of:

<TABLE>
<CAPTION>
                                           September 30,
                                    --------------------------       Useful Lives
                                        2003           2002             (Years)
                                    -----------    -----------       ------------
<S>                                 <C>            <C>               <C>
Furniture and fixtures              $   403,732    $   403,732            5-7
Equipment and Software                6,647,050      6,396,853            1-5
Video library content                 1,368,112      1,368,112              2
Capitalized internal use software       113,794        113,794              3
Leasehold improvements                  206,081        187,068              5
                                    -----------    -----------
                                      8,738,769      8,469,559

Less:  Accumulated depreciation
         and amortization            (7,795,409)    (6,476,345)
                                    -----------    -----------

                                    $   943,360    $ 1,993,214
                                    ===========    ===========
</TABLE>

Depreciation and amortization of property and equipment included in the
statements of operations amounted to approximately $1,351,000 and $1,672,000 for
the years ended September 30, 2003 and 2002, respectively.

                                      F-20

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 5: CONVERTIBLE DEBENTURES AND NOTES PAYABLE

Convertible Debenture

On December 8, 2000 we sold an aggregate of $2,040,000 principal amount of 6%
convertible debentures and granted 33,334 one-year warrants with an exercise
price of $60.00 per share and 13,334 five-year warrants with an exercise price
of $31.95 per share to Halifax Fund, LP and Palladin Opportunity Fund, LLC, two
unaffiliated third parties. Halifax Fund, LP and Palladin Opportunity Fund, LLC
are affiliates as a result of common control of the entities. Each of Halifax
Fund, LP and Palladin Opportunity Fund, LLC purchased the convertible debentures
in the ordinary course of business, and at the time of purchase neither Halifax
Fund, LP or Palladin Opportunity Fund, LLC had any agreement or understanding,
directly or indirectly, with any person to distribute either the convertible
debentures or the shares of our common stock into which they are convertible.

In January 2001, the debenture holders converted $800,000 principal amount of
the debentures and $6,312 of accrued interest into an aggregate of 53,583 shares
of our common stock based upon the then current conversion price of $15.045 per
share pursuant to the terms of the debentures. On October 5, 2001, the debenture
holders exercised their warrants for an aggregate of 33,334 shares of our common
stock. The exercise price of these warrants was adjusted from $60.00 per share
to $9.75 per share by us at the time of exercise.

In February 2001, the Company granted the debenture holders an additional 3,334
five-year warrants with an exercise price of $31.95 per share.

On May 23, 2001, the Company sold an additional 66,581 shares of common stock
for $22.50 per share. As a result of the anti-dilution provisions of the
warrants issued in conjunction with these debentures, the number of shares
issuable upon the exercise of the five year warrants has been increased to
18,156 shares and the exercise price has been reduced to $29.33 per share.

For a period of five days beginning on May 24, 2001, we had the right to sell to
the purchasers an additional $1,020,000 principal amount of convertible
debentures, with identical terms to those described above. On May 24, 2001, we
exercised the put right for an additional $1,020,000 principal amount of 6%
convertible debentures.

The floor price reset to $4.32 per share on December 8, 2001, and as a result of
common stock issued by the Company below the $4.32 per share, the floor price
was reset to $4.245, the lowest selling price of common stock by the Company.
The floor of the convertible debenture is re-set when the Company sells stock
for less then the existing floor, while the convertible debentures are still
outstanding.

On December 11, 2001, the debenture holders converted $381,000 of principal and
$23,048 of accrued interest into 46,765 shares of our common stock at a
conversion price of $8.64 per share pursuant to the terms of the debentures.

                                      F-21

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 5: CONVERTIBLE DEBENTURES AND NOTES PAYABLE (Continued)

On March 11, 2002, we redeemed $300,000 of the outstanding principal of the
convertible debentures at 115% of par (for a total of $345,000), and the
debenture holders each converted $200,000 of the outstanding principal and
$54,119 of accrued interest (on the conversion and redemption) into and
aggregate of 59,016 shares of common stock at $7.695 per share, in accordance
with the conversion calculation from the 6% convertible debentures. We modified
the terms of the 6% convertible debentures to redeem the remaining $1,179,000 of
outstanding principal at 115% of par value in six equal quarterly installments
beginning on July 1, 2002.

We granted the purchasers certain rights of first refusal as they relate to
private equity or equity related transactions, and have agreed to certain other
limitations regarding the issuance of securities at prices less than the
conversion prices described above.

In October 2003, the Company executed a redemption agreement with the debenture
holders. See Note 13.

