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

                                  FORM 10-KSB/A

(Mark One)
[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934

          For the fiscal year ended:  December 31, 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: 000-29645

                               AMNIS SYSTEMS INC.
                           (Formerly Graffiti-X, Inc.)
                 (name of small business issuer in its charter)

                 Delaware                               94-3402831
      ------------------------------         ----------------------------------
     (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)

 3450 Hillview Avenue, Palo Alto, California              94304
 -------------------------------------------              -----
    (Address of principal executive offices)            (Zip Code)

                   Issuer's telephone number:  (650) 855-0200
                                               --------------

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

        Title of each class           Name of each exchange on which registered
               None                                     None
               ----                                     ----

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

       Common Stock, $0.0001 par value
       -------------------------------
              (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.  [X] Yes   [ ] No

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will be contained, to
the  best  of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Issuer's revenues for its most recent fiscal year:  $4,095,755.

The  aggregate  market  value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold,  or  the  average  bid and asked price of such common equity, as of May 3,
2002,  was  $6,885,591.

The  number  of  shares  outstanding  of  each of the issuer's classes of common
equity as of May 3, 2002 was 18,464,237 shares

Documents incorporated by reference:  None

Transitional Small Business Disclosure Format (check one):  [ ] Yes   [X] No


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                                TABLE OF CONTENTS

                                                                         Page
                                                                         ----
                                     PART I

ITEM 1.     DESCRIPTION OF BUSINESS.. . . . . . . . . . . . . . . . . .     3
ITEM 2.     DESCRIPTION OF PROPERTY.. . . . . . . . . . . . . . . . . .    14
ITEM 3.     LEGAL PROCEEDINGS.. . . . . . . . . . . . . . . . . . . . .    14
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . .    14

                                    PART II

ITEM 5.     MARKET FOR COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS.. . . . . . . . . . . . . . . . . . . .    15
ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
            OPERATION.. . . . . . . . . . . . . . . . . . . . . . . . .    17
ITEM 7.     FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . .    19
ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE.. . . . . . . . . . . .    19

                                    PART III

ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
            CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
            EXCHANGE ACT. . . . . . . . . . . . . . . . . . . . . . . .    20
ITEM 10.    EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . .    22
ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
            AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . .    29
ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . .    30
ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K. . . . . . . . . . . . . .    30



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<PAGE>
              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This  report  contains  forward-looking  statements  that  involve  risks  and
uncertainties.  These  forward-looking  statements  are  based  on  our  current
expectations, beliefs and assumptions.  When we use words such as "anticipates,"
"expects,"  "intends," "plans," "believes" or similar expressions, we are making
forward-looking  statements.  Our  actual  results  could differ materially from
those  anticipated in forward-looking statements.  Factors that might cause such
differences  include  the  risks  discussed  in  "Item  1.  Description  of
Business-Risk  Factors"  and in "Item 6. Management's Discussion and Analysis or
Plan  of Operation," as well as those discussed elsewhere in this annual report.

We  caution you not to place undue reliance on these forward-looking statements,
which  reflect  our management's view only as of the date of this annual report.
We  will  not  update  any  forward-looking  statement  to  reflect  events  or
circumstances  after  the  date  hereof  or  to  reflect  the  occurrence  of
unanticipated  events.

                                     PART I

ITEM 1.     DESCRIPTION OF BUSINESS

                                  OUR BUSINESS

     We were formed on July 29, 1998.  On April 16, 2001, we merged with
Optivision, Inc., an operating company, in an exchange of common stock accounted
for as a pooling of interest.

PRODUCTS

     Our products are used to create, manage and transmit compressed
high-quality digital video over broadband computer networks in a wide range of
applications.  This is often referred to as "streaming video." Applications for
our products include, for example, interactive distance learning, corporate
training, video content distribution, video surveillance and telemedicine. The
use of compressed digital video for these applications reduces the network
bandwidth and storage requirements when compared to uncompressed digital video
technologies.

     Our products are compatible with the Motion Picture Expert Group, or MPEG,
digital video industry standard which provides the highest quality digital video
for our customers. In addition our products are compatible with computer network
standards based on various computer network communication protocols such as, for
example, the Internet Protocol, or IP, and the Asynchronous Transfer Mode, or
ATM, protocol.  Our products  enable our customers to:

     -    Capture, compress and transmit high-quality video from any source,
          including cable TV, wireless, satellite, video tape or live events;

     -    Store high-quality video locally or in remote network video servers;


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<PAGE>
     -    Transmit live or stored high-quality video across a computer network;

     -    Manage high-quality video distribution as a part of the total
          application; and

     -    Play live or stored high-quality video on a television monitor,
          desktop personal computer or set-top box.

     We offer a family of products that includes digital video encoders, or
transmitters, receivers, network management software and a media desktop
personal computer player.  All these products are compatible with each other and
can be connected directly to a computer network or easily integrated into
desktop personal computers.

     Our  digital video encoders, or transmitters, and receivers are designed to
transmit,  or  "stream,"  receive, store and process live or previously recorded
digital  video  over  computer  networks.  Customers  can  remotely  control our
digital  video  encoders,  or  transmitters,  and  receivers through our network
management  software.

     Our media desktop personal computer player allows users to play streaming
or stored MPEG video on a desktop personal computer. It also allows users to
simultaneously run other desktop software applications and customize the display
for improved user interface and interaction.

SALES AND MARKETING

     We sell our products primarily to a network of value added resellers, or
VARs, system integrators and original equipment manufacturers, or OEMs.

     We maintain a sales organization consisting of regional sales managers in
North America, and Europe. Our North American sales organization covers the U.S.
and Canadian markets and manages our system integrators and value added
resellers.  Selected overseas markets are covered by systems integrators and
value added resellers in Europe with a dedicated regional sales manager based in
Germany.

     The system integrators and value added resellers have been selected by us
for their ability to provide effective field sales and technical support to our
end user customers. They perform product demonstrations, advise customers on
system configuration and installation, and perform ongoing post-sales customer
support. We believe that many end users depend on the technical support offered
by these system integrators and value added resellers in making product purchase
decisions. We continue to invest resources in developing and supporting our
network of system integrators and value added resellers.

     We also sell our products to original equipment manufacturers who
incorporate our products into end user products that are tailored for specific
applications. These original equipment manufacturers purchase our products and
are responsible for conducting their own marketing, sales and support activities
for their application-specific markets and customers such as, for example,
providing a satellite digital video service for large corporations.


                                        4
<PAGE>
     Our marketing efforts are targeted at corporations, healthcare and
educational institutions and the government.  In order to increase awareness of
our products, we attend a number of trade shows including, for example, the
National Association of Broadcasters, or NAB, and Networld + Interop, or N + I,
tradeshows in the United States.  We also have established strategic
co-marketing, joint product interoperability testing and joint business
development relationships with corporate partners with whom we have the
opportunity to expand our sales and marketing presence through  the extensive
sales force and marketing relationships of our partners to reach new customers
and markets, and with whom we participate in joint marketing activities and
tradeshow booths.

MARKETS

     The markets for our products are characterized by rapidly changing
technology, evolving industry standards and frequent new product introductions.
We believe that our future success will depend on our continued ability to
maintain expertise in the technologies associated with the Moving Picture Expert
Group, or MPEG, standard, and streaming video network applications. In addition,
we believe that our future success will depend, in part, on our continued
ability to enhance our current products and to introduce new products and
features to meet changing customer requirements and evolving industry standards.
Our present products are based on the MPEG standard.  Although MPEG has evolved
as the de-facto standard for compression and decompression of digital video,
other industry standards could replace the current MPEG standard in the future.

     Digital video products generally, and video network products and
technologies specifically, are relatively young and evolving markets.  Our
future growth will depend on our ability to predict the evolution of these
markets as well as new digital video applications, and to successfully penetrate
those markets.  Because of the early stage of the development of the digital
video market, the demand for, and market acceptance of, our products, is subject
to a high degree of uncertainty.  If market growth rates do not meet our
expectations, or if we are unsuccessful in identifying and penetrating those
segments of the digital video market which provide the greatest opportunity for
growth, our business would suffer.

MANUFACTURING AND SOURCES OF SUPPLY

     Our manufacturing strategy focuses on system integration, system assembly
and final system testing and quality control of our products.  We outsource
printed circuit board, system chassis assembly to third party suppliers.  This
outsourcing strategy has enabled us to benefit from the manufacturing
capabilities of our suppliers who can accommodate significant increases in
production volume as necessary.  This strategy also permits us to focus on our
core competencies of rapid product development and deployment.

     We handle all phases of materials planning, production scheduling,
procurement and document control.  In addition to developing manufacturing
strategies, our production staff qualifies our suppliers and their manufacturing
processes to ensure subcontractor quality standards.

COMPETITION


                                        5
<PAGE>
     Competition in the streaming video products market is expected to increase.
To  compete effectively, we must continue to respond promptly and effectively to
changing  customer  preferences, and feature and pricing requirements, and rapid
technological  change.  Our principal competitors include Minerva Networks Inc.,
Optibase  Ltd. and Vbrick Systems Inc.  We believe that these competitors do not
offer  the  range  of products that combine network management, desktop personal
computer players and network video functions provided by us.  We further believe
that  we  offer  our customers a unique blend of computer networking and digital
video  competencies that differentiates us from our competition.  Although there
are  no  public market studies or market share estimate, we believe that we have
the  largest  installed  base  of  products  in  the  this  young  market.

     Competition  in the future may force us to lower product prices and add new
products  and  features  at  lower  prices,  or  we  may  otherwise be unable to
introduce  new  products  at higher prices. We cannot assure you that we will be
able  to compete successfully in this kind of price competitive environment, and
lower  prices  and  reduced  demand for our products would reduce our ability to
generate  revenue.

RESEARCH AND DEVELOPMENT

     The goal of our research and development activities is to continue the
development and introduction of next-generation products for our customers that
resolve the limitations of current network streaming video products and address
new markets.  Our efforts are also focused on increasing the functionality and
reducing the cost of our current products.  We are developing new technologies
and products that will:

     -    Employ the next generation MPEG-4 digital video technologies;

     -    Enhance current products for use in video surveillance and distance
          learning applications;

     -    Provide greater network management and control capability;

     -    Support video storage and server functions; and

     -    Accommodate different computer network bandwidth constraints and
          fluctuations.

     Our research and development expenditures were approximately $1.9 million
and $1.8 million for fiscal years ended December 31, 2001 and December 31, 2000,
respectively.

TRADEMARKS

     We have registered "Optivision," "High Speed Quad," "MPEG Studio" and
"Optivideo" as registered trademarks.  In addition, the names "NAC," "VS-Pro,"
"LiveMap," "LivePlayer," "mpegNet," "mpegStudio Pro" and "ScaleWare" are our
trademarks.

PROPRIETARY RIGHTS


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<PAGE>
     Our  future success and ability to compete are dependent, in part, upon our
proprietary  technology.  We  rely  on  patent,  trade  secret,  trademark  and
copyright  law  to  protect  our intellectual property.  We have one U.S. patent
issued  by  the  U.S.  Patent  and Trademark Office in the area of digital video
coding.  We  cannot  be  sure that any patents will be issued pursuant to future
patent  applications  or  that  patents  issued  to  us will not be invalidated,
circumvented,  challenged or licensed to others.  In addition, we cannot be sure
that  the rights granted under any such patents will provide us with competitive
advantages  or  that  any  patents  issued  to  us  will  be  adequate  to  stop
unauthorized  third  parties  from  copying our technology, designing around our
patents  or  otherwise  obtaining  and  using  our  products,  designs  or other
information.  In  addition,  we  cannot  be  sure  that  others will not develop
technologies  that  are  similar or superior to our technology.  Furthermore, we
believe  that  factors  such  as  the  technological  and creative skills of our
personnel,  new  product  developments,  product  enhancements  and  marketing
activities  are  just as essential as the legal protection of proprietary rights
to  establishing  and  maintaining  a  competitive  position.

     In  addition  to patent protection, we rely on unpatented trade secrets and
know-how  and  proprietary  technological innovation and expertise, all of which
are  protected  in  part  by confidentiality and invention assignment agreements
with  our  employees and consultants, and, whenever possible, our suppliers.  We
cannot  make  any assurances that these agreements will not be breached, that we
will  have  adequate remedies for any breach, or that our unpatented proprietary
intellectual  property  will  not  otherwise  become  known  or  independently
discovered  by competitors.  We also cannot make any assurances that persons not
bound by an invention assignment agreement will not develop relevant inventions.

     Many participants in the digital video market have a significant number of
patents and have frequently demonstrated a readiness to commence litigation
based on allegations of patent and other intellectual property infringement.
From time to time, we receive notices relating to alleged infringement. In some
cases, we have not received subsequent communications after responding to the
initial claim.  In some cases, we have resolved the matters on commercially
reasonable terms.  However, we cannot be sure that future claims will be
resolved on such terms, and failure to resolve such claims on such terms could
result in a material adverse effect on our business, financial condition and
results of operations.  We expect that companies will increasingly be subject to
infringement claims as the number of products and competitors in our industry
segment grows and the functionality of products in different industry segments
overlaps.  Responding to such claims, regardless of merit, could cause product
shipment delays or require us to enter into royalty or licensing arrangements to
settle such claims.  Any such claims could also lead to time-consuming,
protracted and costly litigation, which would require significant expenditures
of time, capital and other resources by our management.  Moreover, we cannot be
sure that any necessary royalty or licensing agreement will be available or
that, if available, such agreement could be obtained on commercially reasonable
terms.

CUSTOMERS

     Our  products  are  used  by corporations, government agencies, educational
institutions,  healthcare  institutions  and  other  institutions with broadband
computer  networks,  that  require  high  quality  streaming  video  for  such
applications as interactive distance learning, corporate training, video content
distribution,  video  surveillance,  and  telemedicine.


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<PAGE>
     Historically, a substantial portion of our revenues has come from large
purchases by a small number of customers. During calendar year 2001 and 2000,
four customers accounted for 52% and 44% of our net revenues, respectively.
During 2001, Hughes Network Systems and Glory Group accounted for 25% and 10% of
our net revenues, respectively, and during 2000 GTE (Verizon) accounted for 11%
of our net revenue.  Our customers purchase our hardware and software products
on an as needed basis by issuing purchase orders directly to us.  Customers of
system integrator and value added resellers are extended a purchase price
discount based on mutual negotiation and agreement which is typically based on
total volume of business over a 12 month period or for a specific order and
delivery schedule. Generally, consistent with industry practice in our market,
our customers do not sign long term contracts with committed purchase volume.
(A)

EMPLOYEES(B)

     We employ a total of 24 full time employees, which include four in
engineering, ten in sales and marketing, five in manufacturing and five in
administration and finance.


