<PAGE>
                     U.S. 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, 2001

[ ]      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
                                     -------
         (State or other jurisdiction of incorporation or organization)

                                   65-0420146
                                   ----------
                      (I.R.S. Employer Identification No.)

                   1291 SW 29 Avenue, Pompano Beach, FL 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:

                                      None
                                      ----
                              (Title of each class)

                    Name of each exchange on which registered

                                 not applicable
                                 --------------

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

                                  Common Stock
                                  ------------


                    Redeemable Common Stock Purchase Warrants
                   ------------------------------------------
                                (Title of Class)

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


<PAGE>

         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. $6,908,043 for
the 12 months ended September 30, 2001.

         State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days. The aggregate market value of the voting stock held by
non-affiliates computed at the closing price of the registrant's common stock on
December 31, 2001 is approximately $12,500,000.

         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 31, 2001,
18,680,164 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 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
             ----    -----

         The discussion in this Annual Report on Form 10-KSB regarding the
Visual Data Corporation and its subsidiaries, and their business and operations
includes "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1996. Such statements consist of any
statement other than a recitation of historical fact and can be identified by
the use of forward-looking terminology such as "may," "expect," "anticipate,"
"estimate" or "continue" or the negative thereof or other variations thereon or
comparable terminology. The reader is cautioned that all forward-looking
statements are necessarily speculative and there are certain risks and
uncertainties that could cause actual events or results to differ materially
from those referred to in such forward looking statements. We do not have a
policy of updating or revising forward-looking statements and thus it should not
be assumed that silence by us over time means that actual events are bearing out
as estimated in such forward looking statements.

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



<PAGE>




                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OUR BUSINESS, PRODUCTS AND SERVICES

         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. Our operations are comprised in
three operating groups, including:

         *        Visual Data Networking Solutions Group (EDNET)

         *        Visual Data On-line Broadcast and Production Group (includes
                  webcasting, live audio and video events, etc.)

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

         Products and services provided by each of the groups are:

Visual Data Networking Solutions GroupVisual 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
integration and engineering services, application-specific technical advice,
webcasting services, audio equipment, proprietary and off-the-shelf codecs,
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 telecommunications providers, which
enables the exchange of high quality audio, compressed video and multimedia data
communications. EDNET 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 an expanding 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 57% and 71% of our
revenues from continuing operations for the years ended September 30, 2001 and
2000, respectively, generates revenues from the sale of equipment, installation
of equipment, performance or bridging services and usage of bandwidth.

Visual Data On-line Broadcast and Production Group

         The Visual Data On-line Broadcast and Production 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 (Internet, broadcast TV and radio) for any business
entity, and can provide point-to-point audio and video transport worldwide.

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         Our On-line Broadcast and Production Group was created to provide
webcasting services, a cost effective means for corporations to broadcast
analyst conference calls live, making them available to the investing public,
the media and worldwide to anyone with Internet access. We market the On-line
Broadcast and Productions Solutions webcasting products through a direct sales
channel, and in conjunction with our business partner, PR Newswire. Each webcast
can be archived for replay for an additional fee and the archived material can
be accessed 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,
speeches on demand, product launches, internal training, corporate video news
and profiles, crisis communications, visual trade shows, and basic online
multimedia fulfillment.

         Significant to this business division is our strategic partnership with
the Internet's leading press release service, PR Newswire, providing a global
sales force to promote the VDAT broadband corporate services packages. We also
completed development of a suite of trade show related broadband media services
including a "Virtual Exhibit Hall", rich-video filming, key-note speaker
interview vignettes, and conference webcasting, all of which have the benefit of
extending the life of a trade show, a highly attractive proposition for show
producers and exhibitors alike. Our On-line Broadcast and Production Group,
which represented approximately 29% and 17% of our revenues from continuing
operations for the years ended September 30, 2001 and 2000, respectively,
generates revenues through production and distribution fees. For the year ended
September 30, 2001, we experienced an approximate 99% growth in our revenues
from last year from webcasting from our Online Broadcast and Production Group.

Visual Data Travel Group

         The Visual Data Travel Group produces high quality, 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. By incorporating the services of many of the
largest travel and leisure websites, we have created a unique distribution
channel for travel industry businesses such as hotel chains and golf courses to
significantly augment their marketing programs using highly effective
multi-media applications.

         The Visual Data Travel Group, which represented approximately 9% and 7%
of our revenues from continuing operations for each of the years ended September
30, 2001 and 2000, respectively, generates revenues from production and
distribution fees. Our Travel Group experienced significant growth at 70% over
last year, and its revenues have not been adversely affected by the events
following September 11th. We own or co-own virtually all the content we create,
which we believe provides us with desirable content for syndication.

DISCONTINUED OPERATIONS

         The Company issued 1,686,445 shares of common stock in Visual Data
Corporation in exchange for 100% of the common stock of SportSoft Golf, Inc.,
which was merged into a wholly-owned subsidiary of the Company, Golf Society of
the U.S. The value of the common stock was approximately $2.3 million.

         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. For the fiscal years ended September 30, 2001 and 2000 it represented
less than 1% of our revenues. The Golf, Leisure and Syndication Group was formed
in December 2000 with the acquisition of the Golf Society of the U.S. which is a
membership business that markets to the golfing community. Its members are
provided with the opportunity to acquire equipment, greens fees, trips and
various other benefits at a discounted price. While the Golf, Leisure and
Syndication Group represented approximately 19% of our total revenues for the
fiscal year ended September 30, 2001, its operations represented approximately
23% of our net loss for fiscal 2001. In December 2001 we determined 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 our
financial condition and in keeping with our overall strategic plan. Please see
Item 6. Management's Discussion and Analysis or Plan of Operation for a
discussion of the impacts of these discontinued operations on our financial
statements.

         In January 2002 we sold the stock of the Golf Society of the U.S. to an
unaffiliated third party in exchange for a $6.5 million convertible debenture.
[Please see Item 6.]

                                       2
<PAGE>

SALES AND MARKETING

         We use a variety of marketing methods, including our internal sales
force, 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 fiscal years ended September 30, 2001 and 2000, respectively,
revenues from our agreements with PR Newswire have represented approximately 26%
and 17% of our revenues. Our agreement with PR Newswire may be terminated on
short notice. See Item 1. Description of Business Risk Factors. Other than this
agreement, no other agreement with a distributor has represented more than 10%
of our revenues during this period.

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 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, we believe that the number
of competitors are, and will remain, small.

         Our primary video networking competitor is VYVX, a division of Williams
Co. This company's focus is on video-networking services utilizing more
expensive, higher-bandwidth fiber connections than ours. We also compete in the
high-end networking market with JCI, MediaNet, and Wam!Net.

         Our On-line Broadcast and Production Group webcasting products and
services compete with V-call, TellSoft, Activate, Yahoo! Broadcasting, and
others who are offering live webcasts of quarterly earnings conference calls. In
live event webcast production, we compete with MediaLink, Yahoo!, and others.
However, our production services have also been in demand by some of our
competitors, and from time to time we contract services to these companies. The
nature of the streaming media sector of the Internet market is highly
interdependent while being competitive.

         We believe we are of the premier Internet travel broadcasters offering
an end-to-end solution for production and serving digital video on the Internet,
however, we face competition from a number of other companies, including local
production companies and other travel content web sites. We believe we stand
apart from our competitors in that they do not provide their customers with
production or editing services, extensive distribution and they do not own the
content that is aggregated on their site. In contrast, we create and produce
most of our content and own virtually all the video and audio content on our web
sites.

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


                                       3
<PAGE>

as music licensing, 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 $1 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.

         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 December 31, 2001 we had 76 full time employees, of whom 42 were
design, production and technical personnel, 15 were sales and marketing
personnel and 19 were general, administrative and executive management
personnel. None of the employees are covered by a collective bargaining
agreement and our management considers relations with employees and consultants
to be good.

RISK FACTORS

WE HAVE AN ACCUMULATED DEFICIT AND WE ANTICIPATE CONTINUING LOSSES WHICH WILL
RESULT IN SIGNIFICANT LIQUIDITY AND CASH FLOW PROBLEMS.


                                       4
<PAGE>

         We have incurred operating losses since our inception and we have an
accumulated deficit of $39,723,329 at September 30, 2001. For the years ended
September 30, 2001 and 2000, we incurred net losses of $11,552,745 and
$11,401,583, respectively. Our operating expenses have increased and we continue
to incur significant operating losses. Our liquidity has substantially
diminished because of these continuing operating losses. Our future
profitability will depend on increases in revenues from operations. There can be
no assurance that future revenues will grow sufficiently to generate a positive
cash flow or otherwise enable us to be profitable. We will experience
significant liquidity and cash flow problems which will require us to raise
additional capital to continue operations if we are not able to substantially
increase our revenues. We cannot guarantee that future revenues will grow
sufficiently to generate positive cash flow or otherwise enable us to become
profitable.

WE CANNOT PREDICT OUR FUTURE REVENUES OR WHETHER OUR PRODUCTS WILL BE ACCEPTED.
IF THE MARKETS FOR OUR PRODUCTS AND SERVICES DO NOT DEVELOP, OUR FUTURE RESULTS
OF OPERATIONS WILL BE ADVERSELY AFFECTED.

         Revenues from our products and services have been limited. We reported
revenues from continuing operations of $6,908,043 and $5,862,465 for the years
ended September 30, 2001 and 2000, respectively. In addition, the markets for
our products and services have only recently begun to develop, are rapidly
evolving and are increasingly competitive. Demand and market acceptance for
recently introduced products and services are subject to a high level of
uncertainty and risk. It is difficult to predict whether, or how fast, these
markets will grow. We cannot guarantee either that the demand for our products
and services will continue to develop or that such demand will be sustainable.
If the market develops more slowly than expected or becomes saturated with our
competitors' products and services, or do not sustain market acceptance, our
business, operating results, and financial condition will be materially and
adversely affected.

WE WILL NEED ADDITIONAL FINANCING WHICH WE MAY NOT BE ABLE TO OBTAIN ON
ACCEPTABLE TERMS. IF WE ARE UNABLE TO RAISE ADDITIONAL CAPITAL AS NEEDED, THE
FUTURE GROWTH OF OUR BUSINESS AND OPERATIONS WILL BE SEVERELY LIMITED.

         Historically, our operations have been financed primarily through the
issuance of equity. Our acquisition and internal growth strategy requires
substantial capital investment. 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 for the
production and marketing of additional on-line multi-media libraries. Our future
capital requirements, however, depend on a number of factors, including our
ability to grow our revenues and manage our business. Our growth will depend
upon our ability to raise additional capital, possibly through the issuance of
long-term or short-term indebtedness or the issuance of our equity securities in
private or public transactions.

         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. There can be no assurance that acceptable financing for future
acquisitions or for the integration and expansion of existing operations can be
obtained on suitable terms, if at all. Our ability to continue our growth and
acquisition strategy could suffer if we are unable to raise the additional funds
on acceptable terms which will have the effect of limiting our ability to
increase our revenues or possibly attain profitable operations in the future.

WE EXPECT 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


                                       5
<PAGE>

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 and e-commerce.

         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 PR Newswire Corporation. Revenue from
PR Newswire represented approximately 26% and 17% of our consolidated revenue
for the years ended September 30, 2001 and 2000, respectively. These contracts
are generally for terms ranging from one to two years, however, many of them
permit our clients and partners to terminate their agreements with us on short
term notice. Because of the significant nature of the revenues from these
contracts to our consolidated results of operations, the termination of any of
these contracts could have a material adverse effect on our business operations
and prospects.

THE EXERCISE OF OPTIONS AND WARRANTS WILL BE DILUTIVE TO OUR EXISTING
STOCKHOLDERS.

         As of September 30, 2001 we had outstanding options and warrants to
purchase a total of 15,494,279 shares of our common stock at prices ranging
between $0.00016 and $17.188 per share. The exercise of these warrants and
options may materially adversely affect the market price of our common stock and
will have a dilutive effect on our existing stockholders.

THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE DEBENTURES
WILL INCREASE AS THE MARKET PRICE OF OUR COMMON STOCK DECREASES.


                                       6
<PAGE>

         At December 31, 2001 we have an aggregate of $1,879,000 principal
amount of 6% convertible debentures outstanding. The debentures which are
convertible, in whole or in part, at the option of the holders into shares of
our common stock at a conversion price equal to the lesser of:

         -        $2.13 per share, or

         -        90% of the average of the three lowest closing bid prices for
                  the 20 trading days prior to conversion (the "variable
                  conversion price").

         The conversion price of the convertible debentures cannot be less than
$.288 per share. The practical effects of this conversion formula based upon the
current conversion formula are:

         *        If the variable conversion price is above $2.13 per share,
                  then the conversion price is based upon the $2.13 per share
                  formula,

         *        If the variable conversion price is less than $2.13 per share,
                  then the conversion price is determined by calculating 90% of
                  the three lowest closing bid price of our common stock for the
                  20 trading days prior to conversion, subject to a floor price
                  of $.288 per share.

         Because the conversion price is not fixed, the ultimate number of
shares of common stock issuable if the holders elect to convert the $1,879,000
principal amount of the debentures is unknown at this time. However, as the
average of the three lowest closing bid prices of our common stock as report on
the Nasdaq National Market for the 20 consecutive trading days prior to January
1, 2002 is $0.76 per share, if the debentures were to be converted now the
conversion price would be at $0.684 per share. The following table sets forth:

         *        the number of shares of our common stock that would be
                  issuable upon conversion of the $1,879,000 based on a
                  conversion price of $0.684 per share, and

         *        the total number of shares of our common stock that would be
                  issuable upon the conversion of all $3,060,000 original
                  principal amount of the debentures, giving effect to the
                  debentures which have already been converted.

<TABLE>
<CAPTION>
                                         Shares Issued                          Total Shares(2)
                                         on Conversion                            Issued on          Total % of(3)
                                              of               % of(1)          conversion of        Shares issued
Market                 Conversion        $1,879,000 of       Outstanding        all $3,060,000      on conversion of
Price                    Price            debentures           Shares             debentures         all debentures
-----                    -----            ----------           ------             ----------         --------------
<S>                    <C>               <C>                <C>                 <C>                 <C>

$0.76 and above           $0.684           2,747,076            14.7%              4,252,288              24.8%
$0.57 (25% less
than $0.76)               $0.513           3,662,768            19.6%              5,167,980              30.1%
$0.38 (50% less
than $0.76)               $0.342           5,494,152            29.4%              6,999,364              40.8%
$0.19(75% less
than $0.76)               $0.288(4)        6,524,306            34.9%              8,029,518              46.8%
</TABLE>

(1)      Based upon 18,680,164 shares issued and outstanding on December 31,
2001, which includes the shares issued previously upon the conversion of an
aggregate of $1,381,000 principal amount of the debentures.