Notes Payable

Notes payable consist of the following as of September 30:

<TABLE>
<CAPTION>
                                                                           2003           2002
                                                                      ------------   ------------
<S>                                                                   <C>            <C>
Note payable to shareholder (A)                                       $  3,000,000   $  1,050,000
Note payable to a director of the Company, with original principal
   of $250,000 at 12% interest issued in May 1999.  The principal
   balance and accrued interest was paid in full in September 2003.              -        125,000
Note payable with original principal of $78,000 at 20% interest
   issued in July 2001.  The principal balance and accrued
   interest was paid in full in October 2002.                                    -         33,800
Note payable with original principal of $100,000 at 25% interest
   issued in June 2001. The interest is payable monthly.                         -        100,000
                                                                      ------------   ------------
                                                                         3,000,000      1,308,800
Discount on shareholder note                                              (141,711)      (179,753)
                                                                      ------------   ------------
                                                                         2,858,289      1,129,047
Less: current portion                                                            -      1,129,047
                                                                      ------------   ------------
Long term notes payable                                               $  2,858,289   $          -
                                                                      ============   ============
</TABLE>

Interest expense to related parties was approximately $15,000 and $17,500 for
the years ended September 30, 2003 and 2002, respectively.

                                      F-22

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 5: CONVERTIBLE DEBENTURES AND NOTES PAYABLE (Continued)

(A) On December 4, 2001 we entered into a private debt financing transaction
with a shareholder pursuant to the terms and conditions of a Loan Agreement, a
Secured Promissory Note in the principal amount of $3 million and a Security
Agreement. Under the terms of the debt financing transaction, the lender
advanced us $1.5 million at closing. The note bears interest at approximately
12%, which was prepaid in January 2002 with the issuance of 33,334 shares of
common stock. This payment of interest utilizing common stock results in an
effective interest rate of 36%. In February 2002 we took the final advance on
the note and agreed to prepay the interest on the note with 33,334 additional
shares of common stock. The value of the stock issued was approximately
$585,000. In June 2002, we issued 3,667 shares of stock valued at $34,500 to the
lender as a principal payment.

Beginning April 2002 we were required to make principal payments on the note of
$125,000 per month, until such time as we repaid $1 million of the note, and
thereafter our monthly payments shall be fixed at $100,000. At such time as we
receive equity or strategic financing in excess of $1.5 million (other than
certain excluded transactions), 30% of the net proceeds of such funds will be
used by us to reduce the principal owed under the note. If we receive $5 million
in an equity or strategic financing transaction (other than certain excluded
transactions), then the entire remaining principal amount of the note is to be
repaid by us.

We granted the lender a security interest in substantially all of our tangible
and intangible assets, and issued him a warrant to purchase 66,667 shares of our
common stock at an exercise price of $15.00 per share. We agreed to file a
registration statement with the SEC to register the resale of the shares
issuable upon the exercise of this warrant, as well as the shares issued as
interest under the note, within six months from the date of the transaction and
we granted the lender certain piggy-back registration rights. The shares
underlying the warrants have not been registered as of yet, and, the Company
received a waiver from the warrant holder.

In conjunction with the transaction, all members of our management had each
agreed to limit their annual compensation under certain circumstances while the
loan is outstanding. In addition, the Chief Executive Officer and Executive Vice
President each agreed to cancel 50,000 options held by them to purchase shares
of our common stock.

                                      F-23

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 5: CONVERTIBLE DEBENTURES AND NOTES PAYABLE (Continued)

In April 2003, the Company received a $600,000 loan from this shareholder. This
was an advance for a transaction the Company was in the process of finalizing.
In May 2003, the Company and the shareholder refinanced the existing obligations
of the Company. The shareholder note had a balance of $1,050,000 at March 31,
2003. The shareholder agreed to fund an additional $350,000 as working capital,
$1,000,000 as restricted cash and restructure the balance on his note of
$1,050,000 and the loan of $600,000 into this transaction. As a result, the
Company has a long-term note of $3,000,000 to the shareholder, which is
collateralized by all of the assets of the Company. As compensation for this
transaction, the Company issued the shareholder 140,000 shares of Class A-8
Convertible Preferred Stock ("Class A-8 Preferred Stock"). The stated value of
the Class A-8 Preferred Stock is $6 per share. The Class A-8 Preferred Stock is
a zero coupon and each share converts to 1.33333 shares of common stock (at
$4.50 per share). In addition, the note bears interest at 5.25%, payable
quarterly, beginning July 15, 2003. The loan is a 36-month loan, with interest
only payments on a quarterly basis, and a balloon at May 7, 2006. If the Company
receives financing in excess of $2,000,000, 35% of the net amount in excess of
$2,000,000 will be used to pay down the principal of the Note. In addition, if
the Company has a positive earnings before interest, taxes, depreciation and
amortization ("EBITDA"), then 35% of the positive EBITDA will be used to pay
down the principal of the Note. The $1,000,000 restricted cash is to be utilized
at the shareholder's discretion. In addition, the shareholder converted his
outstanding common stock in the Company, approximately 123,667 shares, into
92,750 shares of Class A-8 Preferred Stock.

In November 2002, the Company received a $200,000 loan from a shareholder. The
principal plus interest of $6,666 were due on March 25, 2003. In addition, the
Company issued 5, 000 shares of common stock to the lender. On May 9, 2003 the
Company issued 110,488 shares of common stock to satisfy the loan and the
interest payable in full.

