UNITED STATES

SECURITIES AND EXCHANGE COMMISSION



WASHINGTON, D.C. 20549



FORM 10-KSB



(Mark One)



[  ]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended



[X]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from January 1, 2004 to June 30, 2004



Commission file number                             000-23415



GABRIEL TECHNOLOGIES CORPORATION

(formerly Princeton Video Image, Inc.)

(Name of small business issuer in its charter)



|Delaware                                                                 |  | 22-3062052                                 
|------------------------------------------------------------------------ |  | -------------------------------------------
|------------------------------------------------------------------------ |  | -------------------------------------------
|(State or other jurisdiction of incorporation or organization)           |  | (IRS Employer Identification No.)          



|4538 S. 140th Street, Omaha, Nebraska                                    |  | 68137                                      
|------------------------------------------------------------------------ |  | -------------------------------------------
|------------------------------------------------------------------------ |  | -------------------------------------------
|(Address of principal executive offices)                                 |  | (Zip Code))                                



Issuers telephone number:   (402) 614-0258



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



|Title of each class                        |  | Name of each exchange on which registered 
|------------------------------------------ |  | ------------------------------------------
|_______________None_______________________ |  | __________None____________________________
|______________________________________     |  | ______________________________________    



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



______Common Stock_____$.001 par value_______________________________________________

(Title of class)



____________________________________________________________________________________

(Title of class)



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



Persons who are to respond to the collection of information contained in this form are not

required to respond unless the form displays a currently valid OMB control number.



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



State issuers revenues for its most recent fiscal year: None



State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days.  (See definition of affiliate in Rule 12b-2 of the Exchange Act.)



Note:  If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates in the basis of reasonable assumptions, if the assumptions are stated.



ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS



Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes  [ X ]       No [   ]



State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date.  As of September 30, 2004 the Company had 16,424,316 shares of common stock issued and outstanding.



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





#







GABRIEL TECHNOLOGIES CORPORATION

FORM 10-KSB

FOR THE YEAR ENDED JUNE 30, 2004



Table of Contents



PART I



Item 1

Description of Business

Page 5



Item 2

Description of Property

Page 9



Item 3

Legal Proceedings

Page 9



Item 4

Submission of Matters to a Vote of Security Holders

Page 11





PART II



Item 5

Market for Common Equity and Related Stockholder

Matters

Page 11



Item 6

Management's Discussion and Analysis or Plan of

Operations

Page 14



Item 7

Financial Statements

Page 19



Item 8

Changes in and Disagreements with Accountants on

Accounting and Financial Disclosure

Page 19





PART III



Item 9

Directors, Executive Officers, Promoters and Control

Persons; Compliance with Section 16(a) of the Exchange

Act

Page 20



Item 10

Executive Compensation

Page 21



Item 11

Security Ownership of Certain Beneficial Owners and

Management

Page 23



Item 12

Certain Relationships and Related Transactions

Page 24



Item 13

Exhibits and Reports on Form 8-K

Page 24





#







PART I



CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE LITIGATION REFORM ACT OF 1995. Statements contained in this filing that are not based on historical fact, including without limitation statements containing the words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect" and similar words, constitute "forward-looking statements". These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which Princeton Video Image, Inc. ("we", Gabriel, "Princeton" or Company) operates; technology changes; the competition we face; changes in our business strategy or development plans; the high leverage of Princeton; our ability to attract and retain qualified personnel; existing governmental regulations and changes in, or our failure to comply with, governmental regulations; liability and other claims asserted against us; it's our ability or the ability of our third-party suppliers to take corrective action in a timely manner with respect to changing government regulations; and other factors referenced in our filings with the Securities and Exchange Commission.



NOTICE OF FILING OF BANKRUPTCY PETITION AND SALE OF OPERATING ASSETS On May 29, 2003, Princeton Video Image, Inc. filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey (the Bankruptcy Court) in order to facilitate the restructuring of the Companys debt, trade liabilities and other obligations.  The Company is currently operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable court orders.  In general, as a debtor-in-possession, the Company was authorized under Chapter 11 to continue to operate as an ongoing business, but not to engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.



On June 18, 2003, the first meeting of creditors was held pursuant to Section 341 of the Bankruptcy Code.  The Committee was formed by the United States Trustee.



Immediately after the filing of its Petition, Princeton filed, among other pleadings, a Motion (the Motion to Sell) for the entry of an order pursuant to Bankruptcy Code §§ 363(b)(f) and (m), 365(a)(f) and (k), 1146 and 105 and Bankruptcy Rules 2002, 6004, 6006 and 9014 approving, inter alia, (A) the sale of substantially all of Princetons assets and (B) the assumption and assignment of certain executory contracts and unexpired leases to PVI Virtual Media Services, LLC (PVMS).  By filing the Motion to Sell, Princeton sought to move the administration of this Chapter 11 case as quickly as possible to maximize the potential distribution to creditors.



On or about July 28, 2003, after opportunity for higher and better offers and after a hearing the Bankruptcy Court approved the Motion to Sell. A closing on the sale to PVMS took place on or about August 19, 2003.  On or about October 7, 2003, Princeton filed its Plan of Liquidation and related Disclosure Statement.



On or about February 25, 2004, the Company filed its First Modified Plan of Liquidation and First Modified Disclosure Statement in support of the modified plan.  The First Modified Plan and First Modified Disclosure Statement were amended on April 1, 2004.



Pursuant to the Order Confirming and Plan, all of the property of Companys estate vested in the Plan Trustee, free and clear of all claims, liens, encumbrances, charges or other interests, and all executory contracts and unexpired leases were rejected.  The Bankruptcy Court also placed an injunction against all entities that may have held, currently hold, or may hold a debt, claim or other liability or interest against the Company dischargeable upon confirmation of the Plan and permanently enjoined any action on account of such debt, claim, liability, interest or right.  The Bankruptcy Court further terminated all claims arising or related to stock, stock options, stock plans for employees, officers and directors, warrants and convertible provisions within the debt instruments by creditors.  The Bankruptcy Court also ordered that the common stock of the Company be diluted by reverse split of issued and outstanding common shares of the Company.  Under the Order Confirming, each share of the Companys common stock issued and outstanding was reclassified as and changed unto 300th of 1 share of common stock at a $0.001 par value.  The preferred shareholders took nothing under the Plan.



Pursuant to the Plan approved by the Order Confirming First Modified Plan of Liquidation entered by the U. S. Bankruptcy Court for the District of New Jersey, the Company emerged from bankruptcy and amended its Bylaws on July 21, 2004.  As part of the Plan of Reorganization, the Company did restate its Bylaws by changing its name and did also change its fiscal year as set forth in the Bylaws to that of June 30.  Formerly, the Bylaws did provide that the Companys fiscal year was to end on December 31 of each calendar year.  Under the authority granted by the Bankruptcy Court, the Board of Directors changed the fiscal year as they believed the change to be in the best interest of the Company and will provide full disclosure and accurate information of the previous operations of the Company which have ceased and been discontinued.



Pursuant to the Order Confirming, the Bankruptcy Court approved the reorganization and, with the exception of certain debts which funded administrative expense during the reorganization, barred by injunctive relief and stay any and all rights, claims or interest which any creditors, claimants, equity security holder, or others may have had prior to the entry of the Order Confirming.



GIVEN THESE UNCERTAINTIES, READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS. Other than as required by law, we disclaim any obligation to update information concerning the factors mentioned above or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.



ITEM 1:

DESCRIPTION OF BUSINESS



CERTAIN DISCUSSIONS WHICH FOLLOW REGARDING THE DESCRIPTION OF BUSINESS REFER TO THE OPERATING BUSINESS PRIOR TO BEING DISCONTINUED DUE TO THE PENDING BANKRUPTCY AND SUBSEQUENT SALE ON AUGUST 19, 2003.



Princeton Video Image, Inc. (PVI, we, us) is a Delaware corporation with principal offices located in Lawrenceville, New Jersey.  PVI was founded in 1990 to develop and market a real-time video insertion system.  Through our patented computer vision technology and proprietary hardware and software systems, known as the Live Video Insertion System (L-VIS(R)), we were able to place computer-generated electronic images into live and pre-recorded television broadcasts of sports and entertainment programming. These electronic images ranged from simple corporate names or logos to sophisticated multi-media 3-D animated productions.  During the broadcast of a sports or entertainment program, for example, an image can be placed to appear in various high visibility locations in the stadium, on the playing field, or as part of the natural landscape of the scene.  The L-VIS(R) System has been used to insert images, including advertising images and program enhancements, into both live and pre-recorded television broadcasts.



THE L-VIS(R) SYSTEM TECHNOLOGY



Our L-VIS(R) System is a system that contains proprietary hardware and software which we designed to insert electronic images into live and pre-recorded television broadcasts of sports and entertainment programming. The inserted images may be two or three dimensional, static or animated, opaque or semi-transparent and may be placed so that the inserted images appear to exist on the playing field, in the stadium or venue where a game or sporting event is being played, or in the background or natural landscape in entertainment programming. If a player or other object moves in front of an image that is inserted on a wall, in the background, or on a playing field, the L-VIS(R) System is programmed so that the passing object includes that portion of the inserted image. The L-VIS(R) System can also be used to insert a freestanding image so that the image will occlude a person or other object which "passes behind" it.



The basic L-VIS(R) System, also referred to as the "Vision" system, relies on computer vision techniques that recognize features in the television picture and track the motion of the scene. This L-VIS(R) System and its operator may be located at the site of the event, at the network studios of the broadcaster or at an individual station or cable system head-end carrying the broadcast. Before the broadcast, the advertising images to be inserted are prepared and the operator identifies the location in the broadcast scene where the images will be inserted. The Vision system is designed to recognize the broadcast scene in real time during the broadcast and to insert the image as instructed each time the broadcast scene containing the insert location appears. The operator controls which of several images is selected for insertion and when it will be inserted. Since the Vision system can be used at any point in the distribution path of the broadcast signal, a broadcaster can, by installing a system in their main broadcast facility, use one system to insert advertising in broadcasts originating from multiple locations.



Our iPoint(TM) technology enables advertising, promotional material and program enhancements to be inserted locally - on the television or personal computer - so the individual viewer will see advertising and features designed specifically for him or herself. Using digital set top box technology developed to run our software, Internet delivered advertisements and features can be inserted into the individual television broadcast based on customer preferences. These advertisements and features can be interactive, as well, allowing the viewer to customize their viewing experience by selecting particular enhancements or options. An iPoint(TM)enhanced baseball game, for instance, would allow viewers to select such virtual enhancements as "clickable" player statistics or a virtual strike zone. Entertainment programs could include interactive objects or virtual products, giving the user instant pricing, detailed information or the opportunity to make purchases interactively without leaving the program.



Because we operated in a rapidly developing commercial and technological environment, our success will depended in part upon our ability to develop products for the Internet and interactive television as well as product enhancements that keep pace with continuing changes in technology and customer preferences. The video, electronics, data processing, broadcast television and cable television industries are changing rapidly due to, among other things, technological improvements, consolidations of companies and changes in consumer preferences. In particular, the live video image insertion market is relatively new and continues to adapt to the changing preferences and customs of the broadcasters, rights holders, and the ultimate television viewer.



OWNERSHIP OF VIDEO INSERTION RIGHTS



The broadcast of soccer, football, baseball, basketball, hockey and any other type of sporting event is governed by agreements among the applicable teams, leagues, broadcasters and the sports federation, if any. In the NFL, for example, all television, video insertion and national sponsorship rights are controlled by the league for all regular season games, the playoffs, the Super Bowl and the Pro Bowl. Such rights are controlled by individual NFL teams with respect to all pre-season games. In baseball, MLB holds all television, sponsorship and video insertion advertising rights with respect to regular season nationally broadcast games, the All Star Game, playoff games, the World Series and the international distribution of regular season games.



The broadcast of pre-recorded, entertainment programming such as sitcoms, variety shows and award shows can be controlled by agreements among copyright holders, production companies, distributors, broadcasters and/or cablecasters, and sponsors.