(2)      Includes an aggregate of 1,505,212 shares of our common stock
previously issued, including 803,740 shares of our common stock issued upon the
conversion of $800,000 principal amount of the


                                       7
<PAGE>

debentures, and 701,472 shares of our common stock issued on the conversion of
$381,000 principal amount of the debentures..

(3)      Based upon 17,174,952 shares issued and outstanding which does not
include the 1,505,212 shares previously issued upon the conversion of aggregate
principal amount of $1,381,000 of the debentures.

(4)      The conversion price has a floor of $.288 per share.


         The terms of the debentures provide that the number of shares of common
stock into which they are convertible, when added together with all other shares
of our common stock beneficially owned by the holder and its affiliates, cannot
exceed 9.9% of our total issued and outstanding common shares at any one time.
The debenture holders are affiliates, and the number of shares of common stock
owned by each debenture holder would be aggregated for the purposes of
calculating the 9.9% limitation. The terms of the debentures also have the
effect of restricting the amount of debentures which the debentures holders can
convert and sell within any 61 day period. This 9.9% limitation, however, does
not prevent the debenture holders from continually liquidating shares of our
common stock owned by them in order to convert all of the debentures into shares
of our common stock, subject to the terms of the debentures.

THE VARIABLE CONVERSION PRICE FORMULA FOR THE DEBENTURES COULD NEGATIVELY AFFECT
THE MARKET PRICE OF OUR COMMON STOCK.

         The following are special risks which result from the variable
conversion price formula of the debentures:

         *        REDUCTION IN STOCK PRICE. The conversion price of the
                  debentures is variable based on the future trading prices of
                  our common stock, with a floor conversion price of $.288 per
                  share.  As a result of the market-related conversion price,
                  the number of shares of common stock issuable upon conversion
                  of the debentures will be inversely proportionate the market
                  price of the common stock at the dates upon which the
                  conversion price may be determined.

         *        EFFECT OF SHORT SALES BY THIRD PARTIES. As a result of the
                  market-related conversion price of the debentures, third
                  parties may take significant short positions in our common
                  stock. If this occurs, these short positions may have the
                  effect of depressing the trading price of our common stock
                  which would result in additional dilutive issuance of stock
                  upon the conversion of the debentures. In addition, other
                  selling security holders may take short positions in our
                  common stock which while not effecting the exercise price of
                  the underlying warrants or options held by these selling
                  security holders, could have the effect of depressing its
                  trading value and therefore result in additional dilutive
                  issuance of stock upon the conversion of the debentures.

         *        EFFECT OF ADDITIONAL SHARES IN MARKET. To the extent that
                  holder of the debentures converts a portion of the debentures
                  and then sell its common stock in the open market, our common
                  stock price may decrease due to the additional shares in the
                  market, possibly allowing the holder to convert the remaining
                  debentures into greater amounts of common stock, further
                  depressing the stock price.

THE EXERCISE PERIOD FOR OUR CLASS A COMMON STOCK PURCHASE WARRANTS EXPIRES IN
JULY 2002, AT WHICH TIME THE WARRANTS WILL CEASE TRADING.

We currently have outstanding 1,350,000 Class A Common Stock Purchase Warrants
which were sold as part of our initial public offering in July 1997. These
warrants are exercisable at $6.00 per share until July 2002, and are currently
quoted on the Nasdaq National Market under the symbol VDATW. At such time


                                       8
<PAGE>

as the exercise period of the warrants expires, the security will no longer be
quoted on the Nasdaq National Market, any other exchange or in the over the
counter market. In addition, the warrants must be exercised prior to their
expiration, or any right to acquire shares of our common stock thereunder is
extinguished. As the current market price of our common stock is below the
exercise price of the warrants, we do not know if any of these warrants will be
exercised prior to their expiration.


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 directors, of which no shares
were issued and outstanding at September 30, 2001. Our board of directors may,
without shareholder approval, issue preferred stock with dividends, liquidation,
conversion, voting or other rights which 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, exclusive of our EDNET subsidiary. The aggregate
purchase price paid for the facility was $1,475,000, comprised of $475,000 in
cash and an 18-month first mortgage in the principal amount of $1,000,000,
bearing interest at the rate of 8.75% per annum, with 15-year amortization. In
March 1999 we refinanced this mortgage. The current mortgage in the principal
amount of approximately $850,000, which is held by a bank, bears interest at
8.75% per annum on a 15 year amortization, and the unpaid principal balance and
any accrued interest is due on September 30, 2002. We do not anticipate any
difficulty in refinancing the property prior to the due date of this mortgage.

         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. EDNET leases this facility pursuant to a Sublease dated November 1,
1993 with Varitel Video, Inc. ("Varitel"), an unaffiliated entity. The term of
the sublease was for five years, commencing November 15, 1993. At November 14,
1998, the lease was renewed for an additional term ending August 31, 2003. Under
the renewed sublease, the monthly lease payment is $13,251 per month. In lieu of
a security deposit, EDNET granted Varitel a security interest in certain of
EDNET'S equipment with an aggregate purchase price of approximately $75,000.
Varitel may terminate this sublease upon 90 days prior written notice, upon a
change in the principal ownership of EDNET or in the event that EDNET engages in
a "competing type of film or video service business like or similar to Varitel".
This excludes any "networking service application" which we offer in connection
with audio, video and other multimedia networking services.

ITEM 3.  LEGAL PROCEEDINGS

         None.

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


                                       9
<PAGE>

         None.

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock and warrants are quoted on the Nasdaq National Market
under the symbols "VDAT" and "VDATW," respectively. The following table sets
forth the high and low closing sale prices for our common stock and warrants as
reported on the Nasdaq Stock Market and for the period from October 1, 1999
through September 30, 2001, the high and low closing sale prices for our common
stock and warrants as reported on the Nasdaq National Market System.

<TABLE>
<CAPTION>
         COMMON STOCK                    High               Low

         FISCAL YEAR 2000:
         <S>                           <C>               <C>

         First Quarter                 $  15.688         $  7.188
         Second Quarter                $  16.375         $  6.563
         Third Quarter                 $  13.875         $  8.438
         Fourth Quarter                $   9.250         $  3.031

         FISCAL YEAR 2001:

         First Quarter                 $   4.250         $  1.000
         Second Quarter                $   2.750         $  1.000
         Third Quarter                 $   3.790         $  1.250
         Fourth Quarter                $   1.760         $  0.520
</TABLE>


<TABLE>
<CAPTION>
         WARRANTS                        High               Low

         FISCAL YEAR 2000:

         <S>                           <C>               <C>
         First Quarter                 $ 10.125          $  3.500
         Second Quarter                $  8.938          $  4.000
         Third Quarter                 $  4.250          $  1.313
         Fourth Quarter                $  1.813          $  0.813

         FISCAL YEAR 2001:

         First Quarter                 $  1.375          $ 0.2129
         Second Quarter                $  0.563          $ 0.1880
         Third Quarter                 $  1.110          $ 0.2500
         Fourth Quarter                $  0.600          $ 0.1800
</TABLE>

                  On December 31, 2001, the last reported sale prices of the
common stock and warrants on the Nasdaq National Market were $.78 per share and
$.15 per warrant. These prices do not include retail mark-ups, markdowns or
commissions, and may not necessarily represent actual transactions. As of
December 31, 2001, there were approximately 450 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.


                                       10
<PAGE>

         RECENT SALES OF UNREGISTERED SECURITIES

                  On December 4, 2001 we entered into a private debt financing
transaction with a shareholder who is an accredited investor
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 loan bears interest at approximately 12%, which was prepaid in
January 2002 with the issuance of 500,000 shares of common stock.

                  Beginning in January 2002 we will make principal payments on
the loan in an amount equal to 50% of our Collected Revenue (as that term is
defined in the Loan Agreement), with a minimum payment of $100,000 per month,
until such time as we have repaid $750,000 of the loan, and thereafter our
monthly payments shall be fixed at $100,000. After we have repaid $1 million of
principal the lender will make available additional borrowings up to a maximum
outstanding amount of $1.5 million. 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 owned under the Secured Promissory 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
Secured Promissory Note is to be repaid by us.

                  We granted the lender a security interest in all of our
tangible and intangible assets, and issued him a warrant to purchase 1 million
shares of our common stock at an exercise price of $1.00 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 Secured Promissory Note, within six months from the date of
the transaction and we granted the lender certain piggy-back registration
rights.

                  In conjunction with the transaction, all members of our
management have each agreed to limit their annual compensation under certain
circumstances while the loan is outstanding. In addition, each of Randy S.
Selman and Alan Saperstein have agreed to cancel 750,000 options held by them
(for an aggregate of 1,500,000 options to be cancelled) to purchase shares of
our common stock.

                  Copies of the Loan Agreement, Secured Promissory Note,
Security Agreement and Common Stock Purchase Warrant were attached hereto as
exhibits to the Report on Form 8-K which we filed with the SEC on December 17,
2001. The foregoing description is qualified in its entirety by reference to the
full text of such exhibits.

                  In October 2001 we issued an aggregate of 127,191 shares of
our common stock to our executive officers and certain senior staff members as
consideration for a reduction in their salaries for the first quarter of fiscal
2002 in a private transaction exempt from registration under the Securities Act
in reliance on Section 4(2) of that act. The recipients of the securities were
accredited investors, or had such knowledge and experience in business and
financial matters that they were able to evaluate the risks and merits of an
investment in Visual Data, and were, therefore, sophisticated investors at the
time of issuance. The stock certificates evidencing the shares that were issued
contained a legend restricting their transferability absent registration under
the Securities Act or the availability of an applicable exemption therefrom.

                  In November 2001 we issued an unaffiliated third party who is
an accredited investor 50,000 shares of our common stock as consideration for
amounts due the party in a private transaction exempt from registration under
the Securities Act in reliance on Section 4(2) of that act. The stock
certificate evidencing the shares that were issued contained a legend
restricting their transferability absent registration under the Securities Act
or the availability of an applicable exemption therefrom. In November 2001 we
also issued our outside directors an aggregate of 32,033 shares of our common
stock as compensation for their services on our Board of Directors. These shares
were issued in a private transaction exempt from registration under the
Securities Act, and each of the recipients is an accredited investor. The stock
certificates evidencing the shares that were issued contained a legend
restricting


                                       11
<PAGE>

their transferability absent registration under the Securities Act or the
availability of an applicable exemption therefrom

                  In December 2001 we issued an aggregate of 1,568,000 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. The recipients of the securities were
accredited investors, or had such knowledge and experience in business and
financial matters that they were able to evaluate the risks and merits of an
investment in Visual Data, and were, therefore, sophisticated investors at the
time of issuance. The stock certificates evidencing the shares that were issued
contained a legend restricting their transferability absent registration under
the Securities Act or the availability of an applicable exemption therefrom.

                  In December 2001 we also issued an aggregate of 15,000 shares
of our common stock as compensation for services rendered to us in a private
transaction exempt from registration under the Securities Act in reliance on
Section 4(2) of that act. The recipients of the securities were accredited
investors, or had such knowledge and experience in business and financial
matters that they were able to evaluate the risks and merits of an investment in
Visual Data, and were, therefore, sophisticated investors at the time of
issuance. The stock certificates evidencing the shares that were issued
contained a legend restricting their transferability absent registration under
the Securities Act or the availability of an applicable exemption therefrom. In
December 2001 we also issued 50,000 shares of our common stock to an
unaffiliated third party as compensation for services rendered to us in a
private transaction exempt from registration under the Securities Act in
reliance on Section 4(2) of that act .The recipient of the securities was an
accredited investors and the stock certificate evidencing the shares that were
issued contained a legend restricting their transferability absent registration
under the Securities Act or the availability of an applicable exemption
therefrom.

                  In December 2001 we issued 200,000 shares of our common stock
as consideration for the purchase of 2,000,000 shares of common stock of a
development stage company, representing approximately 29% of the issued and
outstanding common stock, in a private transaction exempt from registration
under the Securities Act in reliance on Section 4(2) of that act. Management of
the recipients of the securities had such knowledge and experience in business
and financial matters that they were able to evaluate the risks and merits of an
investment in Visual Data, and were, therefore, sophisticated investors at the
time of issuance. The stock certificate evidencing the shares that were issued
contained a legend restricting their transferability absent registration under
the Securities Act or the availability of an applicable exemption therefrom.


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 Networking Solutions Group (EDNET)

         *        Visual Data On-line Broadcast and Production Group (includes
                  webcasting, live audio and video events, etc.)

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


                                       12
<PAGE>

REVENUE RECOGNITION

         A significant component of our Networking 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
Networking Solutions Group recognizes revenues from equipment installation and
bridging when service is performed. Networking usage revenue is recognized based
on customers' monthly usage. Our 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. Our On-line Broadcast and
Production Group recognizes revenue when a project is completed. 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,
                                                     2001            2000
                                                    ------          ------
<S>                                                 <C>             <C>
Revenue                                              100.0%          100.0%
Cost of revenue                                       63.8           111.7
Operating expenses:
   General and administrative                        104.1            95.8
   Sales and marketing                                35.3            74.8
                                                    ------          ------
Total operating expenses                             139.4           170.6
                                                    ------          ------
Loss from operations                                (103.2)         (182.3)

Other income (expense):
   Interest income                                     1.2             9.7
   Rental income                                       1.2             1.4
   Loss on disposal of assets                           --            (0.2)
    Other income (expense)                             2.6              --
   Interest expense                                  (13.4)           (2.2)
   Minority interest                                    --            10.8
                                                    ------          ------
Total other income (expense)                          (8.4)           19.5
                                                    ------          ------
Loss from continuing businesses                     (111.6)         (162.8)

Losses from discontinued businesses                  (55.6)          (31.6)
                                                    ------          ------
Net loss                                            (167.2)%        (194.4)%
                                                    ======          ======
</TABLE>

REVENUE

         We recognized revenue of approximately $6,908,000 from continuing
operations for the year ended September 30, 2001, representing an increase of
approximately $1,046,000 (18%) over revenues of approximately $5,862,000 for the
same period last year.

         Revenues from the Networking Solutions Group accounted for
approximately $3,905,000 for the year ended September 30, 2001 as compared to
approximately $4,154,000 for the same period in fiscal


                                       13
<PAGE>

2000, which represents a decrease of approximately $249,000 (6%). This decrease
is the result of a decline in the sale of equipment.

         Revenues from the On-Line Broadcast and Production Group accounted for
approximately $2,036,000 for the year ended September 30, 2001 as compared to
approximately $1,023,000 for the same period in fiscal 2000, which represents an
increase of approximately $1,013,000 (99%). This increase is primarily the
result of the increase in the business services provided which includes
webcasts, conference calls and slide show presentations.