In January 2003, the Company received a loan from a shareholder for $100,000.
The principal plus interest of $3,333 were due May 15, 2003. In addition, the
Company issued 2,500 shares of common stock to the lender. On May 9, 2003 the
Company issued 53,334 shares of common stock to satisfy the loan and the
interest payable in full.

In June 2001, the MOD received a loan from a shareholder for $100,000. The note
bears interest at 25%, payable monthly. This note was satisfied in full on March
31, 2003 with the issuance of 43,334 shares of common stock.

Capital Leases

The Company leases certain computer equipment and office equipment. Interest
rates range from 11% to 27% on these leases. During the fiscal year ended
September 30, 2003, the Company negotiated settlements with several of these
leases and paid approximately $216,000. As a result, a gain of approximately
$201,000 was recognized during the year ended September 30, 2003 associated with
these settlements. As of September 30, 2003, the Company has approximately
$9,000 in capital lease obligations.

                                      F-24

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 6: COMMITMENTS AND CONTINGENCIES

Lease Commitments

In September 2002, the Company completed the sale and lease back of its
principal executive offices in Pompano Beach, Florida. The sale price was
$1,700,000 and the Company received net proceeds of approximately $721,000 after
payment of current obligations due from the mortgage. In connection with the
agreement the Company entered into a five-year lease ending in September 2007.
The lease provides for one five-year renewal option. The monthly base rental is
approximately $11,000 plus the Company's share of operating expenses with annual
three percent (3%) increases.

In July 2003, the Company entered into a month-to-month operating lease for
office space for the Visual Data Networking Solutions Group. This operating
lease may be terminated by either party with a 60 day written notice. The
monthly base rental is approximately $10,000. In addition, the Company leases
control equipment under capital leases expiring in 2004.

In December 2002, the Company entered into a one year operating lease for office
space in New York. The New York office is part of the Webcasting Group. The
monthly base rental is approximately $5,000. In October 2003, the Company
extended the initial lease for an additional one year period.

Future minimum lease payments required under the non-cancelable leases are as
follows:

<TABLE>
<CAPTION>
                                                                       Operating        Capital
Year Ending September 30:                                                Leases         Leases
                                                                      ------------   ------------
<S>                                                                   <C>            <C>
2004                                                                  $    195,548   $      8,821
2005                                                                       154,614              -
2006                                                                       143,803              -
2007                                                                       148,117              -
                                                                      ------------   ------------

     Total minimum lease payments                                     $    642,082          8,821
                                                                      ============
Less amount representing interest                                                              53
                                                                                     ------------
Present value of net minimum lease payments                                                 8,768
Less current portion                                                                        8,768
                                                                                     ------------
     Long-term portion                                                               $          -
                                                                                     ============
</TABLE>

Total rental expense for all operating leases for the years
ended September 30, 2003 and 2002 amounted to approximately $339,000 and
approximately $258,000, respectively.

                                      F-25

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 6: COMMITMENTS AND CONTINGENCIES (Continued)

Employment Contracts

In August 2001, the Company's President and Executive Vice President entered
into amended employment agreements with the Company. The contracts have extended
their employment through August 2005 and provided for the granting of 33,334
additional stock options to the President and the Executive Vice President at an
exercise price of $22.50, representing the fair value at the date of grant, to
vest at the rate of 3,333 options per year for the first two years and 13,334
options per year for the next two years on each anniversary date of the
effective date of the agreements provided for under the amendment to the amended
and restated employment agreements. The amended contracts increase the annual
salary to $250,000, each. The contracts further provide for an annual bonus in
cash or stock equal to 2% of the Company's increase in earnings as defined
therein, as long as the Company has a positive Net Income.

In October 2001, the Company's Chief Operating Officer and Chief Financial
Officer entered into employment agreements with the Company. The two-year
contracts provided for the granting of 6,667 stock options to the Chief
Operating Officer and Chief Financial Officer at an exercise price of $11.25,
representing the fair value at the date of grant, to vest at the rate of 3,334
in year one and 3,333 in year two on the anniversary of the effective date of
the contract. The annual salary under each of the agreements is $175,000 for the
Chief Operating Officer and $155,000 for the Chief Financial Officer, which
amount will be increased by 10% each year.

In December 2003, the Company's Chief Financial Officer entered into amended
employment agreements with the Company. The contract has extended her employment
through December 2004 under the terms of the employment agreement executed in
October 2001.

Annual Volume Commitment

EDNET entered into an agreement with a telecommunications company for network
usage discounts, expiring in March 2006. The contract currently has a volume
commitment of approximately $265,000 per year.

                                      F-26

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 7: CAPITAL STOCK

Common Stock

In October 2001, the Company issued 8,480 shares to employees in lieu of
compensation. Of these shares, 5,847 were issued to executive officers of the
Company.

In November 2001, the Company issued 2,136 shares to outside directors in lieu
of compensation.

On February 7, 2002 the Company issued 226,667 shares of common stock to the
shareholders of Mediaondemand.com ("MOD") to acquire 100% of MOD. The Company
also issued 6,534 shares as common stock as a fee on this transaction.