Impediments to the use of our L-VIS(R) System during the broadcast of programs covered by any of these agreements could have a material adverse effect on our business, financial condition and the results of our operations by limiting its acceptance and use in television programming. In many instances, these agreements provide that different persons control the copyrights to the broadcasts in differing circumstances, for instance, regular season play versus playoffs in sports, or first run versus syndication for situation comedies. Agreements often govern permitted forms of advertising and modifications to the broadcast. Use of video insertion technology is not specifically discussed in some existing agreements and under these circumstances it is not clear whose permission must be obtained to use the L-VIS(R) System.



PRODUCT DEVELOPMENT



The L-VIS(R) System is designed using a Flex-Card hardware platform. This platform is more powerful than previous platforms and allows for software re-configuration. We designed the Flex-Card L-VIS(R) System to provide multiple insertion capability, multiple camera capability and an expanded zoom range, and we created a simplified graphical user interface.



COMPETITION



PVI believes three other companies have developed or are trying to develop processes and equipment to pursue a business similar to our own. These organizations are Symah Vision-SA ("Symah"), Orad Hi Tech Systems Ltd. ("Orad"), and Sportvision, Inc. ("Sportvision").



Symah is owned by the LaGardere Group, which controls Matra-Hachette, a large French defense and publishing company. Symah has demonstrated its system publicly and is actively marketing its system in Europe. We believe that Symah's system has been used in Europe during the broadcast of over 300 sporting events.



Orad was founded in 1993 as part of the ORMAT Group, an Israeli company originally established to create alternative energy power stations. Orad's primary business is selling virtual sets and is responsible for the worldwide marketing of their virtual advertising system, "ImADgine". The Orad system has been used during some live commercial broadcasts. We believe Orad has one or more patents or patent applications relating to real-time video insertion.



Sportvision is using camera sensor technology for inserting viewer enhancements, such as a first down line in football, into live television broadcasts. As far as we know, Sportvision has been minimally active in the advertising part of the business. In February 2002, PVI, FOX and Sportvision entered into a cross license agreement, which relates to the use by each company of certain patents of the other company.



REGULATIONS



We do not believe that any federal or state regulations currently directly relate to or restrict the use of the L-VIS(R) System. There are existing regulations imposed on broadcasters, which may require disclosure that the L-VIS(R) System is being used in a particular broadcast.



INTELLECTUAL PROPERTY



PATENTS



We owned twelve issued U.S. patents relating to proprietary technology we used in our business. These patents expire at various times, commencing in 2012. A number of new patent applications were pending in the United States. We also filed patent applications in the European Patent Office and in various non-European countries around the world where we expected to do business.



TRADEMARKS



L-VIS(R), the mark under which we are marketing our live video insertion products was a trademark of PVI which is registered with the U.S. Patent and Trademark Office.



C-TRAK (TM) was a trademark of PVI. We filed a U.S. trademark registration application for C-TRAK(TM), the mark under which we were marketing our electronic imaging system in which a part of the picture or image in a prerecorded or live video signal is scanned, digitized, stored and tracked to thereby maintain the position of one or more inserted images relative to other parts of the main picture or image. We filed a Statement of Use with respect to the C-TRAK mark on July 5, 2001 and it was accepted by the U.S. Patent and Trademark Office on September 7, 2001. The trademark registration was issued on October 16, 2001.



GENERAL



THE FOLLOWING INFORMATION IS APPLICABLE TO THE COMPANY UNTIL THE ASSETS OF THE COMPANY WERE SOLD ON JULY 28, 2003, PURSUANT TO THE ORDERS OF THE BANKRUPTCY COURT.



Governmental Regulation and Legal Uncertainties



The Company is currently subject to various laws and regulations relating to its business, including those of the Bankruptcy Code.  The Company must adhere to the Orders of the Bankruptcy Court and any Plan of Reorganization.



If the Company were alleged to violate federal, state or foreign civil or criminal laws, even if these claims could be successfully defended, Princeton could be materially adversely affected.



ITEM 2.

DESCRIPTION OF PROPERTY



CERTAIN DISCUSSIONS WHICH FOLLOW REGARDING THE DESCRIPTION OF PROPERTY REFER TO THE OPERATING BUSINESS PRIOR TO THE ORDER OF THE BANKRUPTCY COURT REJECTING THE REAL PROPERTY LEASE ON OCTOBER 30, 2003.



The Company did not own or rent any real property after August 19, 2003.  The assets of the Company were approved for sale by the Bankruptcy Court on July 28, 2003.  On October 30, 2003, the Bankruptcy Court rejected our Real Property Lease.



As of January 1, 2003, the Company leased 17,000 square feet of office space in Lawrenceville, New Jersey.  The Lawrenceville facility was the main operations center, including product, hardware and software design, manufacturing and product assembly, product test and documentation, post production, customer training and customer technical support.  The Company entered into an amendment of its lease pursuant to which effective April 1, 2003, the space it leased in Lawrenceville was reduced by approximately 25% and the rent per square foot was reduced by approximately 33%.  Prior to our surrender of the facilities under the Chapter 11 proceedings, the Lawrenceville lease was to expire on March 31, 2006.



ITEM 3.

LEGAL PROCEEDINGS



Pre-Chapter 11 Proceedings



In the ordinary course of its business, the Company may at times be subject to various legal proceedings.  Prior to the filing of the Chapter 11 proceedings, the Company was a party to the following proceedings, to-wit:



On January 30, 2003, PVI filed a bankruptcy request in respect of its subsidiary PVI Europe NV, a Belgian corporation, with the Commercial Court in Brussels.  On February 5, 2003, PVI Europe NV was declared bankrupt by the Commercial Court of Brussels.



On April 25, 2003, an action was commenced in the Civil Court of the City of New York County of New York by Southern Progress Corporation, the Companys landlord for its New York City office, located at 100 Park Avenue, for unpaid rent, late charges and utilities in the aggregate amount of $80,661 (plus legal costs) and a warrant of eviction.  PVI plans to respond to this action in a timely manner.  PVI has recorded a liability for the rent owed as of March 31, 2003.



Chapter 11 Proceedings



On May 29, 2003, PVI filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey (the Bankruptcy Court) in order to facilitate the restructuring of the Companys debt, trade liabilities and other obligations.  The Company is currently operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable court orders.  In general, as a debtor-in-possession, the Company was authorized under Chapter 11 to continue to operate as an ongoing business, but not to engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.



On June 18, 2003, the first meeting of creditors was held pursuant to Section 341 of the Bankruptcy Code.  The Committee was formed by the United States Trustee.



Immediately after the filing of its Petition, Princeton filed, among other pleadings, a Motion (the Motion to Sell) for the entry of an order pursuant to Bankruptcy Code §§ 363(b)(f) and (m), 365(a)(f) and (k), 1146 and 105 and Bankruptcy Rules 2002, 6004, 6006 and 9014 approving, inter alia, (A) the sale of substantially all of Princetons assets and (B) the assumption and assignment of certain executory contracts and unexpired leases to PVI Virtual Media Services, LLC (PVMS).  By filing the Motion to Sell, Princeton sought to move the administration of this Chapter 11 case as quickly as possible to maximize the potential distribution to creditors.



On or about July 28, 2003, after opportunity for higher and better offers and after a hearing the Bankruptcy Court approved the Motion to Sell. A closing on the sale to PVMS took place on or about August 19, 2003.  On or about October 7, 2003, Princeton filed its Plan of Liquidation and related Disclosure Statement.

On or about February 25, 2004, the Company filed its First Modified Plan of Liquidation and First Modified Disclosure Statement in support of the modified plan.  The First Modified Plan and First Modified Disclosure Statement were amended on April 1, 2004.



Pursuant to the Order Confirming and Plan, all of the property of Companys estate vested in the Plan Trustee, free and clear of all claims, liens, encumbrances, charges or other interests, and all executory contracts and unexpired leases were rejected.  The Bankruptcy Court also placed an injunction against all entities that may have held, currently hold, or may hold a debt, claim or other liability or interest against the Company dischargeable upon confirmation of the Plan and permanently enjoined any action on account of such debt, claim, liability, interest or right.  The Bankruptcy Court further terminated all claims arising or related to stock, stock options, stock plans for employees, officers and directors, warrants and convertible provisions within the debt instruments by creditors.  The Bankruptcy Court also ordered that the common stock of the Company be diluted by reverse split of issued and outstanding common shares of the Company.  Under the Order Confirming, each share of the Companys common stock issued and outstanding was reclassified as and changed unto 300th of 1 share of common stock at a $0.001 par value.  The preferred shareholders took nothing under the Plan.



Pursuant to the Plan approved by the Order Confirming First Modified Plan of Liquidation entered by the U. S. Bankruptcy Court for the District of New Jersey, the Company emerged from bankruptcy and amended its Bylaws on July 21, 2004.  As part of the Plan of Reorganization, the Company did restate its Bylaws by changing its name and did also change its fiscal year as set forth in the Bylaws to that of June 30.  Formerly, the Bylaws did provide that the Companys fiscal year was to end on December 31 of each calendar year.  Under the authority granted by the Bankruptcy Court, the Board of Directors changed the fiscal year as they believed the change to be in the best interest of the Company and will provide full disclosure and accurate information of the previous operations of the Company which have ceased and been discontinued.



Pursuant to the Order Confirming, the Bankruptcy Court approved the reorganization and, with the exception of certain debts which funded administrative expense during the reorganization, barred by injunctive relief and stay any and all rights, claims or interest which any creditors, claimants, equity security holder, or others may have had prior to the entry of the Order Confirming.



#







Post Chapter 11 Proceedings



On September 13, 2004 Gabriel and Trace filed suit in the U.S. District Court, Omaha, against Locate Networks and its principals, alleging among other things, misrepresentations in the purchase agreement between Trace and Locate for the purchase by Trace of certain Locate assets.  This suit was subsequently settled and  dismissed without prejudice, on November 19, 2004.  As part of that settlement, Gabriel purchased the remaining shares of Trace that were owned by Locate Networks, giving Gabriel ownership of 100% of the outstanding shares of Trace.  Gabriel also acquired a fully-paid license from Locate Networks for use in the transportation sector, and Locate Networks agreed to the cancellation of all agreements with Trace, including a royalty agreement.  In consideration for the entire settlement transaction, Gabriel agreed to issue a total of 1,750,000 restricted common shares, of which 1,125,000 restricted common shares have been issued and to pay Locate Networks $500,000 upon execution of the settlement agreement, along with three notes totaling $307,500 due and payable in full no later than January 21, 2005





ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



No meetings of the Companys stockholders were held during the fiscal year ended December 31, 2003, the subsequent period for the year-end change of June 30, 2004.





ITEM 5.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER

MATTERS



Common Stock Information



As of September 30, 2004, there were approximately 250 record and beneficial holders of the Companys Common Stock and a total of 16,424,316 shares of the Companys Common Stock were outstanding.  The most recent bid price of the Companys shares were $2.50 per share.



Our common stock traded on The Nasdaq National Market (the National Market) from December 17, 1997 to January 6, 2003, on the Nasdaq SmallCap Market (the SmallCap Market) from January 7, 2003 to March 12, 2003 under the symbol PVII and on the Over-The-Counter (OTC) Bulletin Board under the symbol PVII, PVIQ or PVIQE until September 23, 2003.  We currently trade on the Pink Sheets under the symbol GWLK.  The following table sets forth, for the calendar periods indicated, the range of high and low sale prices for the Companys common stock on the National Markets.  The following sales prices have been restated for the 300 to 1 reverse split under the Bankruptcy Court Order of June 10, 2004:



|     |                         |       
|---- | ----------------------- | ------
|2002 |                         |       
|     | January 1  March 1     | 714.00
|     | April 1  June 30       | 597.60
|     | July 1  September 30   | 315.30
|     | October 1  December 31 | 213.60
|     |                         |       

#









|2003                                                                                                                                     |                         |         
|---------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | --------
|                                                                                                                                         | January 1  March 31    | 45.04   
|                                                                                                                                         | April 1  June 30       | 0.90    
|                                                                                                                                         | July 1  September 30   | 0.30    
|                                                                                                                                         | October 1  December 31 | 0.15    
|                                                                                                                                         |                         |         
|2004                                                                                                                                     |                         |         
|                                                                                                                                         | January 1  March 31    | 0.30 (a)
|                                                                                                                                         | April 1  June 30       | 0.30 (a)
|                                                                                                                                         |                         |         
|(a)  These values were probably much less but the reverse stock split of one to 300 has a greater effect upon the minimum values quoted.