         Revenues from the Travel Group accounted for approximately $646,000 for
the year ended September 30, 2001 as compared to approximately $380,000 for the
same period in fiscal 2000, which represents an increase of approximately
$266,000 (70%). The increase is the result of more production and distribution
performed for hotels and resorts.

         The balance of our revenue for the year ended September 30, 2001,
approximately $321,000, was derived from CareView. We sold CareView assets to
CuraSpan, Inc. in December 2000, and CuraSpan, Inc. entered into a services
agreement with CareView to provide the production and distribution of videos.

COST OF REVENUE

         Cost of revenue includes video production costs including a percentage
of our programmers allocated time and related overhead costs as well as network
fees and equipment costs associated with our Network Solutions Group's revenue.
Cost of revenue was $4,408,000 for the year ended September 30, 2001,
representing a decrease of approximately $2,141,000 (33%) from approximately
$6,549,000 for the same period last year.

         Cost of revenue from the Networking Solutions Group accounted for
approximately $3,121,000 for the year ended September 30, 2001 as compared to
approximately $4,017,000 for the same period in fiscal 2000, which represents a
decrease of approximately $896,000 (22%). This decrease is the result of
decreased sales from the Networking Solutions Group, as well as cost reductions
as a result of cost containment measures adopted in fiscal 2001.

         Cost of revenue from the On-Line Broadcast and Production Group
accounted for approximately $583,000 for the year ended September 30, 2001 as
compared to approximately $547,000 for the same period in fiscal 2000, which
represents an increase of approximately $36,000 (7%).

         The cost of revenue for the Travel Group for the year ended September
30, 2001 was approximately $528,000 representing a decrease of $546,000 (51%)
from $1,074,000 for the same period last year. During fiscal 2001, certain
projects were assigned to the programming department that met capitalization
guidelines under Statement of Position 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use, accordingly, these
costs were capitalized, as well as cost reductions as a result of cost
containment measures adopted in fiscal 2001.

         The balance of the cost of our revenues for the year ended September
30, 2001, approximately $176,000, was derived from production and distribution
of video content libraries for CuraSpan, Inc.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and administrative expenses were $3,437,000 for the year ended
September 30, 2001, representing an increase of approximately $339,000 (11%)
from approximately $3,098,000 for the same period last year. The increase was
primarily the result of the growth in infrastructure to support our webcasting
service for our On-Line Broadcast and Production Group.


                                       14
<PAGE>

         General and administrative expenses from the On-Line Broadcast and
Production Group accounted for approximately $833,000 for the year ended
September 30, 2001 as compared to approximately $409,000 for the same period in
fiscal 2000, which represents an increase of approximately $424,000 (104%). The
increase was the result of additional infrastructure to support our webcasting
service.

         General and administrative expenses from the Networking Solutions Group
accounted for approximately $1,633,000 for the year ended September 30, 2001 as
compared to approximately $1,877,000 for the same period in fiscal 2000, which
represents a decrease of approximately $244,000 (13%). This decrease is the
result of decreased sales from the Network Solutions Group, as well as cost
reductions as a result of cost containment measures adopted in fiscal 2001.


         General and administrative expenses for the Travel Group for the year
ended September 30, 2001 were approximately $607,000 representing an increase of
$83,000 (16%) from $524,000 for the same period last year. The increase was
primarily the result of general business costs associated with the maintenance
of an office in Europe. This office was closed in October 2001.

SALES AND MARKETING EXPENSES

         Sales and marketing expenses were $2,440,000 during the year ended
September 30, 2001, representing a decrease of approximately $1,948,000 (44%)
from approximately $4,388,000 for the same period last year.

         Sales and marketing expenses from the Travel Group accounted for
approximately $984,000 during the year ended September 30, 2001 as compared to
approximately $2,025,000 for the same period in fiscal 2000, which represents a
decrease of approximately $1,041,000 (51%). The decrease was primarily the
result of cost containment and consolidation of sales, marketing and advertising
implemented in the beginning of fiscal 2001.

         Sales and marketing expenses from Other, which includes CareView,
accounted for approximately $335,000 for the year ended September 30, 2001 as
compared to approximately $1,455,000 for the same period in fiscal 2000, which
represents a decrease of approximately $1,120,000 (77%). The decrease was the
result of the sale of assets of CareView to CuraSpan, Inc. and the costs savings
from fewer employees.

         Sales and marketing expenses for the Networking Solutions Group were
approximately $743,000 for the year ended September 30, 2001 as compared to
approximately $670,000 for the same period in fiscal 2000 representing a
increase of $73,000 (11%).

         Sales and marketing expenses from the On-Line Broadcast and Production
Group accounted for approximately $378,000 for the year ended September 30, 2001
as compared to approximately $238,000 for the same period in fiscal 2000, which
represents an increase of approximately $140,000 (59%). The increase was the
result of additional personnel hired to support and expand our webcasting
service.

         CORPORATE ALLOCATION EXPENSES

         Corporate allocation expenses were $3,752,000 during the year ended
September 30, 2001, representing an increase of approximately $1,236,000 (49%)
from approximately $2,516,000 for the same period last year. Corporate
allocation includes $1,022,000 non-cash expense for consulting options as a
result of the fair value recorded by using the Black-Scholes pricing model.
During fiscal 2001, as a result of the cost containment program, certain
employment positions were restructured in order to service the entire
organization as opposed to a single operating unit. These positions were
included at the operating levels during fiscal 2000 and were moved to the
corporate level during fiscal 2001. The remaining increase is primarily the
result of legal and accounting fees, recruiting fees and severance.


                                       15
<PAGE>

OTHER INCOME (EXPENSE)

         Other income (expense) was $(583,000) during the year ended September
30, 2001 compared to approximately $1,141,000 other income for the same period
last year. Interest expense amounted to $928,000 compared to $129,000
representing an increase of $799,000 primarily due to interest, fees and
amortization of debt issue costs associated with the 6% convertible debentures.
This interest expense is primarily the result of the debt discount relating to
the conversion feature being expensed immediately due to the right of conversion
plus the expensing of the fair value of the warrants issued in connection with
the debentures, both are non-cash expenses. In addition, interest income was
approximately $80,000 during the year ended September 30, 2001, representing a
decrease of approximately $487,000 (86%) from approximately $567,000 for the
same period last year. The decrease in interest income earned is the result of
lower cash and cash equivalent balances during the year ended September 30,
2001. Rental income was $81,000 for the year ended September 30, 2001
representing an increase of $14,000 from $67,000 for the same period last year.
Other income (expense) was approximately $184,000 for the fiscal year ended
September 30, 2001 primarily the result of the recovery of prior year inventory
valuations of $200,000 as well as the receipt of the first payment from CuraSpan
Inc. for $50,000, which was fully reserved. These increases were offset by
expenses associated with an acquisition that was terminated. During fiscal year
2000 the inventory at the Network Solutions Group was reserved for obsolescence
due to slow sales. During 2001, the engineers at the Network Solutions Group
developed product improvements according to customer specifications for this
inventory thus making it saleable. For the year ended September 30, 2000,
approximately $636,000 of subsidiary losses were allocated to minority interest.
There were no such allocations to minority interest for the year ended
September, 2001 as the minority interests' investment was reduced to $0, which
occurred during fiscal year 2000. Subsequently, 100% of the net losses of EDNET
were included in the consolidated financial statements.

DISCONTINUED OPERATIONS

         In February 2001, the Company completed the acquisition of SportSoft
Golf, Inc. The Company issued 1,686,445 shares of common stock in Visual Data
Corporation in exchange for 100% of the common stock of SportSoft Golf, Inc.,
which was merged into a wholly-owned subsidiary of the Company, Golf Society of
the U.S. The value of the common stock issued to shareholders of SportSoft Golf,
Inc. was approximately $2.3 million, based upon a share value of $1.375 on
December 22, 2000. The estimated fair market value of the tangible assets and
the liabilities acquired resulted in a negative net asset base of approximately
$2.2 million. Therefore, as a result of the acquisition, the Company recorded
approximately $5.0 million in intangible assets.

         Losses from discontinued operations amounted to approximately
$3,840,000 for the year ended September 30, 2001 as compared to losses of
$1,854,000 for the same period in 2000. As a result of our decision in December
2001 to sell our interest in the Golf, Leisure and Syndication Group,
approximately $2,635,000 of operating losses are classified as discontinued
operations. In December 2001, we also decided to cease operations in the
Financial Solutions Group and have classified approximately $1,205,000 and
$1,854,000 as discontinued operations for the year ended September 30, 2001
and 2000, respectively.

         While the Golf, Leisure and Syndication Group had represented
approximately 19% of our revenues during fiscal 2001, it accounted for
approximately 23% of our net loss. Revenues from the Financial Solutions Group
had been minimal since its inception in 1999. Our decision to discontinue the
operations of these groups is in keeping with our business strategy focusing on
strategic operations which compliment our core business. In January 2002 we sold
the stock of the Golf Society of the U.S. to an unaffiliated third party in
exchange for a $6.5 million convertible debenture. We retained and will
integrate the golf library and multi-media content into our Travel Group,
thereby adding additional rich media content which can be used for syndication
to third parties.

LIQUIDITY AND CAPITAL RESOURCES

         Our working capital deficit at September 30, 2001 was approximately
($619,000), a decrease of $4,439,000 from $3,820,000 at September 30, 2000. The
change in working capital was primarily attributable to cash used in operating
activities of $4,270,000 and for discontinued operations of $5,268,000 for the
year ended September 30, 2001, partially offset by the proceeds from the sale of
preferred stock in TheFirstNews.com ($905,000, net), the sale of 6% convertible
debentures ($3,060,000, net) and the sale of our common stock ($2,805,000, net).
At September 30, 2001 our total current liabilities were $3,101,000 which
increased $497,000 from $2,604,000 at September 30, 2000.


                                       16
<PAGE>
The increase is primarily attributable to approximately $851,000 of current
mortgage note payable an increase of $807,000, due to the balloon payment due on
the mortgage on September 30, 2002.

         Net cash used investing activities was $589,000 for the year ended
September 30, 2001 primarily due to property and equipment additions of
$608,000. Net cash provided by financing activities, as previously described,
for the year ended September 30, 2001 was $6,721,000.

         As discussed previously, we decided to cease operations in the
Financial Solutions Group and the Golf, Leisure and Syndication Group. In
January 2002 we sold the stock of the Golf Society of the U.S. to an
unaffiliated third party in exchange for a $6.5 million convertible debenture.
We classified approximately $3,808,000 to net assets from discontinued
operations as of September 30, 2001. Management anticipates that the
consideration received from the sale of the Golf, Leisure and Syndication Group
will be sufficient to recover the net assets of the group as of September 30,
2001. Based on the sale terms, the Company will receive no cash consideration
for the foreseeable future.

         For the year September 30, 2001, we had an operating loss from
continuing operations of approximately $7.7 million and cash used in operations
of approximately $4.3 million. At September 30, 2001, we had approximately
$52,000 of cash and cash equivalents and approximately $182,000 in restricted
cash. Subsequent to September 30, 2001 we have borrowed an additional $1.5
million of capital under a loan agreement. The Company has an additional $1
million in committed financing. See "Item 5. Market for Common Equity and
Related Stockholder Matters - Recent Sales of Unregistered Securities." We do
not presently have any commitment for capital expenditures. Based upon our
current operations, we believe we have sufficient funds, including available
capital financing to provide for our operations for the next 12 months.

         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. Based upon an ongoing
evaluation of our cash needs, we will 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 we will be successful in obtaining
additional capital, or that such capital will be available on terms acceptable
to us. Further, there can be no assurance that even if such additional capital
is obtained or the planned cost reductions are implemented, that we will achieve
profitability or positive cash flow.

ITEM 7.  FINANCIAL STATEMENTS

         Our financial statements are contained in pages F-1 through F-27 as
follows.

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

         None.

                                    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:


                                       17
<PAGE>

<TABLE>
<CAPTION>
         Name                 Age     Position
         ----                 ---     --------
<S>                           <C>     <C>

Randy S. Selman(1)            45      Chief Executive Officer, President and
                                        Chairman; Chairman of EDNET
Alan M. Saperstein            42      Executive Vice President, Treasurer and
                                        Director; Director of EDNET
George Stemper                47      Chief Operating Officer
Gail Babitt                   38      Chief Financial Officer
Benjamin Swirsky(1)(2)        59      Director
Brian K. Service(1)(2)        54      Director; Director of EDNET
Eric Jacobs                   54      Secretary, Director; Director of EDNET
Robert J. Wussler(1)(2)       62      Director
</TABLE>

(1)      Member of the Compensation Committee.
(2)      Member of the Audit 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 a
member of the Compensation Committee of the Board of Directors. Since July 1998
Mr. Selman has been Chairman of the Board of EDNET. 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. Since July 1998, Mr. Saperstein has been a member of the
Board of Directors of EDNET. 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. HSI is a leading global developer and
marketer of Windows NT and Internet based systems and applications software for
the restaurant, hotel, and club hospitality industry business segments. 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 having hotel technology, telecom, military
applications, and enterprise oriented business solutions. 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. From July 1996 through August 1999, Mr. Stemper was with the Hyatt
Hotels Corporation and with Hilton Hotels from August, 1979 through March 1981.
Mr. Stemper has a B.S. degree from Cornell University with and MBA from
Fairleigh Dickinson University.

         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 Price Waterhouse
Coopers 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 Price Waterhouse
Coopers LLP (formerly Price Waterhouse LLP) and with Ernst & Young LLP


                                       18
<PAGE>

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. Since June 1998, Mr. Swirsky has been Chairman and
CEO of Zconnect, an e-commerce company, where he serves as Chairman. 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: 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) CamVec Corp., a Canadian publicly-traded company
(CAT.CV), (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) Bee Line Monorail Systems, Inc., (v)
Peregrine Industries, Inc. (OTC Bulletin Board: HVAC), (vi) Kaledon.com, Inc.,
where he currently serves as Chairman, and (vii) Don Bell Corporation.

         BRIAN K. SERVICE. Mr. Service has been a member of our Board of
Directors since July 1997 and serves on the Audit and Compensation Committees of
the Board of Directors. Also, since August 1998 Mr. Service has been a Director
of EDNET. Mr. Service is a dual New Zealand and U.S. citizen and currently
resides in California. Mr. Service currently spends a substantial amount of his
professional time in the United States acting as an international business
consultant and a Managing Director of RPMC. In this capacity, he has clients in
North and South America, the United Kingdom, Asia, Australia and New Zealand.
From October 1992 to October 1994, Mr. Service was Chief Executive Officer and
Managing Director of Salmond Smith BioLab, a New Zealand publicly traded company
engaged in the production and sale of consumer and industrial products. From
1982 to 1986 he was Chief Executive Officer and Executive Chairman of Milk
Products, Holding (North America), Inc., a wholly-owned subsidiary of the New
Zealand Dairy Board that was located in Santa Rosa, California. Since September
1999, Mr. Service has served as President, Chief Executive Officer and director
of 3D Systems, Inc., a publicly traded company.

