SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

[.]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM           TO
                                                        -----------  ---------

                         Commission File Number 1-10751

                             OBJECTSOFT CORPORATION
--------------------------------------------------------------------------------
                  (Name of small business issue in its charter)

               Delaware                                       22-3091075
----------------------------------------------      ----------------------------
   (State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization)                         Identification No.)

<TABLE>
<CAPTION>
<S>                                                                                  <C>
 Continental Plaza III, 433 Hackensack Avenue, Hackensack, New Jersey                       07601
----------------------------------------------------------------------                 -----------------
                      (Address of principal executive offices)                            (Zip Code)
</TABLE>

Issuer's telephone number: (201) 343-9100
                          ---------------

Securities registered  under  Section  12(b) of the Exchange  Act: None

 Title of each class:   None

Name of each exchange on which registered:

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

         Title of Each Class:      Common Stock
                                   Redeemable Class A Warrants

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

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

The issuer's revenue for the fiscal year ended December 31, 1999 was $136,000.

At March 28,  2000,  the  aggregate  market  value of the  Common  Stock held by
non-affiliates was $22,877,000 (corresponding to 4,067,087 shares).

At March 28, 2000, 4,296,503 shares of Common Stock were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:  None
Transitional Small Business Disclosure Format (check one):   Yes       No  X
                                                                -----    -----
<PAGE>


                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS
         -----------------------

GENERAL

         ObjectSoft Corporation ("ObjectSoft" or the "Company") was incorporated
in  Delaware in January  1996 and is the  surviving  corporation  of a merger on
January 31, 1996 between it and its predecessor,  ObjectSoft Corporation,  a New
Jersey corporation incorporated in December 1990.

         The Company's  executive  offices are located at Continental Plaza III,
433 Hackensack  Avenue,  Hackensack,  New Jersey 07601;  its telephone number is
(201)  343-9100;  its facsimile  number is (201)  343-0056;  its Internet e-mail
address is investors@Objectsoftcorp.com;  and its homepage on the World-Wide Web
is at http://www.objectsoft.net.

         The Company is currently  engaged in the  business of providing  retail
kiosks, which are Internet-connected,  advertising-supported, interactive kiosks
which  are  public  access  terminals  that  offer   entertainment  as  well  as
information  and the  ability to execute  financial  transactions.  The  Company
expects to add  couponing  and more  general  e-commerce  shortly.  The  Company
employs a "clicks and mortar"  strategy to help  businesses  reach  customers in
retail situations  through the Internet.  A kiosk is a machine deployed in areas
with high  pedestrian  traffic  or within a retail  outlet or public  space that
permits  the  general  public to obtain  information  or to  purchase  goods and
services.  At a minimum,  a kiosk contains a computer,  a computer monitor and a
touch  screen.  It may  also  contain  one or  more  of the  following  devices:
keyboard,  page  printer,  receipt  printer,  credit card reader,  video camera,
signature pad,  communications  devices, a second processor, an upper monitor, a
ticket printer,  illuminated signs or combinations of these devices.  The kiosks
are  used  as  base  standard,   off-the-shelf   operating   systems  which  are
substantially augmented with proprietary software to reliably control and manage
the  kiosks  functions.  These  kiosks  utilize a  foundation  developed  during
projects  with the Cities of New York and San  Francisco  that can support  many
retail businesses with a minimum of adaptation.

         Sponsors of our kiosks  include New Line (a subsidiary of Time Warner),
Central  Park Media,  Playboy  Enterprises,  USA Home  Entertainment,  Universal
Studios  Home Video,  Full Moon  Releasing,  Metro  Goldwyn  Mayer Inc.,  United
Artists International,  DreamWorks SKG, USA Films, Sterling Entertainment, A-PIX
Entertainment,  HBO Home  Video,  and Image  Entertainment.  Studios who license
trailers to us include  Central Park Media,  Full Moon  Entertainment,  USA Home
Entertainment,  New Line Home Video, Universal Studios Home Video, Sterling Home
Entertainment,   A-PIX   Entertainment,    Playboy   Home   Enterprises,   Image
Entertainment,  HBO Home Video, Columbia TriStar Home Video, Lyrick Studios, and
DreamWorks SKG.

         Our kiosks can easily change their personality  (i.e., "look and feel")
in three ways:

                                      -2-
<PAGE>

         o        Change the appearance of the enclosure
         o        Change the on-screen graphics
         o        Change the database supporting what is being retailed

         The Company's  kiosks are primarily held for operating  income which is
derived from advertising fees,  transactional revenue, and rental income but may
be sold outright to some  customers.  This approach  allows the Company  control
over the look and  operation of its kiosks.  A customer can  recognize the brand
name and develop an expectation for how the kiosk will operate. In addition, the
Company can control the content to ensure that it is being kept up-to-date.

         The newest  product is  FastTake(R),  which the Company  introduced  in
October  1998 at the East Coast  Video Show and began  shipping  in March  1999.
FastTake(R) is initially  targeted for the video  industry.  It permits users to
search a database for a favorite actor or director, or by a portion of the movie
name. The user can then access facts about the movie title, a plot summary,  the
names  of its  major  actors  and  directors,  still  pictures  from  the  movie
(photographs)  and a preview of the video  (known as a  trailer).  For the video
store owner, FastTake(R) has three main purposes:

          o    Provide the consumer with an easy way to locate "catalog  titles"
               (i.e.,  older films).  The consumer  does not normally  require a
               kiosk to find the latest video titles which are heavily marketed;
               FastTake(R)  assists  consumers  to find older titles that are no
               longer marketed.

          o    Generate  revenue  through a  revenue  sharing  arrangement  with
               ObjectSoft.

          o    Allow consumers to sign-up on the kiosk for drawings and prizes.

         In a future  release  of  FastTake(R),  the  Company  expects to add an
electronic  commerce  feature  that will enable the purchase or rental of chosen
videos.  As of March 25, 2000, 100 FastTake(R)  kiosks were installed in stores,
30 were in the  process  of being  installed,  and an  additional  300 have been
ordered and are being manufactured.

         FastTake(R) kiosks delivered over 17 million ad impressions in December
1999 and over 21 million ad  impressions  in January 2000 (up 23% from  December
1999).  There can be no  assurances  that such usage will continue to grow or to
remain at current levels.



                                      -3-
<PAGE>

         The  following  table shows the number of pageviews have been recorded
by FasTake(R) from April 1999 to January 2000.


                             FASTTAKE MONTHLY PAGEVIEWS
                                                     Usage
                                                     -----
                    Apr-99                          29,678
                    May-99                          68,108
                    Jun-99                         169,043
                    Jul-99                         331,762
                    Aug-99                         350,566
                    Sep-99                         400,824
                    Oct-99                         586,750
                    Nov-99                         710,307
                    Dec-99                         793,514
                    Jan-00                       1,205,801


                              [GRAPH APPEARS HERE]


         Most  kiosks  installed  to date have been  placed in outlets  owned by
franchisees  of Blockbuster  Corporation,  as well as other large video outlets.
Most  retailers  require  a  90  to  120  day  trial  period  to  determine  how
successfully  FastTake(R)  operates in their stores.  At the  conclusion of such
trial  period,  they can  determine  whether  or not they  wish to  expand  into
additional stores and enter into long-term contracts of two years or more.

         The Company's FastTake(R) kiosks are dependent on agreements with video
retailers  or other  retail  outlets for  placement  in their  stores as well as
studios and other  advertisers  to provide  advertising  support.  To date,  the
Company has entered into a multi-year  contract with DoubleClick Inc. to provide
revenue-producing banner advertising from national and local advertising as well
as agreements with 10 studios and 12 chains of video outlets. Several additional
outlets are expected to sign similar agreements shortly.

         Although  the  Company  anticipates  that it will  begin  to  recognize
greater  revenues from  FastTake(R)  during 2000,  it cannot  predict the actual
timing or amount of such revenues.

         FastTake(R) revenues are expected to be generated from several sources,
as follows:

          o    On-screen advertising and sponsorship capabilities

          o    In-store promotions, including give-aways and offers

          o    Coupons

          o    E-commerce transactions

              The Company also relies on installation  and maintenance  services
for the FastTake(R)  kiosks provided by International  Business  Machines (IBM).
These  contracts  could be  canceled on short  notice.  If such  contracts  were
canceled by IBM,  this could have a negative  effect on the  Company's  sales as
well as on the  quality  of  service  which the  Company  could  provide  to the

                                      -4-
<PAGE>


Company's   customers.   Recently,   the  Company  awarded  IBM  a  contract  to
custom-manufacture the kiosks to the Company's designs and specifications.

              Beginning  in April 2000,  the Company  expects  that an important
part of its revenues  will be derived from its  participation  in  DoubleClick's
Sonar  network,  based  on a  multi-year  agreement  signed  in  December  1999.
DoubleClick   has  the  right  to  terminate   this   agreement   under  certain
circumstances.   Although  DoubleClick  has  competitors,  such  as  24/7,  such
termination  could have a material adverse effect on the Company's sales until a
replacement contract was arranged with another party.

         In early 1996, as part of its kiosk Demonstration  Project, the City of
New York (the  "City")  entered  into an  agreement  with the Company to develop
public  kiosks to be located in City  offices and other  public  locations in an
effort to expedite transactions with the City (the "City Agreement").  Under the
City Agreement,  the City agreed to lease the first five kiosks, and allowed the
Company to deploy additional kiosks throughout the City area at its own risk and
expense, subject to City approval of kiosk locations. The first five kiosks were
deployed in the City in July 1996.  A sixth kiosk was  installed  in August 1997
and  discontinued  in January 1999. A seventh was  installed in March 1998.  All
kiosks providing City services for information,  whether operated by the Company
or other suppliers,  carry the City's  CityAccess(TM) logo. Pursuant to the City
Agreement,  the  Company has  developed  applications  for use on kiosks.  These
applications  allow  the  public  access to the  records  of the  Department  of
Buildings,  certain Department of Health services,  including copies (for a fee)
of birth certificates, death certificates and dog licenses. They can also obtain
public  health  information,   register  for  certain  courses  offered  by  the
Department of Health,  and locate  information  on City  government,  as well as
information  about museums,  tourist  attractions,  shopping and similar matters
without a fee. The City Agreement has been extended  through the end of December
2000.  In 1999,  the City  issued a request for  proposals  to award a long-term
contract for kiosks to one or more  vendors.  The Company  elected not to bid on
this procurement,  because it believed that it could not profitably  operate its
kiosks in accordance with the terms of the proposed procurement. Should the City
proceed to award a contract  to another  vendor,  the Company  expects  that its
contract  with the City will not be  further  extended,  and  revenue  from this
source will cease.  There can be no assurance that the Company's  initial kiosks
will perform on a commercial basis as anticipated, that the Company will be able
to install and operate  additional  kiosks pursuant to the City Agreement,  that
the City will seek to acquire additional kiosks,  that the Company will secure a
contract  to  supply  additional  kiosks to the City,  that it will  succeed  in
marketing  its  kiosks  to  other  potential  users,  or that it will be able to
attract  additional  service  providers  or  advertisers  to kiosks  that may be
located in the City or elsewhere.

         In connection with the development of the kiosks and the deployment and
operation of the first five  kiosks,  the City has paid or agreed to pay a total
of $117,000 in 1999 and is obligated to pay $135,000 in the year 2000. There can
be no  assurance  that this  contract  will be  renewed  beyond  the year  2000.
Revenues  from  advertising  generated a total of $18,000 in 1998 and $13,000 in
1999. Beginning in 1999 the Company has focused its efforts on the private

                                      -5-
<PAGE>

and non-profit sectors and has substantially  curtailed its efforts at marketing
to governments and municipalities.

         In the course of developing  kiosks for the City  project,  the Company
developed a general purpose kiosk operating  system that could easily be used in
new kiosk applications such as the FastTake(R) project. The Company is currently
exploring how to best commercialize this software separate from its kiosks.

         In August 1997,  the Company  announced the  development  and immediate
availability  of  SmartSign(TM),  a  modular  line  of  kiosks  contained  in an
enclosure that is only 7-1/2" in depth,  with each module  weighing less than 70
pounds,  making the units suitable for regular  shipment through UPS and Federal
Express.  The modules  initially  consist of (a) a Pentium class processor unit,
(b) an active-matrix touch screen, with optional sealed heavy-duty keyboard, and
optional  credit card reader,  (c) a printer unit with page printer and optional
receipt  printer,  (d)several  light-box  advertising  modules with optional LCD
display and (e) an optional touch-sensitive  light-box.  There has only been one
commercial  deployment of this line, at the Harlem Heights Historical Society in
the City.  Recently,  the Company has increased its efforts to market this line,
and is  currently  negotiating  to place  SmartSign(TM)  kiosks  in a number  of
locations.  There  can be no  assurances  that  the  Company's  efforts  will be
successful or will generate profits.