To date, the trading volume of our common stock has remained relatively small. As a result, shareholders may experience difficulty selling or otherwise disposing of shares of common stock at favorable prices, or at all.



Companies with low price stocks are governed by additional federal and state regulatory requirements and could lose an effective trading market for their stock. For instance, since our common stock has been delisted from The Nasdaq Stock Market and the price of our common stock is less than $5.00 per share, the sale or purchase of our common stock is subject to Rule 15g-9 under the Securities Exchange Act of 1934. This rule requires that broker-dealers satisfy special sales practice requirements before any transaction, including suitability determinations and receiving a purchaser's written consent. The additional burdens imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our common stock. This would reduce the liquidity of our common stock. If these rules become applicable to our common stock, they could have a material adverse effect on the trading market for our common stock. In addition, our common stock could be deemed "penny stock" under the Securities Enforcement and Penny Stock Reform Act of 1990. If this occurs, additional disclosure would be required if a person wishes to make a trade in our common stock. The disclosure includes the delivery of a disclosure schedule explaining the nature and risks of the penny stock market. These requirements could severely limit the liquidity of our common stock and the ability of purchasers to sell their shares of our common stock in the secondary market.



We have neither paid nor declared any dividends on our common stock since our inception. We expect to retain all earnings, if any, generated by our operations for the development and growth of our business and do not anticipate paying any cash dividends to our shareholders in the foreseeable future. The payment of future dividends on the common stock and the rate of such dividends, if any, will be determined in light of any applicable contractual restrictions limiting our ability to pay dividends, our earnings, financial condition, capital requirements and other factors deemed relevant by our Board of Directors. Furthermore, pursuant to our Certificate of Incorporation, we are prohibited from paying any dividends on the common stock until all accumulated dividends in respect of the Series A preferred stock and Series B preferred stock have been paid. As of December 31, 2003, the accrued dividends with respect to the shares of Series A preferred stock and Series B preferred stock have all been discharged with cancellation of the preferred issuances in the Bankruptcy.



We are required to redeem the Series A preferred stock on a pro rata basis, at a price of $4.50 per share plus all accrued but unpaid dividends, out of 30% of the amount, if any, by which our annual net income after taxes in any year exceeds $5 million, as shown on our audited financial statements. Subject to the prior redemption of all of the Series A preferred stock, we are required to redeem the Series B preferred stock, on a pro rata basis, at a price of $5.00 per share plus all accrued but unpaid dividends out of 20% of the amount, if any, by which our annual net income after taxes in any year exceeds $5 million, as shown on our audited financial statements. As of December 31, 2003, 11,363 shares of Series A preferred stock and 12,834 of Series B preferred stock were outstanding.  At June30, 2004, there were no longer any preferred shares outstanding as per the Order Confirming.



On February 27, 2002, we entered into an asset purchase agreement with SciDel Technologies, Ltd., an Israeli corporation, and its subsidiary, SciDel USA Ltd (collectively, "SciDel"). On March 26, 2002, we completed the transaction, whereby Adco Imaging Ltd. ("Adco"), a newly created Israeli wholly owned subsidiary of PVI, obtained certain assets and liabilities of SciDel in exchange for the issuance of 1,288,000 shares of our common stock and warrants to purchase 670,500 shares of our common stock. In April 2002, Adco changed its name to Princeton Video Image Israel, Ltd. ("PVI Israel"). SciDel, which had been engaged in the development and marketing of a system that enables television broadcasters and the Internet to integrate advertisements into live and pre-recorded televised sports events, sold certain of its assets to us and we intend to continue to use the assets for this same purpose. PVI's primary reasons for acquiring these assets included the value of SciDel's patent portfolio, its sales relationships, including existing contracts in Europe, and the know-how of the R&D personnel we retained. The acquisition, which was a stock-for-assets transaction, was recorded using the purchase method of accounting. The total purchase price of SciDel was approximately $3.7 million and consisted of the following:



|Shares of PVI stock                                                               | 1,288,000       
|--------------------------------------------------------------------------------- | ----------------
|PVI average stock price three days before and
after the acquisition was agreed to | $           1.99
|Value of PVI stock issued for the acquisition                                     | $  2,560,176    
|Fair value of warrants issued as part of the
acquisition (670,500)                | 775,557         
|Acquisition costs                                                                 | 349,231         
|                                                                                  |                 
|Total purchase price                                                              | $  3,684,964    



The warrants issued to SciDel vest over three years and may be exercised at an initial exercise price of $9.00 per share. Our issuance of securities to SciDel in connection with this transaction was exempt from registration under the Securities Act by virtue of Section 4(2) as a transaction not involving a public offering. The securities were issued for investment only and not for purposes of distribution. A legend to such effect was affixed to the stock certificate and warrant certificate issued. SciDel received adequate information about our business.



On June 25, 2002, PVI entered into a Note Purchase and Security Agreement (the "Note Purchase Agreement") with PVI Holding, LLC ("PVI Holding"), a subsidiary of Cablevision Systems Corporation. Pursuant to the Note Purchase Agreement, PVI issued to PVI Holding a $5,000,000 secured convertible promissory note (the "Note"). The Note was amended and restated on February 18, 2003. As amended, the Note is initially convertible into common stock of PVI at $.75 per share. In the event that PVI sells any security (equity, debt or otherwise) in a qualifying transaction (a "New Financing"), the holder of the Note would have the right to convert the Note to PVI common stock at $.75 per share or into the security being issued by PVI in the New Financing, on the same terms as such security is being sold in the New Financing. Following the first New Financing, the common stock conversion price of $.75 per share is increased to $2.50 per share. In addition, the holder will have the right to convert the Note into any security issued in any New Financing that occurs while the Note is outstanding, subject to all of the terms of such New Financing. The holder of the Note is prohibited from converting the Note under any circumstances at a price below $.38 per share, the closing price of PVI's common stock on February 14, 2003. The issuance of the Note was exempt from registration under the Securities Act by virtue of Section 4(2) as a transaction not involving a public offering. The Note was issued for investment only and not for purposes of distribution. A legend to such effect was affixed to the Note issued. PVI Holding, LLC received adequate information about our business.



Pursuant to the 2003 Note Purchase Agreement, PVI issued to Presencia secured convertible notes in the amount of $1,500,000 and $500,000, on February 18, 2003 and March 20, 2003, respectively, in exchange for cash.  These notes bear interest at 10% per annum and mature on July 31, 2003 (with the holder having the right to extend the maturity date for up to two years) upon terms identical to those of the PVI Holding Amended and Restated note.  The notes are initially convertible by the holders into common stock of PVI at $.75 per share.  In the event that PVI sells any security (equity, debt or otherwise) in a qualifying action (a New Financing), the holders of the notes would have the right to convert the notes to PVI common stock at $.75 per share or into security being issued by PVI in the New Financing, on the same terms as such security is being sold in the New Financing.  Following the first New Financing, the common stock conversion price of $.75 per share is increased to $2.50 per share.  In addition, the holders will have the right to convert the notes into any security issued in any New Financing that occurs while the notes are outstanding, subject to all of the terms of such New Financing. The holders of the notes are prohibited from converting the notes under any circumstances at a price below $.38 per share, the closing price of PVIs common stock on February 14, 2003.  To secure payment of its obligations under the notes, PVI has granted Presencia a security interest in all of its assets.



On April 7, 2003, PVI sold a $650,000 secured convertible promissory note to Presencia.  This note has terms identical to those notes described in Note 5.  On the same date, in connection with the sale of this note and pursuant to the 2003 Note Purchase Agreement, PVI (a) issued to Presencia warrants to purchase 34,932 shares of common stock at an exercise price of $6.22 per share, (b) amended previously outstanding warrants to purchase 1,536,825 shares of PVI common stock held by Presencia to reduce the exercise price by 22.22% of the original exercise price and extend the expiration date by four years, and (c) issued to PVI Holding warrants to purchase 106,329 shares of common stock at an exercise price of $6.53 per share and 2,658 shares of common stock at an exercise price of $9.43 per share.  In addition, pursuant to the 2003 Note Purchase Agreement, the Stock and Warrant Purchase Agreement, dated as of February 4, 2001, by and between PVI and PVI Holding as amended by letter agreement, dated as of July 23, 2001, was further amended to reflect PVI Holdings waiver of certain of its governance rights.



ITEM 6.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



General



Overview



CERTAIN DISCUSSIONS FOLLOWING REGARDING THE MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION REFER TO THE OPERATING BUSINESS PRIOR TO BEING DISCONTINUED DUE TO PENDING BANKRUPTCY



The following discussion and analysis of our financial condition and results of discontinued operations should be read in conjunction with our consolidated financial statements, including all notes attached to these statements, which appear at the end of this filing. In addition to historical information, the discussion here and elsewhere in this filing contains some forward-looking statements. These statements by their nature involve risks and uncertainties, and should not be construed to imply any promise, certainty or likelihood that these results or trends will necessarily continue in the future. Our actual results in the future may differ significantly from those anticipated by these forward-looking statements, due to many factors including those set out in the "Risk Factors," "Business" and other sections of this filing.



Plan of Operation



On May 29, 2003, the Company filed a petition for protection under Chapter 11 of the United States Bankruptcy Code in the US Bankruptcy Court for the District of New Jersey.  This allows Princeton to continue to operate while a plan of reorganization is finalized.  Liabilities subject to the bankruptcy proceeding include approximately $121,532 of post-Petition liabilities, prior to June 2004 Bankruptcy Court accounting and approximately $13,829,564 of liabilities deferred pursuant to Chapter 11 of the Bankruptcy Code.  These totals are subject to revision through the Proof of Claim process and further proceedings of the Bankruptcy Court.



The Company is under the general supervision of the Office of the United States Trustee for the District of New Jersey.  The Trustee must approve any transactions outside the ordinary course of business.  The day to day operations of the Company are under the control of the officer of the Company as a Debtor in Possession.  Monthly operating and cash flow reports must be submitted to the U.S. Trustee.



ALL OF THE FOLLOWING DISCUSSIONS REGARDING THE FINANCIAL CONDITION AND OPERATIONS OF PRINCETON VIDEO IMAGE, INC. REFER TO OPERATIONS WHICH HAVE BEEN TRANSFERRED AND SOLD DUE TO THE BANKRUPTCY COURT ORDER AUTHORIZING THE SALE OF ALL OPERATIONAL ASSETS ON JULY 28, 2003.



Since our inception in 1990, we have devoted substantially all of our resources to developing, testing, building and marketing the L-VIS(R) System, an electronic video insertion system based on patented proprietary technology that was designed to modify broadcasts to television viewers by inserting electronic video images. We incurred substantial operating losses since our inception and as of December 31, 2003, we had an accumulated deficit of approximately $101,400,000. This deficit is the result of product development expenses incurred in the development and commercialization of the Live Video Insertion System ("L-VIS(R) System") and iPoint(TM), an advanced application of PVI's patented technology that supports state of the art in-program advertising over the Internet or interactive television, expenses related to field testing of the L-VIS(R) System and its deployment pursuant to customer contracts, operating expenses relating to our field operations and sales and marketing activities, and general administrative costs.



We derived revenue from ads sold by rights holders that use the L-VIS System, from strategic licensing of the L-VIS Systems to third parties, and from fees paid for the services provided by the L-VIS Systems which support the electronic insertion of visual aids in live sports and entertaining programming.  We incurred significant operating losses and negative cash flows in each year since we commenced operations.



As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2002, there as been substantial doubt concerning our ability to continue as a going concern.  During the first quarter of 2003, the Company reduced expenses to the maximum extent possible, including the furloughing of thirty-two employees but was not able to secure additional financing.  As a result, the Company filed for Chapter 11 bankruptcy protection on May 29, 2003.



General



The Company has no significant operations or activities from discontinued operations.  The continuation of this information will be dependent on the Companys subsequent acquisition by another operating entity and a plan of reorganization.