         ERIC JACOBS. Mr. Jacobs has been a member of the Board of Directors
since July 1997 and has served as Secretary since February 1999. From March 1996
until August 1997, Mr. Jacobs was Vice President and General Manager of our
wholly owned subsidiary, HotelView(R) Corporation and thereafter he has served
as Vice President and General Manager of our wholly owned subsidiary, ResortView
Corporation. Since October 1998, Mr. Jacobs has been a member of the Board of
Directors of EDNET. Since 1976, Mr. Jacobs has served as the Chairman of the
Miami Beach Visitor and Convention Authority and since September 1995 as
Chairman of the Greater Miami and the Beaches Hotel Association. Since 1972, Mr.
Jacobs has been a member of Miami Beach Chamber of Commerce and has served as
its Chairman since September 1996. From 1972 through October 1993, Mr. Jacobs
was the owner of, and served as President and General Manager of, the Tarleton
Hotel, Miami Beach, Florida.

         ROBERT J. WUSSLER. Mr. Wussler has been a member of the Board of
Directors since July 1999. Mr. Wussler has served as a Director of EDNET since
1995. 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


                                       19
<PAGE>

as President of SuperStation TBS, and from 1974 to 1978 he was the President of
CBS Television Network and CBS Sports.

         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.

COMMITTEES OF THE BOARD OF DIRECTORS

         Our Board of Directors has established a Compensation Committee and an
Audit Committee. The members of the Compensation Committee and the Audit
Committee consist of a majority of independent directors. The Compensation
Committee administers our stock option plan and makes recommendations to the
Board of Directors concerning compensation, including incentive arrangements, of
our officers and key employees. The members of the Compensation Committee are
Randy S. Selman, Benjamin Swirsky, Brian K. Service and Robert J. Wussler. The
Audit Committee reviews the engagement of the independent accountants and
reviews the independence of the accounting firm. The Audit Committee also
reviews the audit and non-audit fees of the independent accountants and the
adequacy of our internal accounting controls. The members of the Audit Committee
are Benjamin Swirsky, Brian K. Service and Robert J. Wussler.

DIRECTORS' COMPENSATION

         Directors who are not our employees received $1,000 per meeting, until
July 2001 when the fee was adjusted to $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.

         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, 2001 members of our Board of Directors
hold outstanding options to purchase an aggregate of 1,517,000 shares of our
common stock at prices ranging from $.75 to $17.188 per share.

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 (the "Exchange Act") during the fiscal year ended September 30, 2001 and
Forms 5 and amendments thereto furnished to us with respect to the fiscal year
ended September 30, 2001, 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 Exchange Act during the fiscal year
ended September 30, 2001, other than:

         -        Ms. Babitt and Mr. Stemper each failed to timely file their
respective Form 3, which forms were subsequently filed with the SEC, and

         -        Messrs. Selman, Saperstein, Jacobs, Stemper and Ms. Babitt
each failed to timely file a Form 4 reporting a grant of stock options in April
2001, which forms were subsequently filed with the SEC.

ITEM 10. EXECUTIVE COMPENSATION


                                       20
<PAGE>

         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>    <C>   <C>

Randy S. Selman        2001     $227,333(11)  -0-          $ 11,863(1)    -0-           -0-    -0-        -0-
  President, Chief     2000     $223,646(11)  -0-          $ 12,912(2)    -0-           -0-    -0-        -0-
  Executive Officer    1999     $162,110      -0-          $  9,794(3)    -0-           -0-    -0-        -0-
  and Director

Alan Saperstein        2001     $227,333(11)  -0-          $ 14,178(4)    -0-           -0-    -0-        -0-
  Vice President       2000     $223,646(11)  -0-          $ 15,480(5)    -0-           -0-    -0-        -0-
  Treasurer and        1999     $162,110      -0-          $ 14,894(6)    -0-           -0-    -0-        -0-
  Director

George Stemper         2001     $150,000      -0-          $  8,248(7)    -0-           -0-    -0-        -0-
  Chief Operating
  Officer


Gail Babitt            2001     $115,761      -0-          $  7,068(8)    -0-           -0-    -0-        -0-
  Chief Financial
  Officer

Pauline Schneider      2000     $108,693      -0-          $  1,775(9)    -0-           -0-    -0-        -0-
  Chief Financial      1999     $ 76,083      -0-          $  2,287(10)   -0-           -0-    -0-        -0-
  Officer
</TABLE>


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

(2)      Includes $681 for disability insurance, $3,981 for medical insurance
         and $8,250 automobile allowance.

(3)      Includes $681 for disability insurance, $1,913 for medical insurance
         and $7,200 automobile allowance.

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

(5)      Includes $681 for disability insurance, $6,549 for medical insurance
         and $8,250 automobile allowance.

(6)      Includes $597 for disability insurance, $7,097 for medical insurance
         and $7,200 automobile allowance.

(7)      Includes $1,998 for medical insurance and $6,250 automobile allowance.
         Mr. Stemper has served as the Chief Operating Officer since September
         2000.

(8)      Includes $1,651 for medical insurance and $5,417 automobile allowance.
         Ms. Babitt has served as the Chief Financial Officer since November
         2000.

(9)      Includes $0 for disability insurance, $1,775 for medical insurance and
         $2,250 automobile allowance. Ms. Schneider served as the Chief
         Financial Officer until October 2000.

(10)     Includes $0 for disability insurance, $2,287 for medical insurance and
         $0 automobile allowance.

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


                                       21
<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 375,000
shares of common stock at $2.125 per share, vesting 125,000 options on each
anniversary date 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 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 250,000
options at $8.875 (the fair market value at the date of grant) per share to each
of Messrs. Selman and Saperstein, vesting 125,000 options on each anniversary
date 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 further 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
500,000 options at $1.50 (the fair market value at the date of grant) per share
to each of Messrs. Selman and Saperstein, vesting 50,000 options per year for
the first two years and 200,000 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 that maintains 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 which 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.


                                       22
<PAGE>

         Effective October 15, 2001 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.

         Additionally, each of Mr. Stemper and Ms. Babitt were granted options
(which contain certain anti-dilution provisions) to purchase 100,000 shares of
common stock at $.75 per share, vesting 50,000 options on each anniversary date
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 which 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 2001 to the Named Executive Officers.


                                       23
<PAGE>


<TABLE>
<CAPTION>
                 Option Grants in Year Ended September 30, 2001

                                              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            850,000                     17%                      (1)          (1)
Alan Saperstein,
  Executive Vice
  President and
  Director                850,000                     17%                      (1)          (1)
George Stemper,
  Chief Operating
  Officer                 200,000                      4%                      (2)          (2)
Gail Babitt, Chief
  Financial Officer       200,000                      4%                      (3)          (3)
</TABLE>

(1)      On April 18, 2001 we granted options to acquire 350,000 shares of
common stock at an exercise price of $2.00 per share. These options were granted
as part of a bonus program. The term of these options is four years from the
date of grant. These options are fully vested. On August 1, 2001 we granted
options to acquire 500,000 shares of common stock at an exercise price of $1.50
per share. These options were granted as part of an extension of Messrs. Selman
and Saperstein employment contracts. The term of these options is four years
from the date of vesting. These options will vest at 50,000, 50,000, 200,000 and
200,000 on the first, second, third and forth anniversary date of the employment
contract extension, which was the date of grant.

(2)      On September 18, 2000 we granted options to acquire 100,000 shares of
common stock at an exercise price of $4.188 per share. These options were
granted as part of the executive employment package. On April 18, 2001 we
granted options to acquire 100,000 shares of common stock at an exercise price
of $2.00 per share. These options were granted as part of a bonus program.
25,000 of these options were not granted under the 1996 Stock Option Plan. See
"Management - 1996 Stock Option Plan." The term of these options is four years
from the date of grant. These options are fully vested.

(3)      On October 19, 2000 we granted options to acquire 75,000 shares of
common stock at an exercise price of $2.031 per share. These options were
granted as part of the executive employment package. On April 18, 2001 we
granted options to acquire 125,000 shares of common stock at an exercise price
of $2.00 per share. These options were granted as part of a bonus program.
25,000 of these options were not granted under the 1996 Stock Option Plan. See
"Management - 1996 Stock Option Plan." The term of these options is four years
from the date of grant. These options are fully vested.

         The following table sets forth certain information regarding stock
options held as of September 30, 2001 by the Named Executive Officers.


                                       24
<PAGE>

<TABLE>
<CAPTION>
                             Aggregate Option Exercises in Year Ended September 30, 2001
                                                  and Year-End Option Values

                                                  NO. OF SECURITIES
                                               UNDERLYING UNEXERCISED             VALUE OF UNEXERCISED
                      SHARES                         OPTIONS AT                  IN-THE-MONEY OPTIONS AT
                     ACQUIRED                    SEPTEMBER 30, 2001               SEPTEMBER 30, 2001(1)
                        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           --     $    --    1,602,230(2)         750,000 (2)      $29,324        $    --
Alan Saperstein,
  Executive Vice
  President and
  Director               --     $    --    1,602,230(2)         750,000 (2)      $29,324        $    --
George Stemper,
  Chief Operating
  Officer                --     $    --      100,000(3)         100,000 (3)      $    --        $    --
Gail Babitt,
  Chief Financial
  Officer                --     $    --      125,000(4)          75,000 (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 $.91
         per share, being the closing price of our common stock on October 1,
         2001 as reported The Nasdaq National Market.

(2)      Of such exercisable options, at September 30, 2001, 32,230 options were
         exercisable at $.00016 per share, 18,000 options were exercisable at
         $1.45 per share, 350,000 options were exercisable at $2.00 per share,
         875,000 options were exercisable at $2.125 per share, 12,000 options
         were exercisable at $10.00 per share and the remaining 315,000 were
         exercisable at $16.00. Of the unexercisable options, 500,000 have an
         exercise price of $1.50 per share and 250,000 have an exercise price of
         $8.875 per share at September 30, 2001. See Option Grants in Year Ended
         September 30, 2001 above. Subsequent to September 30, 2001, each of
         Messrs. Selman and Saperstein have agreed to return options for 750,000
         shares of our common stock to us pursuant to the Loan Agreement. See
         Item 5. Market for Common Equity and Related Stockholder Matters -
         Recent Sales of Unregistered Securities."

(3)      Of such exercisable options, at September 30, 2001, 100,000 options
         were exercisable at $2.00 per share. Of the unexercisable options,
         100,000 have an exercise price of $4.188 per share. See Option Grants
         in Year Ended September 30, 2001 above. Subsequent to September 30,
         2001, Mr. Stemper was granted options for 100,000 shares of our common
         stock, with an exercise price of $.75 per share, pursuant to the
         employment agreement.

(4)      Of such exercisable options, at September 30, 2001, 125,000 options
         were exercisable at $2.00 per share. Of the unexercisable options,
         75,000 have an exercise price of $2.031 per share. See Option Grants in
         Year Ended September 30, 2001 above. Subsequent to September 30, 2001,
         Ms. Babitt was granted options for 100,000 shares of our common stock,
         with an exercise price of $.75 per share, pursuant to the employment
         agreement.



                                       25
<PAGE>
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"). The purpose of the
Plan is to increase the employees', advisors', consultants' and non-employee
directors' proprietary interest in us and to align more closely their interests
with the interests of our shareholders. The purpose of the Plan is also to
enable us to attract and retain the services of experienced and highly qualified
employees and non-employee directors.

         Pursuant to an amendment to the Plan ratified by shareholders on March
30, 2001, we have reserved an aggregate of 5,000,000 shares of common stock for
issuance pursuant to options granted under the Plan ("Plan Options"). At
December 31, 2001, we have options to purchase 4,481,425 shares of our common
stock outstanding under the Plan. Such options were issued to our directors,
employees and consultants at exercise prices ranging from $.075 to $17.188 per
share.

         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 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


                                       26
<PAGE>

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 December 31, 2001 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)                        1,967,731                     9.6%
Alan M. Saperstein(4)                     1,997,268                     9.7%
George Stemper(5)                           166,375                     *
Gail Babitt (6)                             172,676                     *
Benjamin Swirsky(7)                         246,262                     1.3%
Brian K. Service(8)                         326,538                     1.7%
Eric Jacobs(9)                              298,489                     1.6%
Robert Wussler(10)                          164,233                     *
Fred Deluca                               2,100,000                    10.6%
Halifax Fund, LP(11)                        748,295                     4.0%
Paladin Opportunity Fund, LLC(12)           730,203                     3.9%
All Directors and
  Officers (8 persons)(13)                5,339,572                    22.6%
</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 sixty days from the date of this annual report
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 sixty days from the date hereof
have been exercised. As of December 31, 2001 there were 18,680,164 shares of
common stock outstanding.

(3)      This amount includes options to acquire an aggregate of 32,230 shares
of common stock at an exercise price of $.00016 per share, options to acquire an
aggregate of 18,000 shares of common stock at an exercise price of $1.45 per
share, options to acquire an aggregate of 350,000 shares of common stock at an
exercise price of $2.00 per share and options to purchase 702,000 shares of
common stock at an exercise price of $2.125 per share. In addition, this
includes options to acquire an aggregate of 750,000 shares of common stock at an
exercise price ranging from $2.125 to $16.00 per share.




                                       27
<PAGE>

Excludes options to purchase 500,000 shares of common stock at an exercise price
of $1.50, all of which have not yet vested.

(4)      This amount includes options to acquire an aggregate of 32,230 shares
of common stock at an exercise price of $.00016 per share, options to acquire an
aggregate of 18,000 shares of common stock at an exercise price of $1.45 per
share, options to acquire an aggregate of 350,000 shares of common stock at an
exercise price of $2.00 per share and options to purchase 702,000 shares of
common stock at an exercise price of $2.125 per share. In addition, this
includes options to acquire an aggregate of 750,000 shares of common stock at an
exercise price ranging from $2.125 to $16.00 per share. Excludes options to
purchase 500,000 shares of common stock at an exercise price of $1.50, all of
which have not yet vested.


(5)      This amount includes options to acquire an aggregate of 100,000 shares
of common stock at an exercise price of $2.00 per share and options to purchase
33,333 shares of common stock at an exercise price of $4.188 per share. This
amount excludes options to purchase 66,667 shares at $4.188 per share, which
have not yet vested.