         The Company  anticipates  that the kiosk and Internet  service delivery
programs will  constitute  the most  significant  part of its  business.  It may
continue to engage in consulting  activities as resources permit and may seek to
acquire  one  or  more  other  businesses  providing  kiosk-related   consulting
services.  In  selecting  consulting  opportunities,   the  Company  will  focus
primarily on assignments  in connection  with the sale of kiosk services or that
can  otherwise  enhance its skill base. No such  contracts  were entered into in
1999.

         The Company has  established a strategic  relationship  with  Microsoft
that it believes is important to its sales, marketing and support activities, as
well as to its product  development  efforts  relating to its kiosks.  Microsoft
supports the Company in marketing  its public  access  services,  and has agreed
from time to time to exhibit  the  Company's  kiosks in  Microsoft  displays  at
various  trade shows.  It has also issued  statements  that  included  favorable
references relating to the Company's  products.  Microsoft has also entered into
various  non-disclosure  agreements with the Company with respect to unannounced
Microsoft products,  under which the Company has the opportunity to have advance
knowledge of software  technology  being  developed by Microsoft.  Microsoft has
also provided,  and continues to provide,  fee-based  consulting services to the
Company through  Microsoft  Consulting.  Since 1994, the Company's  Chairman has
served as the exclusive  regional host and sponsor of Microsoft  Developer Days,
an ongoing series of technical  conferences organized and operated by Microsoft.
The most recent  conference was held on September 15, 1999. The Company has also
produced technical papers for, and provided  consulting  services to, Microsoft.
Joint  marketing  efforts with Microsoft are continuing.  Additional  events are
scheduled  through the end of 2000. The current contract with Microsoft  expires
on December 31, 2000.  There can be no  assurances  that this  contract  will be
renewed.

                                      -6-
<PAGE>

         Research and Development  expenditures were $410,000 in 1999,  $491,000
in 1998 and $613,000 in 1997. In addition,  during the years ended  December 31,
1999 and  December  31,  1998 the Company has  capitalized  additional  software
development costs which aggregated $251,000 and $72,000, respectively.

COMPETITION

         The Company is subject to competition  from  different  sources for its
different  services.  The Company's  video kiosk business  competes with several
companies,  including Muze, Inc. and Entertainment  Decisions,  Inc. Blockbuster
Inc. or Hollywood  Entertainment  Corporation,  both of which have resources far
greater than ours, could become competitors in the future..  General competitors
in the kiosk business  include  divisions of IBM and NCR, North  Communications,
Golden Screens and ATCOM/INFO.  The City has also awarded contracts,  comparable
to the contract awarded to the Company, to North  Communications and DSSI (which
awarded a subcontract to Golden Screens), both of which have sold similar kiosks
to other municipalities.

         Although  the  Company  believes  that  FastTake(R)  is  a  competitive
product,  there  can be no  assurance  that  these or other  companies  with far
greater resources than the Company's might enter the field and negatively affect
the Company's FastTake(R) business prospects in this market.

MARKETING

         The three  objectives  of the Company's  marketing  efforts are: (a) to
obtain the rights to place its kiosks in compelling high-density locations;  (b)
to attract  advertisers  based on the number and  demographics of  "impressions"
that the Company can offer to  advertisers;  and (c) for  FastTake(R)  kiosks to
obtain timely and cost-effective licenses to exhibit digital trailers of popular
motion  pictures and games on the  Company's  kiosks.  In  furtherance  of these
efforts,  the Company presents exhibits at national and regional shows sponsored
by  the  Video  Software  Dealers  Association,  among  other  associations  and
organizations.  The  Company  has  retained  a public  relations  consultant  to
disseminate  news  related  to its kiosks and to  stimulate  demand.  Additional
marketing  efforts focus on identifying  content-providers  whose  offerings can
create  additional  transaction  revenue for the  Company's  kiosks.  In seeking
content-providers,  the  Company  also  exhibits  at major  trade shows where it
partners with several of its major vendors.  For example,  the Company partnered
with Microsoft at the VBIT conferences in San Francisco and Chicago. The Company
expects to continue to participate in similar joint efforts on an ongoing basis.
A telemarketing program has been initiated to target studios and video stores.

         The  Company's  marketing  activities  are  currently  performed by its
executive  officers,  its Vice  President  of Sales  and  Marketing  and a staff
located in Hackensack as well as in Los Angeles.

PROPRIETARY RIGHTS

                                      -7-
<PAGE>

         The  Company's   success  is  highly   dependent  on  its   proprietary
technology.  The Company views its SmartSign(TM) and FastTake(R) housing designs
as well as its software as  proprietary,  and relies on a combination of patent,
trade secret,  copyright  and  trademark  laws,  non-disclosure  agreements  and
contractual  provisions to establish  and protect its  proprietary  rights.  The
Company  has  applied to in the  United  States  for the  following  trademarks:
FastTake(R) and ObjectSoft.  In addition,  the Company plans to register certain
of these  trademarks in principal  foreign  jurisdictions.  The Company has also
retained  patent  counsel  and has filed  patent  applications  for  appropriate
hardware and software  components of its technology.  There can be no assurances
that such applications will be allowed by the Patent and Trademark Office, or if
allowed will not be successfully challenged.

         The source code for the Company's  proprietary software is protected as
a trade  secret.  In addition,  because the Company does not sell or license its
technology to third parties,  but rather delivers  services  through its kiosks,
its  proprietary  software is not disclosed to third parties.  Furthermore,  the
Company enters into agreements, as appropriate, with employees,  consultants and
subcontractors   containing  provisions  relating  to  confidentiality  and  the
assignment of inventions and other developments to the Company.  There can be no
assurance that the steps taken by the Company to protect its proprietary  rights
will be  adequate  or that the  Company's  competitors  will  not  independently
develop  technologies  that are  substantially  equivalent  or  superior  to the
Company's technologies or products.

CUSTOMERS

         To  date,  the  Company  has  entered  into  placement  agreements  for
FastTake(R) kiosks with customers  including five Blockbuster Video franchisees,
including New York Ltd., New England Ltd.,  Serendipity  Entertainment,  Texoma,
NorthEast  Management  and Video Rentals of  Pennsylvania.  The Company has also
entered into  placement  agreements  for  FastTake(R)  kiosks with J.C.  Flicks,
Hollywood   Entertainment,    Instant   Replay,   Movie   Gallery,    Transworld
Entertainment,  Video  City and Video  Warehouse.  Studio  agreements  have been
signed with Central Park Media, Full Moon Entertainment, USA Home Entertainment,
New Line Home Video,  Universal Studios Home Video, Sterling Home Entertainment,
A-PIX Entertainment, Playboy Home Enterprises, Image Entertainment, and HBO Home
Video .

         The customer base for the Company's  SmartSign(TM) and  SmartStreet(TM)
business  consists  principally  of  municipalities  and other public  sector or
commercial entities to which the Company would sell or lease kiosks, prospective
advertisers and ultimately  consumers accessing kiosk services or products.  The
Company also intends to market its consulting services to mall operators.

         The  Company  historically  has  derived a  significant  portion of its
revenues from a relatively  limited  number of customers.  During the year ended
December 31, 1999 the City accounted for 86% of the Company's  revenues pursuant
to the City  Agreement.  During  the year  ended  December  31,  1998,  the City
accounted for 73% of the Company's revenues pursuant to the City Agreement.

                                      -8-
<PAGE>

GOVERNMENT REGULATIONS AND LICENSING

         The Company believes that it has all licenses  necessary to operate its
business as currently conducted in New Jersey, New York, and California.

         The  Company  is not  currently  subject  to direct  regulation  by the
Federal  Communications  Commission or any other agency,  other than regulations
applicable  to  businesses   generally  and   businesses   doing  business  with
governmental  agencies. In connection with its contract with the City and future
contracts,  if any,  with  the  City  and  other  municipalities  or  government
entities,  the  Company  will have to comply  with such  regulations,  including
bidding   procedures  and   record-keeping,   audit,   insurance,   bonding  and
anti-discrimination provisions, among others.

         Due to the increase in Internet use and publicity,  it is possible that
laws and regulations may be adopted with respect to the Internet, including with
respect to privacy,  pricing and  characteristics  of products or services.  The
Company cannot predict the impact,  if any, that future laws and  regulations or
legal or regulatory changes may have on its business.

EMPLOYEES

         As of March 25, 2000,  the Company had 30  employees,  25 of which were
full-time,  29 of whom are based in its Hackensack,  New Jersey offices, and one
of whom is based in Los  Angeles,  California.  These  include  three in product
development,  six in management and sales, eleven in operations and 10 in legal,
finance and administration.

         The Company  expects the size of its workforce to remain  approximately
the same in 2000,  and the  Company  intends  to  continue  with its  policy  to
outsource  non-strategic  functions  such  as  artwork  development,  repetitive
testing,  maintenance and bookkeeping  rather than using its own staff for these
functions.

         Other than Messrs.  Sarna and Febish,  no other senior  personnel  have
entered into  employment  agreements  obligating them to remain in the Company's
employ for any specific term;  however,  substantially  all key employees of the
Company  are  parties to  nonsolicitation,  confidentiality  and  noncompetition
agreements with the Company.  In addition,  independent  contractors  enter into
confidentiality agreements with the Company

ITEM 2.           DESCRIPTION OF PROPERTY
                  -----------------------

         The Company occupies approximately 7,141 square feet of office space in
Hackensack, New Jersey, under a lease with an unaffiliated landlord that expires
on July 31, 2007 and  provides  for a base rent of  $167,814  per annum in 2000,
subject to certain increases in subsequent periods.

ITEM 3.           LEGAL PROCEEDINGS
                  -----------------

                                      -9-
<PAGE>

         There are no material pending legal proceedings to which the Company is
a party or to which any of its properties are subject.

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

         On  October  12,  1999,   at  a  special   meeting  of  the   Company's
stockholders, the stockholders approved the following matters:

         First, an amendment to the Company's  Certificate of  Incorporation  in
order to  effect a reverse  split of the  Company's  Common  Stock.  There  were
7,718,474  votes cast for the matter,  415,142 votes cast against the matter and
25,910 abstentions; and

         Second,  the  issuance  of  the  Company's  securities  pursuant  to  a
Subscription  Agreement  dated as of August 13, 1999 among the Company,  Warwick
Corporation,  Ltd. and the investors  referred to therein.  There were 2,614,396
votes  cast for the  matter,  349,845  votes cast  against  the  matter,  52,280
abstentions and 5,143,005 broker non-votes.


                                      -10-
<PAGE>

                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
                  --------------------------------------------------------

         The  Company's  common  stock,  par value $.0001 per share (the "Common
Stock") and  Redeemable  Class A Warrants (the "Class A Warrants") are listed on
the Nasdaq SmallCap Market under the symbols OSFT and OSFTW,  respectively.  The
following  table sets  forth,  for the periods  indicated,  the high and low bid
prices  for the  Common  Stock and Class A Warrants  as  reported  on the Nasdaq
SmallCap Market.

    Quarters            Common Stock          Class A Warrants
    --------            ------------          ----------------
                       High        Low        High         Low
                       ----        ---        ----         ---

Fiscal Year 1999

Fourth Quarter(1)     6.750       0.313       1.281       0.063
Third Quarter         1.781       0.344       0.813       0.109
Second Quarter        2.938       1.000       0.938       0.313
First Quarter         4.813       1.625       2.125       0.375

Fiscal Year 1998

Fourth Quarter         7.50        0.375       3.00        0.063
Third Quarter          2.188       1.00        0.375       0.125
Second Quarter         3.250       1.781       0.656       0.0
First Quarter          3.313       2.125       0.750       0.188

         As of March 28,  2000,  there  were 56  holders of record of the Common
Stock and 10 holders of record of the Class A Warrants.

         The Company did not pay cash  dividends  on its Common Stock during the
two years ended December 31, 1998 and December 31, 1999 and the Company does not
presently intend to pay any dividends on its Common Stock.


------------------
(1)   On October 13, 1999, the Company  effected a one-for-six  consolidation of
      its Common Stock.  As a result,  the Class A Warrants are  exercisable for
      one-sixth  the number of shares of Common Stock and the purchase  price of
      one share of Common Stock is adjusted to $39 from $6.50.


                                      -11-
<PAGE>



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



OVERVIEW

         The  Company  provides  retail  kiosks,  which are  Internet-connected,
advertising-supported, interactive kiosks which are public access terminals that
offer  entertainment as well as information and the ability to execute financial
transactions.  The Company originally provided consulting and training services,
but changed its focus in mid-1994 to its current  transactional,  fee-based  and
advertising-supported  products  and  services.  The Company has  sustained  net
losses in each of the last two  fiscal  years with a net loss of  $3,920,000  in
1999 and a net loss of  $2,515,000  in 1998.  In  September  1995,  the  Company
introduced  OLEBroker(TM) , its fee-based website on the Internet. The Company's
SmartStreet(TM)  kiosks were introduced in July 1996 and its FastTake(R)  kiosks
were  introduced in October 1998. The Company has not recognized any significant
income to date from its kiosks.  Although the Company  anticipates  that it will
begin to recognize greater revenues from the FastTake(R)  kiosks during 2000, it
cannot predict the actual timing or amount of such revenues.