In conjunction with the bankruptcy adjustments during the six month period ending June 30, 2004, the Company recognized additional losses for reorganization items of $121,532 as compared to the year ending December 31, 2003 of $50,686.  Furthermore, in the six months ending June 30, 2004, the Company recognized a one-time gain in the bankruptcy restructuring of $13,892,509 mostly attributed to the liabilities subject to compromised being dismissed to the bankruptcy trust.



The losses from discontinued operations for the six months ended June 30, 2003 was $3,516,091 which by the year ended December 31, 2003 had become $(10,751,347).



Any future operations and revenues will be dependent on the merger with an operating company which was accomplished in July 2004.



LIQUIDITY AND CAPITAL RESOURCES



We have incurred significant operating losses and negative cash flows in each year since we commenced operations, due primarily to the costs of developing, testing and building systems, and operating expenses relating to our field operations and sales and marketing activities. Since our inception, we have primarily financed our operations from (i) the net proceeds from private placements of common stock, warrants and redeemable preferred stock, (ii) the payment of a $2,000,000 licensing fee by Presencia in consideration of the license we granted to Publicidad, (iii) the proceeds of a bridge loan financing which closed in October 1997, (iv) the proceeds from the initial public offering of our common stock which closed in December 1997, (v) the investment in debt and equity of PVI, and the prepayment of license fees by PVI Holding, a subsidiary of Cablevision Systems Corporation, (vi) revenues and license fees relating to use of our services, (vii) investment income earned on cash balances and short term investments, and (viii) the sale of a portion of our state net operating loss and research and development tax credits.



FINANCIAL CONDITION



All discussions regarding the financial condition and results of operations should be read in conjunction with the pending Chapter 11 proceedings.  No funds will be available for distribution to stockholders after all approved bankruptcy administration expenses are paid and distributions have been made to the Companys creditors whose claims exceeded the Companys potential resources from the sale of its operating assets.



#







GIVEN THESE UNCERTAINTIES, READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS. Other than as required by law, we disclaim any obligation to update information concerning the factors mentioned above or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments.



Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from these estimates under different assumptions or conditions. This section summarizes the critical accounting policies and the related judgments involved in their application.



Fair value of equity instruments. In accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), issuances of common stock, stock options, warrants or other equity instruments to employees and non-employees as consideration for goods or services received by us are accounted for based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more readily measurable. We estimate the fair value of options using an option-pricing model (generally, the Black-Scholes model) that meets the criteria set forth in SFAS 123 and common stock using the market value of our stock. Such fair value is measured at an appropriate date pursuant to the guidance in the consensus reached for EITF Issue No. 96-18 (generally, the earlier of the date the other party becomes committed to provide goods or services or the date the performance by the other party is complete) and capitalized or expensed as if we had paid cash for the goods or services.



Given an active trading market for our common stock, we estimate the volatility of our stock based on week ending closing prices over a historical period of not less than one year. As a result, depending on how the market perceives any news regarding us or our earnings, as well as market conditions in general, it could have a material impact on the volatility we use in computing the value we place on these equity instruments.



Valuation of deferred tax assets. We regularly evaluate our ability to recover the reported amount of our deferred income taxes considering several factors, including our estimate of the likelihood that we will generate sufficient taxable income in future years in which temporary differences reverse. Due to the uncertainties related to, among other things, the extent and timing of future taxable income, we offset our net deferred tax assets by an equivalent valuation allowance as of December 31, 2003.



Valuation of long-lived assets. We assess the recoverability of long-lived tangible and intangible assets with definitive lives whenever we determine that events or changes in circumstances indicate that their carrying amount may not be recoverable. Our assessment is primarily based upon our estimate of future cash flows associated with these assets.



Factors Affecting the Future Operations



On May 29, 2003, Princeton Video Image, Inc. filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey (the Bankruptcy Court) in order to facilitate the restructuring of the Companys debt, trade liabilities and other obligations.  The Company is currently operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable court orders.  In general, as a debtor-in-possession, the Company was authorized under Chapter 11 to continue to operate as an ongoing business, but not to engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.



On June 18, 2003, the first meeting of creditors was held pursuant to Section 341 of the Bankruptcy Code.  The Committee was formed by the United States Trustee.



Immediately after the filing of its Petition, Princeton filed, among other pleadings, a Motion (the Motion to Sell) for the entry of an order pursuant to Bankruptcy Code §§ 363(b)(f) and (m), 365(a)(f) and (k), 1146 and 105 and Bankruptcy Rules 2002, 6004, 6006 and 9014 approving, inter alia, (A) the sale of substantially all of Princetons assets and (B) the assumption and assignment of certain executory contracts and unexpired leases to PVI Virtual Media Services, LLC.  By filing the Motion to Sell, Princeton sought to move the administration of this Chapter 11 case as quickly as possible to maximize the potential distribution to creditors.



On or about July 28, 2003, after opportunity for higher and better offers and after a hearing the Bankruptcy Court approved the Motion to Sell. A closing on the sale to PVMS took place on or about August 19, 2003.  On or about October 7, 2003, Princeton filed its Plan of Liquidation and related Disclosure Statement.



On or about February 25, 2004, the Company filed its First Modified Plan of Liquidation and First Modified Disclosure Statement in support of the modified plan.  The First Modified Plan and First Modified Disclosure Statement were amended on April 1, 2004.



Pursuant to the Order Confirming and Plan, all of the property of the Companys estate vested in the Plan Trustee, free and clear of all claims, liens, encumbrances, charges or other interests, and all executory contracts and unexpired leases were rejected.  The Bankruptcy Court also placed an injunction against all entities that may have held, currently hold, or may hold a debt, claim or other liability or interest against the Company dischargeable upon confirmation of the Plan and permanently enjoined any action on account of such debt, claim liability, interest or right.  The Bankruptcy Court further terminated all claims arising or related to stock, stock options, stock plans for employees, officers and directors, warrants and convertible provisions within the debt instruments by creditors.  The Bankruptcy Court also ordered that the common stock of the Company be diluted by reverse split of issued and outstanding common shares of the Company.  Under the Order Confirming, each share of the Companys common stock issued and outstanding was reclassified as and changed into 300th of 1 share of common stock at a $0.001 par value.  The preferred shareholders took nothing under the Plan.  Under the amendment to the Certificate of Incorporation filed with the State of Delaware as per the Order Confirming and Plan, the Company is now only authorized to issue a total of 60,000,000 shares of common stock.  The Certificate of Incorporation no longer provides for any preferred shares.



Pursuant to the Plan approved by the Order Confirming First Modified Plan of Liquidation entered by the U. S. Bankruptcy Court for the District of New Jersey, the Company emerged from bankruptcy and amended its Bylaws on July 21, 2004.  As part of the Plan of Reorganization, the Company did restate its Bylaws by changing its name and did also change its fiscal year as set forth in the Bylaws to that of June 30.  Formerly, the Bylaws did provide that the Companys fiscal year was to end on December 31 of each calendar year.  Under the authority granted by the Bankruptcy Court, the Board of Directors changed the fiscal year as they believed the change to be in the best interest of the Company and will provide full disclosure and accurate information of the previous operations of the Company which have ceased and been discontinued.



Pursuant to the Order Confirming, the Bankruptcy Court approved the reorganization and, with the exception of certain debts which funded administrative expense during the reorganization, barred by injunctive relief and stay any and all rights, claims or interest which any creditors, claimants, equity security holder, or others may have had prior to the entry of the Order Confirming.



ITEM 7.

FINANCIAL STATEMENTS



The financial statements required by this item are set forth on pages 27 through 33.



ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON

ACCOUNTING AND FINANCIAL DISCLOSURE



On July 28, 2004, Gabriel Technologies Corporation (formerly known as Princeton Video Image, Inc.) (the Company) notified PricewaterhouseCoopers, LLP (PwC) that on July 26, 2004, the Board of Directors of the Company dismissed PwC as its independent accounting firm and engaged Williams and Webster of Spokane, Washington (Williams and Webster).  On May 29, 2003, the Company had petitioned for bankruptcy protection.  As the Company initially intended to liquidate (indicated by management of the Company as well as in the Companys filings and related press releases), both the Company and PwC agreed that there would be no further need for PwCs services and there was therefore no formal resignation or dismissal on May 29, 2003.  PwC has performed no services for the Company since May 29, 2003.



Except as noted in the immediately following sentence, the reports of PwC on the consolidated financial statements of the Company as of December 31, 2002 and 2001 and for the year ended December 31, 2002, the six-month period ended December 31, 2001 and the year ended June 30, 2001, contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.  Such reports contained an explanatory paragraph that expressed significant doubt about the Companys ability to continue as a going concern.



For the year ended December 31, 2002, the six-month period ended December 31, 2001, the year ended June 30, 2001, and the period from January 1, 2003 to July 26, 2004:  (i) there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of PwC would have caused them to make reference thereto in their reports on the Companys financial statements for such periods and (ii) there were no reportable events, as defined in Item 304(a)(1)(iv)(B) of Regulation S-B.



The Company has requested that PwC furnish it with a letter addressed to the SEC stating whether or not PwC agrees with the above statements.  A letter dated September 24, 2004 is filed as Exhibit 16 to the Form 8-K/A filed on September 24, 2004.



Williams and Webster were engaged as the new principal independent accountants.  The appointment of Williams and Webster was recommended and approved by the Registrants Board of Directors.  The Company adopted a year end of June 30, 2004.  During the Registrants two most recent fiscal years, and the period from January 1, 2003 to July 26, 2004, the Registrant did not consult Williams and Webster regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed or the type of audit opinion that might be rendered on Registrants financial statements, and neither written report nor oral advice was provided to the Registrant by Williams and Webster that they concluded was an important factor considered by the Registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or event identified in response to paragraph (a)(1)(iv) of Item 304, as those terms are used in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K.



PART III



ITEM 9.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL

PERSONS COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT



Executive Officers and Directors



The following table sets forth certain information regarding the members of our board of directors and our executive officers and, in the case of certain directors, in compliance with Section 14(f) of the Securities Exchange Act of 1934 and Rule 14(f)-1 promulgated by the Securities and Exchange Commission. The following officers and directors will serve in such capacities at Gabriel. The sole director listed below will serve until the next annual meeting of the Gabriel stockholders.





|Name            | Age | Position with the Company                                                     
|--------------- | --- | ------------------------------------------------------------------------------
|                |     |                                                                               
|Keith Feilmeier | 55  | President and Sole Director, Chief Executive Officer, Chief Operations Officer
|                |     |                                                                               
|Maurice Shanley | 59  | Secretary/Treasurer                                                           



The principal occupations for the past five years (and, in some instances, for prior years) of each of our directors and officers are as follows:



Keith Feilmeier, President, Sole Director, Chief Executive Officer, Chief Operations Officer



Prior to founding Gabriel Technologies, LLC, Feilmeier was one of the original founders and President of Gabriel Technologies Inc., a Delaware corporation.  Prior to his affiliation with Gabriel, Feilmeier was Director of Sales for the Midwest Region of ADT.  From 1997 to 1999 Feilmeier was Vice President of ISecureTrac.  Feilmeier was also Owner/Executive Vice President of then start-up PSI.  PSI was eventually sold to Pittney Bowes.  Prior to his PSI endeavor, Feilmeier was Owner/Executive Vice President for Electronic Media One, an outdoor advertising company.  Electronic Media One was sold to Pioneer Corporation, a Division of the Omaha World Herald and the McCarthy Group.



Maurice Shanley, Secretary/Treasurer, Chief Financial Officer



Shanley is a Certified Public Accountant with 28 years experience in a variety of business disciplines.  After several years in public accounting Shanley has worked in positions as Chief Financial Officer, Vice President Finance and as General Manager.  He received his BS Degree from the University of Nebraska at Omaha and is a member of the Nebraska Society of Certified Public Accountants and the American Institute of Certified Public Accountants.



BOARD COMPOSITION AND COMMITTEES



As a result of the Stock Exchange, Keith Feilmeier is the sole member of the Board of Directors of the Company. Consequently, the Company does not have any independent directors and the Board of Directors does not have audit, compensation or other committees.



