UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                           Washington, DC 20549

                                FORM 10-KSB
[X] ANNNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934

                For the fiscal year ended December 31, 1999

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

                      Commission file number 0-11057

                         VICON FIBER OPTICS CORP.
              (Name of Small Business Issuer in its Charter)

               Delaware                           13-2615925
          (State of Incorporation)      (IRS Employer Identification No.)

                 90 Secor Lane, Pelham Manor, New York    10803
             (Address of Principal Executive Offices)   (Zip Code)

Issuer's telephone number (914) 738-5006

Securities registered pursuant to Section 12(b) of the Act:  None

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

                       Common Stock, $.01 par value
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months, 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 which is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  [ ]

Issuer's revenues for the year ended December 31, 1999:   $2,486,164.

Aggregate market value of the voting stock held by non-affiliates of the
Registrant as of December 31, 1999:  $12,573,734.

Number of common shares outstanding on December 31, 1999:  8,679,069

                            Page 1 of 41 Pages
<PAGE>

Item 1  Description of Business

General

Vicon Fiber Optics Corp. (the "Company") was incorporated in 1969 and
currently derives the majority of its revenue from,(1) the manufacture and
sale of fiber optic illuminating systems and components for use in
conjunction with dental equipment and instruments utilizing fiber optic
elements, and,(2) the manufacture and sale of decorative lamps utilizing
fiber optics for their illumination and color display.

Fiber optics are glass fibers through which light is transmitted.  Each
fiber is composed of an inner glass core with one index of refraction,
covered by an outer glass cladding or coating with a higher index of
refraction.  The difference in the index of refraction between the core
glass and the outside coating glass that forms the optical fiber
substantially reduces the dissipation of the light energy from the
filament. Optical fibers may be bundled or employed singly, depending on
their intended use.

There are two basic types of fiber optic bundles: unoriented fiber bundles
and oriented or coherent fiber bundles. Unoriented fiber bundles are used
for the transmission of light for illumination; oriented bundles are used
for the transmission of images ("Image Bundles").

Unoriented fiber optic illuminating systems and components have been and
currently are the type manufactured and utilized by the Company in its
dental and lamp products.  Unoriented fiber optic components consist of a
bundle or cable of thousands of unoriented glass fibers to conduct,
optically, light from a source (the "illuminator") specific area to be
illuminated regardless of the curvature or other normal distortion of the
fiber cable needed to avoid such obstacles.  The use of the fiber optic
cable permits the transmission of electricity and without any significant
transmission of heat.  Accordingly, fiber optic illuminating systems are
suitable for providing illumination under circumstances where the absence
of heat and electricity is desirable and where the area to be illuminated
is relatively inaccessible to conventional means of illumination, such as
in dentistry.

An Image Bundle is a bundle in which each individual filament in the bundle
has the same spatial relationship to all the other fibers in the bundle at
one end of the bundle as it has at the other end.  This allows the
transmission of an image from one end of the Image Bundle to the other
without substantial distortion.  Image Bundles are used to transmit images
in industrial and medical inspection scopes.




                            Page 2 of 41 Pages

<PAGE>

Company's History in the Dental Field

The fiber optics first applied to dental instrumentation were external
attachments to standard instruments used by dentists, such as the mirror,
handpiece (commonly known to the dental patient as the "drill") and
evacuator.  This type of system was introduced into the dental market
simultaneously by four manufacturers, among them the Company.  All the
systems provide much needed light, however, the external attachments and
the multiplicity of cables made them awkward and difficult to use.  To
remedy this problem, the Company developed two products:  (i) handpiece
tubing incorporating a fiber optic bundle, thereby eliminating the need for
a separate fiber optic cable for the handpiece, and (ii) coiled fiber optic
tubing, which reduced substantially the excess play found in conventional
fiber optic tubing previously used with diagnostic instruments.  After many
years of work with original equipment manufacturers of dental instruments,
the Company also developed a suitable design incorporating the Company's
fiber optic elements directly into the handpiece, with an ability to be
coupled to the remaining components of the Company's system.  Prior to 1981
the Company marketed, under its own name and label, its illumination system
consisting of an illuminator, fiber optic handpiece tubing and various
illuminating instruments such as the mirror, cheek retractor and
transilluminator nationally through distributors of dental products.  From
1981 to the present, the Company has marketed its illumination systems and
fiber optic elements to manufacturers and distributors of dental equipment
on a private label, joint venture and original equipment (OEM) basis.

The Company's Current Fiber Optic Dental Products

Currently, the Company manufactures two dental illuminators, one that is
mounted away from the dental work area.  The second consists of two modules
with a small light module under a utility tray in the dental work area and
a power module mounted away from the work area.  The light in both
illuminators is air activated when the handpiece or instrument is removed
from its console hanger.

Both illuminators are composed of a cooling fan, a rheostat and a high
intensity halogen projection lamp that focuses the light onto three fiber
optic cables.  The light is transmitted through the fiber optic cables in
the handpiece tubing that interfaces with the fiber optic element in the
handpiece.

Instruments and attachments are illuminated with one fiber optic cable
(primary probe) which is interchangeable with a transilluminator (used for
the back illumination of teeth), an illuminating mirror, a cheek retractor
providing general illumination, and an evacuator clip for illuminating a
suction tip.
                            Page 3 of 41 Pages


<PAGE>




Decorative Fiber Optics Products



The Company manufactures a line of decorative fiber optic lamps under the
tradename "Fantasia Products."  The Company commenced production and
national sales of the lamps in 1995.