RESULTS OF OPERATIONS

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

         During the year ended December 31, 1999, 100 FastTake(R)  kiosks became
operational in stores, many of them in the fourth quarter. As of March 25, 2000,
100 FastTake(R) kiosks were installed in stores, 30 were in the process of being
installed,  and an additional 300 have been ordered and are being  manufactured.
In addition,  the Company entered into an advertising agreement with DoubleClick
which is expected to begin generating revenues in the second quarter of 2000.

         Revenues  decreased by $25,000 or 16% to $136,000 in 1999 from $161,000
in 1998.  The change was due to a decrease  in the sale of  equipment  offset by
revenues from shipments of FastTake(R) products.

         Costs of services increased by $252,000 or 43% to $835,000 in 1999 from
$583,000 in 1998. Such increases were due to expenses incurred in installing the
new FastTake(R) products and depreciation on FastTake(R) products that have been
installed.

         Research  and  development  expenses  decreased  by  $81,000  or 16% to
$410,000 in 1999 from 491,000 in 1998 due to a decrease in personnel  devoted to
research and development.

         General and  administrative  expenses increased by $1,190,000 or 59% to
$3,204,000  in 1999  from  $2,014,000  in 1998  due to an  increase  in rent and
utilities resulting from the Company

                                      -12-
<PAGE>

relocating  to  larger  quarters,  a  $270,000  provision  for  loan  loss on an
officer's  loan,  non-cash  payments of $277,000 for consulting fees through the
issuance  of  stock  and  warrants  and the  ramp  up of the  sales  effort  for
FastTake(R).

         Other income  (expense)  decreased by $70,000 to ($18,000) in 1999 from
$52,000 in 1998 due to lower  investments,  realized  and  unrealized  losses in
investments  and an  increase  in  interest  expense  which  resulted  from  the
Company's financing some of its equipment.

         The Company has entered  into an  agreement  to sell certain New Jersey
net operating losses and research and development credits, which resulted in the
Company  recognizing  an income tax benefit of $411,000 and $360,000 in 1999 and
1998, respectively.

         Net loss  increased by  $1,405,000  to a net loss of $3,920,000 in 1999
from a net loss of  $2,515,000  in 1998.  The  increase in losses were due to an
increase in expenses  related to the FastTake(R)  product,  a provision for loan
loss,  non-cash  payments for consulting  fees through the issuance of stock and
warrants,  additional  expenses resulting from the Company relocating its office
and an increase in interest expense which resulted from the Company's  financing
some of its equipment, offset by a decrease in research and development.

         At December  31,  1999,  the Company  had  federal net  operating  loss
carryforwards of approximately  $10,900,000.  A valuation allowance  aggregating
$3,541,000  has  been  recorded  as a  result  of  uncertainties  regarding  the
realization  of  substantially  all of the  assets  due to the lack of  earnings
history of the Company.
See Note I of Notes to Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 1999, cash and cash  equivalents  were $2,311,000 as
compared  with  $982,000 at December 31, 1998.  The increase is due primarily to
the sale of 20,000  shares of Series E Convertible  Preferred  Stock and related
warrants  in a  private  placement,  the  sale of  21,000  shares  of  Series  F
Convertible Preferred Stock and related warrants in a private placement, and the
sale of 20,000  shares  of  Series G  Convertible  Preferred  Stock and  related
warrants  in a private  placement.  All of the Series E and  Series F  Preferred
Stock have been converted  into Common Stock.  However,  the Company's  reported
losses for the year ended  December  31, 1999 of  $3,920,000.  The Company  will
continue to incur  substantial  operating  losses  until it  realizes  increased
revenues  from its  FastTake(R)  business.  The Company  had working  capital of
$2,589,000 at December 31, 1999 as compared to $933,000 at December 31, 1998, an
increase of 177%.

         The Company  expects to fund the  deployment of additional  FastTake(R)
and other kiosks,  and make kiosk related  acquisitions,  from available working
capital and from funds that will be derived from future  operating  revenues and
from equipment leasing,  equity and/or debt financing.  However, there can be no
assurance that future  revenues will be generated in sufficient  amounts or that
additional  funds will not be required  for the  expansion  of  operations.  The
Company intends to lease equipment whenever possible on acceptable terms.

         The  Company  raised  approximately  $1,866,000  (net of  expenses)  in
connection  with a private  financing  of Series E  Preferred  Stock and related
warrants  consummated  in  March  1999

                                      -13-
<PAGE>

and  approximately  $2,062,000  (net of expenses) in  connection  with a private
financing of Series F Preferred Stock and related warrants consummated in August
1999.  The  Company  intends  to meet  its  long-term  liquidity  needs  through
available  cash and  cash  flow as well as  through  additional  financing  from
outside  sources.  However,  no assurance  can be given that the Company will be
successful  in obtaining  any  additional  financing.  Further,  there can be no
assurance,  even assuming the Company successfully raises additional funds, that
the Company will achieve profitability or positive cash flows. If the Company is
not successful in raising  additional  funds,  it might be forced to curtail the
scope of its operations.

         The Company  anticipates  that, giving effect to the sale of $2,000,000
of Series G Preferred Stock  consummated on December 30, 1999 and the sale of an
additional  $500,000 of Series G Preferred  Stock  consummated in February 2000,
the Company's existing working capital will be sufficient to fund its operations
at least through March 31, 2001. Continuing operations thereafter will depend on
cash flow from  operations  and the ability to raise  additional  funds  through
equity, debt or other financing.  There can be no assurance,  however, that such
funds will be available.

INFLATION AND SEASONALITY

         The rate of inflation was insignificant  during the year ended December
31, 1999.  In the past,  the effects of  inflation on personnel  costs have been
offset by the Company's  ability to increase its charges for services  rendered.
The  Company  anticipates  that it will be able to continue to do so in the near
future. The Company  continually reviews its costs in relation to the pricing of
its products and services.

         The Company's business is not seasonal.


ITEM 7.           FINANCIAL STATEMENTS
                  --------------------

         The financial  statements of the Company  required by this item are set
forth at end of this Form 10-KSB at pages F-1 through F-19.

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

         None.


                                      -14-
<PAGE>


                                                      PART III


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

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires the Company's Executive Officers and Directors, and any persons who own
more  than  10% of any  class  of the  Company's  equity  securities  which  are
registered  under the  Securities  Act of 1933,  as amended  (the "Act") to file
certain  reports  relating to their  ownership of such securities and changes in
such ownership with the Securities and Exchange  Commission and Nasdaq Small Cap
Market, and to furnish the Company with copies of such reports. To the Company's
knowledge,  all Section 16(a) filing  requirements  applicable to such Officers,
Directors and owners of over 10% of the Company's equity  securities  registered
under the Act, during the year ended December 31, 1999, have been satisfied.

EXECUTIVE OFFICERS AND DIRECTORS

    The executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>

    NAME                                 AGE          POSITION
    ----                                 ---          --------
    <S>                                  <C>         <C>
    David E. Y. Sarna (1)                 50          Chairman, Secretary and Director
    George J. Febish  (1)                 51          President, Treasurer and Director
    Daniel E. Ryan    (1)(2)(3)(4)        52          Director
    Michael A. Burak  (2)(4)              59          Director
    Stanley A. Hirschman                  53          Director Nominee
</TABLE>

     1   Member of Executive Committee.
     2   Member of Audit Committee.
     3   Member of Compensation Committee.
     4   Member of Stock Option Plan Committee


         George J. Febish  together  with Mr. Sarna founded the Company in 1990.
Mr. Febish has been the President,  Co-Chief Executive Officer,  Treasurer and a
director of the Company since  December  1990.  He has also been,  since 1994, a
Contributing  Editor of Datamation  magazine.  Prior to co-founding the Company,
Mr. Febish was Executive  Vice  President and Chief  Operating  Officer of Image
Business Systems Corporation, a computer software development company, from 1988
to 1990. Prior to joining Image Business Systems Corporation, Mr. Febish was the
Director of Marketing at International  Systems Services  Corporation ("ISS"), a
computer  software  company that developed ISS Three(TM).  Prior to joining ISS,
Mr. Febish was the Eastern  Regional Sales Manager for Bool & Babbage.  In 1970,
Mr. Febish began his professional  career with New York Life Insurance  Company.
Mr. Febish holds a BS degree from Seton Hall  University.  He is the  co-author,
with Mr. Sarna,  of PC Magazine  Windows Rapid  Application  Development and the
author of numerous published articles.

         Daniel E. Ryan has been a director  since 1991.  Mr. Ryan was  employed
with New York Life  Insurance  Company  from July 1965 to March  2000 and where,
from 1981, he held the title of Corporate Vice President.  Mr. Ryan was the head
of  the  Service  Center  Development  of  New  York  Life  Insurance  Company's
Information Systems organization. Mr. Ryan holds an MBA in Computer

                                      -15-
<PAGE>

Science from Baruch College and a BS/BA in Industrial  Management from Manhattan
College. Mr. Ryan is a Certified Systems Professional.

         David E. Y. Sarna together with Mr. Febish founded the Company in 1990.
Mr. Sarna has been the Chairman,  Co-Chief  Executive  Officer,  Secretary and a
director of the Company since  December 1990. Mr. Sarna is a director of Mabool,
Inc. and is a member of the Advisory Board of Hudson Venture Partners,  LLP. Mr.
Sarna is also a member of the Board of Trustees of Millennium  Project,  Inc., a
not-for-profit  corporation. He has also been, since 1994, a Contributing Editor
of Datamation  magazine.  Prior to  co-founding  the Company,  Mr. Sarna founded
Image Business Systems Corporation,  a computer software development company, in
1988.  Prior to founding  Image  Business  Systems  Corporation,  Mr.  Sarna was
formerly  Executive  Vice  President and a co-founder of ISS. From 1976 to 1981,
Mr.  Sarna was employed by Price  Waterhouse & Co., as a management  consultant,
beginning as a senior  consultant and rising to the position of senior  manager.
From 1970 to 1976 Mr. Sarna was  employed by IBM  Corporation  in technical  and
sales positions.  Mr. Sarna began his professional  career at Honeywell in 1968.
Mr. Sarna holds a BA degree from  Brandeis  University  and did graduate work at
the Technion - Israel Institute of Technology.  Mr. Sarna is a Certified Systems
Professional and a Certified Computer Programmer.  He is the co-author, with Mr.
Febish, of PC Magazine Windows Rapid Application Development (published by Ziff-
Davis Press in 1994),  several  other books and over 50  articles  published  in
professional  magazines.  Mr. Sarna is also the co-inventor of patented software
for the recognition of bar-codes.

         Michael A. Burak has been a director  since February 1999. Mr. Burak is
President of the firm of Michael A. Burak, Inc. and has been actively engaged in
real estate  operations  for over 30 years as an owner,  a property  manager and
broker dealing with sales and leasing.  Mr. Burak received a B.S. in Real Estate
from New York  University's  School of  Commerce  and M.S.  from Urban  Planning
division of the Graduate  School of Architecture  at Columbia  University.  As a
William Kinne Fellow,  he spent 1964 and 1965 studying Urban problems in Europe.
He is past president of the Metropolitan Real Estate Square Club, and currently,
an active member of the Associated  Owners and Builders of Greater New York, the
National Realty Club and the National Association of Home Builders.

         Stanley A.  Hirschman  is expected to be appointed as a director by the
Board of Directors in April 2000.  He is also expected to become a member of the
Audit and  Compensation  Committees  of the Company.  Mr.  Hirschman has been an
independent  consultant  specializing  in solutions for emerging  companies with
technology  based  products,  since June,  1996. Mr.  Hirschman is currently the
Chairman of Mustang.com  (formerly  Mustang  Software),  the leading provider of
e-mail  management  solutions.  Mr.  Hirschman  has also  served  as a member of
various city boards of the Salvation Army, including the Denver, Minneapolis and
Dallas boards,  since 1984. From February 1989 to June,  1996 Mr.  Hirschman was
Vice President of Store Operations for Software,  Etc., where he was responsible
for 390  retail  store  locations.  Prior to  working  at  Software,  Etc.,  Mr.
Hirschman held senior  management  positions with T.J. Maxx, the Gap, and Banana
Republic.

                                      -16-
<PAGE>


COMMITTEES

         The  Compensation  Committee,  composed of Mr. Burak and Mr. Ryan,  has
authority over the salaries,  bonuses and other compensation arrangements of the
executive  officers of the  Company,  and it also has the  authority to examine,
administer  and make  recommendations  to the Board of Directors with respect to
benefit  plans and  arrangements  (other than the stock  option  plans which are
administered  by the Stock Option  Committee) of the Company.  The  Compensation
Committee  met once  during  fiscal 1999 and took  certain  actions on one other
occasion.