DIRECTOR COMPENSATION



Our sole director, Keith Feilmeier, does not receive any additional salary or other compensation for serving as a director.



INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS



None of our directors or officers or their respective associates or affiliates is indebted to us.



LEGAL PROCEEDINGS



As of the date of this Current Report on Form 8-K, there is no material proceeding as to which any director, officer, affiliate or stockholder of the Company is a party adverse to the Company.



Compliance with Section 16(a) of the Securities Exchange Act of 1934.



Section 16(a) of the Exchange Act requires the Companys directors and officers and persons who beneficially own more than ten percent of the Companys common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock in the Company.  Officers, directors and greater than ten percent shareholders are required by Commission regulation to furnish the Company with copies of all Section 16(a) reports they filed.  To our knowledge, based solely on our review of the copies of reports furnished to us and written representation that no other reports were required, during the fiscal year ended December 31, 2002, these persons complied with all Section 16(a) filing requirements.  The former officers of the Company all resigned as part of the reorganization plan in June, 2004.



ITEM 10.

EXECUTIVE COMPENSATION



CERTAIN DISCUSSIONS FOLLOWING REGARDING EXECUTIVE COMPENSATION REFER TO THE OPERATING BUSINESS PRIOR TO BEING DISCONTINUED DUE TO THE PENDING BANKRUPTCY FILED ON SEPTEMBER 26, 2003.



The following table sets forth all compensation awarded or earned during the last three fiscal years by the Companys Chief Executive Officer, and the four other executive officers who were serving at the end of our last completed fiscal year (the Named Executive Officers)





#









|                                                                             |                           | Annual Compensation         
|---------------------------------------------------------------------------- | ------------------------- | ----------------------------
|                                                                             |                           |                             
|Name and Principal Position                                                  | Year (1)                  | Salary ($)                  
|                                                                             |                           |                             
|Brown Williams
Chairman of the Board and
President, Interactive Technologies | 2004
2003
2002
Transition | (1)
(1)
$ 247,917
136,406   
|                                                                             |                           |                             
|David Sitt (4)
Co-Chief Executive Officer                                    | 2004
2003
2002
Transition | (1)
(1)
$ 245,000
57,366 (5)
|                                                                             |                           |                             
|Robert Sonabend (4)
Co-Chief Executive Officer                               | 2004
2003
2002
Transition | (1)
(1)
$ 245,000
57,366 (5)
|                                                                             |                           |                             
|Howard J. Kennedy
Vice President of Convergence                              | 2003
2002
Transition      | (1)
$ 170,000
91,201        
|                                                                             |                           |                             



|Gene Dwyer
Vice President and Chief
Technology Officer    | 2004
2003
2002
Transition | (1)
(1)
$ 180,000
97,212  | ---
--- | (1)
(1)
$        50,000
---             
|--------------------------------------------------------- | ------------------------- | ------------------------- | ------- | ----------------------------------------
|                                                          |                           |                           |         |                                         
|Samuel A. McCleery
Vice President of Business
Development | 2004
2003
2002
Transition | (1)
(1)
$ 175,000
116,539 | ---
--- | (1)
(1)
$         25,000
$       100,000



------------------------------

(1)

Effective December 21, 2001, PVI changed its fiscal year end from June 30 to December 31.  Transition refers to the six-month transition period that began July 1, 2001 and ended December 31, 2001.  Years 2002, 2001 and 2000 refer to the fiscal years ended December 31, 2002 and June 30, 2001 and 2000, respectively.  Subsequently in 2003, the Company filed bankruptcy and these executives received no further compensation.

(2)

Represents the amount we contributed to the 401(k) Plan.

(3)

Includes 250,000 shares underlying outstanding options that were repriced on February 2, 2001.

(4)

Individual was appointed to serve as one of our interim co-Chief Executive Officers in November 2001.

(5)

Represents amount paid for services rendered as Corporate Vice President and Publicidad from September 2001 to December 2001, and amount earned for services rendered as one of PVIs interim co-Chief Executive Officers from November 2001 to December 2001.

(6)

Represents bonus equal to 30 days pay, of which 15 days pay was required to be paid in accordance with Mexican law.

(7)

Includes $35,328 in sales commissions paid to him, and $4,146 that we contributed to the 401(k) Plan on his behalf.

(8)

Includes $2,750 in sales commission paid to him, and $4,184 that we contributed to the 401(k) Plan on his behalf.

(9)

Includes 50,000 shares underlying outstanding options that were repriced on February 2, 2001.





ITEM 11.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT



The following table sets forth certain information regarding the beneficial ownership of Common Stock as of September 24, 2004 by: (i) each person known by the Company to own beneficially more than five percent (5%) of the outstanding shares of Common Stock; (ii) each of the Companys directors; and (iii) each of the Named Executive Officers; and (iv) all directors and Named Executive Officers of the Company as a group.  (Each person named below has an address sin care of the Companys principal executive offices.)  The Company believes that each person named below has sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by such holder, subject to community property laws where applicable.





|                |                                                                        | Percent | Number    | Note     
|--------------- | ---------------------------------------------------------------------- | ------- | --------- | ---------
|                |                                                                        |         |           |          
|Keith Feilmeier | Director, President, Chief Executive Officer, Chief Operations Officer | 18%     | 2,996,750 | 1,2,3,4,6
|                |                                                                        |         |           |          
|Maurice Shanley | Secretary/Treasurer, Chief Financial Officer                           | 1%      | 500,000   | 1,2,3    
|                |                                                                        |         |           |          
|Wayzata, LLC    | Shareholder                                                            | 11%     | 1,900,000 | 1,2,3,5  



|--------------------
(1)   On July 28, 2004, there were 10,262,339 shares of common stock of the Company outstanding. Each person named above has sole investment and voting power with respect to all shares of the common stock shown as beneficially owned by the person, except as otherwise indicated below.
(2)   Under applicable rules promulgated by the Securities and Exchange Commission (SEC)pursuant to the Securities Exchange Act of 1934, as amended (the Exchange Act), a person is deemed the beneficial owner of a security with regard to which the person, directly or indirectly, has or shares (a) the voting power, which includes the power to vote or direct the voting of the security, or (b) the investment power, which includes the power to dispose or direct the disposition of the security, in each case irrespective of the persons economic interest in the security.  Under these SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire within 60 days through (x) the exercise of any option or warrant or (y) the conversion of another security.
(3)   In determining the percent of common stock of the Company owned by a person (a) the numerator is the number of shares of common stock of the Company beneficially owned by the person, including shares the beneficial ownership of which may be acquired within 60 days upon the exercise of options or warrants or conversion of convertible securities, and (b) the denominator is the total of (i) the 10,262,339 shares of common stock of the Company outstanding on July 28, 2004, and (ii) any shares of common stock of the Company which the person has the right to acquire within 60 days upon the exercise of options or warrants or conversion of convertible securities.  Neither the numerator nor the denominator include shares which may be issued upon the exercise of any other options or warrants or the conversion of any other convertible securities.
(4)   Includes 2,996,750 shares owned by Judith Feilmeier, 20740 Timber Land Drive, Omaha, Nebraska, wife of Keith Feilmeier.
(5)   Includes 1,900,000 shares of Wayzata LLC, 30 Widewater Road, Hilton Head Island, South Carolina, all of which is beneficially owned by Jerry Suess.
(6)   Judith Feilmeier is the wife of Keith Feilmeier.  She is the owner of the shares and by attrition Keith Feilmeier is denoted as the beneficial owner.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Not applicable.



ITEM 13.

EXHIBITS AND REPORTS ON FORM 8-K



(a)

Exhibits



Exhibit

Number

Description



(2)

First Modified Plan of Liquidation of Princeton Video Image, Inc. (1)

(2)

Agreement and Plan of Reorganization between Gabriel Technologies Corporation and Gabriel Technologies, LLC.(3)



(3)(ii)

Bylaws (1)



3(i)

Certificate of Incorporation(5)



3(i)(a)

Certificate of Amendment dated July 20, 2004, implementing the reverse merger pursuant to the Bankruptcy Court Order Confirming First Modified Plan of Liquidation and filed with the Secretary of State of the State of Delaware on the 23rd day of July, 2004.(2)



3(i)(b)

Certificate of Amendment dated July 21, 2004, changing the Companys name to Gabriel Technologies Corporation and filed with the Secretary of State of the State of Delaware on the 23rd day of July, 2004.(2)



16

Letter dated September 24, 2004, from PricewaterhouseCoopers, LLP, stating the accountant agrees with the statements made in this Form 8-K/A.(4)



31.1

Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



________________

(1)

Incorporated by reference to Form 8K/A filed on the 1st day of December, 2004.

(2)

Incorporated by reference to Form 8K filed on the 27th day of July, 2004.

(3)

Incorporated by reference to Form 8K filed on the 30th day of July, 2004.

(4)

Incorporated by reference to Form 8K/A filed on the 24th day of September, 2004.

(5)

Incorporated by reference to Form 8K filed on the 17th day of September, 2001.



(b)

Reports on Form 8-K



Registrants Form 8-K filed February 9, 2004

Registrants Form 8-K filed July 27, 2004

Registrants Form 8-K filed July 30, 2004

Registrants Form 8-K/A filed September 10, 2004

Registrants Form 8-K/A filed September 24, 2004





ITEM 14.

CONTROLS AND PROCEDURES



Due to the pending bankruptcy of the Company, we are operating and controlled by the Reorganization Plan approved by the Bankruptcy Court.  Prior to the filing of the Bankruptcy, we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) that is required to be included in our periodic SEC reports.  There have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date we carried out this evaluation.



There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation described in the preceding paragraph as the Bankruptcy is still pending.





* * * * *



#







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.



GABRIEL TECHNOLOGIES CORPORATION

Registrant



Date: December 13, 2004

By:

/s/   Keith R. Feilmeier

Keith R. Feilmeier, Chief Executive Officer,

President, Director and Principal Executive

Officer



By:

/s/   Maurice Shanley

Maurice Shanley, Chief Financial Officer and

Executive Vice President

(Principal Financial and Accounting 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.



Signature                                                      Title                                           Date





/s/   Keith R. Feilmeier

Keith R. Feilmeier

Chief Executive Officer                   December 13, 2004

President, Director and

Principal Executive Officer





/s/   Maurice Shanley

Maurice Shanley

Chief Financial Officer                   December 13, 2004

Executive Vice President

(Principal Financial and

Accounting Officer)



#







Gabriel Technologies Corporation

(fka Princeton Video Image, Inc.)

Omaha, Nebraska



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







We have audited the accompanying balance sheets of Gabriel Technologies Corporation (fka Princeton Video Image, Inc.)(a Delaware Corporation) as of June 30, 2004 and December 31, 2003, and the related statements of operations and other comprehensive income, stockholders equity and cash flows for the periods 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 audit.



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



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Gabriel Technologies Corporation (fka Princeton Video Image, Inc.) as of June 30, 2004 and December 31, 2003 and the results of its operations, stockholders equity and its cash flows for the periods 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 described in Note 1, in May 2003, the Company filed a voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy Code and was authorized to continue managing and operating the business as a debtor in possession subject to the control and supervision of the Bankruptcy Court and subsequent sale of all discontinued operations.  The Company is emerging from the bankruptcy without any continuing operations and will combine with another operating company.  These conditions raise substantial doubt about the Companys ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





Williams & Webster, P.S.