(6)      This amount includes options to acquire an aggregate of 125,000 shares
of common stock at an exercise price of $2.00 per share and options to purchase
25,000 shares of common stock at an exercise price of $2.031 per share.This
amount excludes options to purchase 50,000 shares at $2.031 per share, which
have not yet vested.

(7)      This amount includes options to purchase 100,000 shares at $2.125 per
share, options to purchase 35,000 shares of common stock at an exercise price of
$16.00, options to purchase 25,000 shares of common stock at an exercise price
of $7.50 and options to purchase 75,000 shares of common stock at an exercise
price of $2.00, which were granted in April 2001, but excludes options to
acquire 25,000 shares of common stock at an exercise price of $7.50 per share
options to acquire 100,000 shares of common stock at an exercise price of $.75
per share which were granted in September 2001, which have not yet vested. Mr.
Swirsky's address is 350 Fairlawn Avenue, Toronto, Ontario, Canada.

(8)      This amount includes options to purchase 125,000 shares at $2.125 per
share, options to purchase an additional 25,000 shares at $3.00, options to
acquire 35,000 shares of common stock at an exercise price of $16.00, options to
purchase 25,000 shares of common stock at an exercise price of $7.50 and options
to purchase 75,000 shares of common stock at an exercise price of $2.00, which
were granted in April 2001. In addition, Mr. Sevice has options to purchase
18,000 shares of common stock at an exercise price of $1.45 and an option to
purchase 12,000 shares of common stock at an exercise price of $10.00, which
were options in Ednet that were converted to options in the Company upon
acquisition of the remaining 49%. . Excludes options to acquire an aggregate of
25,000 shares of common stock at an exercise price of $7.50 per share and
options to acquire an aggregate of 100,000 shares of common stock at an exercise
price of $.75 per share which were granted in September 2001, which have not yet
vested. Mr. Service's address is 123 Red Hill Circle, Tiburon, CA 94920.

(9)      This amount includes options to acquire 75,000 shares of common stock
at an exercise price of $2.125 per share, options to purchase 50,000 shares of
common stock at $7.50 and 75,000 shares of common stock at an exercise price of
$2.00, which were granted in April 2001. In addition, Mr. Jacobs has options to
purchase 12,000 shares of common stock at an exercise price of $10.00, which
were options in Ednet that were converted to options in the Company upon
acquisition of the remaining 49%. Excludes options to acquire 25,000 shares of
common


                                       28
<PAGE>

stock at an exercise price of $7.50 per share and options to acquire an
aggregate of 150,000 shares of common stock at an exercise price of $.75 per
share, which were granted in September 2001, which have not yet vested.

(10)     This amount includes options to acquire 25,000 shares of common stock
at an exercise price of $2.875 per share, options to acquire 25,000 shares of
common stock at an exercise price of $17.188 per share and options to acquire
75,000 shares of common stock at an exercise price of $2.00 per share, which
were granted in April 2001. In addition, Mr. Wussler has options to purchase
10,000 shares of common stock at an exercise price of $1.00, 8,000 shares of
common stock at an exercise price of $1.45 and an option to purchase 12,000
shares of common stock at an exercise price of $10.00, which were options in
Ednet that were converted to options in the Company upon acquisition of the
remaining 49%. Excludes options to acquire 50,000 shares of common stock at an
exercise price of $17.188 per share, which were granted in July 1999, of which,
25,000 were cancelled in December 2000 and options to acquire an aggregate of
150,000 shares of common stock at an exercise price of $.75 per share, which
were granted in September 2001, which have not yet vested.

(11)     Includes up to 1,408,333 shares of common stock issuable upon the
conversion of $963,300 principal amount of convertible debentures presently
outstanding, assuming a conversion at the calculated price on January 2, 2002 of
$.684 per share and 136,144 shares of common stock issuable upon the exercise of
presently outstanding warrants, however, that the number of shares of common
stock into which the debentures are convertible, when added together with all
other shares of our common stock beneficially owned by the holder, cannot exceed
9.9% of our total issued and outstanding common shares at any one time. Halifax
Fund, LP's address is c/o The Paladin Group, 195 Maplewood Avenue, Maplewood,
New Jersey 07040.

(12)     Includes up to 1,338,743 shares of common stock issuable upon the
conversion of $915,700 principal amount of convertible debentures presently
outstanding, assuming a conversion at the calculated price on January 2, 2002 of
$.684 per share and 136,145 shares of common stock issuable upon the exercise of
presently outstanding warrants, however, that the number of shares of common
stock into which the debentures are convertible, when added together with all
other shares of our common stock beneficially owned by the holder, cannot exceed
9.9% of our total issued and outstanding common shares at any one time. Paladin
Opportunity Fund, LLC's address is c/o The Paladin Group, 195 Maplewood Avenue,
Maplewood, New Jersey 07040.

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In May 1999, Eric Jacobs lent EDNET $250,000 under a 90-day unsecured
renewable promissory note bearing interest at 12% per annum. Such funds were
used by EDNET for the purchase of inventory. The note has been renewed, $125,000
has been repaid, and, the remaining $125,000 is due on December 31, 2002.

         We have adopted a corporate governance policy which requires the
approval of any transaction between the us and any officer, director or 5%
shareholder by a majority of the independent, disinterested directors. In
addition, pursuant to the inclusion of our securities on The Nasdaq National
Market, we are is subject to compliance with certain corporate governance
standards adopted by The Nasdaq Stock Market, Inc.


                                       29
<PAGE>

                                     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

<TABLE>
<CAPTION>
EXHIBIT NO.   DESCRIPTION
-----------   -----------

<S>           <C>
2(a)          Agreement and Plan of Merger dated as of December 1, 2000 by
               and among Visual Data Corporation, SportsSoft
               Golf, Inc. and certain shareholders of SportsSoft Golf, Inc.(15)
2(b)          Articles of Merger filed with the State of Florida (16)
2(c)          Articles of Merger filed with the State of Delaware(16)
2(d)          Agreement and Plan of Merger dated June 4, 2001 among
               Entertainment Digital Network, Inc., Visual Data
              Corporation and Visual Data San Francisco, Inc.(17)
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(6)
3(i)(j)       Articles of Amendment dated June 13, 2000(11)
3(ii)         By-laws(1)
4(c)          Specimen Common Stock Certificate(1)
4(d)          Specimen Common Stock Purchase Warrant(1)
4(e)          Form of Underwriter Warrant(10)
4(f)          Form of Common Stock Purchase Warrant(18)
4(g)          Form of 6% Convertible Debenture in the principal amount of
               $1,040,000 due December 8, 2003(12)
4(h)          Form of 6% Convertible Debenture in the principal amount of
               $1,000,000 due December 8, 2003(12)
4(i)          Form of one year Common Stock Purchase Warrant(12)
4(j)          Form of five year Common Stock Purchase Warrant(12)
10(a)         Purchase Agreement (4)10(b) Form of Stock Option Plan and
               Amendment thereto(1)(14)
10(c)         Third Amended and Restated Employment Agreement between the
               Company and Randy S. Selman(7)
10(d)         Third Amended and Restated Employment Agreement between the
               Company and Alan Saperstein(7)
10(e)         Contract for Purchase and Sale of Real Property(3)
10(f)         Registration Rights Agreement(4)
10(g)         Securities Purchase Agreement between the Company and EDNET,
               Inc.(5)
10(h)         Securities Purchase Agreement(9)
10(i)         Registration Rights Agreement(9)
10(j)         Agreement dated March 30, 1998 by and between Video News Wire
               Corporation and P.R. Newswire, Inc.(8)
10(k)         Employment Agreement between Visual Data Corporation and Gail Babitt
10(l)         Employment Agreement between Visual Data Corporation and George Stemper
10(m)         Purchase Agreement(12)
10(n)         Registration Rights Agreement(12)
</TABLE>


                                       30
<PAGE>

<TABLE>
<S>           <C>
10(o)         Form of Securities Purchase Agreement(13)
10(p)         Form of Registration Rights Agreement(13)
21            Subsidiaries of the registrant(2)
10(q)         Form of Stock Purchase Agreement(19)
10(r)         Form of 6% Convertible Debenture(19)
</TABLE>

(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 Annual Report on Form
         10-KSB for the year ended September 30, 1997.

(4)      Incorporated by reference to the registrant's current report on Form
         8-K filed December 18, 2000.

(5)      Incorporated by reference to the registrant's current report on Form
         8-K dated August 11, 1998.

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

(7)      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.

(8)      Incorporated by reference to the registrant's Quarterly Report on Form
         10-QSB/A for the period ended June 30, 1998 as filed with the SEC on
         October 15, 1998.

(9)      Incorporated by reference to the registrant's current report on Form
         8-K filed May 29, 2001.

(10)     Incorporated by reference to the exhibit of the same number filed with
         the registrant's Registration Statement on Form S-1, registration
         number 333-79887.

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

(12)     Incorporated by reference to the registrant's Current Report on Form
         8-K dated December 18, 2000

(13)     Incorporated by reference to the registrant's registration statement on
         Form S-3, registration number 333-71308, as declared effective by the
         SEC on November 14, 2001.

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

(15)     Incorporated by reference to the registrant's current report on Form
         8-K filed January 3, 2001.

(16)     Incorporated by reference to the registrant's current report on Form
         8-K filed March 9, 2001.

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

(18)     Incorporated by reference to the registrant's current report on Form
         8-k filed on May 29, 2001.

(19)     Incorporated by reference to the registrant's current report on Form
         8-k filed on January 14, 2002.

         (b)      Reports on Form 8-K

         On August 6, 2001 we filed a report on Form 8-K reporting under Item 2.
our acquisition of the remaining 49% of EDNET. On September 12, 2001 we filed a
report on Form 8-K reporting under Item 5 the pending merger with RMS Networks,
Inc.


                                       31
<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:
                                          --------------------------------------
                                           Randy S. Selman, President, Chief
                                           Executive Officer

                                       By:
                                           -------------------------------------
                                           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>

                              Director, President,                    January 14, 2002
Randy S. Selman               Chief Executive Officer


                              Chief Financial Officer and
Gail Babitt                   Principal Accounting Officer            January 14, 2002


                              Director and Executive                  January 14, 2002
Alan Saperstein               Vice President


                              Director                                January 14, 2002
Benjamin Swirsky


                              Director                                January 14, 2002
Brian K. Service


                              Director and Secretary                  January 14, 2002
Eric Jacobs


                              Director                                January 14, 2002
Robert J. Wussler
</TABLE>


                                       32

<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, 2001 and 2000, 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. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Visual Data Corporation and
subsidiaries as of September 30, 2001 and 2000, 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.


ARTHUR ANDERSEN LLP



Fort Lauderdale, Florida,
   January 11, 2002.


                                      F-1
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                          SEPTEMBER 30, 2001 AND 2000


<TABLE>
<CAPTION>
                                                                             2001                   2000
                                                                         -----------            -----------
<S>                                                                      <C>                    <C>
                          ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                             $    52,161            $ 3,457,784
   Restricted cash                                                           182,189                316,546
   Accounts receivable, net of allowance for
     doubtful accounts of $218,240 and $268,433, respectively              1,226,586              1,714,135
   Prepaid expenses                                                          423,417                427,306
   Inventories, net of allowance for
     obsolescence of $242,000 and $538,000, respectively                     538,087                508,284
   Other                                                                      59,450                     --
                                                                         -----------            -----------
                  Total current assets                                     2,481,890              6,424,055

PROPERTY AND EQUIPMENT, net                                                3,651,631              3,795,656
GOODWILL, net                                                              2,799,929                581,018
OTHER NON-CURRENT ASSETS                                                     117,341                 29,583
 NET ASSETS OF DISCONTINUED OPERATIONS                                     3,808,442                     --
                                                                         -----------            -----------
                  Total assets                                           $12,859,233            $10,830,312
                                                                         ===========            ===========
</TABLE>


                                  (Continued)


                                      F-2
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                       AS OF SEPTEMBER 30, 2001 AND 2000

                                  (Continued)


<TABLE>
<CAPTION>
                                                                                             2001                     2000
                                                                                         ------------             ------------
<S>                                                                                      <C>                      <C>
                  LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable and accrued expenses                                                 $  1,676,483             $  1,931,374
   Deferred revenue                                                                           232,045                  499,234
   Current portion of obligations under capital leases                                         16,643                    4,045
   Current portion of mortgage note payable                                                   850,923                   44,181
   Notes payable                                                                              325,000                  125,000
                                                                                         ------------             ------------
                  Total current liabilities                                                 3,101,094                2,603,834

OBLIGATIONS UNDER CAPITAL LEASES, net of current portion                                       27,928                       --
MORTGAGE NOTE PAYABLE, net of current portion                                                      --                  848,891
CONVERTIBLE DEBENTURES                                                                      2,343,402                       --

COMMITMENTS AND CONTINGENCIES (Notes 1, 3, 5, 9 & 11)

STOCKHOLDERS' EQUITY:
   Preferred stock, par value $.0001 per share: authorized
     5,000,000 shares:
       Series A Convertible Preferred stock, designated 300 shares,
         None issued and outstanding                                                               --                       --
       Series A-1 Convertible Preferred stock, designated 150 shares,
         None issued and outstanding                                                               --                       --
       Series B Convertible Preferred stock, designated 1,000,000 shares,
         None issued and outstanding                                                               --                       --
   Common stock, par value $.0001 per share; authorized 50,000,000 shares,
     15,165,389 and 8,453,358 issued and outstanding, respectively                              1,516                      845
   Additional paid-in capital                                                              47,108,622               35,547,326
   Accumulated deficit                                                                    (39,723,329)             (28,170,584)
                                                                                         ------------             ------------
                  Total stockholders' equity                                                7,386,809                7,377,587
                                                                                         ------------             ------------
                  Total liabilities and stockholders' equity                             $ 12,859,233             $ 10,830,312
                                                                                         ============             ============
</TABLE>


              The accompanying notes are an integral part of these
                         consolidated balance sheets.