         The Audit  Committee is currently  composed of Mr. Ryan and Mr.  Burak.
The Audit Committee's function is to nominate independent  auditors,  subject to
approval by the Board of Directors,  and to examine and consider matters related
to the audit of the Company's  accounts,  the financial  affairs and accounts of
the  Company,  the  scope of the  independent  auditors'  engagement  and  their
compensation,  the effect on the Company's financial  statements of any proposed
changes in generally  accepted  accounting  principles,  disagreements,  if any,
between  the  Company's  independent  auditors  and  management,  and matters of
concern to the  independent  auditors  resulting  from the audit,  including the
results of the independent auditors' review of internal accounting controls. The
Audit Committee met once during fiscal 1999.

         The Board of Directors has no standing nominating committee.

ITEM 10.          EXECUTIVE COMPENSATION
                  ----------------------

         The  following  table  sets  forth  information  concerning  annual and
long-term  compensation,  paid or accrued,  for the Chief Executive Officers and
for each other  executive  officer of the Company  whose  compensation  exceeded
$100,000 in fiscal 1999 (the "Named  Executive  Officers")  for  services in all
capacities to the Company during the last three fiscal years.

<TABLE>
<CAPTION>
                                            SUMMARY COMPENSATION TABLE


                                                        Annual Compensation            Long Term Compensation
                                                     ---------------------------- ----------------------------------
                                                                       Other         Awards(1)         Payouts
    Name and                                                          Annual        Securities           All
    Principal                                                         Compen-       Underlying          Other
    Position                              Year        Salary(2)     sation (2)     Options/SARs      Compensation
    --------                              ----        ------        ----------     ------------      ------------
   <S>                                   <C>          <C>           <C>           <C>               <C>
    David E.Y. Sarna, Chairman,           1999         $215,000         --            531,666         $50,000(3)
    Secretary and Co-Chief                1998         $215,000         --             8,333              --
        Executive Officer                 1997         $208,000         --             8,333              --


    George J. Febish, President,          1999         $215,000         --            531,666         $50,000(3)
    Treasurer and Co-Chief                1998         $215,000         --             8,333              --
        Executive Officer                 1997         $208,000         --             8,333              --
</TABLE>

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

                                      -17-
<PAGE>

(1)      None of the Named  Executive  Officers  received any  Restricted  Stock
         Awards or LTIP  Payouts  in 1997,  or 1998.  The  number of  securities
         underlying options takes into account the one-for-six  consolidation of
         the Company's common stock which became effective on October 13, 1999.

(2)      As to each individual  named, the aggregate  amounts of perquisites and
         personal  benefits not included in the Summary  Compensation  Table did
         not  exceed the  lesser of either  $50,000  or 10% of the total  annual
         salary and bonus reported for the Named Executive Officer.

(3)      The Compensation  Committee and the Stock Option  Committee  authorized
         the Company to grant cash bonuses in the  aggregate  amount of $325,000
         to each of Mr. Sarna and Mr.  Febish,  to vest upon the  attainment  of
         certain milestones as described below. As of December 30, 1999, each of
         Mr.  Sarna  and Mr.  Febish  received  cash  bonuses  in the  amount of
         $50,000.



                                      -18-
<PAGE>


STOCK OPTIONS

         The following  table sets forth  information  as to all grants of stock
options to the Named  Executive  Officers  during fiscal 1999. All references to
options take into account the Company's one-for-six  consolidation of its common
stock completed on October 13, 1999.

<TABLE>
<CAPTION>

                                             OPTION GRANTS IN 1999(1)


                                                       Individual Grants (1)

                                       Number of     % of Total
                                      Securities       Options
         Name                         Underlying     Granted to      Exercise         Expiration
         ----                           Options       Employees        Price             Date
                                        Granted        in 1999         -----             ----
                                        -------        -------
        <S>                          <C>             <C>            <C>          <C>

         David E.Y. Sarna               8,333               0.73%     $13.50      February 25, 2004

                                       23,333 (2)           2.04%      $1.50      December 8, 2004

                                      500,000 (3)           43.7%      $1.50      December 4, 2004


         George J. Febish               8,333               0.73%     $13.50      February 25, 2004

                                       23,333 (2)           2.04%      $1.50      December 8, 2004

                                      500,000 (3)           43.7 %     $1.50      December 4, 2004
</TABLE>

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

(1)      No stock appreciation rights were granted to any of the Named Executive
         Officers during fiscal 1999.

(2)      The options  vested as to 11,667 shares on December 9, 1999,  the grant
         date, and 11,666 will vest on December 9, 2000.

(3)      The   performance   option  (as  discussed   below  under  the  heading
         "Performance   Stock   Options")  is   exercisable   in  tranches  upon
         achievement of certain  performance  goals. If any performance  goal is
         not achieved by December 9, 2002, the portion of the option relating to
         that  performance  goal will  expire.  As of  December  30,  1999,  the
         performance  option was  exercisable  with respect to 50,000  shares of
         common stock,  subject to stockholder approval at the Annual Meeting of
         Stockholders of the Company scheduled to be held in May 2000.

         There were no stock options or stock  appreciation  right  exercises by
Named  Executive  Officers during fiscal 1999 and no stock  appreciation  rights
were outstanding at December 31, 1999.

OPTION REPRICING

         The  following  table  sets  forth  information  with  respect  to  the
participation  by the  Company's  current  and former  executive  officers  in a
repricing  of options  implemented  by the  Company  on July 9, 1998.  Under the
repricing,  all outstanding employee stock options (and no non-employee director
options)  previously  granted  under the 1996 Plan were  repriced  from $3.50 to
$1.45  ($8.70  post the one-for-six stock consolidation)

                                      -19-
<PAGE>

and the  vesting  periods  were  extended  and  revised.  There  were no  option
repricings implemented in fiscal year 1999.

<TABLE>
<CAPTION>

                                                                                                                      LENGTH OF
                                           NUMBER OF                                                                  ORIGINAL
                                           SECURITIES        MARKET PRICE OF                                          OPTION TERM
                                           UNDERLYING        STOCK AT TIME OF   EXERCISE PRICE AT      NEW            REMAINING AT
                              DATE         OPTIONS           REPRICING OR       TIME OF REPRICING OR   EXERCISE       DATE OF
                              ----         REPRICED OR       AMENDMENT ($)(1)   AMENDMENT ($)(1)       PRICE (4)(1)   REPRICING OR
                                           AMENDED (#)(1)    ---------------    ---------------        ----------     AMENDMENT
                                           ---------------                                                            (YEARS)
                                                                                                                      ------
<S>                          <C>          <C>              <C>                 <C>                     <C>
David E.Y. Sarna, Chairman,   July 9,           50,000             1.45                 3.50               1.45
   Secretary and Co-Chief     1999              (8,333)           (8.70)                (21)              (8.70)            3
   Executive Officer

George J. Febish, President,                    50,000             1.45                 3.50               1.45
   Treasurer and Co-Chief     July 9,          (8,333)            (8.70)                (21)              (8.70)            3
   Executive Officer          1999

</TABLE>

(1)      The number and prices in  parenthesis  give  effect to the  one-for-six
         consolidation  of the Company's  common stock.  The vesting  period for
         these repriced options granted to Mr. Sarna and Mr. Febish was extended
         and revised so that options for half of the shares  remained  vested as
         of July 9, 1998 and  options  for half of the shares  vested on July 9,
         1999.

COMPENSATION COMMITTEE REPORT ON OPTION REPRICING

         The 1996 Stock  Option  Plan (the "1996  Plan") was  established  as an
employment  incentive to retain the persons  necessary for the  development  and
financial success of the Company.  As a result of a decrease in the market price
of the Common Stock and recognizing  that  previously  granted stock options had
lost much of their value in motivating employees,  including the Named Executive
Officers,  to remain with the Company and share in its overall  financial goals,
the Stock Option Committee (the "Committee"), in July 1998, voted to approve the
repricing of 170,000 options, including 100,000 options granted to the executive
officers named above. Such repricing was effected by amending the exercise price
in the option  contracts  of the  employees  to an  exercise  price of $1.45 per
share,  which  was the  fair  market  value of the  Common  Stock on the date of
repricing.  In exchange,  each  employee who  accepted the  repricing  amendment
agreed to a revised vesting schedule.  By repricing the existing options granted
under the 1996 Plan, the Company intended to reward key employees, including the
Named Executive  Officers,  holding such options for their  contributions to the
Company.

EMPLOYMENT AGREEMENTS

         The Company entered into employment agreements with each of David E. Y.
Sarna and  George J.  Febish,  effective  as of July 1,  1996,  which  expire on
December  31, 2001.  These  agreements  each  provide for a current  annual base
salary of  $215,000  and for a bonus of 5% per annum of the  Company's  earnings
before depreciation, interest, taxes and amortization. In addition, on an annual
basis,  the Board of Directors will consider paying an additional  bonus to each
of Messrs.  Sarna and Febish  based upon the  increase  in the  Company's  gross
revenues, taking into account any increase in the Company's expenses. The annual
base salary under the current

                                      -20-
<PAGE>

agreements  may be increased at the  discretion of the Board of  Directors.  The
agreements  provide for (i) a  severance  payment of the base  compensation  and
bonus  of the  prior  full  fiscal  year and  payment  of all  medical,  health,
disability and insurance  benefits then payable by the Company for the longer of
(a) the remainder of the term of the employment  agreement or (b) 12 months,  as
well as (ii) the base compensation and bonus accrued to the date of termination,
upon the  occurrence  of (x)  termination  by the  Company  without  cause,  (y)
termination  by the  employee  for good reason or (z) a change in control of the
Company,  if the employee  resigns  after the  occurrence  of the such change in
control.  Each of the employment  agreements limit the severance  payments to an
amount  that is less than the amount  that would  cause an excise tax or loss of
deduction  under the rules  relating  to golden  parachutes  under the  Internal
Revenue Code.

PERFORMANCE STOCK OPTIONS

         On December 9, 1999,  the Committee and the  Compensation  Committee of
the Board of Directors  authorized  the Company to grant  500,000  non-qualified
performance  vesting  stock options (the  "Performance  Options") to each of Mr.
Sarna and Mr. Febish, subject to stockholder approval at the 2000 annual meeting
of stockholders scheduled to be held in May 2000.

         The  Performance  Options will be  exercisable  at an exercise price of
$1.50 per share for a term of five years,  vesting upon  achievement  of certain
milestones (the  "Milestones")  determined by the Committee and the Compensation
Committee based upon (a) financial statement  achievements,  (b) acquiring lease
financing  for  kiosks,  (c)  placement  of  kiosks,  and  (d)  other  specified
achievements.  In the  event  that any of the  Milestones  are not  achieved  by
December  9, 2002,  the  portion of the  Performance  Options  relating  to that
Milestone  will  expire.   The  Performance   Options  will  immediately  become
exercisable  in full upon a "change in  control"  (as the term is defined in the
performance stock option contracts) of the Company.

         The option exercise price may be paid in cash, or certified check, with
previously  acquired shares of Common Stock which have been held by Mr. Sarna or
Mr. Febish for at least six months, or a combination of the foregoing. The Board
of Directors (or the Committee or any other designated committee of the Board of
Directors)  may permit  payment of the option  exercise price by delivery by the
optionee  of an  executed  notice,  together  with  a  copy  of  the  optionee's
irrevocable  instructions  to a broker to deliver  promptly  to the  Company the
amount of sale or loan proceeds sufficient to pay such exercise price.

         If the optionee's relationship as an employee of the Company terminates
for any reason (other than as a result of death or disability of the  optionee),
he may exercise his Performance Option at any time within three months after the
date of  termination,  but not  after  the date  the  Performance  Option  would
otherwise have expired;  provided that if the relationship is terminated  either
(a) by the Company for "Cause" (as that term is defined in the performance stock
option contracts) or (b) by the optionee, except for "Good Reason" (as that term
is defined in the performance stock option contracts) or with the consent of the
Company, the Performance Option terminates immediately.

         If the optionee  dies (a) while he is an employee of the  Company,  (b)
within three months after he terminates his  relationship  with the Company,  or
(c) within one year  following his  termination  of employment  with the Company
because he is disabled (as the term is defined in the

                                      -21-
<PAGE>

performance stock option contracts), the Performance Option may be exercised, to
the  extent  exercisable  on the  date of the  optionee's  death,  by his  legal
representative,  at any time  within  one year after his death but not after the
date the  Performance  Option would  otherwise  have expired.  If the optionee's
relationship as an employee of the Company terminates because he is disabled, he
may  exercise  his  Performance  Options at any time  within one year after such
date,  but not  after  the date the  Performance  Option  would  otherwise  have
expired.

         In the event of a consolidation,  merger,  sale of all or substantially
all of the Company's  assets,  liquidation or dissolution of the Company,  then,
upon  exercise of the  Performance  Options,  Mr.  Sarna and Mr.  Febish will be
entitled to receive  the stock  which they would have been  entitled if they had
exercised the Performance Options prior to that event.


ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                  --------------------------------------------------------------

         The following table sets forth, as of March 16, 2000,  information with
respect to the beneficial ownership of the Common Stock by (i) each person known
by the Company to  beneficially  own more than 5% of the  outstanding  shares of
Common Stock, (ii) each director and nominee director of the Company, (iii) each
Executive  Officer  named  in  the  Summary  Compensation  Table  herein  titled
"Executive Compensation" and (iv) all directors,  nominee director and executive
officers of the Company as a group.

<TABLE>
<CAPTION>


                            Name and                              Amount and
                           Address of                             Nature of             Percent of
                       Beneficial Owner(1)                        Beneficial             Class(3)
                       -------------------                         Owner(2)              -------
                                                                   --------
          <S>                                                    <C>                    <C>
           David E. Y. Sarna (4) (5)                                189,831               4.32%

           George J. Febish (4) (6)                                 229,583               5.23%

           Daniel E. Ryan (7)                                        15,831                 *

           Michael A. Burak (8)                                      11,832                 *

           Stanley A. Hirschman                                           0                 0


           All officers, directors and nominee                      447,077               9.9 %
           director as a group (5 persons) (3)(9)
</TABLE>

----------------------
*        Less than 1%.

(1)      Unless  otherwise  indicated,  the  business  address  of  each  of the
         officers and directors is c/o ObjectSoft Corporation, Continental Plaza
         III, 433 Hackensack Avenue, Hackensack, New Jersey 07601.

(2)      Unless  otherwise  noted,  the Company  believes that all persons named
         have sole  voting and  investment  power with  respect to all shares of
         Common Stock listed as owned by them.

                                      -22-
<PAGE>

(3)      Each  person's  percentage  interest is  determined  assuming  that all
         options,  warrants  and  convertible  securities  that are held by such
         person  (but  not  by  anyone  else)  and  which  are   exercisable  or
         convertible  within 60 days have been  exercised for or converted  into
         Common Stock.

(4)      Includes, for each of Messrs. Sarna and Febish, immediately exercisable
         warrants  to  purchase  8,333  shares  of  Common  Stock,   immediately
         exercisable  options to purchase  36,666 shares of Common Stock granted
         under the 1996 Plan, and immediately exercisable performance options to
         purchase 50,000 shares of Common Stock, subject to Stockholder approval
         as set forth above under the heading "Performance Stock Options."

(5)      Includes  25,000  shares  held by The David E. Y.  Sarna  Family  Trust
         ("Sarna  Trust"),  of which Rachel Sarna,  the wife of Mr.  Sarna,  and
         Melvin  Weinberg,  Esq. are the  trustees.  The children of Mr. and Dr.
         Sarna  are the  sole  beneficiaries.  Mr.  Sarna  disclaims  beneficial
         ownership of the shares held by the Sarna Trust.  Mr.  Weinberg and Dr.
         Sarna are trustees of the Sarna Trust and share  dispositive power with
         respect to the shares of Common Stock owned by the Sarna Trust, but Dr.
         Sarna has the sole  voting  power  with  respect  to such  shares.  Mr.
         Weinberg disclaims beneficial ownership of the shares held by the Sarna
         Trust.

(6)      Includes  25,000  shares  held by The  George J.  Febish  Family  Trust
         ("Febish Trust"),  of which Janis Febish,  the wife of Mr. Febish,  and
         Melvin  Weinberg,  Esq. are the trustees.  The children of Mr. and Mrs.
         Febish are the sole  beneficiaries.  Mr.  Febish  disclaims  beneficial
         ownership of the shares held by the Febish Trust. Mr. Weinberg and Mrs.
         Febish are  trustees of the Febish  Trust and share  dispositive  power
         with respect to the shares of Common  Stock owned by the Febish  Trust,
         but Mrs.  Febish has the sole voting power with respect to such shares.
         Mr.  Weinberg  disclaims  beneficial  ownership of the shares of Common
         Stock held by the Febish Trust.

(7)      Includes  immediately  exercisable  stock  options to  purchase  15,831
         shares of Common Stock granted under the 1996 Plan.

(8)      Includes  immediately  exercisable  stock  options to  purchase  11,666
         shares of Common  Stock  granted  under the 1996 Plan and 166 shares of
         Common  Stock  purchased  on the open market in the name of Lois Burak,
         Mr.  Burak's  wife.  Mr. Burak  disclaims  beneficial  ownership of the
         shares of Common Stock held by his wife.

(9)      Includes  200,829  shares of Common Stock which  certain of the current
         Executive  Officers and Directors  have a right to acquire  pursuant to
         presently  exercisable  stock options and 16,666 shares of Common Stock
         which certain of the current  Executive  Officers and Directors  have a
         right to acquire pursuant to presently exercisable warrants.


                                      -23-
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

LOANS TO OFFICER

         On  January 2, 1997 the  Company  extended  to Mr.  Sarna a loan in the
amount of $440,000  (the "1997 Loan "). The  maturity  date of the 1997 Loan was
extended  from November 30, 1997 to May 31, 2000.  Mr. Sarna  utilized the funds
for a block purchase of 80,000 shares of the Common Stock from the market maker,
who was also the underwriter of the Company's public offering, in an open market
transaction.  In March 1998, Mr. Sarna executed a Security Agreement in favor of
the Company in which he pledged as collateral for the 1997 Loan certain contract
rights to  receive  an option to  acquire  certain  marketable  securities.  The
individual  who was to transfer  this option  failed to transfer  the option and
thereafter,  in May 1999,  filed for  bankruptcy  protection.  Mr. Sarna and the
Company have filed claims in bankruptcy  court based upon the failure to deliver
the option and have sued such  individual in  bankruptcy  court to prevent their
claims  against  him from  being  discharged  in  bankruptcy.  The costs of such
lawsuit are being borne by the  Company.  The Company has  provided an allowance
for loan loss aggregating $270,000 with respect to the 1997 Loan.

         During  1999,  the Company  made a personal  interest-free  loan to Mr.
Sarna in the  amount of  $105,054.84.  In August  1999,  Mr.  Sarna  executed  a
promissory note in favor of the Company, which note is secured by Mr.
Sarna's pledge of 10,000 shares of Common Stock.


ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K
                  --------------------------------

         a.       EXHIBITS

            2.1(1)      Certificate   of  Ownership  and  Merger  of  ObjectSoft
                        Corporation (a New Jersey corporation) into the Company
            2.2(1)      Plan of Merger of ObjectSoft  Corporation  (a New Jersey
                        corporation) into the Company
            3.1(a)(1)   Certificate of Incorporation of the Company
            3.1(b)(2)   Amendment  to  Certificate  of   Incorporation   of  the
                        Company, dated November 14, 1996
            3.1(c)(12)  Amendment  to  Certificate  of   Incorporation   of  the
                        Company, dated June 3, 1999
            3.1(d)(12)  Amendment  to  Certificate  of   Incorporation   of  the
                        Company, dated October 12, 1999
            3.2(2)      Amended and Restated By-laws of the Company
            4.1(2)      Form of Representative's Unit Purchase Option Agreement
            4.2(2)      Specimen Certificate of the Company's Common Stock
            4.3(1)      Form of Class A Warrant Agreement
            4.4(3)      Private Equity Line of Credit Agreement, dated as of May
                        13, 1998
            4.5(4)      Agreement of  Amendment  and  Modification,  dated as of
                        September 29, 1998
            4.6(10)     Certificate  of  Designation  of  Series  C  Convertible
                        Preferred Stock
            4.7(3)      Form of Warrant A
            4.8(3)      Form of Warrant B
            4.9(3)      Registration Rights Agreement, dated as of May 13, 1998
            4.10(5)     Amended and Restated 6% Series D  Convertible  Preferred
                        Stock.

                                      -24-
<PAGE>

                        Subscription Agreement, dated as of December 30, 1998
            4.11(5)     Certificate of Designation of Series D Preferred Stock
            4.12(5)     Amended Certificate of Designation of Series D Preferred
                        Stock
            4.13(5)     Form of Investor's Warrant for December 1998 financing
            4.14(5)     Registration Rights Agreement,  dated as of December 30,
                        1998
            4.15(6)     6% Series E  Convertible  Preferred  Stock  Subscription
                        Agreement, dated as of March 17, 1999
            4.16(6)     Certificate of Designation of Series E Preferred Stock
            4.17(6)     Amended Certificate of Designation of Series E Preferred
                        Stock
            4.18(6)     Form of Investor's Warrant for March 1999 financing
            4.19(6)     Registration  Rights  Agreement,  dated as of March  17,
                        1999
            4.20(7)     6% Series F  Convertible  Preferred  Stock  Subscription
                        Agreement, dated as of August 13, 1999
            4.21(7)     Amendment Agreement, dated as of August 19, 1999
            4.22(7)     Certificate of Designation of Series F Preferred Stock
            4.23(7)     Form of Warrant  issued  pursuant to the August 13, 1999
                        Subscription Agreement
            4.24(7)     Registration  Rights  Agreement,  dated as of August 13,
                        1999
            4.25(8)     6% Series G  Convertible  Preferred  Stock  Subscription
                        Agreement, dated as of December 30, 1999
            4.26(8)     Certificate of Designation of Series G Preferred Stock
            4.27(8)     Form of Investor's Warrant for December 1999 financing
            4.28(8)     Registration Rights Agreement, dated December 30, 1999
            10.1(2)     Employment Agreement,  dated as of July 1, 1996, between
                        the Company and David E. Y. Sarna
            10.2(2)     Employment  Agreement dated as of July 1, 1996,  between
                        the Company and George J. Febish
            10.3(a)(11) 1996 Stock Option Plan, as amended as of March 15, 1999
            10.3(b)(12) 1996 Stock  Option  Plan,  as amended as of January  18,
                        2000 (subject to stockholder approval)
            10.4(1)     Form of Bridge Loan Promissory Note
            10.5(1)     Form of Bridge Loan Warrant
            10.6(1)     Form of  Warrant  Agreement  with  placement  agent  for
                        Bridge Loan Offering
            10.7(1)     Form   of   Subscription    Agreement   and   Investment
                        Representation of Investor with each of the investors in
                        the July 1996 Offering
            10.8(1)     Form of July 1996 Warrant Agreement
            10.9(1)     Form of Warrant  Agreement with placement agent for July
                        1996 Offering
            10.10(1)    Agreement,  dated January 11, 1996, as amended, with the
                        City of New York  (Department of Information  Technology
                        and Telecommunications)
            10.13(2)    Form of Investor Warrant
            10.14(2)    Form of Officer Warrant
            10.15(2)    Cyndel Warrant
            10.16(9)    Promissory  Note  between  David  E.  Y.  Sarna  and the
                        Company, dated January 2, 1997
            10.17(9)    Security  Agreement  between  David E. Y.  Sarna and the
                        Company, dated March 18, 1998
            10.18(12)   Performance  Stock Option Agreement  between the Company
                        and David E. Y. Sarna, dated as of December 9, 1999

                                      -25-
<PAGE>

            10.19(12)   Performance  Stock Option Agreement  between the Company
                        and George J. Febish, dated as of December 9, 1999
            23.1(12)    Consent of Richard A. Eisner & Company, LLP
            27.1(12)    Financial Data Schedule

         b.       REPORTS ON FORM 8-K

         The  Company  did not file any  reports  on Form  8-K  during  the last
quarter of fiscal  1999.  The  Company  filed a report on Form 8-K on January 4,
2000 in connection  with the  Company's  entering into a 6% Series G Convertible
Preferred Stock Subscription Agreement dated December 30, 1999 among the Company
and certain investors.

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

(1)      Denotes   exhibits   incorporated   by  reference   to  the   Company's
         Registration Statement on Form SB-2 (Registration No. 333-10519).
(2)      Denotes exhibits  incorporated by reference to the Company's  Amendment
         No.  1  to  Registration  Statement  on  Form  SB-2  (Registration  No.
         333-10519).
(3)      Denotes   exhibits   incorporated   by  reference   to  the   Company's
         Registration Statement on Form S-3 (Registration No. 333-57753).
(4)      Denotes an exhibit incorporated by reference to the Company's Amendment
         No.  2  to  Registration   Statement  on  Form  S-3  (Registration  No.
         333-57753).
(5)      Denotes  exhibits  incorporated  by reference to the Company's  Current
         Report on Form 8-K filed on January 15, 1999.
(6)      Denotes  exhibits  incorporated  by reference to the Company's  Current
         Report on Form 8-K filed on March 23, 1999.
(7)      Denotes   exhibits   incorporated   by  reference   to  the   Company's
         Registration Statement on Form S-3 (Registration No. 333-86887).
(8)      Denotes  exhibits  incorporated  by reference to the Company's  Current
         Report on Form 8-K filed on January 4, 2000.
(9)      Denotes  exhibits  incorporated  by reference to the  Company's  Annual
         Report on Form 10-KSB for the fiscal year ended December 31, 1997.
(10)     Denotes  an  exhibit   incorporated   by  reference  to  the  Company's
         Registration Statement on Form S-8 (Registration No. 333-69985).
(11)     Denotes  an  exhibit   incorporated   by  reference  to  the  Company's
         Registration Statement on Form S-8 (Registration No. 333-90303).
(12)     Filed herewith.