Certified Public Accountants

Spokane, Washington

December 10, 2004

#









|GABRIEL TECHNOLOGIES CORPORATION                            
|------------------------------------------------------------
|(fka PRINCETON VIDEO, INC)
BALANCE SHEETS                   
|                                                            
|                                                            
|                                                            
|                                                            
|ASSETS                                                      
|                                                            
|Current Assets:                                             
|                                                            
|                                                            
|                                                            
|Net assets from discontinued operations                     
|                                                            
|                                                            
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)               
|                                                            
|Liabilities not subject to compromise:                      
|Convertible note payable                                    
|                                                            
|                                                            
|Liabilities subject to compromise                           
|                                                            
|                                                            
|                                                            
|                                                            
|Net liabilities of discontinued operations                  
|                                                            
|                                                            
|Preferred stock, $4.50 par value, 11,363 shares             
|                                                            
|Preferred stock, $5.00 par value, 12,834 shares             
|                                                            
|Common stock, $0.001 par value, 60,000,000 shares authorized
|                                                            
|Additional paid-in capital                                  
|Other compresentative income                                
|Accumulated deficit                                         
|                                                            
|                                                            
|                                                            
|                                                            



#









|GABRIEL TECHNOLOGIES CORPORATION
(fka PRINCETON VIDEO, INC)         
|--------------------------------------------------------------------
|STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME             
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Revenues, net                                                       
|                                                                    
|Total cost of revenue                                               
|                                                                    
|Gross profit                                                        
|                                                                    
|Operating expenses                                                  
|                                                                    
|Net loss from continuing operations before reorganization items     
|                                                                    
|                                                                    
|Income taxes                                                        
|                                                                    
|Reorganization items                                                
|                                                                    
|Gain (loss) from discontinued operations and bankruptcy             
|                                                                    
|                                                                    
|Net gain (loss)                                                     
|                                                                    
|Accretion of preferred stock dividends                              
|                                                                    
|Net loss available to common stockholders                           
|                                                                    
|Other comprehensive income (loss)                                   
|                                                                    
|                                                                    
|Comprehensive income (loss)                                         
|                                                                    
|Basic and diluted net loss per common share, discontinued operations
|                                                                    
|Weighted average shares outstanding                                 
|                                                                    





#









|GABRIEL TECHNOLOGIES CORPORATION                      |                                                                       |             
|----------------------------------------------------- | --------------------------------------------------------------------- | ------------
|(fka PRINCETON VIDEO, INC)                            |                                                                       |             
|STATEMENT OF CASH FLOWS                               |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|Cash flows from operating activities:                 |                                                                       |             
|Net income                                            |                                                                       |             
|Net gain from discontinued operations                 |                                                                       | (13,892,509)
|                                                      |                                                                       |             
|Adjustments to reconcile net loss to net cash used in |                                                                       |             
|Operating activities:                                 |                                                                       |             
|                                                      | Liabilities not subject to compromise transferred to bankruptcy trust |             
|                                                      | Increase in liabilities not subject to compromise                     |             
|                                                      | Net cash used by discontinued operations                              |             
|Net cash used in operating activities                 |                                                                       | -           
|                                                      |                                                                       |             
|Cash flows from investing activities:                 |                                                                       |             
|Net cash provided by investing activities             |                                                                       | -           
|                                                      |                                                                       |             
|Cash flows from financing activities:                 |                                                                       |             
|Net cash provided by financing activities             |                                                                       | -           
|                                                      |                                                                       |             
|Net increase (decrease) in cash and cash equivalents  |                                                                       | -           
|Foreign exchange impact on cash                       |                                                                       |             
|                                                      |                                                                       |             
|Cash and cash equivalents at beginning of period      |                                                                       | -           
|                                                      |                                                                       |             
|Cash and cash equivalents at the end of the period    | $                                                                     | -           
|                                                      |                                                                       |             
|Supplemental cash flow disclosures                    |                                                                       |             
|                                                      | Interest paid                                                         |             
|                                                      | Income taxes paid                                                     |             
|                                                      |                                                                       |             



#



|GABRIEL TECHNOLOGIES CORPORATION                 
|-------------------------------------------------
|(fka PRINCETON VIDEO IMAGE, INC.)                
|STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|Balance, December 31, 2002                       
|                                                 
|Miscellaneous and reverse stock split adjustments
|                                                 
|Accretation of preferred stock dividends         
|                                                 
|Foreign currency translation adjustments         
|                                                 
|Net loss for the year ended December 31, 2003    
|                                                 
|Balance, December 31, 2003                       
|                                                 
|Net income for the six months ended June 30, 2004
|                                                 
|Net change in other comprehensive income         
|                                                 
|Restructuring under banruptcy:                   
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|Balance, June 30, 2004                           
|                                                 



#





|GABRIEL TECHNOLOGIES CORPORATION                      |                                                                       |             
|----------------------------------------------------- | --------------------------------------------------------------------- | ------------
|(fka PRINCETON VIDEO, INC)                            |                                                                       |             
|STATEMENT OF CASH FLOWS                               |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|                                                      |                                                                       |             
|Cash flows from operating activities:                 |                                                                       |             
|Net income                                            |                                                                       |             
|Net gain from discontinued operations                 |                                                                       | (13,892,509)
|                                                      |                                                                       |             
|Adjustments to reconcile net loss to net cash used in |                                                                       |             
|Operating activities:                                 |                                                                       |             
|                                                      | Liabilities not subject to compromise transferred to bankruptcy trust |             
|                                                      | Increase in liabilities not subject to compromise                     |             
|                                                      | Net cash used by discontinued operations                              |             
|Net cash used in operating activities                 |                                                                       | -           
|                                                      |                                                                       |             
|Cash flows from investing activities:                 |                                                                       |             
|Net cash provided by investing activities             |                                                                       | -           
|                                                      |                                                                       |             
|Cash flows from financing activities:                 |                                                                       |             
|Net cash provided by financing activities             |                                                                       | -           
|                                                      |                                                                       |             
|Net increase (decrease) in cash and cash equivalents  |                                                                       | -           
|Foreign exchange impact on cash                       |                                                                       |             
|                                                      |                                                                       |             
|Cash and cash equivalents at beginning of period      |                                                                       | -           
|                                                      |                                                                       |             
|Cash and cash equivalents at the end of the period    | $                                                                     | -           
|                                                      |                                                                       |             
|Supplemental cash flow disclosures                    |                                                                       |             
|                                                      | Interest paid                                                         |             
|                                                      | Income taxes paid                                                     |             
|                                                      |                                                                       |             



#





GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004





NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS



Historically, Princeton Video Image, Inc. (PVI) operated as a developer of virtual image technology that enables the insertion of computer-generated images into live or pre-recorded video broadcasts.



The Company filed for Chapter 11 protection under the U.S. Bankruptcy Code on May 29, 2003. (See Note 3)  During August, 2003, the Company sold all of its operating assets and subsequent to December 31, 2003, the Companys control group was changed by a court approved reorganization. (See Note 10)



On July 28, 2004, the Registrant was acquired as part of a reverse merger and recapitalization by Gabriel Technologies, LLC.



Gabriel Technologies, LLC (the Company), a Nebraska limited liability corporation was formed on April 1, 2003. The Company designs, develops, produces, markets and supports a proprietary series of advanced locking systems under the WAR-LOK name.  These locking devices are primarily used for securing shipping containers used by railroads and the trucking industry. The Company sells the WAR-LOK Series products through a direct sales force and qualified distributors in specific vertical industries. The Company originally had a year ended December 31 and has adopted a June 30 fiscal year end in 2004. In July 2004, the Company acquired Gabriel Technologies Corporation (fka Princeton Video Image, Inc.) as part of a recapitalization and reverse merger. The continuing accounting reporting entity is that of the prior Gabriel Technologies, LLCs activities. Certain comparisons, prior period equity and prior period activities, have been converted to represent the current capital structure.



Effective August 16, 2004, Princeton changed its name to Gabriel Technologies Corporation.



In June 2004, the Gabriel Technologies, LLC acquired all the issued and outstanding units of FRK, LLC.  FRK is a wholly owned subsidiary at June 30, 2004.  See note 8.



Going Concern

As more fully described in Note 3, Princeton Video Image, Inc. filed Bankruptcy in May 2003.  The Company originally operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court, but was subsequently converted to a Chapter 11 liquidation with the corporate entity emerging from the bankruptcy in June 2004.  Princeton has no continuing operation as of June 30, 2003.  In July 2003, the operating company Gabriel LLC was merged into this corporate entity.  The Company can not continue as a going concern until the Gabriel LLC acquisition was completed.



NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



This summary of significant accounting policies is presented to assist in understanding the Companys financial statements.  The financial statements and notes are representations of the Companys management, which is responsible for their integrity and objectivity.  These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



Accounting Method

The Companys financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.



Recent Accounting Pronouncement

In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (hereinafter SFAS No. 150).  SFAS No. 150 establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity and requires that those instruments be classified as liabilities in statements of financial position.  Previously, many of those instruments were classified as equity.  SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003.  The adoption of SFAS No. 150 is not expected to have an impact on the financial position or results of operations of the Company.



In April 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 149, Amendment of Statement 133 on Derivative instruments and Hedging Activities: (hereinafter SFAS No. 149).  SFAS No. 149 amends and clarifies the accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.  This statement is effective for contracts entered into or modified after December 31, 2003 and for hedging relationships designated after December 31, 2003.  The adoption of SFAS No. 149 is not expected to have an impact on the financial position or results of operations of the Company.



In December 2002, the Financial Accounting Standards Board issued Statement No. 148 (hereinafter SFAS No. 148) on Accounting for Stock-Based CompensationTransition and Disclosure. This statement provides alternative methods of transition for companies that choose to switch to the fair value method of accounting for stock options.  SFAS No. 148 also makes changes in the disclosure requirements for stock-based compensation, regardless of which method of accounting is chosen. Under the new standard, companies must report certain types of information more prominently and in a more understandable format in the footnotes to the financial statements, and this information must be included in interim as well as annual financial statements.  Historically, the Company has recorded stock based compensation and therefore there are no disclosure requirements of SFAS No. 148 in these financial statements.



In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146 Accounting for Costs Associated with Exit or Disposal Activities (SFAS No. 146).  SFAS No. 146 addresses significant issues regarding the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities.  SFAS No. 146 also addresses recognition of certain costs related to terminating a contract that is not a capital lease, costs to consolidate facilities or relocate employees, and termination benefits provided to employees that are involuntarily terminated under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract.  All costs associated

#



GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



with the disposition of assets in the bankruptcy are included in net assets of discontinued operations and/or net loss from discontinued operations.



Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents.



Accounts Receivable

The Company carries its accounts receivable at net realizable value.  On a periodic basis, the Company evaluates its accounts receivable and considers the need for an allowance for doubtful accounts, based on Company past and expected collections, and current credit conditions.



The Companys recorded no bad debt expense for the years ended December 31, 2003 and 2002.



Cost of Goods Sold

Cost of goods sold consists primarily of the raw materials, labor and overhead of products sold, inbound and outbound shipping charges, and packaging supplies.

Derivative Instruments

The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (hereinafter SFAS No. 133), as amended by SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities  Deferral of the Effective Date of FASB No. 133, and SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, and SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities.  These statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.



If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.



At December 31, 2003 and 2002, the Company has not engaged in any transactions that would be considered derivative instruments or hedging activities.



Earnings (Loss) Per Share

The Company has adopted Statement of Financial Accounting Standards (SFAS) No. 128, which provides for calculation of "basic" and "diluted" earnings (loss) per share.  Basic loss per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period.  Diluted earnings (loss) per share amounts have not been presented in the accompanying consolidated statements of operations because the

GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



Company had net losses for both years and, accordingly, the assumed effects of the exercise of outstanding options and warrants and the application of the treasury stock method, the assumed effects of the conversion of outstanding convertible debentures, including any related adjustments to interest expense, and the assumed effects of the conversion of shares of preferred stock would have been anti-dilutive.



Fair Value of Financial Instruments

The Company's financial instruments as defined by Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," include net assets from discontinued operations, creditors holding secured claims, creditors holding unsecured priority claims, and creditors holding unsecured non-priority claims.  All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at December 31, 2003 and 2002.



Stock Options and Warrants:

In accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), the Company will only recognize compensation costs as a result of the issuance of stock options and warrants to employees based on the excess, if any, of the fair value of the underlying stock at the date of grant (or at an appropriate subsequent measurement date) over the amount the employee must pay to acquire the stock. Therefore, the Company will not be required to recognize compensation expense as a result of any grants of stock options and warrants to employees at an exercise price that is equal to or greater than fair value. The Company will also make pro forma disclosures, in accordance with the provisions of Statement of Financial Accounting Standards No. 123, "Accounting For Stock-Based Compensation" ("SFAS 123"), of net income or loss as if a fair value based method of accounting for stock options and warrants had been applied.