The Company sold shares of common stock under subscription agreements to
institutional investors, as follows. In March 2002 the Company sold 60,000
shares of common stock and issued 8,694 shares as a financing fee, for net
proceeds of approximately $450,000. In April the Company sold an additional
13,334 shares for $100,000 as part of the same subscription agreements. These
agreements had a one time reset provision whereby the Company would issue more
shares of common stock to the investors if the stock was below $7.50 per share
on the day the registration statement went effective. On June 7, 2002, the
Company issued an additional 48,889 shares to investors and 5,663 for a
financing fee to effect the one time reset resulting from the decline in the
stock price.

In December 2001, the Company sold 300,000 shares of Class A-6 Preferred Stock
for $300,000 and paid a financing fee of $39,000. In April 2002, the 300,000
shares of Class A-6 Preferred Stock were converted into 40,000 shares of common
stock under the same terms as the March 2002 subscription agreements. On June 7,
2002, the Company issued an additional 26,667 shares of common stock to effect
the one time reset resulting from the decline in the stock price.

The Company sold 118,540 shares of common stock under subscription agreements to
institutional investors in June 2002 for net proceeds of approximately $503,000.
The Company issued 26,667 shares as a financing fee.

The Company has reserved 1,737,062 shares of common stock for issuance relating
to unexpired options and warrants at September 30, 2003. Included in the
reserved shares at September 30, 2003 are the shares related to the conversion
of the 6% Convertible Debenture at the $4.245 per share floor value into 363,577
shares, the conversion of the 257,750 shares of Class A-8 Convertible Preferred
Stock into 343,668 shares and the conversion of the 20,000 shares of Class A-9
Convertible Preferred Stock into 66,668 shares.

During the quarter ended December 31, 2002, the Company issued 28,750 shares of
common stock for consulting and financial advisory services. The services are
being provided over periods ranging from 2 months to 1 year, and will result in
the expensing of approximately $96,000.

In January 2003, the Company issued approximately 12,000 shares of common stock
to employees as a bonus. None of these shares were issued to directors or
officers of the Company. The value of these shares was approximately $33,000.

                                      F-27

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 7: CAPITAL STOCK (Continued)

Common Stock (Continued)

During the quarter ended March 31, 2003, the Company issued 40,667 shares of
common stock for consulting and financial advisory services. The services are
being provided over periods ranging from 3 months to 1 year, and will result in
the expensing of approximately $85,000.

During the quarter ended March 31, 2003, the Company issued 95,800 shares of
common stock to settle approximately $239,000 of obligations. Any difference
between the value of the stock on the settlement date and the obligation as
reflected in the Company's books and records is recorded as other income and
expense, and, therefore, does not impact income from continuing operations.

During the quarter ended June 30, 2003, the Company issued 61,667 shares of
common stock for consulting and financial advisory services. The services are
being provided over periods ranging from 3 months to 1 year, and will result in
the expensing of approximately $136,000.

During the quarter ended June 30, 2003, the Company issued 40,467 shares of
common stock to settle approximately $66,000 of obligations. Any difference
between the value of the stock on the settlement date and the obligation as
reflected in the Company's books and records is recorded as other income and
expense, and, therefore, does not impact income from continuing operations.

During the quarter ended September 30, 2003, the Company issued 56,368 shares of
common stock for consulting and financial advisory services. The services are
being provided over periods ranging from 3 months to 1 year, and will result in
the expensing of approximately $140,000.

In September 2003, the Company settled the outstanding note to an employee who
is formerly a member of the Company's board of directors through the issuance of
78,890 shares of common stock. The note plus accrued interest was approximately
$140,000.

TheFirstNews.com

In December 2001, as a result of our decision to cease operations of our
Financial Solutions Group, we have treated the net assets and results of
operations of the Visual Data Financial Solutions Group as a discontinued
operation as of and for the year ended September 30, 2002. In December 2001 we
issued an aggregate of 104,533 shares of our common stock upon the conversion of
the shares of preferred stock held by The FirstNews.com shareholders pursuant to
the terms of such security in a private transaction exempt from registration
under the Securities Act in reliance on Section 4(2) of that act.

                                      F-28

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 7: CAPITAL STOCK (Continued)

Class A-7 Preferred Stock

The Company through approval of the board of directors has designated 162,500
shares of Class A-7 Preferred Stock for issuance. The Class A-7 Preferred Stock
is non-voting. The holders of the Class A-7 Preferred Stock have a liquidation
preference. The Class A-7 Preferred Stock bears a 12% coupon, payable
semi-annually on the first of March and September.

In September 2002, the Company sold 7,500 shares of Class A-7 Convertible
Preferred Stock for $90,000. Each share of Class A-7 Convertible Preferred Stock
converts to 2.66667 shares of common stock (at $4.50 per share). In addition,
the Company issued 4,332 shares of Class A-7 Convertible Preferred Stock, valued
at approximately $52,000, to consultants for services rendered.