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<PAGE>
                                  RISK FACTORS

The  risks and uncertainties described below are not the only ones that we face.
Additional  risks  and  uncertainties  not  presently  known  to  us  or that we
currently  believe  to be immaterial may also adversely affect our business.  If
any  of  the  following  risks and uncertainties develop into actual events, our
business,  financial condition and results of operations could be materially and
adversely  affected,  and  the  trading price of our common stock could decline.

OUR RECURRING OPERATING LOSSES, STOCKHOLDERS' DEFICIT AND WORKING CAPITAL
DEFICIT CAUSE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE OUR BUSINESS.

     We have received a report from our independent auditors on our financial
statements for fiscal years ended December 31, 2001 and 2000, respectively, in
which our auditors have included explanatory paragraphs indicating that our
recurring operating losses, stockholders' deficit and working capital deficit
cause substantial doubt about our ability to continue as a going concern.  If
our recurring operating losses, stockholders' deficit and working capital
deficit continue, our business could be materially adversely affected.

WE HAVE A HISTORY OF LOSSES, AND WE WILL NEED ADDITIONAL CAPITAL TO CONTINUE OUR
OPERATIONS. IF WE ARE UNABLE TO OBTAIN ADDITIONAL CAPITAL, WE WILL HAVE TO
CURTAIL OUR OPERATIONS.

     As of this date, we have generated limited revenues and incurred
significant losses.  As of December 31, 2001, we had an accumulated deficit of
approximately $19,640,644.  For the fiscal years ended December 31, 2001 and
2000, respectively, our consolidated operating losses were $5,432,172 and
$5,419,655, respectively.  In the first quarter of 2002, we expect a loss of
between $1.3 million and $1.7 million.  We have never been profitable and
continue to incur losses from operations. We expect to incur net losses over the
next two years of between $4 million and $6 million.  We may never generate
sufficient revenue, income and cash flows to support our operations.  Our future
revenues could decline by reason of factors beyond our control such as
technological changes and developments, downturns in the economy and decreases
in demand for digital video networking and broadband Internet products.  If we
continue to incur losses, if our revenues decline or grow at a slower rate, or
if our expenses increase without commensurate increases in revenues, our
operating results will suffer and the price of our common stock may decline.

     We currently expect to reach break even in 2004. So, in order to sustain
our operations until then, we currently estimate that we will need additional
funding of between $4 million and $6 million.  However, our capital requirements
will depend on many factors, including, for example, acceptance of and demand
for our products, the extent to which we invest in new technology and research
and development projects, general economic conditions, and the status and timing
of competitive developments.  To the extent that our existing sources of
liquidity and cash flow from operations are insufficient to fund our activities,
we will continue to need to raise additional capital.


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<PAGE>
     If additional funds are raised through the issuance of equity securities,
the percentage of equity ownership of our existing stockholders will be reduced.
In addition, holders of these equity securities may have rights, preferences or
privileges senior to those of the holders of our common stock.  If additional
funds are raised through the issuance of debt securities, we may incur
significant interest charges, and these securities could also impose
restrictions on our operations.  If additional financing is not available when
needed on terms favorable to us or at all, we will have to curtail our
operations.

WE DEPEND ON SEVERAL LARGE RESELLERS FOR A SIGNIFICANT PORTION OF OUR REVENUES,
AND THE LOSS OF ONE OR MORE OF THESE CUSTOMERS, OR A SIGNIFICANT DECREASE IN
REVENUE FROM ANY OF THESE CUSTOMERS, COULD HAVE A DISPROPORTIONATE IMPACT ON OUR
REVENUES AND INCOME.  IF THESE RELATIONSHIPS DO NOT CONTINUE, OUR BUSINESS MAY
BE MATERIALLY ADVERSELY AFFECTED.

     We use a network of value added resellers, or VARs, consisting primarily of
system integrators and original equipment manufacturers, or OEMs, to assist with
the marketing of our products and installation and servicing of our streaming
video network products.  Some of these value added resellers,  system
integrators and original equipment manufacturers are important customers
representing a substantial portion of our revenues.  If we lose one or more of
our key customers or experience a delay or cancellation of a significant order
or a decrease in the level of purchases from any of our key customers, our net
revenues could decline and our operating results and business could be harmed.
In addition, our net revenues could decline and our operating results and
business could be harmed if we experience any difficulty in collecting amounts
due from one or more of our key customers.  During 2001 and 2000, four customers
accounted for 52% and 44% of our net revenues, respectively. As of December 31,
2001 and 2000 approximately 44% and 45%, respectively, of accounts receivable
were concentrated with five customers.

     Our future success depends on our ability to maintain old relationships and
develop new relationships with value added resellers, system integrators and
original equipment manufacturers, and on their marketing efforts and
installation and support services.  A decline in the financial prospects of
particular customer or any of their customers, inadequate installation and
support services by a customer or our inability to maintain existing
relationship or contract with additional customers could have a material adverse
effect on our business.

WE DEPEND ON THIRD PARTIES FOR THE SUPPLY AND MANUFACTURE OF ALL OF OUR
COMPONENT AND ELECTRONIC PARTS.  IF THESE MANUFACTURERS AND SUPPLIERS DO NOT
MEET OUR DEMAND, OUR BUSINESS MAY BE MATERIALLY ADVERSELY AFFECTED.

     We purchase components and electronic parts pursuant to purchase orders in
the ordinary course of business and do not maintain supply agreements.  We are
substantially dependent on the ability of third-party manufacturers and
suppliers to meet our design, performance and quality specifications.  If our
third-party suppliers cannot supply us with systems or parts within our
timeframes or allocate the supply of certain high demand components, we could be
unable to meet our delivery schedules and requirements on a timely and
competitive basis, which could have a material adverse effect on our business.


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<PAGE>
IF OUR PRODUCTS DO NOT KEEP PACE WITH THE TECHNOLOGICAL DEVELOPMENT IN THE
RAPIDLY CHANGING DIGITAL VIDEO AND BROADBAND INTERNET VIDEO INDUSTRY, OUR
BUSINESS MAY BE MATERIALLY ADVERSELY AFFECTED.

     The digital video industry generally and the broadband Internet video
industry specifically are in the early state of development, and the demand for,
and market acceptance of, our technologies and products under development is
subject to a high degree of uncertainty.  If we cannot develop and launch our
new products, or if we fail to achieve market acceptance of our new products,
our business may be materially adversely affected.

     Our future success also depends upon our ability to continue to enhance our
existing products and to successfully develop and market new products in a
cost-effective and timely basis.  Once a new product is developed, we must
rapidly commence volume production. This process requires accurate forecasting
of customer requirements and attainment of acceptable manufacturing costs. The
introduction of new or enhanced products also requires us to manage the
transition from older, displaced products in order to minimize disruption in
customer ordering patterns, avoid excessive levels of older product inventories
and ensure that adequate supplies of new products can be delivered to meet
customer demand. In addition, reliability, quality or compatibility problems
with our products could significantly delay or reduce market acceptance of our
products, could require the devotion of significant time and resources to
addressing errors, could divert our engineering and other resources from other
tasks and development efforts, and could damage our reputation and adversely
affect our ability to retain our existing customers and to attract new
customers.

COMPETITION MAY DECREASE OUR MARKET SHARE, NET REVENUES AND GROSS MARGINS.

     Competition in the streaming video products market is intense, and we
expect competition to increase. To compete effectively, we must continue to
respond promptly and effectively to changing customer preferences, and feature
and pricing requirements, and rapid technological change. Our principal
competitors include Minerva Networks Inc., Optibase Ltd. and Vbrick Systems Inc.
Some of our actual and potential competitors have greater name recognition,
access to a larger customer base and significantly greater financial, marketing,
technical and other resources than we do. Our competitors also sell products
that provide some of the benefits of the products that we sell, and we could
lose sales to our competitors. Moreover, the digital video products industry is
undergoing a period of consolidation in which companies, including some of our
competitors, are participating in business combinations. These combinations may
result in the emergence of competitors who have larger market shares, customer
base, sales forces and product offerings and greater technology marketing
expertise than we do. As a result, our competitors may be able to adapt more
quickly to new or emerging technologies and changes in customer requirements or
to devote greater resources to the promotion and sale of their products than us.
We may not be able to compete successfully against current and future
competitors, or to make technological advances necessary to improve or even
maintain our competitive position, or achieve market acceptance for our
products.


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<PAGE>
WE DEPEND ON A LIMITED NUMBER OF KEY PERSONNEL WHO WOULD BE DIFFICULT TO
REPLACE, AND IF WE LOSE THE SERVICES OF THESE INDIVIDUALS OR CANNOT HIRE
ADDITIONAL QUALIFIED PERSONNEL, OUR BUSINESS COULD BE SERIOUSLY HARMED.

     Our future success also depends in large part on the continued services of
our senior management, and key technical and sales personnel.  In particular, we
are highly dependent on the services of Michael A. Liccardo, our chairman,
president and chief executive officer, Lawrence L. Bartlett, our vice president,
chief financial officer and secretary, and Richard A. Falcone our vice president
of marketing, worldwide sales and business development.  We do not carry key
person life insurance on our senior management or key personnel.  Any loss of
the services of Messrs. Liccardo, Bartlett, or Falcone, or other key personnel
could seriously harm our business.

IF WE FAIL TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGES AND MULTIPLE EVOLVING
STANDARDS THAT CHARACTERIZE THE DIGITAL VIDEO AND NETWORKING MARKET, OUR
BUSINESS MAY BE MATERIALLY ADVERSELY AFFECTED AND OUR RESULT OF OPERATIONS MAY
SUFFER.

     The markets for our products are characterized by rapidly changing
technology, evolving industry standards and frequent new product introductions.
We believe that our future success will depend on our continued ability to
maintain expertise in the technologies associated with the Moving Picture Expert
Group, or MPEG, and computer network and broadband Internet video applications.
Our present products are based on the MPEG standard.  Although MPEG has evolved
as the de-facto standard for compression and decompression of digital video,
other industry standards could replace the current MPEG standard in the future,
and this may materially adversely affect our business.

     In addition, we or our competitors may announce new products that have the
potential to shorten the life cycle of, or replace, our current products.  Such
announcements could cause customers not to buy or to defer to buy our products.
Similarly, such new products could render our products or technologies
non-competitive or obsolete. If we fail to enhance our current products and to
introduce new products and features to meet changing customer requirements and
evolving industry standards, our results of operations may suffer.


IF WE ARE UNSUCCESSFUL IN IDENTIFYING AND PENETRATING THOSE SEGMENTS OF THE
DIGITAL VIDEO MARKET WHICH PROVIDE THE GREATEST OPPORTUNITY FOR GROWTH, OUR
BUSINESS WOULD SUFFER.

     Digital video products generally, and video network and broadband Internet
video products and technologies specifically, are relatively young and evolving
markets.  Our future growth will depend on our ability to predict the evolution
of these markets as well as new streaming video applications, and to
successfully penetrate those markets.  Because of the early stage of the
development of the digital video market, the demand for, and market acceptance
of our products, is subject to a high degree of uncertainty.  If we are
unsuccessful in identifying and penetrating those segments of the digital video
market which provide the greatest opportunity for growth, our business would
suffer.


                                       12
<PAGE>
WE MAY ISSUE ADDITIONAL SHARES AND DILUTE YOUR OWNERSHIP PERCENTAGE.

     Some events could result in the issuance of additional shares of our common
stock, which would dilute your ownership percentage. We may issue additional
shares of common stock:

     -    to raise additional capital or finance acquisitions;

     -    upon the exercise or conversion of outstanding options, warrants,
          convertible notes, convertible debentures or investment options; and

     -    in lieu of obligations owed in cash.

OUR STOCK PRICE MAY BE VOLATILE AND THE TRADING MARKET FOR OUR COMMON STOCK IS
LIMITED.

     The market price for our common stock, like that of the securities of many
companies in the technology and emerging growth sectors, has fluctuated
substantially and may continue to be highly volatile in the future.  We believe
that the following factors, in addition to other risk factors described above,
will continue to significantly affect the market price of our common stock:

     -    announcements of technological innovations or new commercial products
          by us and our competitors;

     -    developments concerning research and development, manufacturing, and
          marketing alliances or collaborations by us and our competitors;

     -    developments in our industry;

     -    general market and economic conditions and other factors, including
          factors unrelated to our operating performance or the operating
          performance of our competitors; and

     -    period-to-period fluctuations in our operating results and the
          operating results of our competitors.

     In addition, stock markets have from time to time experienced extreme price
and volume fluctuations.  These fluctuations have especially affected the stock
market price of many technology companies, and, in many cases, are unrelated to
the operating performance of the particular companies.  We believe that these
broad market fluctuations may continue to affect the market price of our common
stock.

     With the advent of the Internet, new avenues have been created for the
dissemination of information. We do not have control over the information that
is distributed and discussed on electronic bulletin boards and investment chat
rooms. The motives of the people or organizations that distribute such
information may not be in our best interest or in the interest of our
shareholders. This, in addition to other forms of investment information



                                       13
<PAGE>
including newsletters and research publications, could result in significant
fluctuations in the market price of our common stock.

     From time to time, there has been limited trading volume with respect to
our common stock which is traded in the over-the-counter market on the OTC
Bulletin Board, and we cannot make any assurances that there will continue to be
a trading market in our common stock.

ITEM 2. DESCRIPTION OF PROPERTY

     Our  principal  administrative,  marketing,  manufacturing  and  product
development facility is located in Palo Alto, California. This facility occupies
approximately 22,000 square feet pursuant to a lease which commenced on November
1,  1995  and which will terminate on December 15, 2002.  The lease provides for
two  successive  options  to  extend  the  lease term, each for a period of five
years.

ITEM 3. LEGAL PROCEEDINGS

     We are not a party to any material pending legal proceedings and, to the
best of our knowledge, no such action by or against us has been threatened.

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

     None.


                                       14
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRICE RANGE OF COMMON STOCK

     Our common stock is traded in the over-the-counter market and is quoted on
the OTC Bulletin Board under the symbol "AMNM." The following table sets forth
the high and low closing bid prices (which reflect prices between dealers and do
not include retail markup, markdown or commission and may not represent actual
transactions) for each quarterly period since our common stock first began
trading in the over-the-counter market in July 2000. From time to time, during
the periods indicated, trading activity in our common stock was infrequent.  As
of May 3, 2002, the closing price of our common stock was $0.39 per share. As of
March 19, 2002, there were approximately 168 record holders of our common stock.
We believe we have approximately 5,700 beneficial stockholders.  The source of
the quotes is the Nasdaq Stock Market, Inc.