In accordance with SFAS 123, the Company will recognize the cost of preferred or common shares, options, warrants and other equity instruments issued to non-employees as consideration for services as expense over the periods in which the related services are rendered by a charge to compensation cost or another appropriate expense or prepaid expense account and a corresponding credit to additional paid-in capital. Generally, cost will be determined based on the fair value of the equity instruments at the date of issuance. The fair value of shares, options, warrants and similar equity instruments were estimated based on the minimum value method prior to the Exchange and the Black-Scholes option pricing method after the Exchange (which are methods that meet the criteria set forth in SFAS 123) based on the assumption that all of the options or other equity instruments will ultimately vest. The effect of actual forfeitures will be recognized as they occur.



Stock Split

On June 10, 2004, the Bankruptcy Court ordered that the common stock of the Company be diluted by reverse split of issued and outstanding common shares of the Company.  Under the Order Confirming, each share of the Companys common stock issued and outstanding was reclassified as and changed into 300th of 1 share of common stock at a $0.001 par value.  All share, per share, authorized, common stock, and additional paid-in capital amounts have been restated for all periods presented to reflect the reverse stock split.

#



GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004

Income Taxes

The Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes.  This statement requires the recognition of deferred tax liabilities and assets for the future consequences of events that have been recognized in the Companys consolidated financial statement or tax returns.  Measurement of the deferred items is based on enacted tax laws. In the event that future consequences of differences between financial reporting bases and tax bases of the Companys assets and liabilities results in a deferred tax asset, SFAS No. 109 requires an evaluation of the probability of being able to realize the future benefits indicated by such an asset. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion or all of the deferred tax asset will not be realized.  (See Note 5.)

Long-lived Assets

Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, establishes a single accounting model for long-lived assets to be disposed of by sale, including discontinued operations, and requires that these long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or discontinued operations.  Accordingly, the Company reviews the carrying amount of long-lived assets for impairment where events or changes in circumstances indicate that the carrying amount may not be recoverable.  The determination of any impairment would include a comparison of estimated future cash flows anticipated to be generated during the remaining life of the assets to the net carrying value of the assets.  All costs associated with the disposition of assets in the bankruptcy are included in net assets of discontinued operations and/or net loss from discontinued operations.



Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.  All significant transactions and balances among the companies included in the consolidated financial statements have been eliminated.



Reclassification

Certain amounts from prior periods have been reclassified to conform to the current period presentation.  This reclassification has resulted in no changes to the Companys accumulated deficit or net losses presented, and only had the effect of disclosing discontinued operations or the bankruptcy of the Company in the financial statements for 2003.

Use of Estimates

The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses.  Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements.  Accordingly, upon settlement, actual results may differ from estimated amounts.



Voluntary Bankruptcy

On May 29, 2003, the Company and filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey (the

GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



Bankruptcy Court) in order to facilitate the restructuring of the Companys debt, trade liabilities and other obligations (See Note 3).



Revenue Recognition

Products are shipped FOB shipping point and title passes upon shipment.  The Company recognizes revenue from sales when there is persuasive evidence that an arrangement exists, services have been rendered, the sellers price to the buyer is determinable, and collectibility is reasonably assured.  The operations for 2003 and 2002, and their revenue recognition will be different from any further operations may be.





NOTE 3  PETITION FOR RELIEF UNDER CHAPTER 11



On May 29, 2003, Princeton Video Image, Inc. filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey (the Bankruptcy Court) in order to facilitate the restructuring of PVIs debt, trade liabilities and other obligations.  The Company was currently operating as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable court orders.  In general, as a debtor-in-possession, the Company is authorized under Chapter 11 to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.



Under Section 362 of the Bankruptcy code, the filing of a bankruptcy petition automatically stays most actions against a company, including most actions to collect pre-petition indebtedness or to exercise control of the property of a companys estate.  Absent an order of the Bankruptcy Court, substantially all pre-petition liabilities will be addressed under a plan of reorganization.



Under Section 365 of the Bankruptcy Code, a company may assume or reject certain pre-petition executory contracts and unexpired leases, including leases of real property, subject to the approval of the Bankruptcy court and certain other conditions.  In general, rejection of an unexpired lease or executory contract is treated as a pre-petition breach of the lease or contract.  Counterparties to these rejected contracts or leases may file proofs of claim against a companys estate for damages relating to such breaches.  A company cannot presently determine with certainty the ultimate aggregate liability which will result from the filing of claims relating to such contracts that have been or may be rejected.



The United States Trustee for the District of New Jersey has appointed an official committee of unsecured creditors (the Creditors Committee).  The Creditors committee and its legal representatives have a right to be heard on all matters that come before the Bankruptcy Court.  The rights and claims of various creditors and security holders will be determined by a plan of reorganization that is confirmed by the Bankruptcy Court.  Under the priority rules established by the Bankruptcy  Code, certain post-petition liabilities and certain pre-petition liabilities (i.e. senior secured debt) are given priority over unsecured pre-petition indebtedness and need to be satisfied before unsecured creditors or stockholders are entitled to any distribution.



GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



In order to exit from Chapter 11 successfully, a company will need to propose and obtain confirmation by the Bankruptcy Court of a plan of reorganization that satisfies the requirements of the Bankruptcy Code.  At this time, it is not possible to know the effect of the Chapter 11 reorganization process on a companys business, creditors or stockholders or when a company may emerge from Chapter 11.  A companys future results depend on the timely and successful confirmation and implementation of a plan of reorganization.



PVI substantially consummated the sale of its primary assets by way of a sales transaction.  On July 28, 2003, the Court authorized to sell substantially all of its assets, which primarily consisted of mortgage origination software and other related intellectual property to PVI Virtual Media Services, LLC.



On February 25, 2004, PVI filed its First Modified Plan of Liquidation and its First Modified Disclosure Statement in support of the Modified Plan.  On March 3, 2004, the Bankruptcy Court pre-empted the Company, as Debtor-in-Possession, the authority to execute a convertible promissory note, pursuant to U.S.C. §§105, 361, 362 and 364, and Bankruptcy Rule 4001, which authorized the Debtor to obtain incur post-Petition financing.  The funds received under the Convertible Promissory Note were for the payment of administrative expenses in the amount of $37,500.  The Note is convertible into a total of 500,000 common shares and 5,500,000 warrants issued pursuant to Section 1145 of the Bankruptcy Code and exempt from the registration requirements of Section 5 of the Securities Act of 1933 and any state or local law requiring registration for an offer or sale of a security.



On or about April 1, 2004, the Debtor filed its Second Modified Disclosure Statement in Support of the Modified Plan and on April 12, 2004 the Bankruptcy Court approved the Second Modified Disclosure Statement.  The Company served the Second Modified Disclosure Statement and Modified Plan in accordance with that certain Order Approving the Second Modified Disclosure Statement.  A hearing was set by the Court for June 10, 2004, to consider confirmation of the First Modified Plan.  The Court did subsequently approve the First Modified Plan and entered a written Order on June 15, 2004.  The Order provided that the property dealt with by the Plan shall be free and clear of all liens, claims, encumbrances and interest, with valid liens, claims, encumbrances and interest to attach to the proceeds of sale as set forth in the Plan herein referred to as a Liquidating Trust,



Pursuant to the Plan, as confirmed by the Bankruptcy Court, all prior operational assets were to be liquidated and the proceeds paid per the approved claim schedule to creditors and for the administration of the estate.  The Bankruptcy Court also placed an injunction against all entities that may have held, currently hold, or may hold a debt, claim or other liability or interest against the Company dischargeable upon confirmation of the Plan and permanently enjoined any action on account of such debt, claim, liability, interest or right.  The Bankruptcy Court terminated the duties and positions of the then current directors and officers and appointed David Lennox as the sole director, president, secretary/treasurer until a successor was appointed and qualified.  Under the Plan, $37,500 was placed into the Liquidating Trust for the purchase of 6,000,000 shares of common stock, nondilutable.  The Plan also provided for the conversion of the Promissory Note pursuant to Section 1145(a) of the United States Bankruptcy Code into shares and warrants exempt from the registration requirements of Section 5 of the Securities Act of 1933 and any state or local law requiring registration for an offer or sale of a security.



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GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



The Bankruptcy Court further terminated all claims arising or related to stock, stock options, stock plans for employees, officers and directors, warrants and convertible provisions within the debt instruments by creditors  The Bankruptcy Court also ordered that the common stock of the Company be diluted by reverse split of issued and outstanding common shares of the Company.  Under the Order Confirming, each share of the Companys common stock issued and outstanding was reclassified as and changed into 300th of 1 share of common stock at a $0.001 par value.  The preferred shareholders took nothing under the Plan.  Under the Amendment to the Certificate of Incorporation filed with the State of Delaware as per the Order Confirming and Plan, the Company is now only authorized to issue a total of 60,000,000 shares of common stock.  The Certificate of Incorporation no longer provides for any preferred shares.



Under the provisions of the reverse split ordered by the Bankruptcy Court, any pre-split certificates shall represent only the right to receive post-split certificates and all fractional shares post-split shall be rounded up to the next whole number.  Any common stock certificate holder having a post-split aggregate number of shares of less than 10 shares will no longer be listed as a shareholder by the Companys Transfer Agent and shall not be entitled to a new post-split certificate, but instead shall receive $0.05 per share post-split within 30 days upon surrender of a pre-split certificate to the Companys transfer agent.  As a result of the Bankruptcy, American Stock Transfer & Trust Company terminated its services as the Companys transfer agent.  Colonial Stock Transfer Company of Salt Lake City, Utah, was retained by the Board and is now the Companys new transfer agent.



Accounting Impact

These audited consolidated financials statements have been prepared in accordance with the provisions of the American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (SOP 90-7).  Pursuant to SOP 90-7, the Companys pre-petition liabilities that are subject to compromise are reported separately on the balance sheet as an estimate of the amount that will ultimately be allowed by the Bankruptcy Court.  As of December 31, 2003, the reorganization liabilities not subject to compromise were $50,686.



The following table sets forth the liabilities of the Company subject to compromise as of December 31, 2003:





Creditors holding secured claims

$   8,165,866

Creditors holding unsecured nonpriority claims

5,663,698

Total liabilities subject to compromise

$  13,829,564



Pursuant to SOP 90-7, an objective of financial statements issued by an entity in Chapter 11 is to reflect its financial evolution during the proceeding.  For that purpose, the financial statements for periods including and subsequent to filing the Chapter 11 petition should distinguish transaction and events that are directly associated with the reorganization from the ongoing operations of the business.  Certain expenses not directly related to ongoing operations are reflected separately in the consolidated statement of operations as reorganization items.  (See Note 7.)





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GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



NOTE 4  INCOME TAXES



For the six months ended June 30, 2004, the Company recognized a gain on discontinued operations of $13,892,509, arising from the bankruptcy relief received concerning the prior liabilities subject to compromise of approximately $13,800,000 and the settlement of agreements with certain investors which advanced operating funds to the Company.  The Company issued 200,000 shares of common stock and affirmed a continuing convertible note payable of $37,500.  The convertible note payable pays interest at 6% per annum and has conversion rights to convert into 6,000,000 shares of common stock.  In negotiations after June 30, 2004, the continuing company agreed to convert this loan into 500,000 shares of common stock and 5,500,000 warrants exercisable at $25 for up to 10 years.  The Company will have to leave an accumulated deficit of $37,763 until a recapitalization is completed.  This allows for the $263 in common stock and the convertible note for $37,500 to be transferred in the recapitalization.



Income taxes are provided based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes.  Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end.  A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the more likely than not standard imposed by SFAS No. 109 to allow recognition of such an asset.



Deferred tax liabilities were $1,218,771 as of December 31, 2002.  With the filing of the bankruptcy petition in 2003, substantially all tax attributes were expected to be eliminated in the liquidation and sale of the Companys assets.  No further adjustments have been made for any additional income tax accruals on adjustments.  Either through the bankruptcy or the resultant control change, all net operating losses will be severely limited to any future control group.