In October and November 2002, the Company sold 20,000 shares of its Class A-7
Convertible Preferred Stock for $240,000 in a private offering. In connection
with this offering we paid a commission of $31,200, issued 5,000 shares of Class
A-7 Preferred Stock for services rendered and to be rendered and issued 15,000
shares of Class A-7 Preferred Stock in a conversion from common stock. Each
share of Class A-7 Preferred Stock converts to 2.66667 shares of common stock
(at $4.50 per share). The Company allowed investors to convert common stock
purchased in March or June 2002, which was adjusted to $4.50 per share and
$4.245 per share, respectively, into shares of Class A-7 Preferred Stock if they
purchased an equal or greater amount of shares of Class A-7 Preferred Stock. The
40,000 shares of common stock that were converted into 15,000 shares of Class
A-7 Preferred Stock would result in the issuance of 40,000 shares of common
stock if converted under the terms of the shares of Class A-7 Preferred Stock.

In January 2003, the Company sold 2,500 shares of Class A-7 Preferred Stock in a
private transaction for $30,000. In connection with this transaction the Company
paid a commission of $3,900 to a broker/dealer for its services.

In March 2003, the Company issued 62,500 shares of Class A-7 Preferred Stock,
with a value of $750,000, to Onstream Media in exchange for 1,500,000 shares of
common stock in Onstream Media. This increased the Company's ownership in
Onstream Media to approximately 29%. The total investment in Onstream Media is
approximately $950,000 and is reflected in the balance sheet under the equity
method at approximately $780,000. See Note 2.

The Company declared the dividend as prescribed in the designations of the
shares of Class A-7 Preferred Stock. The amount owed at March 1, 2003 was
approximately $29,000, which was satisfied through the issuance of 7,793 shares
of common stock on May 29, 2003.

In May 2003, the holder of an aggregate of 30,000 shares of Class A-7 Preferred
Stock converted those shares into an aggregate of 80,000 shares of common stock
pursuant to the designations of the preferred stock.

                                      F-29

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 7: CAPITAL STOCK (Continued)

Class A-7 Preferred Stock

The Company declared the dividend as prescribed in the designation of the shares
of Class A-7 Preferred Stock. The amount owed on the dividend at September 1,
2003 was approximately $68,000, which was satisfied through the issuance of
approximately 28,250 shares of common stock on September 10, 2003.

On August 26, 2003, 1,666 shares of Class A-7 Preferred Stock were converted
into 4,444 shares of common stock. On September 1, 2003, 62,500 shares of Class
A-7 Preferred Stock were converted into 166,667 shares of common stock. On
September 29, 2003, 22,666 shares of Class A-7 Preferred Stock were converted
into 120,887 shares of common stock. The amount owed on the dividend from
September 1, 2003 through the conversion date of September 29, 2003 was
approximately $2,500, which was satisfied through the issuance of approximately
1,111 shares of common stock on September 29, 2003. As of September 29, 2003,
all shares of Class A-7 Preferred Stock have been converted into common stock.

Class A-8 Preferred Stock

In May 2003, the Company issued 140,000 shares of Class A-8 Convertible
Preferred Stock, which is non-voting, to a shareholder as compensation for
restructuring an existing loan to the Company and loaning the Company additional
funds. The Company paid a finders fee of 25,000 shares of Class A-8 Preferred
Stock to a third party. In addition, the shareholder converted his outstanding
common stock in the Company, 123,667 shares, into 92,750 shares of Class A-8
Preferred Stock. See Note 5.

Class A-9 Convertible Preferred Stock ("Class A-9 Preferred Stock")

In June 2003, the Company completed an agreement for a $750,000 private
financing transaction. The Company received proceeds of $450,000 from the first
tranche of the transaction and $300,000 in the second tranche. In the first
tranche the Company sold 30,000 shares of its Class A-9 Preferred Stock and four
year warrants to purchase 10,000 shares of its common stock . The four-year
warrants are exercisable at $4.50 per share. In connection with the first
tranche of this private offering, the Company paid a cash commission of $15,000
and issued an aggregate of 19,400 shares of common stock as additional
compensation. In September 2003, the holders of the Class A-9 Preferred Stock
converted the 30,000 outstanding shares into 214,286 shares of common stock. The
conversion rate was the floor price of $2.10 per share. In addition, the
investors executed the second tranche of the Class A-9 Preferred Stock pursuant
to which the Company sold these investors 20,000 shares of its Class A-9
Preferred Stock and four year warrants to purchase 40,000 shares of its common
stock for $300,000. The four-year warrants are exercisable at $3.00 per share.
In connection with this second tranche, the Company paid a cash commission of
$10,000 and issued 18,934 shares of common stock as additional compensation. As
of September 30, 2003, the investors executed the second tranche of the Class
A-9 Preferred Stock but the Company had not received the proceeds. The $300,000
receivable is reflected in the balance sheet as due from shareholders. See Note
13.