                                       15
<PAGE>
CALENDAR YEAR 2000                       HIGH BID   LOW BID

Third Quarter 2000 (commencing July 19)  $  10.00   $  0.355
Fourth Quarter 2000                      $   6.00   $   3.00

CALENDAR YEAR 2001                       HIGH BID   LOW BID

First Quarter 2001                       $   3.82   $   1.75
Second Quarter 2001                      $   2.95   $   0.89
Third Quarter 2001                       $   1.69   $   0.41
Fourth Quarter 2001                      $   0.92   $   0.33

CALENDAR YEAR 2002                       HIGH BID   LOW BID

First Quarter 2002                       $   1.72   $   0.52
Second Quarter 2002 (through May 3)      $   0.63   $   0.31


     As of May 3, 2002, there were approximately 18,464,237 shares of common
stock issued and outstanding.

OUR DIVIDEND POLICY

     We  anticipate  that  for the foreseeable future, earnings will be retained
for  the  development  of our business. Accordingly, we do not anticipate paying
dividends  on  the common stock in the foreseeable future. The payment of future
dividends  will  be  at  the  sole discretion of our board of directors and will
depend  on  our  general  business  condition.

RECENT SALES OF UNREGISTERED SECURITIES

     In October 2001, we issued and sold to an unaffiliated qualified corporate
investor 555,555 shares of our common stock for a total of $200,000 in cash in
reliance upon an exemption from registration pursuant to Regulation S
promulgated under the Securities Act of 1933.

     In December 2001, we issued and sold to an unaffiliated accredited investor
a 12% two-year secured convertible debenture in the principal amount of $500,000
convertible at the holder's option at any time into shares of our common stock
at the lesser of 70% of the average of the lowest three trading prices of our
common stock during the 20 trading day period ending one trading day prior to
the date of conversion or $0.385 per share, investment options for the purchase
up to $500,000 of our common stock at the same conversion price of the
debenture, and warrants exercisable for up to 1,000,000 shares of our common
stock at an exercise price equal to the lesser of $0.385 per share or 70% of the
average of the lowest three trading prices for our common stock during the 20
days immediately prior to exercise.  In connection therewith, as a finders fee,
we issued to Bristol Capital, L.L.C. and Alexander Dunham Capital Group, Inc.
10% of the cash proceeds from the debentures issuance and warrants to purchase


                                       16
<PAGE>
up to a total of 100,000 shares of our common stock at an exercise price equal
to the lesser of $0.385 per share or 70% of the average of the lowest three
trading prices for our common stock during the 20 days immediately prior to
exercise.  These securities were issued in reliance upon an exemption from
registration pursuant to Section 4(2) of the Securities Act of 1933.


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

GENERAL

          We  are  a  Delaware corporation formed in July 1998. We make hardware
and software products for the creation, management and transmission of
high-quality digital video over computer networks. Our products are distributed
worldwide through a network of value added resellers, or VARs, system
integrators and original equipment manufacturers, or OEMs. Our products are used
in diverse applications such as interactive distance learning, corporate
training, video content distribution, video surveillance and telemedicine.

     On  April  16, 2001, we merged with Optivision, Inc., an operating company,
in an exchange of common stock accounted for as a pooling of interest. Under the
terms  of  the  merger,  each  issued and outstanding share of Optivision common
stock  was  converted  into the right to receive 0.10 shares of our common stock
rounded  to  the nearest whole share; each outstanding but unexercised option to
purchase  common stock of Optivision was converted into an option to acquire the
number  of shares of our common stock equal to the product of 0.10 multiplied by
the  number  of  shares of Optivision common stock that would have been obtained
before  the merger, rounded to the nearest whole share; each outstanding warrant
to  purchase  common stock of Optivision was converted into a warrant to acquire
the number of shares of our common stock equal to the product of 0.10 multiplied
by the number of shares of Optivision common stock that would have been obtained
before  the  merger,  rounded  to  the  nearest  whole  share.

     On  January  30,  2002,  we entered into a work out agreement plan with the
creditors  of  Optivision,  under  which we will pay the creditors of Optivision
$0.35  for  every  $1.00 owed.  Under the agreement, the debt will be settled in
monthly  payment  by  June  30,  2002.

RESULTS OF OPERATIONS

     Revenues for the year ended December 31, 2001 were $4,095,755, an increase
of $521,665 or 14.6% over revenues of $3,574,090 for the year ended December 31,
2000. Revenues increased primarily as a result of the continued growth in
enterprise market applications for digital video products. As a part of this
growth we saw an increase in foreign sales as the market expands internationally
and an increase in sales to defense contractors as a result of the heightened
interest in video surveillance following the September 11, 2001 terrorist
attacks. During calendar year 2001 and 2000, foreign sales accounted for 15.8%
and 14.0% of our total sales, respectively. During calendar year 2001 and 2000,
four customers accounted for 52% and 44% of our net revenues, respectively.
During 2001, Hughes Network Systems and Glory Group accounted for 25% and 10% of
our net revenues, respectively, and during 2000 GTE (Verizon) accounted for 11%
of our net revenue.


                                       17
<PAGE>
     Cost of sales for the year ended December 31, 2001 were $2,148,038, a
decrease of $229,192 or 9.64% over cost of sales of $2,377,230 for the year
ended December 31, 2000. The decrease in cost of sales came from improved
materials management that resulted in less scrap and obsolete materials.  In
addition, manufacturing and product testing process revisions brought new
efficiencies that allowed a reduction in manufacturing headcount.

     Research and development expenses were $1,870,630 for the year ended
December 31, 2001, an increase of $98,156 or 5.54%, as compared to $1,772,474
for the year ended December 31, 2000. Product development and support during
2001 was increased through the use of outside consultants.  Increases in
engineering costs will continue with development of new network digital video
products.

     Sales and marketing expenses for the year ended December 31, 2001
were $2,822,510, an increase of $191,700 or 7.29%,  as compared to $2,630,810
for the year ended December 31, 2000. In 2001 we increased our marketing effort
with more trade show activity and increased travel expenditure.  This trend is
expected to continue.

     General and administrative costs were $2,033,688 for the year ended
December 31, 2001, an increase of $25,273 or 1.26%, as compared to $2,008,415
for the year ended December 31, 2000. This is primarily due to the cost of
acquiring Optivision's operations in April 2001 and meeting regulatory reporting
requirements. Increases were offset by decreased expenditures necessitated by
our revenue slowdown.

     Interest and other expense, net was $653,071 for the year ended December
31, 2001, an increase of $448,245 or 219%, as compared to $204,816 for the year
ended December 31, 2000. The increase was primarily due to accruing interest on
shareholder loans and other increases in debt. These interest expenses will
continue until such time as the notes are repaid or converted to equity.

     Our net loss for the 2001 fiscal year remained steady, increasing by
$12,517, or 0.23%, to a net loss of ($5,432,172) from a net loss of ($5,419,655)
in the comparable 2000 period. This is the result of all of the above
operational changes and financing costs.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2001, we had cash and cash equivalents of $42,467, a
decrease of $166,299 from $214,766 at the end of the year ended December 31,
2000.  We also had continuing operating losses for the year ended December 31,
2001 of $5,432,172, and we expect a loss of between $1.3 million and $1.7
million for the first quarter of 2002.

     In October 2001, we received financing that was sufficient to support our
working capital requirements through December 2001.  In December 2001, we
entered into financing agreements with Bristol Investment Fund, Ltd. to provide
us with a total of $1,000,000 of financing through the issuance of two tranches
of convertible debentures, and up to a further $1,300,000 in financing through
the exercise of investment options and warrants.  The terms of the financing


                                       18
<PAGE>
with Bristol Investment Fund are more fully described in this prospectus in the
section entitled "Description of Securities - Convertible Debenture Financing."
In January 2001, we received the first tranche of financing from the issuance of
$500,000 in principal amount of convertible debentures to Bristol Investment
Fund.  The proceeds of this financing, together with the proceeds from a new
$1,800,000 unit financing in February 2002, are being used to sustain operations
and meet existing creditor obligations.  We expect to receive the second tranche
of the Bristol Investment Fund convertible debenture financing with the issuance
of a further $500,000 in principal amount of convertible debenture within ten
business days after the effective date of the registration of the shares that
are the subject of this offering.  Receipt of this additional convertible
debenture financing and financing through the exercise of the related investment
options and warrants will be critical for us to continue operations through
2002.

     Although we currently expect to break even in 2004, we expect to incur net
losses over the next two years of between $4 million and $6 million.  So, in
order to sustain our operations, finance our growth and achieve our strategic
objectives until then, we currently estimate that we will need additional
funding of between $4 million and $6 million.  Management has  implemented
measures to increase cash flows through increases in revenue and cost-cutting
measures and is  actively pursuing additional sources of funding.   Financing
transactions may include the issuance of equity or debt securities, obtaining
credit facilities, or other financing mechanisms. However, the trading price of
our common stock and the downturn in the U.S. stock and debt markets could make
it more difficult for us to obtain financing through the issuance of equity or
debt securities.  Even if we are able to raise the funds required, it is
possible that we could incur unexpected costs and expenses, fail to collect
significant amounts owed to us, or experience unexpected cash requirements that
would force us to seek alternative financing. Further, if we issue additional
equity or debt securities, stockholders may experience additional dilution or
the new equity securities may have rights, preferences or privileges senior to
those of existing holders of our common stock.  If additional financing is not
available or is not available on acceptable terms, we will have to curtail our
operations.

     The risk factors described above are not the only ones facing our company
and they should be read in conjunction with all other risk factors disclosed in
reports filed with the Securities and Exchange Commission. Additional risks not
presently known to us, or that we currently deem immaterial, may also impair our
business operations.

ITEM 7. FINANCIAL STATEMENTS

     Our consolidated financial statements and the independent auditors' report
appear on pages F-1 through F-20 of this Report and are incorporated into this
Item 7 by reference.


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

     None.


                                       19
<PAGE>
                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

     The following table sets forth the names, age, and position of each of our
Directors and executive officers.

NAME                     AGE  POSITION
----                     ---  --------
Michael A. Liccardo       56  President, Chief Executive Officer
                              and Chairman
Lawrence L. Bartlett      62  Chief Financial Officer, Vice President, Secretary
                              and Director
Richard A. Falcone        46  Vice President of Marketing, Worldwide Sales and
                              Business Development
Catherine Palmen          44  Director


     Our  executive officers are appointed by, and serve at the pleasure of, our
board  of  directors.  There  are no family relationships among our directors or
executive  officers.  Our  directors  are elected to serve until the next annual
meeting  of  stockholders  or  until their successors are elected and qualified.
Pursuant  to  our  bylaws,  the number of directors on our board of directors is
fixed  at  four  members.

BIOGRAPHICAL INFORMATION

     Set forth below is biographical information for each officer and director.
No person other than officers and directors will currently perform any of our
management functions.

     Michael  A.  Liccardo  has served as a director since February 2001, and as
our  chief  executive  officer,  president and chairman of the board since April
2001.  Mr.  Liccardo  has  been  the  president  and  chief executive officer of
Optivision  since  1998  and chairman since December 1999. With over 25 years of
experience  in  the  high  technology  industry  in  various  senior  marketing,
operations  and  financial  management  positions,  Mr.  Liccardo  has  directed
business  strategy  for  a  broad  range  of  markets,  including  computer  and
peripheral systems, software, semiconductors and multimedia communication. Prior
to  joining  Optivision,  Mr.  Liccardo  served  in various executive management
positions  at  Cirrus  Logic,  a  supplier  of  analog  circuits  and  advanced
mixed-signal  chip  products,  including vice president of business development,
vice  president  of  strategic planning, and vice president and general manager.
While  at  Cirrus  Logic,  Mr.  Liccardo  directed  the spin off of Lexar Media.
Previously,  Mr.  Liccardo  was  the chief operating officer of Scientific Micro
Systems  where  he  successfully  completed  its  initial  public  offering. Mr.
Liccardo  also  served  as a member of the board at BusLogic. Mr. Liccardo holds


                                       20
<PAGE>
both  master  and bachelor of science degrees in electrical engineering from the
University  of  California  at  Berkeley,  and  an MBA from Stanford University.

     Lawrence  L.  Bartlett  has  served  as  interim  president from March 2001
through April 2001 and has served as our vice president, chief financial officer
and  secretary since April 2001. Mr. Bartlett has also served on our board since
February  2001.  Mr.  Bartlett has also served as the chief financial officer of
Optivision  since  June  1998,  overseeing  Optivision's worldwide financial and
administration  operations. He has also been a director of Optivision since June
2000.  He brings over 25 years of leadership in high technology financial, human
resources  and  information  technology management. Prior to joining Optivision,
Mr.  Bartlett  served  for  five  years as the senior finance and administration
executive  at  Peninsula  Laboratories.  Mr.  Bartlett  spent  eight  years as a
contract  chief  financial  officer,  providing  financial expertise to startup,
turnaround  and  fast-track  growth  companies. Mr. Bartlett also served as vice
president  of  finance  and  administration,  and  chief  financial  officer  of
Northstar  Computers  and  corporate  controller  for  Bio-Rad  Laboratories. At
Northstar Computers, Mr. Bartlett led the company to an initial public offering.
Previously,  Mr.  Bartlett  was  an  auditor  with  Arthur Andersen LLP. He is a
certified public accountant and holds a bachelor of science degree in accounting
and  business  statistics  from  the  University  of  Oregon.

     Richard  A.  Falcone  has served as our vice president, worldwide sales and
business  development,  since  April  2001.  He  joined  Optivision in 1997 with
significant  experience  in  sales,  marketing,  strategic planning, finance and
operational  management  in  growth environments. During his career, Mr. Falcone
has  developed  both enterprise direct and indirect models within end user, OEM,
integration  and service provider environments. Prior to Optivision, Mr. Falcone
spent  nine  years  at  General Signal Networks (now InRange), a manufacturer of
data  communications  switching  and  test  equipment,  network control and open
systems  connectivity.  GSN  was  the  result  of the merger of Telenex and Data
Switch  corporations. As Area Vice President, he built and managed a $40 million
field  organization,  including  sales,  business  development, field marketing,
systems  engineering  and  support.  Prior  to General Signal, Mr. Falcone spent
eight  years  at  Nortel Networks, most recently serving as eastern region sales
director  for  the  Spectron  Division  (data communications). He was top ranked
among  management  in  quota  achievement. While at Nortel, Mr. Falcone gained a
wealth  of  experience serving in numerous management and professional positions
including  director  marketing/sales  operations,  senior  manager  financial
planning,  and  strategic  planning  analyst. He benefited from a broad scope of
assignments  within  formal  executive  development  initiatives  for  select
candidates.  Mr. Falcone holds a master's degree in business administration from
Drexel  University  in  Philadelphia,  PA,  and  a bachelor of science degree in
mathematics  from Villanova University in Villanova, PA. He was elected to Pi Mu
Epsilon,  a  national  mathematics  honor  society.  Throughout  his career, Mr.
Falcone  has  dedicated  himself  to  continuing  education, including executive
simulation  programs  at  the  Wharton  School.