                                      F-3
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000


<TABLE>
<CAPTION>
                                                                   2001                     2000
                                                               ------------             ------------

<S>                                                            <C>                      <C>
REVENUE                                                        $  6,908,043             $  5,862,465

OPERATING EXPENSES:
   Cost of revenue                                                4,407,586                6,549,016
   General and administrative                                     7,189,426                5,614,486
   Sales and marketing                                            2,440,315                4,387,953
                                                               ------------             ------------
                  Total operating expenses                       14,037,327               16,551,455
                                                               ------------             ------------

Loss from operations                                             (7,129,284)             (10,688,990)
                                                               ------------             ------------

OTHER INCOME (EXPENSE):
   Interest income                                                   79,571                  567,576
   Rental income                                                     80,875                   81,665
   Gain (loss) on disposal of assets                                  2,114                  (12,251)
   Other income (expense)                                           181,930                   (2,400)
   Interest expense                                                (927,613)                (129,224)
   Minority interest share of losses                                     --                  635,959
                                                               ------------             ------------
                  Total other income (expense), net                (583,123)               1,141,325
                                                               ------------             ------------

Losses from continuing operations                                (7,712,407)              (9,547,665)
                                                               ------------             ------------

DISCONTINUED OPERATIONS:
      Loss from golf, leisure and syndication group              (2,635,227)                      --
      Loss from financial solutions group                        (1,205,111)              (1,853,918)
                                                               ------------             ------------
  Loss from discontinued operations                              (3,840,338)              (1,853,918)
                                                               ------------             ------------

Net loss                                                       $(11,552,745)            $(11,401,583)
                                                               ============             ============

Loss per share - basic and diluted:
    Continuing operations                                      $      (0.68)            $      (1.13)
    Discontinued operations                                           (0.34)                   (0.22)
                                                               ------------             ------------
Net loss per share                                             $      (1.02)            $      (1.35)
                                                               ============             ============
Weighted average shares of common stock
  outstanding - basic and diluted                                11,339,995                8,446,724
                                                               ============             ============
</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

                FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000


<TABLE>
<CAPTION>
                                                         Common Stock             Additional
                                                     -----------------------       Paid-in         Accumulated
                                                       Shares        Amount        Capital           Deficit          Total
                                                     -----------     -------     ------------     ------------     ------------

<S>                                                  <C>             <C>         <C>              <C>              <C>
Balance, September 30, 1999                            8,444,870     $   844     $ 35,585,195     $(16,769,001)    $ 18,817,038
Issuance of warrants and options for services and
incentives                                                    --          --          177,099               --          177,099
Issuance of shares for assets                              9,938           1           52,173               --           52,174
Exercise of warrants                                      37,550           4          115,488               --          115,492
Exercise of options                                       50,000           5          106,245               --          106,250
Stock repurchase and retirement                          (89,000)         (9)        (488,874)              --         (488,883)
Net loss                                                      --          --               --      (11,401,583)     (11,401,583)
                                                     -----------     -------     ------------     ------------     ------------

Balance, September 30, 2000                            8,453,358         845       35,547,326      (28,170,584)       7,377,587

Proceeds from private offering of TFN subsidiary              --          --          905,430               --          905,430
Conversion of warrants from debt to equity                    --          --          486,135               --          486,135
Issuance of shares, warrants and options for
services and incentives                                  216,011          21        1,378,646               --        1,378,667
Issuance of shares upon acquisition of GSUS
subsidiary                                             1,737,038         174        2,388,254               --        2,388,428
Issuance of shares upon acquisition of EDNET
subsidiary                                             1,200,721         120        2,152,823               --        2,152,943
Conversion of debentures                                 803,740          80          806,232               --          806,312
Proceeds from sale of stock                            2,248,755         225        2,804,969               --        2,805,194
Issuance of shares for assets                            498,016          50          628,716               --          628,766
Exercise of options                                        7,750           1           10,091               --           10,092
Net loss                                                      --          --               --      (11,552,745)     (11,552,745)
                                                     -----------     -------     ------------     ------------     ------------

Balance, September 30, 2001                           15,165,389     $ 1,516     $ 47,108,622     $(39,723,329)    $  7,386,809
                                                     ===========     =======     ============     ============     ============
</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

                FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000


<TABLE>
<CAPTION>
                                                                                      2001               2000
                                                                                  ------------       ------------

<S>                                                                               <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                                       $(11,552,745)      $(11,401,583)
       Depreciation and amortization                                                 1,461,735          1,148,193
       Loss on sale of property and equipment                                               --             12,251
       Provision for (reduction in) allowance for doubtful accounts                    (50,193)           239,980
       Provision for (reduction in) allowance for inventory obsolescence              (296,000)           460,453
       Minority interest                                                                    --           (635,959)
       Loss from discontinued operations                                             3,840,338          1,853,918
       Interest expense on convertible debentures                                      775,849                 --
       Amortization of deferred services and incentives                              1,044,700            301,946
       Changes in assets and liabilities:
         Decrease (increase) in accounts receivable                                    487,042         (1,059,142)
         Decrease in prepaid expenses                                                  334,800             13,308
         (Increase) decrease in other current assets                                   (59,450)           136,221
         Decrease (increase) in inventories                                            266,197           (392,304)
              (Increase) decrease in accounts payable and accrued expenses            (254,890)           501,566
         (Decrease) increase in deferred revenue                                      (267,189)           209,009
                                                                                  ------------       ------------
              Net cash used in operating activities                                 (4,269,806)        (8,612,143)
                                                                                  ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisitions of property and equipment                                             (608,308)        (1,217,177)
   Decrease (increase) in restricted cash                                              134,357            (15,538)
   Capital transactions of subsidiary                                                       --             31,540
   Acquisition of GSUS subsidiary, net of cash                                           7,632                 --
   Acquisition of minority interest of EDNET subsidiary                               (140,050)                --
   Sale of IBS subsidiary's assets, net of expenses                                         --             50,000
   Decrease (increase) in other non-current assets                                      17,667            (15,808)
                                                                                  ------------       ------------
              Net cash used in investing activities                                   (588,702)        (1,166,983)
                                                                                  ------------       ------------
</TABLE>


                                      F-6

<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                FOR THE YEARS ENDED SEPTEMBER 30, 2001 AND 2000

                                  (Continued)


<TABLE>
<CAPTION>
                                                                                          2001                   2000
                                                                                       -----------           ------------

<S>                                                                                    <C>                   <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on mortgage note payable                                                   $   (42,149)          $    (38,595)
   Payments on capital leases                                                              (17,696)               (11,580)
   Proceeds from line of credit                                                                 --                100,000
   Proceeds from exercise of warrants and options                                           10,092                221,742
   Repayments of line of credit                                                                 --               (100,000)
   Repayment of notes payable - related parties                                                 --               (165,500)
   Stock repurchase and retirement                                                              --               (488,883)
   Issuance of common stock, net of costs                                                2,805,194                     --
   Proceeds from sale of convertible debentures                                          3,060,000                     --
   Proceeds from sale of preferred stock of subsidiary                                     905,430                     --
                                                                                       -----------           ------------
              Net cash provided by (used in) financing activities                        6,720,871               (482,816)
                                                                                       -----------           ------------

CASH USED IN DISCONTINUED OPERATIONS:
   Operating activities                                                                 (5,170,722)            (1,853,918)
   Investing activities                                                                    (97,264)                    --
                                                                                       -----------           ------------
                       Net cash used in discontinued operations                         (5,267,986)            (1,853,918)
                                                                                       -----------           ------------

NET DECREASE IN CASH AND
   CASH EQUIVALENTS                                                                     (3,405,623)           (12,115,860)

CASH AND CASH EQUIVALENTS, beginning of year                                             3,457,784             15,573,644
                                                                                       -----------           ------------

CASH AND CASH EQUIVALENTS, end of year                                                 $    52,161           $  3,457,784
                                                                                       ===========           ============

SUPPLEMENTAL DISCLOSURES OF CASH
   FLOW INFORMATION:
     Cash payments for interest                                                        $    89,081           $    121,452
                                                                                       ===========           ============
     Cash payments for income taxes                                                    $        --           $      2,400
                                                                                       ===========           ============

SUPPLEMENTAL SCHEDULE OF NON-CASH
   INVESTING AND FINANCING ACTIVITIES:
     Issuances of common shares for property and equipment                             $   628,766           $     52,174
     Issuances of Note for property and equipment                                          200,000                     --
     Issuance of common stock for acquisition of GSUS                                    2,388,428                     --
     Issuance of common stock for acquisition of minority interest of EDNET              2,152,943                     --
     Conversion of debentures                                                              806,312                     --
     Issuance of shares, warrants and options for deferred
       services and incentives                                                           1,351,157                177,099
</TABLE>


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


                                      F-7
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 1:  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Visual Data Corporation (The "Company" 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
On-line Broadcast and Production Group (includes Webcasting, live audio and
video events, etc.), Visual Data Networking Solutions Group (EDNET) and Visual
Data Travel Group (includes HotelView, ResortView, etc.)

The Visual Data On-line Broadcast and Production 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 (Internet, broadcast TV and radio) for any business
entity, and can provide point-to-point audio and video transport worldwide. The
On-line Broadcast and Production Group generates revenues through production
and distribution fees.

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, web-casting services, 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 sales, 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 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 CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


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

During the fiscal year ended September 30, 2001 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 is a
membership business that markets to the golfing community. Its members are
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

The Company has incurred losses since its inception, and has an accumulated
deficit of $39,723,329 as of September 30, 2001. For the year ended September
30, 2001, we had an operating loss from continuing operations of approximately
$7.7 million and cash used in continuing operations of approximately $4.3
million. The Company's forecast for fiscal year 2002 anticipates a reduction in
cash used for operations. At September 30, 2001, we had approximately $52,000
of cash and cash equivalents and approximately $182,000 in restricted cash.
Subsequent to September 30, 2001 we have borrowed an additional $1.5 million of
capital under a Loan Agreement. The Company has an additional $1 million in
committed financing.  See Note 11. Management believes the cash on hand plus
funds available related to the Loan Agreement discussed in Note 11 will be
sufficient to fund the Company's working capital, anticipated operating cash
flow deficit and capital expenditure requirements for at least the next 12
months.


The Company's operations have been financed primarily through the issuance of
equity. The Company's liquidity has substantially diminished because of such
continuing operating losses and the Company may be required to seek additional
capital to continue operations. 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. Based
upon an ongoing evaluation of our cash needs, we 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 we will be successful
in obtaining additional capital, or that such capital will be available on terms
acceptable to us. Further, there can be no assurance that even if such
additional capital is obtained or the planned cost reductions are implemented,
that we will achieve profitability or positive cash flow.

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of
Visual Data Corporation and its subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.

On July 25, 2001, EDNET became a wholly-owned subsidiary when the Company
purchased the remaining 49%. Previously, the Company had recognized the
minority interests' 49% share of EDNET's net losses, until the minority
interests' investment was reduced to $0, which occurred during fiscal year
2000. Subsequently, 100% of the net losses of EDNET were included in the
consolidated financial statements.


                                      F-9
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


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

Goodwill

Prior to July 2001, the Company recorded goodwill resulting from the acquisition
of 51% of EDNET. The total goodwill recorded from this acquisition was
approximately $750,000. Goodwill is amortized on a straight-line basis over 15
years. Goodwill amortization expense was approximately $74,000 and $77,000 for
the years ended September 30, 2001 and 2000, respectively. All amortization
expense is included in general and administrative expenses in the accompanying
consolidated Statements of Operations. Goodwill is reflected in the accompanying
consolidated Balance Sheets net of accumulated amortization of approximately
$243,000 and $169,000, as of September 30, 2001 and 2000, respectively. As of
July 2001 the company acquired the remaining 49% of EDNET which generated
$2,293,000 in goodwill which is accounted for under SFAS 142, and, therefore,
has not been amortized.

The realizability of goodwill is evaluated periodically when events or
circumstances indicate a possible inability to recover the carrying amount.
Such evaluation is based upon an undiscounted cash flow analysis to determine
whether an impairment has occurred. Although EDNET has experienced losses in
the last two fiscal years, management's analysis of undiscounted cash flows
indicates there has been no impairment of goodwill, and, therefore, has not
been amortized.

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. 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 consists of amounts provided by one of the Company's customers
and is held in an escrow account. The restricted cash relates to a minimum
revenue commitment by such customer and will be released from the escrow
account as the services are provided by the Company or by the passage of time.
The Company received the full amount of the remaining restricted cash during
the first quarter of fiscal 2002.

Inventories

Inventories, composed primarily of purchased products for resale, are valued at
the lower of cost or market with cost being determined on the first-in,
first-out basis. Provision has been made for excess or obsolete inventories
based on the amounts by which original cost is estimated to be in excess of
market.

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.


                                     F-10
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


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

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.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes
in business circumstances indicate that the carrying amount of the assets may
not be fully recoverable. The Company performs an undiscounted cash flow
analysis to determine if an impairment has occurred. If an impairment is
determined to exist, any related impairment loss is calculated based upon a
discounted cash flow analysis to determine the fair value of the related asset.
Impairment losses on assets to be disposed of, if any, are based on the
estimated proceeds to be received, less costs of disposal.

Reclassifications

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

Revenue Recognition

The Visual Data Online Broadcast and Production Group recognizes revenue when a
project is completed.

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 contracts. 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.

Deferred Revenue

Deferred revenue primarily represents cash received from customers in the
Visual Data Travel Group for production services that are in process. As
projects are completed the revenue is recognized as production revenue.


                                     F-11
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


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

Advertising

Advertising costs are charged to operations as incurred. Advertising expenses
related to continuing operations were $201,000 and $578,000 for the years ended
September 30, 2001 and 2000, respectively.

Comprehensive Income or Loss

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

Income Taxes

In accordance with Financial Accounting Standards Board Statement on Financial
Accounting Standards ("SFAS") Statement No. 109 deferred tax assets or
liabilities are computed based upon the difference between the financial
statement and income tax basis of assets and liabilities using the enacted tax
rate applicable when the related asset or liability is expected to be realized
or settled. Deferred income tax expense or benefit is based on the changes in
the asset or liability from period to period. If available evidence suggests
that it is more likely than not that some portion or all of the deferred tax
assets will not be realized, a valuation allowance is required to reduce the
deferred tax assets to the amount that is more likely than not to be realized.
Because of the uncertainty regarding the realizability of the Company's net
operating loss carryforwards, the Company has provided a 100% valuation
allowance on its net deferred tax assets at September 30, 2001 and 2000. Future
changes in such valuation allowance would be included in the provision/benefit
for deferred income taxes in the period of change.

Earnings Per Share

For the years ended September 30, 2001 and 2000, 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 15,549,279 and 7,728,715 at September 30, 2001 and 2000,
respectively.

Fair Value of Financial Instruments

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

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.


                                     F-12
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


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

Effects of Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. The accounting for changes in the fair value
of a derivative (that is, gains and losses) depends upon the intended use of
the derivative and resulting designation. In July 1999, FASB issued SFAS No.
137, Accounting for Derivative Instruments and Hedging Activities - Deferral of
the Effective Date of SFAS No. 133, which postponed the effective date of SFAS
No. 133 for one year. In June 2000, FASB issued SFAS No. 138, Accounting for
Certain Derivative Instruments and Certain Hedging Activities, an Amendment to
SFAS No. 133. The Company adopted SFAS No. 133 (as amended by SFAS No. 138) as
of October 1, 2000. The adoption of this statement had no impact on the
Company's financial position or results of operations.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial
Statements. SAB 101 was required to be adopted no later than the fourth fiscal
quarter of the Company's fiscal year ending September 30, 2001. Adoption of the
Statement had an immaterial impact on the Company's consolidated financial
position and results of operations.