                                      F-30

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 7: CAPITAL STOCK (Continued)

Class A-9 Preferred Stock (Continued)

The Class A-9 Preferred, which carries no voting rights, pays cash dividends at
the rate of 12% per annum based on the stated value of $15.00 per share. The
Class A-9 Preferred Stock is redeemable by the Company beginning six months from
the date of issuance at $15.00 per share plus accrued and unpaid dividends, and
in the event of liquidation or winding up of the Company, each share carries a
liquidation preference of $15.00. The shares of Class A-9 Preferred Stock are
convertible at any time at the option of the holder at $4.50 per share. In
addition, the shares of Class A-9 Preferred Stock are subject to a mandatory
conversion any time after two years from the date of issuance upon notice by the
Company. The conversion price of the stock is the lesser of (i) $4.50 per share
or (ii) the greater of (A) $2.10 per share or (B) 90% of the fair market value
of the Company's common stock. The shares of Class A-9 Preferred Stock also have
an anti-dilution provision in the event that the Company sells common stock
below $2.10 per share or preferred stock with a lower conversion price, with a
floor of $1.575 per share. In any event, the number of shares issued upon such
conversion cannot exceed 19.9% of the Company's then issued and outstanding
common stock.

Reverse stock split

On June 20, 2003, at the 2003 Annual Shareholders Meeting, the Company's
shareholders authorized a reverse stock split of between one-for-ten and
one-for-twenty, at the discretion of the board of directors. On June 24, 2003
the Company affected a one-for-fifteen reverse stock split. The reverse stock
split was affected by transferring the change in common stock at the $.0001 par
value to additional paid in capital. This has no net effect on equity. The
number of common shares and preferred shares the Company is authorized to issue
was maintained at 75 million shares and 5 million shares, respectively. The
Company issued 1,597 shares of common stock to eliminate any fractional shares
owned.

                                      F-31

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 8: INCOME TAXES

The Company has approximately $59.8 million in net operating loss carryforwards
at of September 30, 2003, which expire in 2011 through 2024. The utilization of
approximately $11.4 million of the net operating loss carryforward, acquired
from the acquisition of MOD, against future taxable income may be limited as a
result of ownership changes and other limitations. The Company also has an
approximately $3.5 million capital loss carryforward which expires in 2008.

The Company has a deferred tax asset of approximately $22.5 million primarily
resulting from the net operating loss carryforward. A full valuation allowance
has been recorded related to the deferred tax asset as a result of management's
uncertainty as to the realization of such asset. There are no significant
temporary differences. Accordingly, no income tax benefit has been recorded in
the accompanying consolidated statement of operations as a result of the
approximately $3.3 million and $9.3 million current year increase in the
Company's valuation allowance related to the 2003 and 2002 net operating losses,
respectively.

NOTE 9: SEGMENT INFORMATION

The Company's operations are currently comprised of three operating groups;
Visual Data Webcasting Group, Visual Data Networking Solutions Group and Visual
Data Travel Group. These operating units are managed from the Company's Pompano
Beach, San Francisco and New York facilities.

All material balances related to Company sales, primary business activities, and
location of property and equipment are within the United States.

For the year ended September 30, 2003, the Company provided webcasting services
to one significant customer, CCBN. This customer was a customer of MOD, and,
therefore, we did not have revenues from this customer until the quarter ended
March 31, 2002. For the year ended September 30, 2002, the Company provided
webcasting services to one significant customer, PR Newswire. During the later
part of fiscal 2002, PR Newswire created an operating group, MultiVu, to manage
the large video events. In addition, PR Newswire transitioned their audio only
webcasting business to Thomson Financial. Therefore, PR Newswire was not a
significant customer for the year ended September 30, 2003. For the years ended
September 30, 2003 and 2002 sales to CCBN were approximately $1,138,000 or 17%
and $768,000 or 9% of total consolidated revenue, respectively. For the years
ended September 30, 2003 and 2002 sales to PR Newswire, including MultiVu, were
approximately $353,000 or 5% and $1,579,000 or 19% of total consolidated
revenue, respectively. The contract with either of these customers can be
terminated upon a 30-day notification

                                      F-32

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 9: SEGMENT INFORMATION (Continued)

Detailed below are the results of operations by segment for the years ended
September 30, 2003 and 2002.

<TABLE>
<CAPTION>
                                               Year Ended September 30,
                                             ---------------------------
                                                 2003           2002
                                             ------------   ------------
<S>                                          <C>            <C>
Revenue:
Webcasting Group                             $  3,511,515   $  4,083,538
Networking Solutions Group                      2,931,207      3,507,672
Travel Group                                      372,397        604,038
Other                                                   -         18,413
                                             ------------   ------------
Total consolidated revenue                      6,815,119      8,213,661

Segment operating income (loss)
Webcasting Group                                  557,015        599,376
Networking Solutions Group                        382,149        (68,767)
Travel Group                                      148,975       (504,324)
Other                                                   -         17,629
                                             ------------   ------------
Total operating income                          1,088,139         43,914