     Catherine  Palmen  has served as a director since February 2001. Ms. Palmen
has  also  been  a  director  of  Optivision  since June 2000 and is chairman of
Optivision's  creditors  committee.  Since  March  1998,  Ms. Palmen has been an
account  executive  with  Interprose, a public relations agency for emerging and


                                       21
<PAGE>
established  players  in  the  information  technology  and  telecommunications
industries,  where  she  supports  trade  shows  and  tours, coordinates product
reviews,  and  manages  relations  with  business  and  trade press for multiple
clients.  Before  joining Interprose, Ms. Palmen worked in public relations with
Newbridge  Networks  Inc.  and  in  public  relation and sales with UB Networks.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section  16(a)  of the Securities Exchange Act of 1934, as amended, and the
regulations  of  the  Securities and Exchange Commission promulgated thereunder,
require our directors, executive officers and persons who own more than 10% of a
registered  class  of  our  equity  securities  to file reports of ownership and
changes in ownership with the Securities and Exchange Commission, and provide us
with  copies  of  such  reports.  Based  solely on a review of the copies of the
reports  furnished  to  us,  or  written  representations  that  no reports were
required  to be filed, we believe that during the fiscal year ended December 31,
2001  all  Section  16(a)  filing  requirements  applicable  to  our  directors,
officers, and greater than 10% beneficial owners were complied with, except that
Michael  A.  Liccardo  reported  four transactions on a late Form 4, Lawrence L.
Bartlett  reported  four  transactions  on a late Form 4, and Richard A. Falcone
reported  three  transactions  on  a  late  Form  4.

ITEM  10.     EXECUTIVE  COMPENSATION

EXECUTIVE COMPENSATION

     The following table sets forth all compensation awarded, earned or paid for
services  rendered  in  all  capacities to us during fiscal years 1999, 2000 and
2001  to:

     -    Each person who served as our chief executive officer during 2001; and

     -    Our other executive officers whose total annual salary and bonus in
          2001 exceeded $100,000.


                                       22
<PAGE>
<TABLE>
<CAPTION>
                               SUMMARY COMPENSATION TABLE

                                  ANNUAL COMPENSATION (1)    LONG TERM COMPENSATION (1)
                                  ------------------------  ---------------------------

                                                             SECURITIES     ALL OTHER
                                                             UNDERLYING   COMPENSATION
NAME AND PRINCIPAL          YEAR  SALARY ($)(2)  BONUS ($)  OPTIONS (#S)     ($) (3)
--------------------------  ----  -------------  ---------  ------------  -------------
    POSITION
    --------
<S>                         <C>   <C>            <C>        <C>           <C>
Michael A. Liccardo         2001        164,680        ---     1,100,000         1,278
  President, Chief          2000        182,148        ---     1,300,000           ---
Executive Officer and       1999        175,014        ---       110,000           ---
Chairman of the Board
(4)
Jason John                  2001            ---        ---           ---           ---
  President, Secretary      2000            ---        ---           ---           ---
and  Chairman of the        1999            ---        ---           ---           ---
Board (5)
Lawrence L. Bartlett        2001        163,414        ---       825,000         1,245
  Chief Financial           2000        185,450        ---       425,000           ---
Officer, Vice President     1999        131,250        ---        30,000           ---
and Secretary (6)
Richard A. Falcone          2001        184,228        ---       740,000           878
  Vice President of         2000        174,538        ---       500,000           ---
Marketing, Worldwide        1999        155,675        ---        49,250           ---
Sales and Business
Development
<FN>
_________________

(1)  Amounts for fiscal year 1999 and 2000 reflect pre-merger compensation
     awarded, earned or paid for services rendered in all capacities to
     Optivision, Inc.
(2)  Amounts shown include cash and non-cash compensation earned and received by
     the named executive officers. These officers elected to defer all or a
     significant portion of their salaries in order that our financial resources
     be directed toward supporting operations. At the end of 2001, Messrs.
     Bartlett and Falcone had deferred compensation of approximately $40,000 and
     $39,800, respectively, all of which was paid in February 2002. At the end
     of 2001, Mr. Liccardo had deferred compensation of approximately $87,000, a
     portion of which was paid in the form of 13,695 stock options that were
     granted and immediately exercised by Mr. Liccardo on January 15, 2002 at
     the price of $1.20 per share, and the remainder of which will not be paid
     until our board of directors deems it prudent and such payment will not
     adversely affect our operations.
(3)  Represents the premiums paid by us with respect to term life insurance on
     the lives of each named executive officer pursuant to which the proceeds
     are paid to the beneficiaries of each policy.
(4)  Mr. Liccardo became our president, chief executive officer and chairman of
     the board of directors in April 2001.
(5)  Mr. John became our president, chairman of the board and secretary and
     served as the sole director in August 2000, and resigned as director in
     February 2001 and as chairman of the board, president and secretary in
     March 2001.
(6)  Mr. Bartlett served as our interim president upon the resignation of Mr.
     John in March 2001 and until Mr. Liccardo was appointed in April 2001.
</TABLE>


                                       23
<PAGE>
                       OPTION GRANTS IN LAST FISCAL YEAR

     The following table sets forth information regarding option granted to each
of the named executive officers during the year ended December 31, 2001.

<TABLE>
<CAPTION>
                                       INDIVIDUAL GRANTS
                      ---------------------------------------------------------------
                                            PERCENTAGE OF
                           NUMBER OF        TOTAL OPTIONS
                          SECURITIES         GRANTED TO      EXERCISE OR
                      UNDERLYING OPTIONS    EMPLOYEES IN     BASE PRICE    EXPIRATION
NAME                        GRANTED        FISCAL YEAR (1)   ($/SH) (2)       DATE
--------------------  -------------------  ---------------  -------------  ----------
<S>                   <C>                  <C>              <C>            <C>
Michael A. Liccardo       200,000 (3) (4)            5.25%  $       2.00     04/09/11
                          900,000 (5) (6)           23.65           1.07     06/28/11
Lawrence L. Bartlett      160,000 (3) (4)            4.20           2.00     04/09/11
                          365,000 (5) (6)            9.59           1.07     06/28/11
                          200,000 (5) (7)            5.25           0.35     10/13/11
                          100,000 (5) (8)            2.62           0.62     12/27/11
Richard A. Falcone        150,000 (3) (4)            3.94           2.00     04/09/11
                          365,000 (5) (6)            9.59           1.07     06/28/11
                          125,000 (5) (7)            3.28           0.35     10/13/11
                          100,000 (5) (8)            2.62           0.62     12/27/11
<FN>
_________________

(1)  Based on a total of 3,805,300 shares subject to options granted to
     employees (not counting options granted to non-employees) under all our
     stock option plans in the year ended December 31, 2001, including options
     granted to the named executive officers.
(2)  All options were granted at an exercise price equal to the fair market
     value of our common stock at the date of grant, or, in the case of
     Optivision, Inc. options, issued at the fair market value of the
     Optivision, Inc. common stock as determined by the board of directors of
     Optivision, Inc.
(3)  These options were issued under our 1997 Stock Plan in exchange for
     Optivision, Inc. options in connection with our merger with Optivision,
     Inc. on April 16, 2001. The Optivision, Inc. options were granted on April
     9, 2001.
(4)  The option vests at a rate of 2.08% each month.
(5)  These options were issued under our 2000 Stock Plan.
(6)  The option vests 25% on the date of grant, 25% on March 1, 2002, and 2.08%
     each month thereafter.
(7)  The option vested 33% on November 12, 2001, 33% on December 12, 2001 and
     34% on January 12, 2002.
(8)  The option vests 25% on March 30, 2002 and 2.08% each month thereafter.
</TABLE>


    AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
                                     VALUES

     The following table sets forth information regarding the number and value
of securities underlying unexercised options held by each of the named executive
officers at December 31, 2001. None of the named executive officers exercised
stock options during the year ended December 31, 2001.


                                       24
<PAGE>
<TABLE>
<CAPTION>
                                             NUMBER OF SECURITIES
                                            UNDERLYING UNEXERCISED       VALUE OF UNEXERCISED
                       SHARES                    OPTIONS AT             IN-THE-MONEY OPTIONS AT
                      ACQUIRED              DECEMBER 31, 2001 (1)        DECEMBER 31, 2001 (2)
                         ON       VALUE   --------------------------  ----------------------------
NAME                  EXERCISE  REALIZED  EXERCISABLE  UNEXERCISABLE  EXERCISABLE   UNEXERCISABLE
--------------------  --------  --------  -----------  -------------  ------------  --------------
<S>                   <C>       <C>       <C>          <C>            <C>           <C>
Michael A. Liccardo        ---       ---    1,858,000        730,000  $    122,500  $       59,500
Lawrence L. Bartlett       ---       ---      663,801        636,199        81,886          27,927
Richard A. Falcone         ---       ---      709,039        590,001        65,188          22,313
<FN>
_________________

(1)  These amounts represent the total number of shares subject to options held
     by the named executive officers at December 31, 2001. These options were
     granted on various dates during 2001 and include options issued in exchange
     for Optivision, Inc. options in connection with our merger with Optivision,
     Inc. on April 16, 2001.
(2)  These amounts represent the difference between the exercise price of
     options and the closing bid price of our common stock on December 31, 2001
     for all the in-the-money options held by the named executive officers. The
     in-the-money option exercise prices were all at $0.35. These options were
     granted at the fair market value of the stock on the grant date.
</TABLE>

DIRECTOR COMPENSATION

     We  do  not  currently  compensate  our  directors  for  their  services as
directors.  Directors are reimbursed for their reasonable out-of-pocket expenses
incurred  with  attending  board  or  committee  meetings.

EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS

Michael A. Liccardo

     In  April  2001,  we  entered  into  an executive employment agreement with
Michael  A.  Liccardo,  who serves as our president, chief executive officer and
chairman of the board. Our agreement with Mr. Liccardo provides for, among other
things,  a  three-year  term  of  employment,  the  payment  of a base salary of
$200,000  per  year,  and  the  minimum  payment  of  one  year's base salary in
severance  upon  termination  of  employment without cause. The agreement may be
terminated  for  any reason by Mr. Liccardo upon 30 days written notice or by us
for  cause  upon  30  days  written notice or without cause upon 90 days written
notice.  Upon  termination  of employment or change in our ownership or control,
all options granted to Mr. Liccardo will be accelerated and will be exercisable,
in the case of termination, for one year after such termination and, in the case
of  a  change  of control, for the 60-day period prior to such change in control
and  for  a  one-year  period after such change in control. Mr. Liccardo is also
subject  to  confidentiality  restrictions  under  his  employment  agreement.

Lawrence L. Bartlett

     In  April  2001,  we  entered  into  an executive employment agreement with
Lawrence L. Bartlett, who serves as our vice president, chief financial officer,
secretary  and  director.  Our  agreement  with Mr. Bartlett provides for, among
other  things,  employment  for  three  years,  the  payment of a base salary of
$190,000  per  year,  and  the  minimum  payment  of  one  year's base salary in
severance  upon  termination  of  employment without cause. The agreement may be
terminated  for  any reason by Mr. Bartlett upon 30 days written notice or by us


                                       25
<PAGE>
for  cause  upon  30  days  written notice or without cause upon 90 days written
notice.  Upon  termination  of employment or change in our ownership or control,
all options granted to Mr. Bartlett will be accelerated and will be exercisable,
in the case of termination, for one year after such termination and, in the case
of  a  change  of control, for the 60-day period prior to such change in control
and  for  a  one-year  period after such change in control. Mr. Bartlett is also
subject  to  confidentiality  restrictions  under  his  employment  agreement.

Richard A. Falcone

     In  April  2001,  we  entered  into  an executive employment agreement with
Richard  A.  Falcone,  who  serves as our vice-president of marketing, worldwide
sales  and  business  development.  Our agreement with Mr. Falcone provides for,
among  other things, employment for three years, the payment of a base salary of
$130,000  per  year,  and  the  minimum  payment  of  one  year's base salary in
severance  upon  termination  of  employment  without cause. Mr. Falcone is also
entitled  to sales commissions as may be approved by the board of directors from
time to time. The agreement may be terminated for any reason by Mr. Falcone upon
30 days written notice or by us for cause upon 30 days written notice or without
cause  upon  90 days written notice. Upon termination of employment or change in
our ownership or control, all options granted to Mr. Falcone will be accelerated
and  will  be  exercisable,  in the case of termination, for one year after such
termination  and,  in the case of a change of control, for a 60-day period prior
to  such  change  in  control  and  for the one-year period after such change in
control.  Mr.  Falcone is also subject to confidentiality restrictions under his
employment  agreement.

1997 STOCK PLAN

General

     Our  board  of  directors  adopted  the  1997  Stock  Plan  (formerly  the
Optivision, Inc. 1997 Stock Plan) in February 2001 effective upon the completion
of the merger with Optivision, Inc. in April 2001. Our stockholders approved the
1997  Stock  Plan  in  February  2000.  3,993,482 shares of our common stock are
authorized  for  issuance  under  the  1997 Stock Plan. As of December 31, 2001,
options  to  purchase  3,576,146  shares  were outstanding at a weighted average
exercise  price  of  $0.86 per share and 397,053 shares of common stock remained
available for future grant. The 1997 Stock Plan will terminate in February 2011.

Administration

     The  1997  Stock  Plan  is  administered  by  our  board  of directors or a
committee  of the board. The 1997 Stock Plan provides for the grant of incentive
stock  options  as  defined  in  Section 422 of the Internal Revenue Code to our
employees  (including  officers  and  directors  who are also employees) and the
employees  (including  officers  and  directors  who  are also employees) of our
subsidiary  corporations.  The  1997  Stock  Plan also provides for the grant of
nonstatutory  stock  options  and the grant of stock purchase rights both to our
employees,  non-employee  directors,  consultants  and  advisors,  and  to  the
employees,  non-employee  directors,  consultants and advisors of our subsidiary


                                       26
<PAGE>
corporations.  Our  board of directors has the authority to amend the 1997 Stock
Plan  at  any  time,  with  stockholder  approval,  if  required.