                                      -26-
<PAGE>


                                   SIGNATURES

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


Dated:  March 29, 2000                        OBJECTSOFT CORPORATION


                                              By:   /s/ David E. Y. Sarna
                                                    ---------------------------
                                                    David E. Y. Sarna, Chairman


         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 dated indicated:

<TABLE>
<CAPTION>

               Signature                                        Title                                   Date

<S>                                       <C>                                               <C>
 /s/ David E. Y. Sarna                     Chairman, Co-Chief Executive Officer,              March 29, 2000
-------------------------------            Secretary and Director (Principal
David E.Y. Sarna                           Executive Officer, Principal Financial
                                           Officer and Principal Accounting Officer)


 /s/  George J. Febish                     President, Co-Chief Executive Officer,             March 29, 2000
--------------------------------           Treasurer  and Director  (Principal  Executive
George J. Febish                           Officer)


                                           Director                                           March __, 2000
--------------------------------
Daniel E. Ryan


 /s/ Michael A. Burak                      Director                                           March 29, 2000
-------------------------------
Michael A. Burak

</TABLE>

<PAGE>

OBJECTSOFT CORPORATION

CONTENTS

                                                       PAGE
                                                       ----

FINANCIAL STATEMENTS

   Independent auditors' report                                       F-2

   Balance sheet as of December 31, 1999                              F-3

   Statements of operations for the years ended
      December 31, 1999 and 1998                                      F-4

   Statements of changes in stockholders' equity
      for the years ended December 31, 1999 and 1998                  F-5

   Statements of cash flows for the years ended
      December 31, 1999 and 1998                                      F-6

   Notes to financial statements                                      F-7



<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
ObjectSoft Corporation
Hackensack, New Jersey


We have audited the accompanying  balance sheet of ObjectSoft  Corporation as of
December  31,  1999  and  the  related  statements  of  operations,  changes  in
stockholders' equity and cash flows for each of the years in the two-year period
ended December 31, 1999. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements enumerated above present fairly, in all
material  respects,  the  financial  position of  ObjectSoft  Corporation  as of
December 31, 1999 and the results of its  operations  and cash flows for each of
the years in the two-year  period ended  December 31, 1999, in  conformity  with
generally accepted accounting principles.



/s/ Richard A. Eisner & Company, LLP

Richard A. Eisner & Company, LLP


Florham Park, New Jersey
February 23, 2000


                                                                            F-2
<PAGE>


OBJECTSOFT CORPORATION

BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<CAPTION>


ASSETS
<S>                                                                                                   <C>
Current assets:
   Cash and cash equivalents                                                                            $2,311,000
   Marketable securities                                                                                   323,000
   Accounts receivable, less allowance for doubtful accounts of $130,000                                    29,000
   Prepaid expenses and other current assets                                                               338,000
   Deferred tax asset                                                                                      258,000
                                                                                                   ---------------

      Total current assets                                                                               3,259,000

Furniture and equipment, at cost, net of accumulated depreciation                                        1,584,000
Capitalized software                                                                                       215,000
Notes receivable - officer/shareholder, less allowance for loan loss of $270,000                           275,000
Other assets                                                                                                94,000
Deferred tax asset - noncurrent                                                                            200,000
                                                                                                   ---------------
                                                                                                        $5,627,000
                                                                                                   ================
LIABILITIES
Current liabilities:
   Current portion of long-term debt                                                                       $12,000
   Current portion of obligations under capital lease                                                      137,000
   Accounts payable                                                                                        345,000
   Accrued expenses                                                                                        173,000
   Other liabilities                                                                                         3,000
                                                                                                   ---------------
      Total current liabilities                                                                            670,000

Long-term debt                                                                                               1,000
Obligations under capital lease                                                                            375,000
                                                                                                   ---------------
      Total liabilities                                                                                  1,046,000
                                                                                                   ---------------

Commitments

STOCKHOLDERS' EQUITY
6% non-voting  convertible Series E preferred stock, $100 par, authorized 25,000
shares;
   issued and outstanding 1,000 shares                                                                     100,000
6% non-voting convertible Series G preferred stock, $.0001 par, authorized 30,000 shares,
   issued and outstanding 21,200 shares, at stated value                                                 2,120,000
Common stock, $.0001 par, authorized 50,000,000 shares, issued and outstanding
   4,257,895 shares
Additional paid-in capital                                                                              14,519,000
Accumulated deficit                                                                                    (12,158,000)
                                                                                                   ---------------

      Total stockholders' equity                                                                         4,581,000
                                                                                                   ---------------

                                                                                                        $5,627,000
                                                                                                   ================
</TABLE>

See Notes to financial statements                                           F-3


<PAGE>

OBJECTSOFT CORPORATION

STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                                                              YEAR ENDED
                                                                                                             DECEMBER 31,
                                                                                                   ------------------------------
                                                                                                        1999              1998
                                                                                                   -------------    -------------

Revenues:
<S>                                                                                               <C>             <C>
   Development and training                                                                        $                $      44,000
   Rental and kiosk related income                                                                       136,000          117,000
                                                                                                   -------------    -------------

      Total revenues                                                                                     136,000          161,000
                                                                                                   -------------    -------------

Expenses:
   Cost of services                                                                                      835,000          583,000
   Research and development                                                                              410,000          491,000
   General and administrative                                                                          3,204,000        2,014,000
                                                                                                   -------------    -------------

      Total expenses                                                                                   4,449,000        3,088,000
                                                                                                   -------------    -------------

Loss from operations                                                                                  (4,313,000)      (2,927,000)
                                                                                                   -------------    -------------
Other income (expense):
   Realized and unrealized gain (loss) on marketable securities                                          (12,000)          (7,000)
   Interest and dividend income                                                                           62,000           73,000
   Interest expense                                                                                      (68,000)         (14,000)
                                                                                                   -------------    -------------

      Total other income (expense)                                                                       (18,000)          52,000
                                                                                                   -------------    -------------

(LOSS) BEFORE INCOME TAX BENEFIT                                                                      (4,331,000)      (2,875,000)
Income tax benefit                                                                                       411,000          360,000
                                                                                                   -------------    -------------

NET (LOSS)                                                                                         $  (3,920,000)   $  (2,515,000)
                                                                                                   ==============   =============

Net (loss) available to common stockholders                                                         $ (4,973,000)   $  (2,515,000)
                                                                                                    ============    =============

Basic and diluted net loss per share                                                                   $(3.20)          $(3.32)
                                                                                                       ======           ======


</TABLE>

See Notes to financial statements                                           F-4


<PAGE>


STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>


                                       CONVERTIBLE
                                        PREFERRED
                                          STOCK              COMMON STOCK              ADDITIONAL
                                          -----              ------------               PAID-IN
                                          AMOUNT         SHARES         AMOUNT          CAPITAL         (DEFICIT)           TOTAL
                                          ------         ------         ------          -------         ---------           -----
<S>                                 <C>              <C>           <C>              <C>                <C>             <C>
BALANCE, JANUARY 1, 1998                              4,082,676     $      0         $6,942,000        $(4,670,000)      $2,272,000
Consolidation of common
   stock on the basis of
   1 for 6                                           (3,402,230)
                                      ------------  -----------     --------       -------------     --------------   --------------
BALANCE, JANUARY 1, 1998,
   RESTATED                                             680,446                       6,942,000         (4,670,000)       2,272,000
Common stock, net of costs                              119,907                         337,000                             337,000
Issuance of preferred stock           $  2,298,000        9,630                        (212,000)                          2,086,000
Compensatory warrants and
   common stock                                           8,333                          13,000                              13,000
Conversion of preferred stock
   to common stock                      (1,248,000)     323,479                       1,248,000                                   0

Net loss                                                                                                (2,515,000)      (2,515,000)
                                      ------------  -----------     --------       -------------     --------------   --------------

BALANCE, DECEMBER 31, 1998               1,050,000    1,141,795            0          8,328,000         (7,185,000)       2,193,000

Issuance of preferred stock              6,570,000                                     (706,000)                          5,864,000
Compensatory warrants, options
   and common stock                                      58,333                         399,000                             399,000
Conversion of preferred stock
   to common stock                      (5,400,000)   3,021,221                       5,400,000
Exercise of options and
   warrants                                               9,894                          45,000                              45,000
Discount on preferred stock
   accounted for as a dividend                                                          993,000           (993,000)
Dividends paid in common stock                           26,652                          60,000            (60,000)

Net loss                                                                                                (3,920,000)      (3,920,000)
                                      ------------  -----------     --------       -------------     --------------   --------------

BALANCE, DECEMBER 31, 1999            $  2,220,000    4,257,895     $      0        $14,519,000       $(12,158,000)      $4,581,000
                                      ============  ===========     ========        ===========      =============      ==========

</TABLE>

See Notes to financial statements                                           F-5

<PAGE>


OBJECTSOFT CORPORATION

Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                           YEAR ENDED
                                                                                           DECEMBER 31,
                                                                                   --------------------------
                                                                                        1999             1998
                                                                                   -----------    -----------
<S>                                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net (loss)                                                                      $(3,920,000)   $(2,515,000)
   Adjustments to reconcile net loss to net cash (used in) operating activities:
      Depreciation and amortization                                                    522,000        362,000
      Deferred tax benefit                                                             (98,000)      (360,000)
      Warrants and common stock issued for services rendered                           277,000         13,000
      Provision for uncollectible accounts and officer/shareholder notes               325,000         75,000
      Unrealized (gain) loss on marketable securities                                  (30,000)        66,000
      Changes in:
        Marketable securities                                                         (293,000)       850,000
        Accounts receivable                                                             (7,000)       212,000
        Prepaid expenses and other current assets                                      (21,000)        40,000
        Other assets                                                                    62,000        (85,000)
        Accounts payable                                                              (177,000)       226,000
        Accrued expenses                                                                55,000         34,000
        Other liabilities                                                               (1,000)         2,000
                                                                                   -----------    -----------

         Net cash used in operating activities                                      (3,306,000)    (1,080,000)
                                                                                   -----------    -----------
CASH FLOW FROM INVESTING ACTIVITIES:
   Capital expenditures                                                               (925,000)      (476,000)
   Capitalized software                                                               (251,000)       (72,000)
   Note receivable - other                                                                             25,000
   Notes receivable - officer/shareholder                                             (105,000)
                                                                                   -----------    -----------
        Net cash used in investing activities                                       (1,281,000)      (523,000)
                                                                                   -----------    -----------
CASH FLOW FROM FINANCING ACTIVITIES:
   Repayment of note payable                                                           (15,000)       (16,000)
   Proceeds from sale - leaseback                                                      123,000        337,000
   Proceeds from exercise of warrants and nonemployee options                           45,000
   Principal payments on obligations under capital leases                             (101,000)       (30,000)
   Net proceeds from issuance of preferred stock                                     5,864,000      2,085,000
                                                                                   -----------    -----------

        Net cash provided by financing activities                                    5,916,000      2,376,000
                                                                                   -----------    -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                            1,329,000        773,000
Cash and cash equivalents, beginning of period                                         982,000        209,000
                                                                                   -----------    -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                           $ 2,311,000    $   982,000
                                                                                   ===========    ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   Cash paid for:
      Interest                                                                     $    58,000    $    12,000
                                                                                   ===========    ===========
</TABLE>


                                                                            F-6
<PAGE>


OBJECTSOFT CORPORATION

NOTES TO FINANCIAL STATEMENTS


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

[1]    THE COMPANY:

       ObjectSoft  Corporation  (the  "Company")  is  currently  engaged  in the
       business  of  providing   transaction  based  and  advertising  supported
       services over the Internet and through public access kiosks  primarily in
       video stores and in various public  buildings.  Its kiosks may be sold to
       others or operated by the Company for operating income.

[2]    CASH AND CASH EQUIVALENTS:

       Cash and cash equivalents  include cash on hand,  demand deposits and all
       highly-liquid  investments with a maturity of three months or less at the
       time of purchase.

[3]    FURNITURE AND EQUIPMENT:

       Furniture   and   equipment   is  carried  at  cost,   less   accumulated
       depreciation.  Depreciation  is provided using the  straight-line  method
       over estimated useful lives of the assets (three to seven years).

[4]    SOFTWARE DEVELOPMENT COSTS:

       The Company capitalizes  software  development costs when the preliminary
       project  stage is completed.  All other  software  development  costs are
       expensed as research and development as incurred.

       The Company  amortizes the capitalized  software  development  costs over
       their  estimated  useful  life,  generally  two years.  It is  reasonably
       possible that the remaining economic useful life of the software may vary
       in the near term.

[5]    MARKETABLE SECURITIES

       The Company's  marketable  securities,  primarily equity securities,  are
       bought and held  principally  for the purpose of selling them in the near
       term and are  classified as trading  securities.  Trading  securities are
       recorded at fair value on the balance sheet in current  assets,  with the
       changes in fair value during the period reported in earnings.