Depreciation and amortization                   1,964,989      2,132,605
Corporate and unallocated shared expenses       2,894,232      3,481,485
Other expense, net                                420,426      5,099,021
                                             ------------   ------------
Loss before discontinued operations            (4,191,508)   (10,669,197)
Loss from discontinued operations                       -       (762,976)
                                             ------------   ------------

Net loss                                     $ (4,191,508)  $(11,432,173)
                                             ============   ============

Total assets:
Webcasting Group                             $  2,836,434   $  3,942,545
Networking Solutions Group                      2,865,722      3,852,352
Travel Group                                      166,573        321,873
Other                                           3,368,870      1,043,576
                                             ------------   ------------
Total                                        $  9,237,599   $  9,160,346
                                             ============   ============
</TABLE>

                                      F-33

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 10: ACQUISITION OF MEDIAONDEMAND.COM

On February 7, 2002, MediaOnDemand.com, Inc. ("MOD") was merged with and into
VDAT/MOD Acquisition Corp., a Florida corporation and a wholly owned subsidiary
of Visual Data Corporation. VDAT controlled MOD as of January 1, 2002 and had
made advances of $157,000 to MOD as of that date. The results of MOD are
included in these financial statements as if the transaction had occurred on
January 1, 2002. All outstanding shares of MOD capital stock and options have
been converted into an aggregate of 226,667 shares of VDAT restricted common
stock. The value of the common stock issued was approximately $2.1 million,
based on a share value of $9.45 on February 7, 2002. The estimated fair market
value of the tangible assets and the liabilities acquired resulted in a negative
net asset base of approximately $1.0 million. Therefore, as a result of the
acquisition, approximately $3.1 million of the purchase price was allocated to
customer lists. The following table sets forth the Unaudited pro-forma
consolidated results of operations for the year ended September 30, 2002 giving
effect to the acquisition of MOD, as if the acquisition had occurred as of the
beginning of the period presented:

<TABLE>
<CAPTION>
                             Year Ended
                         September 30, 2002
                         ------------------
<S>                      <C>
Revenues                  $   8,966,000
                          =============
Net loss                  $ (12,397,000)
                          =============
Net loss per share        $       (7.59)
                          =============
</TABLE>

                                      F-34

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 11: DISCONTINUED OPERATIONS

In December 2001, management adopted a plan to sell the Company's Golf, Leisure
and Syndication Group and cease operations of the Financial Solutions Group in
order to focus on certain core businesses. Accordingly, the operating results of
these segments have been segregated from continuing operations and reported as a
separate line item on the statement of operations. The Visual Data Golf, Leisure
and Syndication Group and Financial Solutions Group have been classified as
discontinued operations for all periods presented in the accompanying financial
statements.

The following table sets forth a summary of the results of operations of the
Company's Financial Solutions Group ("TFN") and the Golf, Leisure and
Syndication Group ("GSUS"):

<TABLE>
<CAPTION>
                             Years Ended September 30,
                     -----------------------------------------
                         2003                   2002
                     -----------     -------------------------
                     GSUS    TFN         GSUS            TFN
<S>                  <C>    <C>      <C>            <C>
Revenue              $  -   $  -     $  516,790     $        -
Operating expenses      -      -     (1,113,529)      (174,216)
Other income            -      -          7,124              -
Interest income         -      -            855              -
                     ----   ----     ----------     ----------

Net loss             $  -   $  -     $ (588,760)    $ (174,216)
                     ====   ====     ==========     ==========
</TABLE>

                                      F-35

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 12: STOCK OPTIONS AND WARRANTS

On February 9, 1997, the Board of Directors and a majority of the Company's
shareholders adopted the 1996 Stock Option Plan (the "Plan"). On April 11, 2002,
an amendment to the Plan, ratified by the shareholders, reserved an aggregate of
733,334 Plan Options and added an equity compensation component. At September
30, 2003 and 2002 the Company has granted options to management, employees and
directors under the Plan. The term of these options are from three to eight
years and the vesting periods are from immediate to four years.

All options are granted at a price equal to or greater than the fair market
value at the date of grant. Detail of option activity for the years ended
September 30, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                2003                      2002
                                      -----------------------   -----------------------
                                                    Weighted                  Weighted
                                        Number      Average       Number       Average
                                          Of        Exercise        Of        Exercise
                                        Shares       Price        Shares        Price
                                      ----------   ----------   ----------   ----------
<S>                                   <C>          <C>          <C>          <C>
Balance, beginning of year               594,978   $    33.00      699,657   $    53.48
Expired during the year                 (132,236)       38.14     (217,399)       89.55
Exercised during the year                      -            -       (4,297)           -
Granted during the year                    2,200         4.50      117,017        14.40
                                      ----------   ----------   ----------   ----------

Balance, end of the year                 464,942   $    31.40      594,978   $    33.00
                                      ==========   ==========   ==========   ==========
Exercisable at end of the year           387,595   $    33.78      399,502   $    39.30
                                      ==========   ==========   ==========   ==========
</TABLE>

The following table summarizes information about the Company's outstanding and
exercisable stock options at September 30, 2003:

<TABLE>
<CAPTION>
                                  Outstanding               Exercisable
                                    Weighted
                                    Average     Weighted           Weighted
                                   Remaining    Average             Average
                                  Contractual   Exercise           Exercise
Range of Exercise Price   Shares  Life (Years)   Price     Shares   Price
-----------------------  -------  ------------  --------  -------  --------
<S>                      <C>      <C>           <C>       <C>      <C>
$3.45 - $11.24            12,201      2.20      $   5.85   12,201  $  5.85
$11.25 - $29.99          221,488      2.69         19.65  146,473    19.89
$30.00 - $62.81          201,280      1.22         31.94  198,948    31.96
$62.82 - $150.00          26,473       .61        107.63   26,473   107.63
$150.01 - $257.82          3,500       .81        256.70    3,500   256.70

                         464,942      1.91      $  31.40  387,595  $ 33.78
</TABLE>

                                      F-36

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 12: STOCK OPTIONS AND WARRANTS (Continued)

The fair value of each option granted is estimated on the date of grant using
the Black-Scholes model with the following assumptions: expected volatility of
158.0%, risk-free interest rate of 6.25%, expected dividends of $0 and expected
term is the full term of the option ranging from 1 to 8 years.

The Company has granted options to management, employees, directors and
consultants that are outside of the Plan. For the year ended September 30, 2003,
the Company granted 667 options to consultants at a weighted average fair value
of $1.46 per share and an average exercise price of $4.50 per share. The term of
these options are three years and the vesting periods are immediate. At
September 30, 2003 the Company had 145,801 granted options to consultants
outstanding. These options have been accounted for under SFAS No. 123. The
Company has recognized approximately $58,000 and $731,000 in expense for
consultant options during the years ended September 30, 2003 and 2002,
respectively.

At September 30, 2003, there were vested warrants to purchase an aggregate of
352,406 shares of common stock outstanding, inclusive of the Debenture Warrants
and a warrant issued to lender discussed in Note 5. At September 30, 2003, there
were 352,406 warrants outstanding. The warrants contain exercise prices ranging
from $2.65 to $247.50 expiring from May 2004 to October 2007. During the year
ended September 30, 2003 the Company granted 106,667 warrants, including 40,000
in conjunction with the Class A-7 Preferred Stock, 50,000 in conjunction with
the Class A-9 Preferred Stock and 16,667 in conjunction with the settlement of a
Note. The exercise prices of the warrants granted during the year ended
September 30, 2003 range from $2.65 per share to $4.50 per share.

                                      F-37

<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2003

NOTE 13: SUBSEQUENT EVENTS

On October 22, 2003 Visual Data Corporation executed an agreement and plan of
merger agreement with privately held Onstream Media Corporation to acquire the
remaining 72% of Onstream Media not currently owned by Visual Data. See Note 3.
Under the terms of the agreement, each common share of Onstream Media (other
than shares owned by Visual Data) shall be converted into the right to receive
..1481 restricted common shares of Visual Data common stock. It is estimated that
at the time of the merger Visual Data will issue approximately 2 million shares
of restricted common stock to acquire the remaining interest in Onstream Media.

The closing of the merger is subject to various conditions, including approval
by Visual Data and Onstream Media shareholders, as well as the completion by
Visual Data of a financing for a minimum of $6.5 million. Jesup & Lamont
Securities Corporation has issued a fairness opinion regarding this transaction
to the board of directors of Visual Data.

In October 2003 Visual Data also executed a redemption agreement with Palladin
Opportunity Fund, L.L.C. and Halifax Fund, L.P. (collectively as "Palladin")
with respect to a 6% convertible debenture due December 8, 2003 and a 6%
convertible debenture due May 24, 2004 held by Palladin. Under the terms of the
redemption agreement, Visual Data redeemed a portion of the 6% convertible
debentures for approximately $610,000 in cash and Palladin converted the balance
of the debentures into an aggregate of 300,000 shares of Visual Data's common
stock. These shares have previously been registered by Visual Data under Section
12(g) of the Securities Act of 1933. See Note 5.

In October 2003, Visual Data raised approximately $864,000 in a private
placement exempt from registration under the Securities Act of 1933 in reliance
on Section 4(2) of said act and Rule 506 of Regulation D. In this private
placement Visual Data sold 411,500 shares of its common stock and four year
common stock purchase warrants exercisable into an aggregate of 82,300 shares of
common stock with an exercise price of $3.00 per share to a group of
approximately 17 accredited investors. Visual Data paid a commission and finders
fees of 53,495 shares of common stock for assisting it in the private placement.
Visual Data granted the purchasers registration rights covering the shares,
including the shares issuable upon exercise of the warrants. The proceeds from
this private placement were used to facilitate the cash portion of the
aforedescribed redemption agreement, with the balance to be used as general
working capital.

In October and November 2003, the Company collected the $300,000 represented as
due from shareholder for the purchase of the second tranche of Class A-9
Preferred Stock. See Note 7.

                                      F-38