Plan Features

     Under  the  1997  Stock  Plan:

     -    Qualified  employees  are  eligible  for  the grant of incentive stock
          options  to  purchase  shares  of  our  common  stock;

     -    Our  board  of  directors  or  the committee appointed by the board to
          administer  the  1997  Stock Plan will determine the exercise price of
          options or the purchase price of stock purchase rights, but the option
          price  for  incentive  stock options will not be less than 100% of the
          fair  market  value of the stock on the date of grant and the exercise
          price  of  nonstatutory stock options will not be less than 85% of the
          fair  market  value  of  the  stock  on  the  date  of  grant;  and

     -    The  exercise  price  or  purchase price may, at the discretion of our
          board  of  directors  or  the  committee  appointed  by  the  board to
          administer  the  1997  Stock  Plan, be paid in cash, cash equivalents,
          promissory note, surrender of stock, a cashless exercise, surrender of
          stock, past services, cancellation of indebtedness owed to the grantee
          or  any  form  of  payment  that  is  consistent with applicable laws,
          regulations  and  rules.

Change of Control and Accelerated Vesting

     In  the  event  that  we  merge  with  or  into another corporation or sell
substantially  all of our assets, to the extent permitted by applicable law, the
surviving  corporation will assume all outstanding stock awards, including stock
options,  or  substitute  equivalent  stock awards. If the successor corporation
does not agree to assume the stock awards or substitute equivalent stock awards,
all  stock  awards shall become fully vested and exercisable prior to the change
of  control, and our board of directors (or the committee appointed by the board
to  administer  the plan) will notify plan participants that the stock award are
fully  exercisable  for  a  15-day period from the date of the notice. The stock
awards  will  terminate  upon  expiration  of  such  period. In the event of our
proposed  dissolution  or  liquidation, our board of directors (or the committee
appointed  by the board to administer the plan) will notify plan participants at
least  15  days  prior to such proposed action. Unless previously exercised, all
stock  awards  will  terminate  immediately  prior  to  the consummation of such
proposed  action.


                                       27
<PAGE>
2000 STOCK PLAN

General

     Our board of directors adopted the 2000 Stock Plan in October 2000, and our
stockholders  approved  the plan in October 2000. 5,500,000 shares of our common
stock  are authorized for issuance under the 2000 Stock Plan. As of December 31,
2001, options to purchase 2,612,500 shares of common stock were outstanding at a
weighted  average  exercise  price  of  $0.88  per share and 2,887,500 shares of
common  stock  remained  available  for  future  grant. The 2000 Stock Plan will
terminate  in  October  2010.

Administration

     The  2000  Stock  Plan  is  administered  by  our  board  of directors or a
committee  of the board. The 2000 Stock Plan provides for the grant of incentive
stock  options  as  defined  in  Section 422 of the Internal Revenue Code to our
employees  (including  officers  and  directors  who are also employees) and the
employees  (including  officers  and  directors  who  are also employees) of our
subsidiary  corporations.  The  2000  Stock  Plan also provides for the grant of
nonstatutory  stock  options  and the grant of stock purchase rights both to our
employees,  non-employee  directors,  consultants  and  advisors,  and  to  the
employees,  non-employee  directors,  consultants and advisors of our subsidiary
corporations.  Our  board of directors has the authority to amend the 2000 Stock
Plan  at  any  time,  with  stockholder  approval,  if  required.

Plan Features

     Under  the  2000  Stock  Plan:

     -    Qualified  employees  are  eligible  for  the grant of incentive stock
          options  to  purchase  shares  of  our  common  stock;

     -    Our  board  of  directors  or  the committee appointed by the board to
          administer  the  plan  will determine the exercise price of options or
          the  purchase price of stock purchase rights, but the option price for
          incentive  stock options will not be less than 100% of the fair market
          value  of  the  stock  on  the date of grant and the exercise price of
          nonstatutory  stock  options  will  not  be  less than 85% of the fair
          market  value  of  the  stock  on  the  date  of  grant;  and

     -    The  exercise  price  or  purchase price may, at the discretion of our
          board  of  directors  or  the  committee  appointed  by  the  board to
          administer  the  plan,  be  paid in cash, cash equivalents, promissory
          note,  surrender  of  stock,  a cashless exercise, surrender of stock,
          past services, cancellation of indebtedness owed to the grantee or any
          form  of  payment that is consistent with applicable laws, regulations
          and  rules.


                                       28
<PAGE>
Change of Control and Accelerated Vesting

     In the event that we merge with or into another corporation or sell
substantially all of our assets, to the extent permitted by applicable law, the
surviving corporation will assume all outstanding stock awards, including stock
options, or substitute equivalent stock awards. If the successor corporation
does not agree to assume the stock awards or substitute equivalent stock awards,
all stock awards shall become fully vested and exercisable prior to the change
of control, and our board of directors (or the committee appointed by the board
to administer the plan) will notify plan participants that the stock award are
fully exercisable for a 15-day period from the date of the notice. The stock
awards will terminate upon expiration of such period. In the event of our
proposed dissolution or liquidation, our board of directors (or the committee
appointed by the board to administer the plan) will notify plan participants at
least 15 days prior to such proposed action. Unless previously exercised, all
stock awards will terminate immediately prior to the consummation of such
proposed action.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table presents information about the beneficial ownership of
our common stock, as of May 3, 2002, by:

-    each person or entity who is known by us to own beneficially more than 5%
     of the outstanding shares of our common stock;

-    each of our directors;

-    each of our named executive officers;

-    each of the persons who served as our chief executive officer during our
     fiscal year ended December 31, 2001; and

-    all directors and executive officers as a group.

     Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities, subject to community property laws, where
applicable.  Shares of our common stock subject to options or other convertible
securities that are presently exercisable or convertible or exercisable or
convertible within 60 days of May 3, 2002 are deemed to be outstanding and
beneficially owned by the holder for the purpose of computing shares and
percentage ownership of that holder, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.  The
percentage of beneficial ownership is based on 18,464,237 shares of common stock
outstanding as of May 3, 2002.


                                       29
<PAGE>
<TABLE>
<CAPTION>
                                                              NUMBER OF
                                                                SHARES      PERCENTAGE OF
                                                             BENEFICIALLY       SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER (1)                       OWNED(7)     OUTSTANDING(7)
-----------------------------------------------------------  -------------  --------------
<S>                                                          <C>            <C>
Michael A. Liccardo (2)                                         13,931,205           44.7%
Lawrence L. Bartlett (3)                                         1,146,305            5.8%
Catherine Palmen (4)                                                 2,000              *
Jason John (5)                                                           0              0
  885 West Georgia Street
  Vancouver, BC V6C 1T2
Richard A. Falcone (6)                                           1,146,306            5.8%
All directors and executive officers as a group (4 persons)     16,225,816           48.5%
<FN>
______________
* Less than 1%.

(1)  Unless otherwise indicated, the address of each of the persons or entities
     listed in the table is c/o Amnis Systems Inc., 3450 Hillview Avenue, Palo
     Alto, California 94304.
(2)  Includes (a) 2,247,548 shares that may be acquired currently or within 60
     days of May 3, 2002 through the exercise of options, and (b) 10,136,905
     shares that may be acquired currently through the conversion of a
     convertible note in the principal amount of $3,547,916.
(3)  Includes 780,400 shares that may be acquired currently or within 60 days of
     May 3, 2002 through the exercise of options.
(4)  Includes 2,000 shares that may be acquired currently or within 60 days of
     May 3, 2002 through the exercise of options.
(5)  Mr. John resigned as director in February 2001 and as chairman, president
     and secretary in March 2001.
(6)  Includes 761,326 shares that may be acquired currently or within 60 days of
     May 3, 2002 through the exercise of options.
(7)  Unless otherwise indicated, this prospectus assumes that none of the
     convertible debentures or the related investment options and warrants have
     been converted or exercised.
</TABLE>

     We are not aware of any arrangements that at a latter date may result in a
change in our control.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Under a November 2001 arrangement with us and subject to certain
conditions, we will issue to Richard A. Falcone, our vice president of
marketing, worldwide sales and business development, 300,000 shares of our
common stock as a bonus if we are acquired by a public company that Mr. Falcone
has identified to us.

     In  January 2002, we issued to Michael A. Liccardo, our president and chief
executive officer and chairman of the board, a convertible note in the principal
amount  of  $3,547,916  in  exchange  for  the  cancellation  of  certain  loans
(including  accrued  interest  thereon) that Mr. Liccardo had made to us to meet
current  operating  expenses.  The  note  bears  interest  at  10% per annum and
matures  on  January  14, 2003.  Mr. Liccardo may, at any time, elect to convert
the  note into a number of shares of our common stock determined by dividing the
outstanding  principal  and interest on the note by $0.35.  The $0.35 conversion
price  is  subject to adjustment to a lower conversion price through January 14,
2003,  and is also subject to customary adjustment in the event of stock splits,
dividends,  recapitalizations  and  the  like.

ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K

     (a)(1) Financial Statements

     The following financial statements are incorporated by reference in Item 7
of this Report:


                                       30
<PAGE>
<TABLE>
<CAPTION>
                                                                                          Page
<S>                                                                                       <C>
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-1
Consolidated Balance Sheets, December 31, 2001 and 2000 . . . . . . . . . . . . . . . . .  F-2
Consolidated Statements of Operations for years ended December 31, 2001 and 2000. . . . .  F-3
Consolidated Statements of Cash Flow for years ended December, 2001 and 2000. . . . . . .  F-4
Statements of Stockholders' Deficit for years ended December 31, 2001 and 2000. . . . . .  F-5
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . .  F-6 to F-20
</TABLE>


     (a)(2) Exhibits

<TABLE>
<CAPTION>
Exhibit Number  Identification of Exhibit
--------------  -------------------------
<S>             <C>
2.1**           Agreement and Plan of Merger dated as of September 11, 2000 by and
                among the Issuer, Optivision, Inc., and ASI Acquisition, Inc.

2.2**           Amendment to Agreement and Plan of Merger dated as of January 11, 2001
                by and among the Issuer, Optivision, Inc., and ASI Acquisition, Inc.
3.1*            Certificate of Incorporation of Issuer dated as of July 29, 1998

3.2**           Certificate of Amendment of Certificate of Incorporation of the Issuer dated
                as of August 24, 2000

3.3**           Certificate of Amendment of Certificate of Incorporation of the Issuer dated
                as of September 13, 2000

3.4*            Bylaws of the Issuer dated as of August 4, 1998

3.5**           Amended and Restated Bylaws of the Issuer dated as of October 2, 2000

4.1***          Form of Secured Convertible Debenture issued pursuant to the Securities
                Purchase Agreement dated as of December 28, 2001 between the Issuer and
                Bristol Investment Fund, Ltd.

4.2***          Form of Warrant issued pursuant to the Securities Purchase Agreement dated
                as of December 28, 2001 between the Issuer and Bristol Investment Fund,
                Ltd.

4.3****         Form of Warrant issued pursuant to each Unit Subscription Agreement
                between the Issuer and each qualified investor

10.1*****       + Amended 1997 Stock Option Plan

10.2*****       + Amended 2000 Stock Option Plan

10.3*****       Lease Agreement dated as of August 8, 1995 between Optivision, Inc. and
                Alta California Associates

10.4*****       + Employment Agreement dated as of April 18, 2001 between the Issuer and
                Michael A. Liccardo

10.5*****       + Employment Agreement dated as of April 18, 2001 between the Issuer and
                Lawrence L. Bartlett


                                       31
<PAGE>
10.6*****       + Employment Agreement dated as of April 18, 2001 between the Issuer and
                Richard A. Falcone

10.7***         Securities Purchase Agreement dated as of December 28, 2001 between the
                Issuer and Bristol Investment Fund, Ltd.

10.8***         Registration Rights Agreement dated as of December 28, 2001 between the
                Issuer and Bristol Investment Fund, Ltd.

10.9***         Security Agreement dated as of December 28, 2001 between the Issuer and
                Bristol Investment Fund, Ltd.

10.10****       Form of Unit Subscription Agreement between the Issuer and each qualified
                investor

21.1******      List of Subsidiaries of the Issuer
<FN>

+      Management contract or compensatory plan or arrangement

*      Filed as an exhibit to the registration statement on Form 10-SB filed with the
Securities and Exchange Commission on February 22, 2000, File No. 0-29645

**     Filed as an exhibit to the annual report on Form 10-KSB filed with the Securities and
Exchange Commission on April 2, 2001

***    Filed as an exhibit to the report on Form 8-K filed with the Securities and Exchange
Commission on January 14, 2002

****   Filed as an exhibit to the report on Form 8-K filed with the Securities and
Exchange Commission on March 4, 2002

*****  Filed as an exhibit to the registration statement on Form SB-2 filed with the
Securities and Exchange Commission on March 22, 2002

****** Filed as an exhibit to the annual report on Form 10-KSB filed with the Securities and
Exchange Commission on March 28, 2002
</TABLE>

     (b)     Reports on Form 8-K

     On May 1, 2001, we filed a report on Form 8-K, as subsequently amended by a
report  on  Form  8-K/A that we filed on July 2, 2001, in which we announced our
merger  with  Optivision,  Inc,  a  California corporation, and ASI Acquisition,
Inc.,  a  California  corporation,  and we filed the financial statements of the
businesses  acquired.

     On  January 14, 2002, we filed a report on Form 8-K announcing the issuance
of  a  convertible  debenture  in  the  principal amount of $500,000, investment
options  for  the  purchase  up  to  $500,000  of our common stock, and warrants
exercisable  for  up  to  1,000,000  shares  of  our  common  stock in a private
financing  arranged  by  Bristol  DLP,  LLC.


                                       32
<PAGE>
     On  March 4, 2002, we filed a report on Form 8-K announcing the issuance of
$1,800,000  in  designated units of common stock and warrants to three qualified
investors  in  a  private  placement  transaction.


                                   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.

Date:  May 8, 2002                   AMNIS SYSTEMS INC.
       -----------

                                     By:  /s/  Michael A. Liccardo
                                        -------------------------------------
                                        Michael A. Liccardo
                                        Chairman of the Board, President and
                                        Chief Executive 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.


Date:  May 8 , 2002                  By:  /s/  Michael A. Liccardo
       ------------                     --------------------------------------
                                        Michael A. Liccardo
                                        Director and Chairman of the Board,
                                        President and Chief Executive Officer


Date:  May 8, 2002                   By:  /s/  Lawrence L. Bartlett
       -----------                      --------------------------------------
                                        Lawrence L. Bartlett
                                        Director, Vice President,
                                        Chief Financial Officer and Secretary


                                       33
<PAGE>




                               Amnis Systems Inc.