[6]    PROVISION FOR INCOME TAXES:

       Deferred  income taxes arise from net operating  loss  carryforwards  and
       temporary  differences,  primarily  from income and  expense  items being
       reported on an accrual  basis for financial  statement  purposes and cash
       basis for tax purposes and capitalized software.



                                                                            F-7

<PAGE>


OBJECTSOFT CORPORATION

NOTES TO FINANCIAL STATEMENTS


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

[7]    STOCK-BASED COMPENSATION:

       Statement of Financial  Accounting  Standards  No. 123,  "Accounting  for
       Stock-Based  Compensation"  ("SFAS No. 123")  allows  companies to either
       expense the estimated fair value of stock options granted to employees or
       to continue to follow the intrinsic value method set forth in APB Opinion
       25,  "Accounting  for Stock Issued to Employees"  ("APB 25") but disclose
       the pro forma  effects on net  (loss)  had the fair value of the  options
       been  expensed.  The  Company  has elected to continue to apply APB 25 in
       accounting for its stock option incentive plans.

[8]    PER SHARE DATA:

       The basic and  diluted  per share data has been  computed on the basis of
       the loss applicable to common  stockholders  for each year divided by the
       weighted average number of shares of common stock outstanding.

       The  following  summarizes  the basic and diluted  loss per share for the
       years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                            -----------------------------------------  -----------------------------------------
                                           1 9 9 9                                      1 9 9 8

                                                        BASIC AND                                       BASIC AND
                                           WEIGHTED      DILUTED                       WEIGHTED          DILUTED
                                           AVERAGE      PER SHARE                       AVERAGE         PER SHARE
                              NET LOSS       SHARES        AMOUNT         NET LOSS       SHARES           AMOUNT
                            ----------     -------     ----------         --------       ------           ------
<S>                        <C>            <C>         <C>             <C>               <C>             <C>
Net loss                   $(3,920,000)                                $ (2,515,000)
Preferred stock
   dividends                (1,053,000)
                           -----------                                 ------------
Net loss applicable
   to common
   stockholders            $(4,973,000)     1,553,302    $(3.20)       $  (2,515,000)     758,116         $(3.32)
                           ===========      =========    =======       =============      =======         ======

</TABLE>

[9]    USE OF ESTIMATES:

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


NOTE B - NOTES RECEIVABLE OFFICER/SHAREHOLDER

The note receivable is due from the chairman of the Company's board of directors
and was  collateralized  by contract  rights to receive  from an  individual  an
option  exercisable  for marketable  securities  which the individual  failed to
deliver.  This note was initially due November 1997 and was extended to May 1999
and further  extended to May 31, 2000 and bears interest at 8 percent per annum.
While the  chairman  and the Company are  pursuing  legal  remedies  against the
individual,  the collectibility of this note cannot be determined.  Accordingly,
the Company has provided an allowance for loan loss aggregating $270,000.

During 1999,  the Company  loaned the chairman an additional  $105,000  which is
partially  collateralized  by 10,000  shares of the Company's  common stock,  is
non-interest bearing and due on demand.


                                                                            F-8

<PAGE>

NOTE C - FURNITURE AND EQUIPMENT

As of December 31, 1999, furniture and equipment consists of:


           Kiosks                                        $2,132,000
           Furniture and other equipment                    479,000
                                                          ---------
                                                          2,611,000

           Accumulated depreciation                       1,027,000
                                                          ---------

                                                         $1,584,000
                                                         ==========

Depreciation  expense  aggregated  $428,000  and  $271,000  for the years  ended
December  31,  1999 and 1998,  respectively.  Included  in  furniture  and other
equipment  are assets under capital  leases with costs of $593,000.  Accumulated
depreciation  on these  assets  aggregated  $196,000.  Depreciation  expense  on
equipment  under capital lease  aggregated  $120,000 and $33,000,  for the years
ended December 31, 1999 and 1998, respectively.

During  1999 and 1998,  the  Company  acquired  equipment  under  capital  lease
aggregating $427,000 and $47,000, respectively.


NOTE D - CAPITALIZED SOFTWARE

During the years  ended  December  31, 1999 and 1998,  the  Company  capitalized
software development costs which aggregated $251,000 and $72,000,  respectively.
Amortization of capitalized  software costs  aggregated  $95,000 and $91,000 for
the years ended December 31, 1999 and December 31, 1998, respectively.


NOTE E - OBLIGATIONS UNDER CAPITAL LEASE

Minimum future lease payments under capital leases expiring  through 2004, as of
December 31, 1999 are as follows:

           YEAR ENDING
           DECEMBER 31,                                          AMOUNT
           ------------                                          ------

              2000                                             $263,000
              2001                                              253,000
              2002                                              153,000
              2003                                               37,000
              2004                                                3,000
                                                           -------------
                                                                709,000
           Less amount representing interest                    197,000
                                                           ------------
           Present value of net minimum lease payments          512,000
           Due within one year                                  137,000
                                                           ------------
           Due after one year                                  $375,000
                                                           ============


                                                                            F-9

<PAGE>

OBJECTSOFT CORPORATION


NOTE F - LONG-TERM DEBT

Long-term debt as of December 31, 1999 consists of:

             Note payable collaterlized by equipment,
                interest at 15.44%, principal and interest
                of $1,077, due in monthly installments
                through January 2001                                $13,000

             Current portion of long-term debt                       12,000
                                                                     ------

             Long-term debt                                          $1,000
                                                                     ======


As of December 31, 1999,  annual  maturities of long-term debt  outstanding  are
$12,000 in 2000 and $1,000 in 2001.


NOTE G - ACCRUED EXPENSES:

Accrued expenses are:

             Accrued interest                                       $11,000
             Accrued rents                                           10,000
             Accrued legal fees                                      79,000
             Other                                                   73,000
                                                               ------------

                                                                   $173,000
                                                               ============


NOTE H - STOCKHOLDERS' EQUITY

COMMON STOCK:

In June 1999, the Company  increased the authorized  shares of common stock from
20 million to 50 million.

In September 1999, the Company declared a consolidation of its common stock on a
1  for  6  basis.  This  has  been  reflected  retroactively  in  the  financial
statements.  Therefore,  all per share and share  amounts have been  adjusted to
reflect the consolidation of shares.

PREFERRED STOCK:

From  April  1999  through  July  1999,  all of the  then  outstanding  Series D
preferred stock were converted into 174,176 shares of common stock.

In March  1999,  the Company  issued  20,000  shares of Series E 6%  convertible
preferred  stock and  warrants  to  purchase  8,333  shares  of common  stock at
$19.0125 per share for  $1,866,000,  net of costs.  Additionally,  the placement
agent received 1,000 shares of the Series E preferred stock and  aforementioned
warrant  to  purchase  8,333  shares of  common  stock.  From July 1999  through
December 1999,  20,000 shares of the  outstanding  Series E preferred stock were
converted  into 635,925  shares of common  stock.  The warrants  expire in March
2004.

                                                                           F-10

<PAGE>


NOTE H - STOCKHOLDERS' EQUITY (CONTINUED)

In August 1999, the Company issued for $2,062,000,  net of costs,  21,000 shares
of Series F 6% cumulative  convertible  preferred stock and warrants to purchase
39,167  shares  at $6.42 per  share  expiring  August  2004.  Additionally,  the
placement  agent received 2,500 shares of Series F preferred  stock. In December
1999,  all of the  outstanding  Series F  preferred  stock were  converted  into
2,211,120 shares of common stock.

In December 1999, the Company issued for $1,936,000, net of costs, 20,000 shares
of Series G 6% cumulative  convertible  preferred stock and warrants to purchase
200,000 shares at $2.95625 per share expiring December 2004.  Additionally,  the
placement   agent  received  1,200  shares  of  Series  G  preferred  stock  and
aforementioned  warrants  to  purchase  50,000  shares.  The number of shares of
common stock to be issued upon  conversion  shall be  determined by dividing the
purchase  price of the  shares to be  converted  by the lesser of $2.6875 or the
average of the two lowest  closing bid prices during the 20 business days ending
one day prior to the conversion ("look back period"). If the preferred stock has
not been  converted  into common stock by March 31,  2000,  the look back period
will increase by two business days on the first day of each month through August
2000.

Additionally,  in February  2000, the Company issued for $500,000 , 5,000 shares
of Series G preferred  stock and  warrants to purchase  50,000  shares of common
stock.  The  placement  agent  received  300 shares of the  preferred  stock and
warrants to purchase 12,500 shares of common stock.

The following summarizes the changes in non-voting  convertible  preferred stock
for the two years ended December 31, 1999:
<TABLE>
<CAPTION>


                    BALANCE,                       CONVERSION         BALANCE.                       CONVERSION          BALANCE,
                   JANUARY 1,                     INTO COMMON       DECEMBER 31,                     INTO COMMON       DECEMBER 31,
                      1997         ISSUANCES         STOCK              1998         ISSUANCES          STOCK              1999
                      ----         ---------         -----              ----         ---------          -----              ----
<S>               <C>           <C>               <C>            <C>              <C>                <C>               <C>
Series C:
   Shares                              12,480          (12,480)
   Amounts                       $  1,248,000       (1,248,000)

Series D:
   Shares                              10,500                            10,500                           (10,500)
   Amounts                       $  1,050,000                     $   1,050,000                       $(1,050,000)

Series E:
   Shares                                                                                 21,000          (20,000)             1,000
   Amounts                                                                          $  2,100,000      $(2,000,000)          $100,000

Series F:
   Shares                                                                                 23,500          (23,500)
   Amounts                                                                          $  2,350,000      $(2,350,000)

Series G:
   Shares                                                                                 21,200                              21,200
   Amounts                                                                          $  2,120,000                          $2,120,000

</TABLE>

STOCK OPTIONS AND WARRANTS:

The Company has warrants  outstanding,  expiring in April 2000, for the purchase
of 16,667 shares of common stock at an exercise price of $3.00. Additionally,  a
warrant to purchase 20,000 shares expired in 1999.

In November  1998,  the Company  issued  warrants to purchase  112,500 shares of
common  stock at prices  ranging from $6.00 to $30.00 per share and 8,333 shares
of  common  stock  in  exchange  for  professional   services  to  be  performed
substantially  over a 24 month period.  The estimated fair value of the warrants
and stock at date of issue  aggregated  $248,000 and is being  amortized over 24
months.  During  the  years  ended  December  31,  1999 and  1998,  the  Company
recognized  an  expense  of  $104,000  and  $13,000,  respectively.

NOTE H-STOCKHOLDERS' EQUITY (CONTINUED)

                                                                           F-11


<PAGE>


OBJECTSOFT CORPORATION

NOTES TO FINANCIAL STATEMENTS

During 1999,  the Company  issued  warrants  exercisable  into 55,540  shares of
common stock for services rendered by a financial advisor and a leasing company,
including 33,333 that vest upon completion of certain  financings.  The exercise
prices range from $2.92 to $13.00 and the warrants  expire in 2004. For the year
ended December 31, 1999, the Company recognized an expense of $173,000.

In December 1999, the Company issued to each of the co-chief  executives options
on 500,000  shares at $1.50 per share  subject to the  Company  meeting  certain
milestones  including the completion of certain  financings,  lease financing of
kiosks,  completion  and  advertising  agreements,  reduction  of the  quarterly
losses, certain kiosk enhancements and the completion of an offering of at least
$10 million.  The options  expire in 2004 and options for any milestones not met
by  December  10,  2002 are  cancelled.  The  Company  has  estimated  when each
milestone will most likely be met.  However,  these options require  stockholder
approval  which has not been received yet;  charges to operations  will commence
upon receipt of stockholder approval.

The Company  maintains a stock option plan  ("Plan")  pursuant to which  208,333
shares of  common  stock are  reserved  for  issuance  upon  exercise  of either
incentive or  nonincentive  stock options which may be granted from time to time
by  the  Board  of  Directors  to  employees  and  others.  In  June  1999,  the
stockholders approved increasing the shares reserved under the Plan from 125,000
shares to 208,333 shares.

The Company recognizes  compensation expense for the difference between the fair
value of the  underlying  common  stock and the grant price of the option at the
date of grant.  The effect of valuing the options,  on 1999 and 1998 net loss is
not necessarily  representative  of the effects on reported net earnings or loss
for future years due to, among other things, (1) the vesting period of the stock
options and (2) the fair value of additional  stock options in future years. Had
compensation  cost for the Company's  stock option plans been  determined  based
upon the fair value of the options at the grant date for awards  under the plans
consistent with the methodology prescribed under SFAS No. 123, the Company's pro
forma net loss in 1999 would have been approximately $4.0 million or $(3.26) per
share and the pro  forma net loss in 1998  would  have been  approximately  $2.6
million or $(3.42) per share.