NOTE 5  STOCK OPTIONS AND WARRANTS



The following discussion is applicable to the periods prior to the bankruptcy filing.  All of the outstanding stock options, warrants or rights are expected to be terminated by the rulings of the Bankruptcy Court.



The Company has elected to continue to use the provisions of APB 25 in accounting for stock options and warrants granted to employees. During 2002, the exercise price of options granted to employees was equal to or greater than the fair market value of the stock at the date of grant and, accordingly, no earned or unearned compensation cost was recognized for options granted to employees. The Company recognized compensation cost of $243,000 as a result of the issuance of warrants to purchase 1,314 shares to officers in 2002. During 2001, the Company granted options to purchase 978 shares to employees. The exercise price of options granted was $41 per share and the fair market value per share of common stock was $140 per share. Accordingly, a charge of $99 per share, or an aggregate charge of $803,910, was initially recorded as unearned compensation with an offsetting credit to additional paid-in capital. During 2002, options to purchase 1,152 shares of common stock were cancelled and, accordingly, the Company reduced unearned compensation related to those options by $118,110. The unearned compensation is being amortized over the respective vesting periods of the options of three to four years. During 2002, the Company amortized $157,321 of unearned compensation. The remaining balance of unearned compensation of $329,028 as of

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GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



December 31, 2003 and 2002, respectively, has been reflected as a reduction of stockholders' equity (deficit).



The fair value of each option granted was estimated as of the date of grant using the Black Scholes option pricing model in 2002 and the minimum value method in 2001 in accordance with SFAS 123.



|Expected volatility                     | 83.5% - 108%
|--------------------------------------- | ------------
|Risk free interest rate                 | 4%          
|Expected years of options/warrant lives | 3-5 years   
|Expected dividends                      | 0%          



Issuance of options and warrants to employees:

During 2002, the Company issued warrants to purchase 1,314 shares of the Company's common stock to two of its officers as additional compensation. The warrants have an exercise price of $164 per share and expire on September 30, 2007. The fair value of the warrants on the date of issuance was, effectively, $353 per share.  In accordance with the provisions of APB 25, the Company recognized compensation cost of $243,000 as a result of the issuance of these warrants based on the excess of the fair value of the underlying stock at the date of grant over the amount the employee must pay to acquire the stock.



In addition, the Company has a stock option plan (the "Option Plan") which provides for the issuance of incentive stock options to employees and consultants of the Company for the purchase of common stock. The term of each option, including the vesting provisions and the manner of exercise, is determined by the Board of Directors. Options granted to employees and consultants have a maximum of ten years from the date of grant to exercise their options. As of December 31, 2002, the Company had 22,103 shares reserved for issuance under the Option Plan.



NOTE 6  DISCONTINUED OPERATIONS



During the year ended December 31, 2003, PVI elected to fully dispose of its prior operations and the resulting net loss associated with discontinued operations of $10,802,033 for the year then ended and restated losses for the year ended December 31, 2002 of $21,207,709.  The following is the creditors subject to compromise as of December 31, 2003.



|                                               |                                         |   |           |           
|---------------------------------------------- | --------------------------------------- | - | --------- | ----------
|Creditors holding secured claims               |                                         | $ | 8,165,866
|Creditors holding unsecured nonpriority claims |                                         |   | 5,663,698
|                                               | Total liabilities subject to compromise |   | $         | 13,829,564
|                                               |                                         |   |           |           



In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146, Accounting for Costs Associated with Exit or Disposal Activities (hereinafter SFAS No. 146). SFAS No. 146 addresses significant issues regarding the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities.

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GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



SFAS No. 146 also addresses recognition of certain costs related to terminating a contract that is not a capital lease, costs to consolidate facilities or relocate employees, and termination benefits provided to employees that are involuntarily terminated under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS No. 146 was issued in June 2002, effective December 31, 2002.  All costs associated with the disposition of assets in the bankruptcy are included in net assets of discontinued operations and/or net loss from discontinued operations.



The total liabilities subject to compromise of $13,829,564 was relieved by the Bankruptcy Court resulting in the recognition of $13,892,509 in gain from the release of all liabilities either subject to compromise or not subject to compromise.  Under the orders of the Bankruptcy Court, all of the remaining liabilities, other than the unconverted note payable of $37,000 were discharged.





NOTE 7  REORGANIZATION ITEMS



Pursuant to SOP 90-7, the Company is required to segregate certain expenses, realized gains and losses and provisions for losses not directly related to ongoing operations as reorganization items in the condensed consolidated statements of operations.  The following reorganization items were incurred during the period ended December 31, 2003:



December 31, 2003

Court Costs and legal fees

$50,686





NOTE 8 - STOCKHOLDERS EQUITY



Restricted stock:

All transactions involving issuances by the Company of shares of the Company's common stock and other securities during June 30, 2003 and December 31, 2002, respectively, involved unregistered shares of common stock and securities. Accordingly, trading of such securities is restricted pursuant to Rule 144 of the Securities Act of 1933.



On January 3, 2002, Gabriel Technologies Corporation (fka Princeton Video Image, Inc.) completed a share exchange transaction (the Exchange Transaction) with EliteAgents, Inc. (EliteAgents), whereby Gabriel Technologies Corporation (fka Princeton Video Image, Inc.) issued shares of its common stock to the shareholders of EliteAgents in exchange for all of the issued and outstanding ownership interests in EliteAgents.  EliteAgents was originally incorporated in New Jersey in 1999 under the name MortgageBANC, Inc. as a New Jersey correspondent mortgage banker.  The name was changed to QuickFinance, Inc. and then to EliteAgents, Inc. in March 2000.  Following the Exchange Transaction, EliteAgents, Inc. amended its Articles of Incorporation to change its name to EliteAgents Mortgage Services Inc. in February, 2002.  As a result of the Exchange Transaction, EliteAgents became a wholly owned subsidiary of Gabriel Technologies Corporation (fka Princeton Video Image, Inc.) for legal purposes and the continuing operating entity for accounting purposes.  All references in the

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GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



accompanying financial statements and notes to the common shares and per share amounts have been restated to reflect the reverse stock split.



Sales, issuances and cancellations of common stock:

In connection with the sale of common stock in 2000, the Company received a stock subscription receivable of $101,675. As of December 31, 2002, the stock subscription receivable had not been satisfied and, accordingly, it was cancelled and reversed against additional paid-in capital in 2002. Certain of the purchasers of shares of common stock in 2000 received warrants to purchase 3,841 shares of the Company's common stock at exercise prices ranging from $353 to $403 per share.  All of these warrants expired on December 31, 2002. During 2001, the Company issued warrants to purchase 310 shares of its common stock in exchange for services in connection with the sale of common stock in 2000. The warrants, which have an exercise price of $140 per share and expire on December 10, 2006, remained outstanding at December 31, 2002 and June 30, 2003.



During 2002, the Company sold 21,000 units at a cost of $10 per unit and received proceeds of $210,000. Each unit consisted of 1/16 of one share of the Company's common stock, a warrant exercisable for up to 1/32 of one share of the Company's common stock at an exercise price of $329 per share (the "Class A Warrants") and a warrant exercisable for up to 1/32 of one share of the Company's common stock at $493 per share (the "Class B Warrants"). Both the Class A Warrants and Class B Warrants expire 24 months from the date of grant.



The Company issued 1,430 shares of common stock for the reimbursement of expenses and as payment for services in 2002. A total of 1,083 shares were issued to officers of the Company in 2002 for the reimbursement of expenses totaling $43,750. The number of shares issued to the officers was determined based on the offering price per share for shares sold through private placements. However, the fair value of the shares at the date of issuance was $267,173 based on the quoted market price. Accordingly, the Company recognized a charge of $267,173 during 2002 for the fair value of the shares issued to the officers. A total of 286,250 shares was issued by the Company as payment for services in 2002. The shares had a fair value of $54,300, which is included in loss from discontinued operations.  Subsequent to December 31, 2003, the Company issued approximately 67 shares of common stock in relationship to various commitments under the reorganization agreement.



Series A convertible preferred stock:

All of the Companys shares of Series A convertible preferred stock were exchanged for shares of Princeton common stock on January 3, 2002.



Series B convertible preferred stock:

As of January 1, 2001, Elite had 15,033 shares of Series B preferred stock outstanding including 13,467 shares for which it had subscriptions receivable of $1,925,000 at a purchase price of $140 per share. The fully-paid shares earned dividends, if declared, at the rate of 8% on the original purchase price. Each share of Series B preferred stock was convertible into one share of common stock. During 2001, the Company received proceeds of $1,454,773 from the payment of subscriptions receivable and canceled subscriptions for the purchase of 3,288 shares. In addition, during 2001, the Company: (i) sold an additional 4,186 shares of Series B preferred stock and received proceeds of $598,365, (ii) issued 315 shares of Series B preferred

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GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



stock as payment for salaries of $45,000 earned in years prior to 2001 and (iii) issued 1,329 shares of Series B preferred stock in exchange for the cancellation of a $190,000 loan from an officer.



All of the Companys shares of Series B convertible preferred stock were exchanged for shares of Princeton common stock on January 3, 2002.



All preferred stock was cancelled by order of the Bankruptcy Court in June 2004.



Forgiveness of officers' salaries:

During the year ended December 31, 2003, which includes the period ending June 30, 2003, the officers of the Company forgave salaries of $312,166 in 2003, of which $275,750 was earned in 2003 and $36,416 was earned in 2002. Officers of the Company forgave salaries of $409,333 in 2002, of which $367,666 was earned in 2002 and $41,667 was earned in 2001.



Recapitalization

On July 28, 2004, Gabriel, LLC agreed to a share acquisition agreement with Gabriel Technologies, Corporation (GTC) (fka Princeton Video Image, Inc.) where Gabriel LLCs outstanding member units of 10,000,000 were exchanged for 10,000,000 shares of common stock of GTC.  This transaction was accounted for as a reverse merger recapitalization of Gabriel, LLC, with Gabriel, LLC as the continuing accounting entity.



The recapitalization resulted in the continuation of the issuance of 263,384 shares of common stock including all shares issued for rounding purposes in the prior 300 to 1 reverse stock split within GTC.  Also a convertible note for $37,500 was transferred with the rights to convert into 6,000,000 shares of common stock.  In August 2004, this note was converted into 500,000 shares of common stock and 5,500,000 warrants exercisable at $25 with a term of 10 years.  The warrants were deemed to have no economic value.  Also, associated with the recapitalization, the Company agreed to pay for the cancellation of certain stock issuance rights $440,000 to gain control of the former Princeton Video Image, Inc.  This payment was expensed as a financing cost.

Furthermore, during the quarter ended September 30, 2004 the Company issued 72,166 shares of common stock as part of a private placement including the exercise of 21,560 warrants.  Another 3,281,906 common stock shares were issued for prior investment deposits and the exercise of options and warrants.  The Company issued common stock shares for prior investment deposits for its agreements to invest in Trace Technologies, LLC and to acquire Cayuga Acquisition Corporation totaling 1,300,000 common stock shares.  For services valued at $27,186, the Company issued 271,860 common stock shares.

Also during the quarter, the Company issued 750,000 shares for a note receivable of $1,875,000.  This note is treated as a common stock subscription payable wherein equity is reduced until satisfied.





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GABRIEL TECHNOLOGIES CORPORATION

(FKA PRINCETON VIDEO IMAGE, INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2004



NOTE 9  SUBSEQUENT EVENTS

On July 21, 2004, the Companys Board of Directors approved the changing of the Companys name to Gabriel Technologies Corporation, which action was effectuated by the Company filing an Amended Certificate of Incorporation with the Secretary of State of Delaware on the 23rd day of July, 2004.  The 25,000,000 shares authorized to be issued under the Bankruptcy Plan were relinquished and cancelled but for 200,000 restricted common shares.



On August 28, 2004, the Company was acquired through a stock exchange with Gabriel Technologies, LLC, based in Omaha, Nebraska.  The Company issued an aggregate of 10,000,000 of restricted common stock on a one-for-one basis to the membership holders of Gabriel Technologies, LLC.  Upon consummation of the stock exchange, the Company assumed the business operations of the now subsidiary Gabriel Technologies, LLC.



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