In July 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS No.
142, Goodwill and Other Intangible Assets. SFAS 141 requires all business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method. Under SFAS 142, goodwill and intangible assets with indefinite
lives are no longer amortized but are reviewed annually (or more frequently if
impairment indicators arise) for impairment. Separable intangible assets that
are not deemed to have indefinite lives will continue to be amortized over
their useful lives (but with no maximum life). The amortization provisions of
SFAS 142 apply to goodwill and intangible assets acquired after June 30, 2001.
With respect to goodwill and intangible assets acquired prior to July 1, 2001,
the Company has adopted SFAS 142 effective October 1, 2001. The Company is
currently evaluating the effect that adoption of the provisions of SFAS 142
will have on its results of operations and financial position. As of July 2001
the Company acquired the remaining 49% of EDNET which generated $2,293,000 in
goodwill which is accounted for under SFAS 141 and SFAS 142.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which replaces SFAS No. 121. The accounting
model for long-lived assets to be disposed of by sale applies to all long-lived
assets, including discontinued operations, and replaces the provisions of APB
Opinion No. 30, Reporting Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, for the disposal of segments of
a business. SFAS No. 144 requires that those long-lived assets be measured at
the lower of the carrying amount or fair value less cost to sell, whether
reported in continuing operations or in discontinued operations. Therefore,
discontinued operations will no longer be measured at net realizable value or
include amounts for operating losses that have not yet occurred. SFAS No. 144
also broadens the reporting of discontinued operations to include all
components of an entity with operations that can be distinguished from the rest
of the entity and that will be eliminated from the ongoing operations of the
entity in a disposal transaction. The provisions of SFAS No. 144 are effective
for financial statements issued for fiscal years beginning after December 15,
2001 and, generally, are to be applied prospectively. The Company has not yet
evaluated the impact that adoption of SFAS No. 144 will have on its financial
statements.


                                     F-13
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 2:  PROPERTY AND EQUIPMENT

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


<TABLE>
<CAPTION>
                                                      September 30,
                                             --------------------------------       Useful Lives
                                                2001                  2000             (Years)
                                             ----------            ----------        -----------

<S>                                         <C>                   <C>                <C>
Building                                    $ 1,632,154           $ 1,551,189            39
Furniture and fixtures                          337,301               266,988             7
Equipment and software                        4,297,710             4,298,433            3-10
Video library content                         1,203,362               429,175            2-3
Capitalized internal use software               145,503                    --             3
Leasehold improvements                           51,306               104,837             5
                                            -----------            ----------
                                              7,667,336             6,650,622
Less:  Accumulated depreciation
         and amortization                    (4,015,705)           (2,854,966)
                                            -----------            ----------

                                            $ 3,651,631           $ 3,795,656
                                            ===========           ===========
</TABLE>

Depreciation and amortization of property and equipment included in the
statements of operations amounted to approximately $1,388,000 and $1,071,000
for the years ended September 30, 2001 and 2000, respectively.

NOTE 3:  DEBT

Convertible Debentures

In December 2000, the Company sold an aggregate of $2,040,000 principal amount
of 6% Convertible Debentures. The 6% Convertible Debentures mature on December
8, 2003 and are convertible, in whole or in part, at the option of the holders
into shares of the Company's common stock at a conversion price equal to the
lesser of (i) $2.13 per share, or (ii) 90% of the average of the three lowest
closing bid prices for the 20 trading days prior to conversion (the "variable
conversion price"). The conversion price of the 6% Convertible Debentures shall
not be less than $.90 per share; provided that this floor price will be reset
to 50% of the variable conversion price on December 8, 2001. In accordance with
the provisions of the Emerging Issues Task Force ("EITF") issue 98-5, the
$340,000 value of beneficial conversion was recorded as additional interest
expense upon issuance of the 6% Convertible Debentures. The floor price reset
to $.288 per share on December 8, 2001.

In conjunction with this transaction, the Company issued the purchasers (i) a
one year warrant to purchase an aggregate of 500,000 shares of VDC common stock
at an exercise price of $4.00 per share, and (ii) a five year warrant to
purchase an aggregate of 250,000 shares of the Company's common stock at an
exercise price of $2.13 per share (collectively, the "Warrants"). The warrants
include a cashless exercise feature in the event the Company is unable to
register the common stock underlying the warrants.

On January 23, 2001, the Company sold an additional 800,000 shares of common
stock for $1.25 per share. As a result of the anti-dilution provisions of the
Warrants, the number of shares issuable upon the exercise of the five year
warrants has been increased to 259,375 shares and the exercise price of the
one-year warrants has been reduced to $2.053 per share.

On January 25, 2001, Halifax Fund LP and Paladin Opportunity Fund LLP, holders
of the Company's 6% Convertible Debentures converted $800,000 of principal and
$6,312 of accrued interest into 803,740 shares of the Company's common stock at
a conversion price of $1.003 per share.


                                     F-14
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 3:  DEBT (Continued)

Convertible Debentures (continued)

On May 23, 2001, the Company sold an additional 998,702 shares of common stock
for $1.50 per share. As a result of the anti-dilution provisions of the
Warrants, the number of shares issuable upon the exercise of the five year
warrants has been increased to 272,289 shares and the exercise price of the
one-year warrants has been reduced to $1.955 per share.

On May 24, 2001, the Company exercised the put right for an additional
$1,000,000 6% Convertible Debenture.

In the event that the market price of the Company's common shares shall be less
than $1.50 per share for 20 consecutive trading days, at the Company's option
all or a portion of the 6% Convertible Debentures are redeemable in an amount
equal to 115% of the Outstanding Principal Amount (as that term is defined in
the 6% Convertible Debenture) plus all accrued but unpaid interest and all
Delay Payments (as that term is defined in the 6% Convertible Debenture),
subject to certain conditions. The Company's redemption right shall, if
exercised, be irrevocable, may be exercised no more than twice and may not be
exercised again until three months after the first redemption closing date. In
addition, the holders of the 6% Convertible Debentures have the right to
convert the debentures at any time until the Redemption Closing Date. At
September 30, 2001 the outstanding principal and interest on the 6% Convertible
Debenture was $2,260,000 and $83,402, respectively.

Notes Payable

Notes payable consist of the following as of September 30:


<TABLE>
<CAPTION>
                                                                                           2001                  2000
                                                                                          --------             --------

<S>                                                                                       <C>                  <C>
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 is due on December 31, 2002. Accrued interest payable
   was $2,500 and $863, respectively.                                                     $125,000             $125,000
Note payable to a broker for the acquisition of assets, with original
   principal of $200,000 at 6% interest was issued in September 2001. The
   principal balance and accrued interest is due on November 20, 2001.                     200,000                   --
                                                                                          --------             --------
   Subsequent to September 30, 2001 this Note was repaid. Accrued interest
   payable was $0.                                                                        $325,000             $125,000
                                                                                          ========             ========
</TABLE>

Interest expense to related parties was approximately $15,000 and $29,000 for
the years ended September 30, 2001 and 2000, respectively.

Mortgage Note Payable

<TABLE>
<CAPTION>
                                                                                           2001                 2000
                                                                                         ---------            ---------
<S>                                                                                      <C>                  <C>
Note payable to an unrelated financial institution, interest payable at
   8.75% on a 15 year amortization, unpaid principal balance and any accrued
   interest due September 30, 2002, secured by a mortgage on the Company's
   facility in Pompano Beach, Florida.                                                   $ 850,923            $ 893,072

         Less:  current portion                                                           (850,923)             (44,181)
                                                                                         ---------            ---------

         Long term portion                                                               $      --            $ 848,891
                                                                                         =========            =========
</TABLE>


                                     F-15
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 4:  THEFIRSTNEWS.COM STOCK OFFERING

In December 2000, TheFirstNews.com, Inc. ("TFN"), a subsidiary of the Company
that comprises its Financial Solutions Group, sold Units in a private offering.
Each Unit consists of 10,000 shares of TFN common stock and 20,000 shares of
TFN 10% redeemable, convertible preferred stock. The purchase price for each
unit was $50,000. TFN received net proceeds of approximately $800,000. TFN has
the right to redeem each block of 20,000 shares of preferred stock included in
each Unit, at any time from the closing of the offering until 12 months
thereafter, after providing the holder with 10 days notice, for $50,000 per
20,000 shares of preferred stock plus accrued and unpaid interest. In the event
TFN fails to redeem the preferred stock within 12 months after the closing of
the offering, the preferred stock shall be automatically converted into common
stock at the conversion rate of one share of preferred stock for one share of
common stock. In the event TFN fails to either file a registration statement
under the Securities Act of 1933, as amended, with the Securities and Exchange
Commission for the public offering of TFN's common stock within 12 months of
the closing of the offering, or such registration statement has not been
declared effective within six months of its initial filing with the Securities
and Exchange Commission, the investors shall have the right to convert those
shares of TFN common stock received initially with the Units and those received
upon conversion of the preferred stock into shares of the Company's common
stock, at the conversion rate of one share of TFN common stock for two shares
of the Company's common stock. Minority interest relating to this transaction
was insignificant.

In March 2001, an additional two Units, the over allotment Units, were sold
from the TFN offering. TFN received net proceeds of approximately $100,000.

In December 2001, we decided to cease operations of our Financial Solutions
Group. See Note 11. In December 2001 we also issued an aggregate of 1,568,000
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-16
<PAGE>
                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

NOTE 5:  COMMITMENTS AND CONTINGENCIES

Lease Commitments

In January 1999, the Company entered into an operating lease for office space
for the Visual Data Networking Solutions Group. This operating lease is
effective for two years with yearly renewal options thereafter, not to exceed
five years. In addition, the Company leased control equipment under various
noncancelable capital leases that expired in 2001. The company leased additional
control equipment during fiscal 2001 under capital leases for 36 months expiring
in 2004.

Future minimum lease payments required under the noncancelable leases are as
follows:

<TABLE>
<CAPTION>
                                                         Operating       Capital
               Year Ending September 30:                   Leases        Leases
                                                         ---------       -------
<S>            <C>                                       <C>             <C>
               2002                                      $ 159,016       $21,169
               2003                                        145,764        21,169
               2004                                             --         8,821
               2005                                             --            --
                                                         ---------       -------

                      Total minimum lease payments       $ 304,780        51,159
               Less amount representing interest                           6,588
                                                                           -----
               Present value of net minimum lease payments                44,571
               Less current portion                                       16,643
                                                                         -------
                      Long-term portion                                  $27,928
                                                                         =======
</TABLE>

Total rental expense for all operating leases for the years ended September 30,
2001 and 2000 amounted to $168,700 and $164,872, respectively.


Employment Contracts

In January 1998, the Company's President and Executive Vice President entered
into amended employment agreements with the Company. The three-year contracts
provided for the granting of 375,000 stock options to the President and the
Executive Vice President at an exercise price of $2.125, representing the fair
value at the date of grant, to vest at the rate of 125,000 options on each
anniversary of the effective date of the amended contract. These contracts were
amended in September 1999 to extend the term for two-years and grant an
additional 250,000 stock options with an exercise price of $8.875, representing
the fair value at the date of grant, to each executive to vest at the rate of
125,000 options on each anniversary of the effective date of the contract. 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 500,000
additional stock options to the President and the Executive Vice President at an
exercise price of $1.50, representing the fair value at the date of grant, to
vest at the rate of 50,000 options per year for the first two years and 200,000
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.


                                      F-17
<PAGE>
                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

NOTE 5:  COMMITMENTS AND CONTINGENCIES (Continued)

Employment Contracts (Continued)

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 100,000 stock options to the Chief
Operating Officer and Chief Financial Officer at an exercise price of $.75,
representing the fair value at the date of grant, to vest at the rate of 50,000
on each 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 July 2000, EDNET entered into a two year employment agreement with its
President and CEO. The contract provides for an annual salary of $160,000.

In conjunction with a debt financing transaction (See Note 11), all members of
our management have 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 cancelled 750,000 options held by them
to purchase shares of our common stock.

Annual Volume Commitment

EDNET entered into an agreement with a telecommunications company for network
usage discounts. The agreement had a two-year term commencing March 31,1998 and
was extended for two additional years expiring in March 2002. The contract is
currently being renegotiated and the Company will commit to $540,000 in annual
volume.

NOTE 6:  CAPITAL STOCK

Common Stock

On April 17, 2000, the Company announced that its Board of Directors had
authorized the Company to repurchase up to one million shares of its common
stock from time to time in the open market. The Company has repurchased 89,000
shares of its Common Stock for an aggregate purchase price of approximately
$489,000, or an average purchase price per share of approximately $5.49. The
Board of Directors has determined that no additional shares will be purchased as
part of this program. The Common Stock that was repurchased has been
subsequently retired.

In January 2001, the Company sold 800,000 shares of common stock for
approximately $1,000,000 in a private offering.

In May 2001, the Company sold 730,638 shares of common stock for approximately
$1,500,000 in a private offering. The agreement has a protection feature to
prevent the investor from being exposed to a decline in the market value of the
stock prior to the shares being registered. As a result of the stock price
decline before registration, the investor received an additional 268,064 shares
of common stock. In addition to the shares, the Company issued warrants to
purchase 246,128 shares of common stock with an exercise price of $2.76 per
share. The term of the warrants is 3 years.


                                      F-18
<PAGE>
                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 6:  CAPITAL STOCK (Continued)

Common Stock (Continued)

In July 2001, the Company issued 1,200,721 shares of common stock to the
shareholders of EDNET to acquire the remaining 49%. The transaction resulted in
the Company recording an additional $2,293,000 in goodwill.

In August 2001, the Company sold 446,429 shares of common stock for
approximately $500,000 in a private offering. In addition to the shares, the
Company issued warrants to purchase 150,000 shares of common stock with an
exercise price of $1.75 per share. The term of the warrants is 3 years.

The Company has reserved 19,661,059 shares of common stock for issuance relating
to unexpired options and warrants at September 30, 2001. Included in the
reserved shares at September 30, 2001 are the shares related to the conversion
of TheFirstNews.com preferred stock as well as the conversion of the 6%
Convertible Debenture at the $.90 per share floor value into approximately
1,500,000 and 2,600,000 shares, respectively. As of December 8, 2001 the floor
was reset to $.288 per share, therefore, the conversion of the 6% Convertible
Debenture may result in shares in excess of the 2,600,000 reserved shares.