The fair value of each option granted in 1999 and 1998 has been estimated on the
date of grant using the  Black-Scholes  options pricing model with the following
assumption:  no dividends yield,  expected  volatility of 90% in 1999 and 40% in
1998,  risk free interest rates of 4.84% and 6.03% in 1999 and 5.50% in 1998 and
expected lives of approximately  five years for the 1999 options and three years
for the 1998 options.  The weighted  average fair value of options  granted were
$1.81 per share during 1999 and $2.18 per share during 1998.

As of December 31, 1999,  2,190,598  shares were reserved for issuance of shares
for outstanding warrants and options.

The following summarizes stock option transactions under the Plan:
<TABLE>
<CAPTION>


                                                                        YEAR ENDED DECEMBER 31,
                                                            --------------------------------------------------
                                                                   1999                          1998
                                                           ----------------------      -----------------------
                                                                         WEIGHTED                     WEIGHTED
                                                                         AVERAGE                       AVERAGE
                                                                         EXERCISE                     EXERCISE
                                                           Shares         PRICE         SHARES          PRICE
                                                           ------         -----         ------          -----
        <S>                                               <C>           <C>            <C>           <C>
         Outstanding options at the beginning
            of year                                          65,278         $8.70         41,667        $23.76
         Options granted                                    147,500          3.29         72,500           8.70
         Options expired or canceled                         (4,445)         8.70        (48,889)         21.54
         Options exercised                                   (2,673)         8.70
                                                           --------                     --------
         Outstanding options at the end of
            year                                            205,660         $4.82         65,278        $ 8.70
                                                        ============                  ===========

</TABLE>

                                                                           F-12

<PAGE>

OBJECTSOFT CORPORATION

NOTE H - STOCKHOLDERS' EQUITY (CONTINUED)

The following table summarizes  information about the plan's options outstanding
as of December 31, 1999:

<TABLE>
<CAPTION>
                                               OPTIONS OUTSTANDING                      OPTIONS EXERCISABLE
                                               ---------------------------------   -----------------------------
                                                     WEIGHTED
                                                     AVERAGE
                                                    REMAINING         WEIGHTED                          WEIGHTED
               RANGE OF                            CONTRACTUAL         AVERAGE                           AVERAGE
               EXERCISE             NUMBER             LIFE           EXERCISE          NUMBER          EXERCISE
                PRICES           OUTSTANDING        (IN YEARS)          PRICE         EXERCISABLE         PRICE
                ------           -----------        ----------          -----         -----------         -----
               <S>              <C>                 <C>                <C>           <C>                 <C>
                $1.50               124,166            4.9              $1.50             63,000          $1.50
                 8.70                61,494            3.5               8.70             51,000           8.70
                13.50                20,000            4.1              13.50             12,000          13.50
</TABLE>


NOTE I - INCOME TAXES

The significant  components of the Company's deferred tax assets and liabilities
as of December 31, 1999 is as follows:

             Net operating losses carryforward                  $   3,925,000
             Research and development credit                          168,000
             Allowance for loan loss                                  108,000
             Other                                                     32,000
                                                                -------------
             Deferred tax asset                                     4,233,000
                                                                -------------
             Capitalized software                                      86,000
             Accrual to cash adjustment                               119,000
             Depreciation                                              29,000
                                                                -------------
             Deferred tax liability                                   234,000
             Valuation allowance                                   (3,541,000)
                                                                -------------

             Net deferred tax asset                             $     458,000
                                                                =============

Income tax benefit as of December 31, 1999 and 1998 consists of the following:

                                                  1999          1998
                                                  ----          ----

             Current:
                State                        $  313,000
             Deferred:
                State                            98,000     $360,000
                                               ----------   --------
                                               $411,000     $360,000
                                               ========     ========


The change in the valuation allowances for the years ended December 31, 1999 and
1998 was $735,000 and $507,000, respectively.

As permitted by New Jersey  statutes,  the Company has entered into an agreement
to sell certain New Jersey net  operating  losses and  research and  development
credits accordingly, state income tax benefits and deferred tax assets have been
recognized in 1999 and 1998.

                                                                           F-13

<PAGE>


NOTE I - INCOME TAXES (CONTINUED)


The difference  between the statutory  federal income tax rate and the effective
rate for the Company's  income tax benefit for each of the years ended  December
31, 1999 and 1998, respectively, is summarized as follows:

                                                               1999     1998
                                                               ----     ----

      Statutory federal income tax rate                         34.0%    34.0%
      State income tax benefit, net of federal tax effect        6.9      9.5
      Increase in valuation allowance                          (30.8)   (31.4)
      Miscellaneous                                              0.4      2.3
                                                                 ---      ---

      Effective income tax rate                                 10.5%    14.4%
                                                               =====   ======

As of December 31, 1999,  the Company had a net operating loss  carryforward  of
$10,924,000 for federal income tax purposes, which expires through 2019.


NOTE J - EMPLOYEE BENEFIT PLAN

The Company  maintains a  noncontributory  Employee  Savings Plan, in accordance
with the provisions of Section 401(k) of the Internal Revenue Code.  Pursuant to
the terms of the plan,  participants can defer a portion of their income through
contributions to the Plan.


NOTE K - FINANCIAL INSTRUMENTS, REVENUES AND OTHER MATTERS

[1]    CASH AND CASH EQUIVALENTS:

       The Company places its cash and cash equivalents in a commercial bank. At
       times, the cash balances exceed federally insured limits.

[2]    REVENUES:

       For the years ended December 31, 1999 and 1998, 86 percent and 73 percent
       of revenues were derived from one customer, respectively.

[3]    MICROSOFT CORPORATION:

       The  Company's   software  is  generally  based  upon  Microsoft  Windows
       technology.  Additionally,  it has  established a strategic  relationship
       with  Microsoft  that  management  believes  is  important  to its sales,
       marketing and support and product  development  activities.  Accordingly,
       any change in this  relationship  or any factor  adversely  affecting the
       demand for, or the use of Microsoft's Windows operating system could have
       a negative  impact on demand for the  Company's  products  and  services.
       Additionally,  changes  to  the  underlying  components  of  the  Windows
       operating  system would  require  changes to the  Company's  products and
       could  result  in the  loss of  sales if the  Company  did not  implement
       changes in a timely manner.

                                                                           F-14

<PAGE>


NOTE L - COMMITMENTS

[1]    LEASE INCOME:

       The Company leases five kiosks,  hardware and software to the City of New
       York.  All rental income  relates to this  agreement.  Additionally,  the
       Company can earn fees based upon the number of  transactions  effectuated
       in the kiosks.  The Company  extended its agreement  with the City of New
       York  through  January 1, 2001.  Under the terms of this  agreement,  the
       annual rental income is $135,000.

[2]    LEASE:

       The Company leases office space and equipment under operating leases with
       initial or  remaining  terms of one year or more  through  2007.  Minimum
       annual rentals are as follows:

                        YEAR ENDING
                        DECEMBER 31,                      AMOUNT
                        ------------                      ------
                              2000                      $ 182,000
                              2001                        177,000
                              2002                        178,000
                              2003                        185,000
                              2004                        199,000
                              Thereafter                  329,000
                                                     ------------
                                                      $ 1,250,000
                                                      ===========

       Rent  expense  approximated  $129,000  and  $100,000  for the years ended
       December 31, 1999 and 1998, respectively.

[3]    EMPLOYMENT AGREEMENTS:

       The Company  previously  entered into employment  agreements with two key
       executives  expiring in December 2001. Under the terms of the agreements,
       the aggregate  current  annual  compensation  is $215,000 per  executive.
       Additionally,  the agreements include provisions for bonuses (aggregating
       the sum of 5 percent of earnings before depreciation, interest, taxes and
       amortization and other amounts,  if any, to be determined by the board of
       directors),  increases in compensation  and severance  payment based upon
       certain events.


NOTE M - ADVERTISING COSTS

Advertising  costs are charged to operations in the year incurred and aggregated
$63,000  and  $41,000  for  the  years  ended   December   31,  1999  and  1998,
respectively.


                                                                           F-16

<PAGE>

                                 EXHIBITS INDEX
                                 --------------

            2.1(1)      Certificate   of  Ownership  and  Merger  of  ObjectSoft
                        Corporation (a New Jersey corporation) into the Company
            2.2(1)      Plan of Merger of ObjectSoft  Corporation  (a New Jersey
                        corporation) into the Company
            3.1(a)(1)   Certificate of Incorporation of the Company
            3.1(b)(2)   Amendment  to  Certificate  of   Incorporation   of  the
                        Company, dated November 14, 1996
            3.1(c)(12)  Amendment  to  Certificate  of   Incorporation   of  the
                        Company, dated June 3, 1999
            3.1(d)(12)  Amendment  to  Certificate  of   Incorporation   of  the
                        Company, dated October 12, 1999
            3.2(2)      Amended and Restated By-laws of the Company
            4.1(2)      Form of Representative's Unit Purchase Option Agreement
            4.2(2)      Specimen Certificate of the Company's Common Stock
            4.3(1)      Form of Class A Warrant Agreement
            4.4(3)      Private Equity Line of Credit Agreement, dated as of May
                        13, 1998
            4.5(4)      Agreement of  Amendment  and  Modification,  dated as of
                        September 29, 1998
            4.6(10)     Certificate  of  Designation  of  Series  C  Convertible
                        Preferred Stock
            4.7(3)      Form of Warrant A
            4.8(3)      Form of Warrant B
            4.9(3)      Registration Rights Agreement, dated as of May 13, 1998
            4.10(5)     Amended and Restated 6% Series D  Convertible  Preferred
                        Stock.
<PAGE>
                        Subscription Agreement, dated as of December 30, 1998
            4.11(5)     Certificate of Designation of Series D Preferred Stock
            4.12(5)     Amended Certificate of Designation of Series D Preferred
                        Stock
            4.13(5)     Form of Investor's Warrant for December 1998 financing
            4.14(5)     Registration Rights Agreement,  dated as of December 30,
                        1998
            4.15(6)     6% Series E  Convertible  Preferred  Stock  Subscription
                        Agreement, dated as of March 17, 1999
            4.16(6)     Certificate of Designation of Series E Preferred Stock
            4.17(6)     Amended Certificate of Designation of Series E Preferred
                        Stock
            4.18(6)     Form of Investor's Warrant for March 1999 financing
            4.19(6)     Registration  Rights  Agreement,  dated as of March  17,
                        1999
            4.20(7)     6% Series F  Convertible  Preferred  Stock  Subscription
                        Agreement, dated as of August 13, 1999
            4.21(7)     Amendment Agreement, dated as of August 19, 1999
            4.22(7)     Certificate of Designation of Series F Preferred Stock
            4.23(7)     Form of Warrant  issued  pursuant to the August 13, 1999
                        Subscription Agreement
            4.24(7)     Registration  Rights  Agreement,  dated as of August 13,
                        1999
            4.25(8)     6% Series G  Convertible  Preferred  Stock  Subscription
                        Agreement, dated as of December 30, 1999
            4.26(8)     Certificate of Designation of Series G Preferred Stock
            4.27(8)     Form of Investor's Warrant for December 1999 financing
            4.28(8)     Registration Rights Agreement, dated December 30, 1999
            10.1(2)     Employment Agreement,  dated as of July 1, 1996, between
                        the Company and David E. Y. Sarna
            10.2(2)     Employment  Agreement dated as of July 1, 1996,  between
                        the Company and George J. Febish
            10.3(a)(11) 1996 Stock Option Plan, as amended as of March 15, 1999
            10.3(b)(12) 1996 Stock  Option  Plan,  as amended as of January  18,
                        2000 (subject to stockholder approval)
            10.4(1)     Form of Bridge Loan Promissory Note
            10.5(1)     Form of Bridge Loan Warrant
            10.6(1)     Form of  Warrant  Agreement  with  placement  agent  for
                        Bridge Loan Offering
            10.7(1)     Form   of   Subscription    Agreement   and   Investment
                        Representation of Investor with each of the investors in
                        the July 1996 Offering
            10.8(1)     Form of July 1996 Warrant Agreement
            10.9(1)     Form of Warrant  Agreement with placement agent for July
                        1996 Offering
            10.10(1)    Agreement,  dated January 11, 1996, as amended, with the
                        City of New York  (Department of Information  Technology
                        and Telecommunications)
            10.13(2)    Form of Investor Warrant
            10.14(2)    Form of Officer Warrant
            10.15(2)    Cyndel Warrant
            10.16(9)    Promissory  Note  between  David  E.  Y.  Sarna  and the
                        Company, dated January 2, 1997
            10.17(9)    Security  Agreement  between  David E. Y.  Sarna and the
                        Company, dated March 18, 1998
            10.18(12)   Performance  Stock Option Agreement  between the Company
                        and David E. Y. Sarna, dated as of December 9, 1999

<PAGE>

            10.19(12)   Performance  Stock Option Agreement  between the Company
                        and George J. Febish, dated as of December 9, 1999
            23.1(12)    Consent of Richard A. Eisner & Company, LLP
            27.1(12)    Financial Data Schedule