                           December 31, 2001 and 2000




================================================================================






                        Consolidated Financial Statements

                                       and

                          Independent Auditors' Report







<PAGE>
INDEPENDENT AUDITORS' REPORT


BOARD OF DIRECTORS
AMNIS SYSTEMS INC.
Palo Alto, California

We  have  audited  the  accompanying consolidated balance sheet of AMNIS SYSTEMS
INC.  (THE  COMPANY)  as  of  December  31,  2001  and  2000,  and  the  related
consolidated statements of operations, stockholders' deficit, and cash flows for
the  years then ended.  These financial statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

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

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Amnis Systems Inc.
as  of  December 31, 2001 and 2000, and the results of their operations and cash
flows  for  the  years  then  ended  in  conformity  with  accounting principles
generally  accepted  in  the  United  States  of  America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 2 to the
financial  statements,  the  Company  has  incurred a net loss of $5,432,172 and
$5,419,655 in the years ended December 31, 2001 and 2000 respectively, and has a
stockholders' deficit of $7,379,620 and $4,279,042 and a working capital deficit
of  $7,348,697 and $4,824,707 at December 31, 2001 and 2000 respectively.  These
factors  raise  substantial  doubt  about the Company's ability to continue as a
going concern.  Management's plans in regard to these matters are also described
in  Note  2.  The financial statements do not include any adjustments that might
result  from  the  outcome  of  this  uncertainty.



San  Francisco,  California
February  22,  2002


                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                                                                                                         AMNIS SYSTEMS INC.

                                                                                                 CONSOLIDATED BALANCE SHEET

===========================================================================================================================
December 31,                                                                                       2001           2000
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>            <C>
ASSETS

CURRENT ASSETS:
  Cash                                                                                         $     48,467   $    214,766
  Accounts receivable, net of allowance for doubtful accounts of $236,000 and $262,725
     for 2001 and 2000, respectively                                                                371,517        634,932
  Note receivable                                                                                   500,000
  Inventories                                                                                       624,056      1,106,649
  Prepaid expenses and other                                                                         82,734         50,236
---------------------------------------------------------------------------------------------------------------------------

    Total current assets                                                                          1,626,774      2,006,583
---------------------------------------------------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT:
  Machinery and equipment                                                                         1,919,634      2,073,292
  Demonstration equipment                                                                           452,188        459,921
  Furniture and fixtures                                                                            498,796        548,810
  Leasehold improvements                                                                            351,111        351,565
---------------------------------------------------------------------------------------------------------------------------

                                                                                                  3,221,729      3,433,588
  Less:  Accumulated depreciation and amortization                                               (3,069,937)    (3,047,386)
---------------------------------------------------------------------------------------------------------------------------

    Property and equipment, net                                                                     151,792        386,202
---------------------------------------------------------------------------------------------------------------------------

DEBT ISSUE COSTS                                                                                                   140,000

DEPOSITS                                                                                             84,890         93,270
---------------------------------------------------------------------------------------------------------------------------

    Total assets                                                                               $  1,863,456   $  2,626,055
===========================================================================================================================


LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES:
  Notes payable-WTI                                                                                           $     83,042
  Financing obligations collateralized by accounts receivable                                  $  1,029,283      1,138,598
  Accounts payable - moratorium                                                                   1,561,500      1,575,673
  Accounts payable - other                                                                          932,866        868,808
  Accrued salaries                                                                                  766,286        316,003
  Accrued vacation                                                                                  274,833        259,470
  Accrued interest payable                                                                          381,104         94,269
  Reserve for sales adjustment                                                                                     263,331
  Note payable                                                                                      250,000
  Stockholders' notes payable                                                                     3,309,375      1,572,197
  Deferred rent                                                                                     108,892        199,195
  Deferred revenue                                                                                   59,095         47,819
  Other accrued expenses                                                                            302,237        412,885
---------------------------------------------------------------------------------------------------------------------------

    Total current liabilities                                                                     8,975,471      6,831,290

LONG-TERM LIABILITIES:
  Sublease deposits                                                                                  72,800         73,807
  Convertible note payable                                                                          500,000
  Discount on convertible note payable                                                             (305,195)
---------------------------------------------------------------------------------------------------------------------------

    Total liabilities                                                                             9,243,076      6,905,097
---------------------------------------------------------------------------------------------------------------------------

STOCKHOLDERS' (DEFICIT):
  Preferred stock, 20,000,000 authorized; none outstanding in 2001 and 2000
  Common stock, no par value, 100,000,000 and 20,000,000 shares authorized in 2001 and 2000,
     respectively; 12,947,082 and 30,536,902 shares
     issued and outstanding in 2001 and 2000, respectively                                            1,295          3,053

  Additional paid-in capital                                                                     12,259,729      9,926,377
  Accumulated deficit                                                                           (19,640,644)   (14,208,472)
---------------------------------------------------------------------------------------------------------------------------

    Total stockholders' deficit                                                                  (7,379,620)    (4,279,042)
---------------------------------------------------------------------------------------------------------------------------

    Total liabilities and stockholder's deficit                                                $  1,863,456   $  2,626,055
===========================================================================================================================
</TABLE>

See accompanying summary of accounting policies and notes to the financial
statements.


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                                                             AMNIS SYSTEMS INC.

                                           CONSOLIDATED STATEMENT OF OPERATIONS

===============================================================================

For the Years Ended Ended December 31,         2001                2000
-------------------------------------------------------------------------------
<S>                                      <C>                <C>
SALES                                    $      4,095,755   $       3,574,090

COST OF GOODS SOLD                              2,148,038           2,377,230
-------------------------------------------------------------------------------

    Gross margin                                1,947,717           1,196,860

OPERATING EXPENSES:
  Research and development                      1,870,630           1,772,474
  Sales and marketing                           2,822,510           2,630,810
  General and administrative                    2,033,688           2,008,415
-------------------------------------------------------------------------------

                                                6,726,828           6,411,699
-------------------------------------------------------------------------------

    Loss from operations                       (4,779,111)         (5,214,839)

OTHER INCOME (EXPENSE)
  Interest expense, net                          (693,071)           (273,923)
  Other, net                                       40,010              69,107
-------------------------------------------------------------------------------

     Total other (expense)                       (653,061)           (204,816)
-------------------------------------------------------------------------------

NET LOSS                                 $     (5,432,172)  $      (5,419,655)
===============================================================================

BASIC AND DILUTIVE LOSS PER SHARE        $          (0.21)  $           (0.18)
===============================================================================
</TABLE>

See accompanying summary of accounting policies and notes to the financial
statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                                                                                     AMNIS SYSTEMS INC.

                                                                   CONSOLIDATED STATEMENT OF CASH FLOWS

=======================================================================================================

For the Years Ended December 31,                                                 2001          2000
-------------------------------------------------------------------------------------------------------
<S>                                                                          <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                   $(5,432,172)  $(5,419,655)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
    Stock options for services                                                   362,605
    Debt forgiven                                                                (42,967)
    Depreciation and amortization                                                271,956       507,924
    Loss on disposal of property and equipment                                     5,480
    Provision for doubtful accounts                                              (26,725)       18,016
    Provision for excess and obsolete inventories                                 62,519      (416,717)
  Decrease in accounts receivable                                                290,140       286,054
  Decrease (increase) in inventories                                             420,074       (20,279)
  (Increase) decrease in prepaid expenses and other assets                       (32,498)       70,114
  Decrease (increase) in deposits                                                  8,380        (6,817)
  Decrease in debt issue costs                                                   140,000
  Decrease in accounts payable moratorium                                        (14,173)     (100,000)
  Increase in accounts payable                                                    64,058       364,653
  Increase (decrease) in accrued salaries                                        480,474       (24,554)
  Increase in accrued vacation                                                    15,363        25,458
  Increase in accrued interest                                                   504,784        66,189
  Increase (decrease) in reserve for sales adjustment                           (263,331)      263,331
  Decrease in deferred rent                                                      (90,303)      (48,070)
  Increase (decrease) in deferred revenue                                         11,276       (71,087)
  Decrease in other accrued liabilities                                         (110,648)     (107,044)
  Decrease (increase) in sublease deposits                                        (1,007)       73,807
-------------------------------------------------------------------------------------------------------

    Net cash used by operating activities                                     (3,376,715)   (4,538,677)
-------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                            (43,026)      (55,490)
-------------------------------------------------------------------------------------------------------

    Net cash used by investing activities                                        (43,026)      (55,490)
-------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings from stockholders                                                 1,737,178     1,722,197
  Proceeds from financing obligations collateralized by accounts receivable   (1,334,546)     (714,447)
  Payments on financing obligations collateralized by accounts receivable      1,225,231       736,496
  Proceeds from issuance of common stock                                       1,431,487     2,929,446
  Proceeds from notes payable                                                    250,000
  Payment on notes payable                                                       (55,908)     (159,315)
  Payment on capital lease obligation                                                           (5,715)
-------------------------------------------------------------------------------------------------------

    Net cash provided by financing activities                                  3,253,442     4,508,662
-------------------------------------------------------------------------------------------------------

NET DECREASE IN CASH                                                            (166,299)      (85,505)

CASH AND CASH EQUIVALENTS, beginning of year                                     214,766       300,271
-------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, end of period                                     $    48,467   $   214,766
=======================================================================================================


NON CASH INVESTING AND FINANCING ACTIVITIES:
  Shareholder debt exchanged for common stock                                              $   500,000
  Debt issue costs exchanged for common stock                                                  140,000
  Convertible note payable in exchange for note receivable                   $   500,000
  Discount on convertible note payable                                          (305,195)
  Stock options issued for services                                              362,605
  Accrued interest exchanged for common stock                                    202,116
  Accrued salaries exchanged for common stock                                     30,191
  Debt and accrued interest forgiven                                              43,967
=======================================================================================================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid for income taxes                                                 $     1,600   $     1,600
  Cash paid for interest                                                     $   203,390   $   205,702
=======================================================================================================
</TABLE>

See accompanying summary of accounting policies and notes to the financial
statements.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                                      AMNIS SYSTEMS INC.

                                              STATEMENT OF STOCKHOLDERS' DEFICIT

=============================================================================================================================


For the Years Ended December 31, 2001 and 2000
-----------------------------------------------------------------------------------------------------------------------------

                                                     Convertible
                                                    Preferred Stock             Common Stock        Additional      Total
                                              --------------------------  -----------------------    Paid-In     Accumulated
                                                 Shares        Amount       Shares       Amount      Capital       Deficit
                                              --------------------------------------------------------------------------------
<S>                                           <C>           <C>           <C>          <C>         <C>           <C>
BALANCE - December 31, 1999                       310,073   $ 6,033,241   10,108,211   $    1,011  $   465,732   $ (8,788,817)

  Stock split prior to merger 2.82:1                                      16,944,200        1,694       (1,694)

  Exercise of common stock options                                           107,785           11       23,185

  Issuance of common stock for services                                       50,000            5      106,245

  Conversion of stockholder debt                                           1,333,300          133      499,867

  Purchase of common stock                                                 1,683,333          168    2,799,832

  Conversion of preferred stock                  (310,073)   (6,033,241)     310,073           31    6,033,210

  Net loss                                                                                                         (5,419,655)
------------------------------------------------------------------------------------------------------------------------------

BALANCE, December 31, 2000                              -             -   30,536,902        3,053    9,926,377    (14,208,472)

  Conversion of debt and accrued interest
     to common stock                                                           4,307                     8,613

  Cancellation of common stock                                           (19,740,000)      (1,974)       1,974

  Conversion of accrued interest to
     common stock                                                            133,378            13     193,490

  Sale of common stock                                                     1,248,889           126   1,415,874

  Issuance of common stock for services                                      663,000            67     325,933

  Exercise of stock options                                                  100,606            10      45,668

  Beneficial conversion feature and warrants
     on issuance of convertible note payable                                                           305,195

  Issuance of common stock options to
     non-employees                                                                                      36,605

  Net loss                                                                                                         (5,432,172)
------------------------------------------------------------------------------------------------------------------------------

BALANCE, December 31, 2001                              -   $         -   12,947,082   $    1,295  $12,259,729   $(19,640,644)
==============================================================================================================================


                                                 Total
                                              Stockholders'
                                                Deficit
                                              ------------
<S>                                           <C>
BALANCE - December 31, 1999                   $(2,288,833)

  Stock split prior to merger 2.82:1

  Exercise of common stock options                 23,196

  Issuance of common stock for services           106,250

  Conversion of stockholder debt                  500,000

  Purchase of common stock                      2,800,000

  Conversion of preferred stock

  Net loss                                     (5,419,655)
----------------------------------------------------------

BALANCE, December 31, 2000                     (4,279,042)

  Conversion of debt and accrued interest
     to common stock                                8,613

  Cancellation of common stock

  Conversion of accrued interest to
     common stock                                 193,503

  Sale of common stock                          1,416,000

  Issuance of common stock for services           326,000

  Exercise of stock options                        45,678

  Beneficial conversion feature and warrants
     on issuance of convertible note payable      305,195

  Issuance of common stock options to
     non-employees                                 36,605

  Net loss                                     (5,432,172)
----------------------------------------------------------

BALANCE, December 31, 2001                    $(7,379,620)
==========================================================
</TABLE>

See accompanying summary of accounting policies and notes to the financial
statements.


                                      F-5
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE  1 - DESCRIPTION OF COMPANY:

          Amnis Systems Inc. (the Company), a Delaware consolidated corporation,
          develops,  manufactures  and  delivers  networked  streaming  video
          solutions  for  high  quality  video  creation,  management  and
          distribution.  The  Company's  network  video products are distributed
          worldwide  both  directly  and  through  leading  industry  partners.

          The  Company's  products  are  used  in  diverse  applications such as
          distance  learning,  corporate  training,  video  courier  services,
          telemedicine,  surveillance  and  visual  collaboration.


NOTE  2 - GOING CONCERN:

          The  Company  is  subject  to  a  number  of  business risks affecting
          companies  at  a  similar  stage of development, including competition
          from  companies  with  greater resources and alternative technologies,
          the  ability to obtain financing to fund future operations, dependence
          on  new  product  introductions  in  a  rapidly changing technological
          environment,  dependence  on a limited number of customers, dependence
          on  key  employees  and  the  ability to attract and retain additional
          qualified  personnel.

          The accompanying financial statements have been prepared assuming that
          the  Company  will continue as a going concern. The Company incurred a
          net loss of $5,432,172 and $5,419,655 for the years ended December 31,
          2001  and  2000,  respectively,  and  has a working capital deficit of
          $7,348,697 and $4,824,707 at December 31, 2001 and 2000, respectively.
          These  factors  raise substantial doubt about the Company's ability to
          continue  as  a  going  concern.  Subsequent  to year-end, the Company
          entered  into  an  agreement  with its creditors to settle outstanding
          obligations  shown  on  the  balance  sheet  as  "Accounts  payable  -
          moratorium"  at  a  rate  of $0.35 per dollar outstanding. An original
          balance  of  $1,575,673  of  accounts  payable  was  subject  to  this
          agreement. Since the acceptance of this agreement the Company has paid
          $50,000  toward  the outstanding balance. Also subsequent to year-end,
          the  Company  entered  into  a financing arrangement that will provide
          funding  for  operations  and  payments  of obligations (see Note 18).
          There  is  no  assurance  that  the  Company  will  be able to achieve
          successful operations or obtain sufficient financing. The accompanying
          financial  statements do not include any adjustments that might result
          from  the  outcome  of  these  uncertainties.



NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          a.   Principles of Consolidation
               ---------------------------

               The  financial  statements  include  the  consolidation  of  the
               Company's  wholly-owned  subsidiary,  Optivision,  Inc.  All
               significant  intercompany  accounts  and  transactions  have been
               eliminated  in  consolidation.


                                      F-6
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

          b.   Use of Estimates in the Preparation of Financial Statements
               -----------------------------------------------------------

               The  preparation  of  financial  statements  in  conformity  with
               accounting  principles generally accepted in the United States of
               America  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 revenues and
               expenses  during  the period. The Company has made an estimate of
               additional  costs  related  to  disallowable items that may arise
               from  the  completion  of  certain  audits of the Company's Small
               Business  Innovation Research ("SBIR") grants that is included in
               other  accrued  expenses.  Due  to the uncertainty related to the
               ultimate  outcome of the audits, the estimate of additional costs
               is  subject  to  change  and  actual  results could be materially
               different  from  this  estimate.

          c.   Stock-Based Compensation
               ------------------------

               The  Financial  Accounting  Standards  Board  issued Statement of
               Financial  Accounting Standards ("SFAS") No. 123, "Accounting for
               Stock-Based  Compensation," in October 1995. SFAS No. 123 permits
               the use of either a fair value based method or the method defined
               in  Accounting  Principles  Board ("APB") Opinion 25, "Accounting
               for  Stock  Issued  to  Employees,"  to  account  for stock-based
               compensation  arrangements.  Companies  that  elect to employ the
               valuation  method provided in APB No. 25 are required to disclose
               the  pro  forma net loss that would have resulted from the use of
               the  fair value based method. The Company has elected to continue
               to  determine  the value of stock-based compensation arrangements
               under  the  provisions  of  APB  No.  25 and, accordingly, it has
               included the pro forma disclosures required under SFAS No. 123 in
               Note  11.

          d.   Cash and Cash Equivalents
               -------------------------

               For  the  purpose  of the balance sheet and the statement of cash
               flows,  the  Company  considers  all  highly  liquid  investments
               purchased with an original maturity of three months or less to be
               cash  equivalents.

          e.   Inventories
               -----------

               Inventories are stated at the lower of cost (first-in, first-out)
               or market. Provision has been made to reduce obsolete inventories
               to their net realizable value. Inventories contain components and
               assemblies  in  excess  of  the  Company's  current  estimated
               requirements  and these are reserved for at December 31, 2001 and
               2000,  respectively.  Due to competitive and market pressures, it
               is  reasonably  possible that these estimates could change in the
               future.


                                      F-7
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

          f.   Property and Equipment
               ----------------------

               Property  and  equipment  are  stated  at  cost. Depreciation and
               amortization are computed using the straight-line method over the
               estimated  lives  of  the  assets,  which range from two to seven
               years.  Amortization of leasehold improvements is provided on the
               straight-line  basis  over  the  lesser  of the lease term or the
               estimated  useful  lives  of  the  assets.

          g.   Revenue Recognition
               -------------------

               Revenues  from  product  sales  to  Value  Added Resellers (VAR),
               Original  Equipment  Manufacturers  (OEM),  and  end  users  are
               recognized  upon  shipment  to the customer, whereby risk of loss
               has  been  transferred  to the customer, the price and terms have
               been  fixed,  and  no right of return exists. The company further
               recognizes  revenues  from  warranty contracts on a straight-line
               basis over the contractual life of the warranty. The unrecognized
               balance  of  the  warranty is recorded as deferred revenue on the
               balance  sheet.

          h.   Advertising Costs
               -----------------

               The  Company  expenses  all  advertising  costs, including direct
               response  advertising  costs, as they are incurred. There were no
               significant  advertising  expenses  in  2001  or  2000.

          i.   Loss per Share
               --------------

               Basic  and  diluted loss per share is computed using the weighted
               average  number  of  common shares outstanding during the period.
               Since  we have a net loss for all periods presented, net loss per
               share  on  a  diluted  basis  is equivalent to basic net loss per
               share because the effect of converting outstanding stock options,
               warrants,  convertible  debt  and  other common stock equivalents
               would  be  anti-dilutive.

               Basic  and  diluted  loss  per  share  was  calculated based upon
               outstanding  common  stock  and  equivalents  of  26,364,506  and
               29,394,680  for  2001  and  2000,  respectively.

          j.   Risks Due to Concentration of Significant Customers
               ---------------------------------------------------

               During 2001 and 2000, four customers accounted for 52% and 44% of
               net  revenues,  respectively.  As  of  December 31, 2001 and 2000
               approximately  44%  and 45%, respectively, of accounts receivable
               were  concentrated  with  five  customers.  To reduce credit risk
               relating  to  all  customers, the Company performs ongoing credit
               evaluations  of  customers'  financial  conditions and limits the
               amount  of  credit  extended  when  considered  necessary,  but
               generally  requires  no  collateral on product sales. The Company
               maintains  allowances  for  sales  returns,  estimated  bad  debt
               losses, and for unallowable costs on government grants to address
               potential  undetected  credit  risks.


                                      F-8
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

          k.   Income Taxes
               ------------

               The Company accounts for income taxes in accordance with SFAS No.
               109,  "Accounting  for Income Taxes." This statement provides for
               an asset and liability approach under which deferred income taxes
               are  provided based upon enacted tax laws and rates applicable to
               the  periods  in  which  the  taxes  become  payable.

          l.   Current Pronouncements
               ----------------------

               In  September  2000, the FASB issued SFAS No. 140, Accounting for
               Transfers  and  Servicing of Financial Assets and Extinguishments
               of  Liabilities.  The statement provides accounting and reporting
               standards  for  transfers  and  servicing of financial assets and
               extinguishments  of  liabilities,  and  revises  the  accounting
               standards  for  securitization  and transfers of financial assets
               and  collateral.  The  adoption  of  SFAS  No. 140 did not have a
               material  impact  on the Company's financial position, results of
               operations,  or  cash  flows.

               In  June  2001,  the  FASB  issued  SFAS  No.  141,  Business
               Combinations,  and  SFAS  No.  142, Goodwill and Other Intangible
               Assets.  SFAS  No.  141  requires business combinations initiated
               after June 30, 2001 to be accounted for using the purchase method
               of accounting. It also specifies the types of acquired intangible
               assets that are required to be recognized and reported separately
               from  goodwill.  The  Company  does  not  anticipate any material
               impact  from  the  adoption  of  this standard. SFAS No. 142 will
               require  that  goodwill  and  certain  intangibles  no  longer be
               amortized,  but  instead  will  be tested for impairment at least
               annually.  SFAS  No.  142  is  effective  for  all  fiscal  years
               beginning  after  December  15,  2001,  with  early  application
               permitted  in  certain circumstances. The Company does not expect
               SFAS  142  to  have  a material impact on the Company's financial
               position,  results  of  operations  or  cash  flows.

               In  June 2001, the FASB issued SFAS No. 143, Accounting for Asset
               Retirement  Obligations.  The  statement  addresses  financial
               accounting  and  reporting  for  obligations  associated with the
               retirement  of  long-lived  assets  and  the  associated  asset
               retirement costs. The statement is effective for all fiscal years
               beginning  after June 15, 2002, with early application permitted.
               The  Company does not expect the adoption of SFAS No. 143 to have
               a material impact on the Company's financial position, results of
               operations,  or  cash  flows.


                                      F-9
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

               In  August 2001, The FASB issued SFAS No. 144, Accounting for the
               Impairment  or  Disposal  of  Long-Lived  Assets.  This statement
               supercedes  SFAS  No.  121,  Accounting  for  the  Impairment  of
               Long-Lived  Assets  and  for Long-Lived Assets to be Disposed of,
               and  the  accounting  and reporting provisions of APB Opinion No.
               30,  Reporting  the 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  a  segment  of  a  business.  The statement is
               effective for all fiscal years beginning after December 15, 2001,
               with early application permitted. The Company does not expect the
               adoption  of  SFAS  No.  143  to  have  a  material impact on the
               Company's  financial  position,  results  of  operations, or cash
               flows.


NOTE  4 - BUSINESS COMBINATION:

          On  April  16,  2001, the Company effected a business combination with
          Optivision,  Inc.  by  exchanging 4,467,063 shares of its common stock
          for all of the common stock of Optivision, Inc. The principal business
          of  Optivision  is  manufacturing  and  delivering networked streaming
          video  solutions  for  high  quality  video  creation,  management and
          distribution.  The  combination has been accounted for as a pooling of
          interests  and,  accordingly, all prior financial statements have been
          restated  to  include  Optivision.  The  results  of operations of the
          separate  companies  are  summarized  as  follows:


                                         Net Sales     Net Loss

          YEAR ENDED DECEMBER 31, 2001
            Amnis                                     $ (362,605)
            Optivision                  $4,095,755    (5,069,567)
          -------------------------------------------------------
                                        $4,095,755   $(5,432,172)
          =======================================================


          YEAR ENDED DECEMBER 31, 2000
            Amnis                                     $ (110,923)
            Optivision                  $3,574,090    (5,308,732)
          -------------------------------------------------------
                                        $3,574,090   $(5,419,655)
          =======================================================


                                      F-10
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE  5 - INVENTORY:

          Inventories  consist  of  the  following  at  December  31:


                                                            2001        2000

          Raw materials                                 $ 274,593   $  326,491
          Work-in-process                                 445,490      803,862
          Demonstration inventory                         115,798      125,596
          ---------------------------------------------------------------------
                                                          835,881    1,255,949
          Reserve for inventory obsolescence and
            demonstration inventory refurbishing costs   (211,825)    (149,300)
          ---------------------------------------------------------------------
                                                        $ 624,056   $1,106,649
          =====================================================================


          Certain of the Company's products contain components that are supplied
          by  a  limited  number  of  third  parties.  While  the Company has an
          inventory  of  these components, any significant prolonged shortage of
          these  components,  or  the  failure  of these supplies to maintain or
          enhance  these  components  could  materially  adversely  affect  the
          Company's  results  of  operations.


NOTE  6 - ACCOUNTS RECEIVABLE FINANCING:

          In October 1998, the Company entered into a financing arrangement with
          Pacific Business Funding whereby funds were provided to the Company in
          exchange  for  factoring accounts receivable. Funding was based on 80%
          of  qualified  receivables.  The Company is liable for any uncollected
          receivables.  As  of  December 31, 2001 and 2000 borrowings under this
          agreement  were  $1,029,283  and $1,138,598, respectively. The balance
          bears  interest  at  18% per annum. The Company has currently exceeded
          its  credit limit available on this agreement. This amount is included
          on  the  balance  sheet  as  "Financing  obligations collateralized by
          accounts  receivable".


                                      F-11
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE  7 - NOTES PAYABLE:

          In  prior  years,  the  Company  obtained equipment financing lines of
          $2,000,000  and  $1,000,000, respectively, through Venture Lending and
          Leasing, Inc. The full amount under both equipment financing lines was
          drawn down by the Company under two notes, one note for $2,000,000 and
          a  second  note  for $1,000,000 (collectively, the "notes"). The Notes
          bear  interest at 17%, are secured by equipment, fixtures and accounts
          receivable,  and  contain certain covenants. The covenants include the
          requirement  that  the  Company maintain compliance with the covenants
          included  in  the Company's accounts receivable financing. The Company
          was  not  in compliance with the covenants and therefore the notes are
          due  on  demand and have been reflected as a current liability for the
          year  ended December 31, 2000. During the year ended December 31, 2001
          the  lender  forgave  the  remaining  balance  on the note and accrued
          interest  in  the  amount of $43,967. This amount is included in other
          income.

          An  unsecured  note  payable  in  the amount of $250,000 was issued in
          February  of  2001. The note bears interest at 10% per annum. Interest
          and  principal  are  due  one  year  from  the  date  of issuance, and
          therefore  has  been  classified  as  current  on the balance sheet at
          December  31,  2001.


NOTE  8 - STOCKHOLDERS' NOTES PAYABLE

          Certain  stockholders  loaned  the  Company  unsecured  funds,  which
          amounted  to  a  balance  of $3,309,375 and $1,572,197 at December 31,
          2001 and 2000, respectively. These loans are all classified as current
          and  bear  interest  at a rate of 10% per annum. The carrying value of
          these  notes  payable  approximates  their  fair  value.

          Subsequent  to  December 31, 2001, one stockholder converted a portion
          of  the  notes  above, subsequent loans, and accrued interest thereon,
          totaling  $3,547,917,  into  a convertible note. This convertible note
          bears interest at 10% per annum, and allows the stockholder to convert
          the  note  to  common stock at $0.35 per share, subject to adjustment.


                                      F-12
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE  9 - CONVERTIBLE  DEBT:

          On December 28, 2001, the Company entered into an agreement to issue a
          debenture,  bearing  interest  at  12%  per  annum,  in  the amount of
          $500,000,  which is currently recorded as a debenture receivable, with
          the  right to convert the debt into common stock upon demand at a rate
          equal  to  the  lesser  of $0.385 per share or 70% of the three lowest
          trading  prices  over the previous 20 days trading. In addition to the
          debenture,  the  lender  was issued investment options to purchase, at
          the  applicable conversion price, one additional share of common stock
          for  each share of common stock owned upon conversion of the debenture
          and  warrants to purchase up to 1,000,000 shares of common stock at an
          exercise  price  equal  to  the lesser of $0.385 or the average of the
          lowest  trading  prices over the previous 20 days tradingThe debenture
          limits  the ownership that can be acquired through this transaction to
          be no greater than 4.9%. Additional warrants to purchase up to a total
          of  100,000  shares of common stock, at the same exercise price as the
          warrants  issued  to  the  lender,  were  issued  as  a  finders  fee.

          Since  there are multiple components of the debenture, value was added
          to  each  component (warrants and debenture) based on their respective
          value. A discount on the debenture was calculated in two parts, first,
          the  beneficial  conversion feature on the debenture was valued as the
          difference  between  the  purchase  price  of  the  conversion and the
          current trading price of the stock. Secondly, the warrants were valued
          using  the  Black  Scholes  Model.  The  combined  total  discount  is
          $305,195,  and  will  be  amortized  over  the  two  year  life of the
          debenture.  This  is  the  first  installment received on a $2,385,000
          commitment  from  the  lender.  The  carrying  value of this debenture
          approximates  its fair value. On January 3, 2002, the Company received
          $500,000  pursuant  to  this  debenture.