NOTE 7:  INCOME TAXES

The Company has a net operating loss carryforward as of September 30, 2001 of
approximately $38 million for federal income tax purposes, inclusive of
accumulated start-up costs. The net operating losses are carried forward for tax
purposes and begin to expire in 2016. The Company's deferred tax assets
primarily consist of the net operating losses. The Company has recorded a
valuation allowance of approximately $15 million (100%) with respect to any
future tax benefits arising from any net operating losses and the amortization
of the start-up costs due to the uncertainty of their ultimate realization.
Accordingly, no income tax benefit has been recorded in the accompanying
consolidated statement of operations as a result of the increase in the
Company's valuation allowance related to the net operating losses.

NOTE 8:  SEGMENT INFORMATION

The Company's operations are currently comprised of three operating groups;
Visual Data Travel Group, Visual Data On-Line Broadcast and Production Group and
Visual Data Networking Solutions Group. These operating units are managed from
the Company's Pompano Beach facility and the facility run by EDNET.

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

For the years ended September 30, 2001 and 2000 the Company, through its Online
Broadcast and Production Group, provided webcasting services to a single
customer, which represented 26% and 17% of total consolidated revenues,
respectively. Revenues for such customer totaled approximately $1,810,000 and
$1,023,000 for the years ended September 30, 2001 and 2000, respectively. The
contract with this customer can be terminated upon a 30-day notification.

The Company has presented the revenues and cost of revenues from CuraSpan, Inc.
("CuraSpan"), which are the result of services provided from the sale of assets
of CareView to CuraSpan, as well as unallocated corporate operating expenses in
the segment table as Other.


                                      F-19
<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 8:  SEGMENT INFORMATION (Continued)

Detailed below are the results of operations by segment (in thousands) for the
year ended September 30, 2001.

<TABLE>
<CAPTION>
                                      Travel         On-Line         Network          Other                 Total
                                     -------         -------         -------         -------              --------
<S>                                  <C>             <C>             <C>             <C>                  <C>
Revenue                              $   646         $ 2,036         $ 3,905         $   321              $  6,908

Cost of revenue/allocation               528             583           3,121             176                 4,408
General and administrative               607             833           1,633             364                 3,437
Sales and marketing                      984             378             743             335                 2,440
Corporate allocation                   1,126           1,126             750             750                 3,752
                                     -------         -------         -------         -------              --------
Total operating costs                  3,245           2,920           6,247           1,625                14,037
                                     -------         -------         -------         -------              --------
Loss from operations                  (2,599)           (884)         (2,342)         (1,304)               (7,129)
                                     -------         -------         -------         -------              --------

Other income (expense)
   Interest income                        --              --               2              78                    80
   Rental and other income                --              --              --              81                    81
   Interest expense                       --              --             (18)           (910)                 (928)
   Other income (expense)                 --              --             200             (16)                  184
                                     -------         -------         -------         -------              --------
Total other income (expense)              --              --             184            (767)                 (583)
                                     -------         -------         -------         -------              --------

Net loss                             $(2,599)        $  (884)        $(2,158)        $(2,071)             $ (7,712)
                                     -------         -------         -------         -------              --------

Depreciation and amortization        $   364         $   486         $   248         $   364              $  1,462
                                     -------         -------         -------         -------              --------
</TABLE>



                                      F-20
<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 8:  SEGMENT INFORMATION (Continued)

Detailed below are the results of operations by segment (in thousands) for the
year ended September 30, 2000.

<TABLE>
<CAPTION>


                                      Travel         On-Line         Network          Other                 Total
                                     -------         -------         -------         -------              --------
<S>                                  <C>             <C>             <C>             <C>                  <C>
Revenue                              $   380         $ 1,023         $ 4,154         $   305              $  5,862

Cost of revenue/allocation             1,074             547           4,017             911                 6,549
General and administrative               524             409           1,877             288                 3,098
Sales and marketing                    2,025             238             670           1,455                 4,388
Corporate allocation                     755             755             503             503                 2,516
                                     -------         -------         -------         -------              --------
Total operating costs                  4,378           1,949           7,067           3,157                16,551
                                     -------         -------         -------         -------              --------
Loss from operations                  (3,998)           (926)         (2,913)         (2,852)              (10,689)
                                     -------         -------         -------         -------              --------

Other income (expense)
   Interest income                        --              --              12             555                   567
   Rental and other income                --              --              --              67                    67
   Interest expense                       --              --             (39)            (90)                 (129)
   Minority interest                      --              --              --             636                   636
                                     -------         -------         -------         -------              --------
Total other income (expense)              --              --             (27)          1,168                 1,141
                                     -------         -------         -------         -------              --------

Net loss                             $(3,998)        $  (926)        $(2,940)        $(1,684)             $ (9,548)
                                     -------         -------         -------         -------              --------

Depreciation and amortization        $   288         $   385         $   187         $   288              $  1,148
                                     -------         -------         -------         -------              --------
</TABLE>

                                      F-21
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 9: DISCONTINUED OPERATIONS

In February 2001, the Company completed the acquisition of SportsSoft Golf, Inc.
The Company issued 1,686,445 shares of common stock in Visual Data Corporation
in exchange for 100% of the common stock of SportsSoft Golf, Inc., which was
merged into a wholly-owned subsidiary of the Company, Golf Society of the U.S.
The value of the common stock issued to shareholders of SportsSoft Golf, Inc.
was approximately $2.3 million, based upon a share value of $1.375 on December
22, 2000. The estimated fair market value of the tangible assets and the
liabilities acquired resulted in a negative net asset base of approximately $2.2
million. Therefore, as a result of the acquisition, the Company recorded
approximately $5.0 million in intangible assets.

In December of 2001, management adopted a plan to sell the Company's Golf,
Leisure and Syndication Group segment and cease operations of the Financial
Solutions Group segment 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 results of the Golf, Leisure and Syndication Group are not
included in the fiscal 2000 financial statements as the acquisition occurred in
December of 2000. The Visual Data Financial Solutions Group has been classified
as discontinued operations for all periods presented in the accompanying
financial statements.

The Company is in the process of negotiating the sale of the Golf, Leisure and
Syndication Group segment and expects that the sale will be completed in the 2nd
quarter of the fiscal year ending September 30, 2002. Management anticipates
that the consideration received from the sale of the Golf, Leisure and
Syndication Group will be sufficient to recover the net assets of the group as
of September 30, 2001. Based on the expected sale terms, the Company will
receive no cash consideration for the foreseeable future (see Note 11).
Management does not anticipate a gain or loss from the discontinuation of the
Financial Solutions Group as a result of the segment being shut down, not sold.

A summary of the net assets of discontinued operations for the Company's Golf,
Leisure and Syndication Group is as follows as of September 30, 2001:

<TABLE>
<CAPTION>
                  <S>                                         <C>
                  Current assets                              $ 1,914,118
                  Non-current assets                            5,001,473
                                                              -----------
                           Total assets                         6,915,591
                                                              -----------

                  Current liabilities                           3,107,149
                  Non-current liabilities                              --
                                                              -----------
                           Total liabilities                    3,107,149
                                                              -----------
                  Net assets of discontinued operations       $ 3,808,442
                                                              ===========
</TABLE>



                                      F-22
<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 9: DISCONTINUED OPERATIONS (Continued)

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") for the years ended September 30:

<TABLE>
<CAPTION>
                                                                   2001                          2000
                                                      -------------------------------         -----------
                                                          GSUS                TFN                 TFN
                                                      -----------         -----------         -----------
               <S>                                    <C>                 <C>                 <C>
               Revenue                                $ 1,587,983         $     7,161         $     5,970
               Expenses:
                    Cost of operations                    549,632             276,611             475,226
                    General and administrative          2,868,829             517,231             352,555
                    Selling and marketing                 794,918             418,430           1,032,107
                                                      -----------         -----------         -----------
               Total expenses                           4,213,379           1,212,272           1,859,888

               Operating loss                          (2,625,396)         (1,205,111)         (1,853,918)
               Other expense                              (15,845)                 --                  --
               Interest income                              6,014                  --                  --
                                                      -----------         -----------         -----------

               Net loss                               $(2,635,227)        $(1,205,111)        $(1,853,918)
                                                      ===========         ===========         ===========
</TABLE>


NOTE 10:  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"). Pursuant to an
amendment to the Plan ratified by shareholders on July 16, 1999, the Company
reserved an aggregate of 2,500,000 shares of common stock for issuance pursuant
to options granted under the Plan ("Plan Options"). On March 30, 2001, an
amendment to the Plan, ratified by the shareholders, reserved an aggregate of
5,000,000 Plan Options. At September 30, 2001 and 2000 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.



                                      F-23
<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 10:  STOCK OPTIONS AND WARRANTS (CONTINUED)

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 is as follows:

<TABLE>
<CAPTION>
                                               2001                           2000
                                    ------------------------        ------------------------
                                                    Weighted                        Weighted
                                     Number         Average          Number         Average
                                       Of           Exercise           Of           Exercise
                                     Shares           Price          Shares           Price
                                    ---------       --------        ---------       --------
<S>                                <C>              <C>             <C>             <C>
Balance, beginning of year          4,966,385         $5.59         4,429,635         $ 5.86
Expired                              (575,456)         4.10          (605,900)         11.55
Exercised                              (7,500)         1.30           (50,000)          2.13
Granted                             6,111,426          1.95         1,192,650           7.47
                                   ----------         -----         ---------         ------

Balance, end of year               10,494,855         $3.57         4,966,385         $ 5.59
                                   ==========         =====         =========         ======

Exercisable at end of year          5,672,585         $4.20         3,648,885         $ 5.09
                                   ==========         =====         =========         ======
</TABLE>


The following table summarizes information about the Company's outstanding and
exercisable stock options at September 30, 2001, (See note 11):

<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>
$.00016 - $.50                     64,460          .25            $ 0.00           64,460         $ 0.00
$.51 - $1.00                      510,000         3.95            $ 0.75           10,000         $ 1.00
$1.01 - $2.00                   3,711,950         3.88            $ 1.74        1,579,450         $ 1.91
$2.01 - $4.50                   4,519,695         1.92            $ 2.28        3,031,175         $ 2.24
$7.31 - $9.50                     783,250         3.89            $ 8.43          127,000         $ 7.76
$9.75 - $17.19                    905,500         2.11            $15.08          860,500         $15.10
                               ----------         ----            ------        ---------         ------
                               10,494,855         2.86            $ 3.57        5,672,585         $ 4.20
</TABLE>


The Company adopted SFAS 123 in the fiscal year ended 1997. 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.



                                      F-24
<PAGE>

                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 10:  STOCK OPTIONS AND WARRANTS (CONTINUED)

The following table summarizes the pro forma consolidated results of operations
of the Company as though the fair value based accounting method in SFAS 123 had
been used in accounting for stock options.

<TABLE>
<CAPTION>
                                                                                2001                  2000
                                                                            ------------        ------------
<S>                                                                         <C>                 <C>
Pro forma results of operations:
   Net loss                                                                 $(14,079,152)       $(12,603,824)
   Net loss per share                                                       $      (1.24)       $      (1.49)
</TABLE>


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
50.0%, risk-free interest rate of 6.25%, expected dividends of $0 and expected
term of 4 years.

The Company has granted options to management, employees, directors and
consultants that are outside of the Plan. For the year ended September 30, 2001,
the Company granted 1,513,391 options to consultants at a weighted average fair
value of $.44 per share and an average exercise price of $2.30 per share. The
term of these options are from two to four years and the vesting periods are
immediate. At September 30, 2001 the Company had 1,937,991 granted options to
consultants outstanding. These options have been accounted for under SFAS No.
123, "Accounting for Stock-Based Compensation," ("SFAS 123"). The Company has
recognized approximately $1,022,000 and $271,000 in expense for consultant
options during the years ended September 30, 2001 and 2000, respectively.

In addition to the 1,135,000 publicly traded warrants issued at the time of the
Company's initial public offering, at September 30, 2001, there were vested
warrants to purchase an aggregate of 1,981,433 shares of common stock
outstanding, inclusive of the Debenture Warrants discussed in Note 3, at
exercise prices ranging from $1.75 to $16.50 expiring from July 2002 to May
2006. During the year ended September 30, 2001 the Company granted 1,512,232
warrants, including 98,358 warrants granted as part of the acquisition of the
remaining 49% of EDNET, with a weighted fair value at the date of grant of $.39
per share and an average exercise price of $3.47 per share.



                                      F-25
<PAGE>


                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001

NOTE 11:  SUBSEQUENT EVENTS

Debt Financing

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 loan bears interest at approximately 12%, which was
prepaid in January 2002 with the issuance of 500,000 shares of common stock.

Beginning in January 2002 we will make principal payments on the loan in an
amount equal to 50% of our Collected Revenue (as that term is defined in the
Loan Agreement), with a minimum payment of $100,000 per month, until such time
as we have repaid $750,000 of the loan, and thereafter our monthly payments
shall be fixed at $100,000. After we have repaid $1 million of principal the
lender will make available additional borrowings up to the maximum outstanding
amount of $1.5 million. 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 Secured Promissory 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 Secured Promissory Note is to be repaid
by us.

We granted the lender a security interest in all of our tangible and intangible
assets, and issued him a warrant to purchase 1 million shares of our common
stock at an exercise price of $1.00 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
Secured Promissory Note, within six months from the date of the transaction and
we granted the lender certain piggy-back registration rights.

In conjunction with the transaction, all members of our management have 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 cancelled 750,000 options held by them to purchase shares of our
common stock.

Conversion of 6% Convertible Debenture

On December 11, 2001, Halifax Fund LP and Paladin Opportunity Fund LLP, holders
of the Company's 6% Convertible Debentures converted $381,000 of principal and
$23,048 of accrued interest into 701,472 shares of the Company's common stock at
a conversion price of $.576 per share pursuant to the terms of the debentures in
a private transaction exempt from registration under the Securities Act of 1933
in reliance on Section 4(2) of such act. After this conversion, an aggregate of
$1,879,000 principal amount of 6% Convertible Debentures were outstanding.

Conversion of The FirstNews.com Stock

In December 2001 we issued an aggregate of 1,568,000 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-26
<PAGE>
                    VISUAL DATA CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001


NOTE 11:  SUBSEQUENT EVENTS (Continued)

Golf, Leisure and Syndication Group Divestiture

On January 10, 2002, the Company executed a Stock Purchase Agreement for the
sale of the Golf Society of the U.S. for a $6.5 million 6% Convertible Debenture
(the "Debenture"). The Debenture is convertible into common stock of Golf
Society International, Inc., an unaffiliated third party. The Debenture is for
five years and limits the beneficial ownership of the Company to 19.9%, with the
exception of a simultaneous conversion and private or public sale of the
investment.



                                      F-27