NOTE 10 - COMMITMENTS  AND  CONTINGENCIES:

          Lease  Commitments
          ------------------

               The  Company  leases  office  and  manufacturing  space,  under a
               non-cancelable  operating  lease, which expires in December 2002.
               The  lease agreement for the Company's office facilities provides
               for  scheduled  rent  increases throughout the life of the lease.
               Rent  expense  under  this  agreement  is  being  recognized on a
               straight-line  basis  over  the term of the lease. The difference
               between  the amounts paid and the amounts expensed for accounting
               purposes  on  the  straight-line  basis is classified as deferred
               rent  in  the  accompanying  balance  sheet.  Rental  expense was
               approximately  $1,310,000  and  $1,240,000  for  2001  and  2000,
               respectively.

               Minimum  rental  payments  under  these leases for 2002 amount to
               $1,047,278.

               The Company subleased a portion of its leased facilities under an
               operating  lease  that  is  scheduled  to  expire  February 2002.
               Sublease  income  for  2001 and 2000 was approximately $1,065,000
               and  $852,000,  respectively.  These  amounts  are reflected as a
               reduction  of  rent  expense  on  the  Statement  of  Operations.


                                      F-13
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

          Employment  Agreement
          ---------------------

               The  Company  has entered into employment agreements with certain
               key  employees with original terms of three years. Minimum future
               payments  under  these  agreements  for  the  years subsequent to
               December  31,  2001  are  as  follows:

                  2002                                 $520,000
                  2003                                  520,000
                  2004                                  173,000
               ------------------------------------------------
                                                      1,213,000
               ================================================


               Generally,  the  employment  agreements are automatically renewed
               for  successive  one  year  terms,  unless either party submits a
               notice  not to renew within certain days prior to the term of the
               initial  or  renewal  term.  If  the  Company  terminates  these
               agreements  without  cause  or  the  employee  resigns  with good
               reason,  as defined, the Company shall pay severance compensation
               to  the  employee  in  a  lump sum equal to the greater of twelve
               months  of base salary, or the base salary for the remaining term
               of  the  agreements.

          Provision for Contract Costs
          ----------------------------

               As  of  December  31,  2001  and  2000, the Company has accrued a
               provision  for  contract  costs  of  $134,519  and  $125,264,
               respectively.  The  Company's SBIR contracts are subject to audit
               by  the  Defense Contract Audit Association ("DCAA") with respect
               to  claims  made  by  the  Company  under the SBIR contracts. The
               Company  has  made an estimate of the costs of disallowable items
               under  the  SBIR  contracts  that  is  based on management's best
               estimate  of  the  ultimate settlement and management's review of
               the Company's claims and the regulations covering allowable items
               under  SBIR  contracts. Should the final settlement with the DCAA
               result  in a significantly different liability from that accrued,
               the  Company's operating results and financial condition could be
               materially  and  adversely  affected.

          Guarantee to Federal Government for Contracts Assigned to ONI
          -------------------------------------------------------------

               Certain  government  contracts  were  assigned  to  ONI (a former
               division  of Optivision, Inc.) as part of a spin-off during 1998.
               After  the government has approved the assignment of contracts to
               ONI,  the  Company  as  transferor,  remains  a  guarantor of the
               successful  completion  of  the contracts by ONI. As of April 30,
               1998,  the total contract value of contracts assigned to ONI, and
               subject  to  guarantee  by  the  Company  was  $7,047,000.  As of
               December  31,  2001 the Company has not determined which, if any,
               of  these contracts have been closed and as a result, what is the
               amount  of  the  reduced  liability  exposure.


                                      F-14
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 11 - STOCK OPTION PLANS:

          The Company has two stock option plans: the 1997 Stock Plan (the "1997
          Plan")  and  the  2000 Stock Plan (the "2000 Plan"). The 1997 Plan was
          adopted  in  connection  with the merger with Optivision, Inc. and has
          3,993,482  shares authorized for issuance. The 2000 Plan has 5,500,000
          shares  authorized  for  issuance. The 1997 Plan and 2000 Plan specify
          that  the exercise price of Incentive stock options (ISOs) will not be
          less  than 100% (110% for 10% stockholder) of fair market value on the
          date  of  grant  and  that  the  exercise  price of Nonstatutory stock
          options  (NSOs) will not be less than 85% (110% for a 10% stockholder)
          of  fair  market  value  on  the  date of grant. The fair value of the
          Company's  common  stock  is  determined  by  the  Board of Directors.
          Options granted under the 1997 Plan and 2000 Plan generally expire ten
          years  from  the date of grant (five years for a 10% stockholder), and
          vest  over  four  years.

          Stock  option  activity  under  the  Plans  is  as  follows:

<TABLE>
<CAPTION>
                                                                      Weighted
                                                       Number of       Average
                                                        Shares     Exercise Price
<S>                                                   <C>          <C>
Balance, December 31, 2001                             3,826,236   $          0.60
  Granted                                              3,805,300              1.40
  Exercised                                             (100,604)             0.56
  Canceled                                            (1,342,285)             1.31
----------------------------------------------------------------------------------
Balance, December 31, 2001                             6,188,646   $          0.88
==================================================================================

Balance, December 31, 2000                               520,215   $          1.90
  Granted                                              3,325,790              0.50
  Exercised                                               (2,243)             1.40
  Canceled                                               (17,526)             1.70
----------------------------------------------------------------------------------
Balance, December 31, 2000                             3,826,236   $          0.60
==================================================================================

Stock options authorized and available to be granted                     3,304,836
==================================================================================
</TABLE>


                                      F-15
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

          The  following  table  summarizes  information  about  stock  options
          outstanding  at  December  31,  2001:

<TABLE>
<CAPTION>
                        Options  Outstanding               Options  Exercisable
               -----------------------------------------  ----------------------
                                Weighted
                                Average        Weighted                 Weighted
Range of                       Remaining       Average                   Average
Exercise         Number       Contractual      Exercise      Number     Exercise
Prices         Outstanding  Life (in years)     Price     Exercisable     Price
<S>            <C>          <C>               <C>         <C>           <C>
0.00 - $1.00    3,380,596              8.77  $     0.40     2,196,555  $    0.40
1.01 - $2.00    2,719,738              9.11        1.39     1,600,040       1.37
2.01 - $3.00       87,500              9.04        3.00        30,110       3.00
3.01 - $4.00          812              4.77        4.00           812       4.00
--------------------------------------------------------------------------------
                6,188,646              8.93  $     0.88     3,827,517  $    0.84
================================================================================
</TABLE>

          The  difference between the exercise price and the fair market options
          issued  on  the  dates  of  the  grant  is  accounted  for as unearned
          compensation and amortized to expense over the related vesting period.
          The  Company  recognized  $36,605  and $0 of expense in 2001 and 2000,
          respectively,  related  to  stock  options  granted to consultants. As
          discussed  in  the Summary of Accounting Policies, the Company follows
          APB  No.  25  for  measurement and recognition of employee stock-based
          transactions.  Had  the  Company  elected to adopt the measurement and
          recognition  provisions  of  SFAS  No.  123,  the  Company  would have
          incurred  an  additional  $111,783 and $43,458 in related compensation
          expenses  during  the  years  ended  December  31,  2001  and  2000,
          respectively.  Under  the provisions of SFAS No. 123, the proforma net
          (loss)  income  and  basic and diluted (loss) income per share for the
          years  ended  December  31,  2001  and  2000  are  as  follows:


                                                 2001          2000
          NET LOSS:
            As reported                      $(5,432,172)  $(5,419,655)
            Pro forma                         (5,543,955)   (5,457,113)
          ======================================================================

          BASIC AND DILUTED LOSS PER SHARE:
            As reported                      $      0.21   $      0.18
            Pro forma                               0.21          0.19
          ======================================================================

          The  pro forma information provided above was estimated at the date of
          grant,  using  the  Black-Scholes  option-pricing  model,  with  the
          following  weighted  average  assumptions:


                                      F-16
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

                                                         2001       2000

          Expected life (in years)                         4.0       4.0
          Risk-free interest rate                          3.5%      3.5%
          Volatility                                    137.44%    100.0%
          Dividend yield                                   0.0%      0.0%



NOTE 12 - WARRANTS:

          As  part of a convertible debt agreement, the Company issued 1,250,000
          warrants  to  purchase  common  stock  at a price of $2.25 - $4.25 per
          share.  An  additional 100,000 warrants were issued to a vendor with a
          purchase price of $3.00 per share. 1,100,000 warrants were also issued
          with  the  debt  discussed  in  note  7.

<TABLE>
<CAPTION>
                                 Weighted
                                  Average        Weighted                 Weighted
Range of                         Remaining       Average                   Average
Exercise           Number       Contractual      Exercise      Number     Exercise
 Prices          Outstanding  Life (in years)     Price     Exercisable     Price
<S>              <C>          <C>               <C>         <C>           <C>
0.000 - $0.001       52,301              4.83  $    0.001        52,301  $   0.001
0.002 - $0.350    1,100,000              7.00  $    0.350     1,100,000  $   0.350
2.250 - $4.250    1,350,000              1.65  $    2.680     1,350,000  $   2.680
----------------------------------------------------------------------------------
                  2,502,301              4.07  $     1.60     2,502,301  $    1.60
==================================================================================
</TABLE>


NOTE 13 - EMPLOYEE BENEFITS:

          The  Company  maintains a profit sharing and 401(k) plan (the "Plan").
          Under  the  profit  sharing  portion  of the Plan, the Company, at the
          discretion  of  the  Board  of  Directors,  may contribute 5% to those
          employees  meeting minimum age and length of service requirements. The
          Company  recognizes  expenses  as  paid.  The Company made no matching
          contributions  during  2001  or  2000.

          Employees  may make pre-tax contributions in amounts from 2% to 15% of
          compensation  up  to  a  pre-determined  limit  each  year.


                                      F-17
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 14 - CONCENTRATION OF CREDIT RISK:

          The  Company  has  identified  its  financial  instruments  which  are
          potentially  subject  to  credit  risk.  These  financial  instruments
          consist  principally of cash and cash equivalents and receivables (see
          Note  3  j).

          During  the  year, the Company had significant operating cash and cash
          equivalents  in  excess  of  the  federally  insured  limits.



NOTE 15 - SEGMENT REPORTING

          In  the  normal  course  of business, the Company sells its product in
          various  foreign  countries.  Total sales in foreign countries were as
          follows  for  the  years  ended  December  31:


                                               2001      2000

          Hong Kong                          $405,620  $287,397
          Other foreign countries             243,212   213,433
          -----------------------------------------------------
          Total                              $648,832  $500,830
          =====================================================


NOTE 16 - CANCELLATION OF SHARES

          The  19,740,000  shares  cancelled  on  April  1,  2001 were part of a
          business  plan  to  facilitate  the merger dated April 16, 2001. These
          shares  were  originally  issued  in August, 2000 by means of a 2.82:1
          split of the common stock of the Company. These shares were granted to
          a  promoter  to  prepare  the  Company  for  a merger. Upon successful
          completion  of the duties of the promoter, all of the promoters shares
          were  relinquished  and  cancelled.


                                      F-19
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 17 - INCOME TAXES:

          The net deferred income tax asset consist of the following at December
          31:



                                                        2001          2000

          Deferred income tax assets from:
          Federal net operating loss carryforwards  $ 5,989,000   $ 4,215,000
          State net operating loss carryforwards        783,000       551,000
          Cumulative net temporary differences          892,000       803,000
          --------------------------------------------------------------------

                                                      7,664,000     5,569,000
          Valuation allowance                        (7,664,000)   (5,569,000)
          --------------------------------------------------------------------
          Net deferred income tax assets            $         -   $         -
          ====================================================================

          The  valuation  allowance  was increased $2,095,000 from 2000 to 2001.
          This  is  as  a  result  of  the  increase in net deferred tax assets,
          primarily  net  operating  loss  carryforwards  (NOL's).  Because  the
          Company's  management is unable to determine whether it is more likely
          than  not  that  the  net  deferred  tax  assets will be realized, the
          Company  continues to record a 100 percent valuation allowance against
          the  net  deferred  tax  assets.

          Net  operating  loss  carryforwards  at  December  31,  2001  were
          approximately  $17,460,000  for  Federal  income  tax  purpose  and
          $8,770,000  for  state  income  tax  purposes.  The net operating loss
          carryforwards  expire  on  various  dates  through  the year 2021. The
          Internal  Revenue  Code  contains  provisions  which may limit the net
          operating  loss  carryforwards  to  be used in any given year upon the
          occurrence  of  certain  events,  including  a  significant  change in
          ownership interest. The Company believes sufficient uncertainty exists
          regarding  the reliability of the net operating loss carryforwards and
          other timing difference at December 31, 2001. Accordingly, a valuation
          allowance  has  been  provided  for the entire amount related thereto.


                                      F-20
<PAGE>
                                                              AMNIS SYSTEMS INC.

                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 18 - SUBSEQUENT EVENTS:

          On  January  30,  2002, the Company successfully negotiated a work-out
          agreement plan with the creditors of Optivision, Inc., under which the
          Company  will  pay  the  creditors of Optivision, Inc. $0.35 for every
          $1.00  owed  on debt listed on the balance sheet as Accounts Payable -
          moratorium.  As  of  the  date of this report, the Company was current
          with  all payments under the agreement. Per the agreement, the debt is
          to  be  settled  in  monthly  payments  by  June  30,  2002.

          Subsequent  to  December  31,  2001,  the  Company  settled  with  its
          employees  for unpaid compensation by issuing additional stock options
          in  lieu  of  cash  in  the  amount  of  $670,595.

          On  January  14,  2002,  the  Company issued a convertible note in the
          principal  amount  of  $3,547,916.62  to  Mr.  Michael A Liccardo, our
          president,  chief  executive  officer  and  chairman  of  the board of
          directors,  in  exchange  for  the  cancellation  of  certain  loans
          (including  accrued interests thereon) that Mr. Liccardo had loaned to
          Optivision,  Inc. to meet current operating expenses. At any time, Mr.
          Liccardo  may elect to convert the note to Common stock of the Company
          at  $  0.35  per  share,  subject  to  adjustment.

          Between  February  14,  2002 and February 21, 2002 the Company entered
          into  financing agreements for the sale of its common stock. The stock
          was  sold  in units, which include ten shares of common stock, subject
          to  adjustment,  and  one warrant, for $8.00 each. Each warrant allows
          the holder to purchase three shares of common stock at $0.90 per share
          subject  to  adjustment.  The  total  selling price of these units was
          $1,800,000.

          The  Company has negotiated an agreement whereby $250,000 of debt plus
          interest  of  $25,890  would  be  converted  into  common stock of the
          Company  at  $1.00  per  share.


                                      F-21
<PAGE>