Manufacturing in China


The Company manufactures its line of decorative fiber optic lamps in two
modern manufacturing facilities in southern China.

Raw Materials

All components of the Company's fiber optic illuminating systems other than
the fiber optic cables, which the Company manufactures with its own
equipment, are manufactured for the Company by others and assembled by the
Company at its plant.  Many of these components (such as the light source
and control module) are items inventoried by their manufacturers, and such
items or their equivalent are available from several sources.  Their
respective manufacturers make other components, such as the housing and
certain of the instrumentation for these systems, to the Company's plans
and specifications. In most cases, essential tooling for these components
is owned by the Company.  The Company uses only one source for each of
these components, but believes that alternative or supplementary sources
can readily be obtained. None of the Company's suppliers is affiliated with
the Company and the Company has no contractual relationship with any of
them except for purchase orders issued from time to time.  The Company
believes that an adequate and reliable supply of raw materials is and will
continue to be available for the manufacture its products.

Distribution and Sales

During 1999 one customer purchased approximately 16% of the Company's
products, another customer purchased 14% and another two customers
purchased 8%. The loss of any one or more of these four largest customers
by the Company would have a material adverse effect on the Company's
business.  In 1999, 5% of the Company's sales were to foreign customers.

As of December 31, 1999, the Company had a sales backlog of approximately
$525,000.  The Company believes that the backlog represents firm orders as
of that date.  As of December 31, 1998 the Company had a backlog of
approximately $490,000.  The Company believes that the increased backlog is
due primarily to the timing of orders from customers.

                               Page 4 of 41

<PAGE>

Competition

The Company believes it is one of the leading domestic manufacturers of
fiber optic components and illuminating systems for use in the dental
industry and of decorative fiber optic lamps.  While the Company has little
direct competition for its products, there are a few other domestic
manufacturers that produce similar products for the same markets as the
Company.  The Company depends on its proprietary manufacturing techniques
and abilities to design and manufacture products for the specific needs of
its customers at competitive prices with a high degree of quality and
service to enable the Company to maintain market share.

Employees

The Company has 25 full-time employees, of whom three are executives, two
are engineers, and one is administrative, with the balance consisting of
production employees.  A pool of workers adequate to accommodate projected
sales volume is available locally.  The Company considers its relations
with its employees good.

Investment

On July 2, 1998, the Company acquired 250,000 shares of common stock
(approximately  9%) of American Entertainment Group, Inc. ("AEG"), doing
business as "Another Universe.com.", at $2.00 per share, for a total of
$500,000.00 in cash.  As of December 31, 1999, it has been determined that
the investment in AEG has become worthless and the Company has taken a one
time charge against earnings for the full cost of the investment.


Item 2.  Description of Property

The Company's offices and plant are located at 90 Secor Lane, Pelham Manor,
New York, where the Company leases approximately 10,500 square feet, but
has made modifications to the facility that provide a total of
approximately 17,500 square feet of working area.  The Company has
approximately one and one-half year remaining on a three-year lease of
space.  The building is a two story, modern, fireproof concrete block
structure.  The aggregate annual rental paid by the Company in 1999 was
approximately $90,293.

The Company believes that the facilities currently in use are suitable and
adequate for its business.

Item 3.  Legal Proceedings

The Company or its property is not a party or subject to any pending
material legal proceeding.


                               Page 5 of 41
<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders

None.

                                  PART II


Item 5.  Market for the Registrant's Common Equity and
         Related Stockholder Matters

         (a)  Price Range of Common Stock
Set forth below in tabular form for the quarterly periods indicated are the
high and low bid prices of Vicon Common Stock in the over-the-counter
market as quoted by the National Quotation Bureau, Inc., or by market
makers.

                                   Bid Prices
                               Low           High
1998 First Quarter             7/8          1 1/8
Second Quarter                   1          1 1/2
Third Quarter                  5/8          1 7/8
Fourth Quarter                 1/2          25/32

1999 First Quarter           11/16         1 3/16
Second Quarter               27/32         1 7/32
Third Quarter                 9/16          27/32
Fourth Quarter               15/32          1 3/4




Such over-the-counter market quotations reflect inter-dealer prices without
retail mark up, mark down or commission and may not necessarily represent
actual transactions.

         (b)  Approximate Number of Equity Security Holders

                                     Approximate Number of Record
         Title of Class            Holders as of December 31, 1999

         Common Stock, $.01 par value               1300

         (c)  Dividend Policy

Holders of Common Stock of the Company are entitled to a pro rata share of
any dividends when, as and if declared by the Board of Directors and to
share pro rata in any such distributions available for holders of Common
Stock upon liquidation of the Company.  There have been no cash dividends
paid since the inception of the Company and the Company's anticipated
capital requirements are such that it intends to follow a policy of
retaining earnings in order to finance growth of the business.

                              Page 6 of 41

<PAGE>



Item 6.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations

Financial Condition of Vicon

Vicon gauges its liquidity and financial stability by the measurements as
shown in the following table:

                              1999           1998
Working Capital            $1,931,320     $1,893,073
Current Ratio                7.4 to 1       3.5 to 1
Shareholders' Equity       $2,270,034     $3,016,852
Net Income (Loss)           ($803,067)       $96,498

The decrease in working capital during 1999 was due to net loss for the
year, less expenditures for capital equipment and long-term debt becoming
due within one year. Additionally, working capital was decreased by
adjustments to inventory (See NOTES 12, 14 and 15 to the financial
statements)

The decrease in shareholders' equity during 1999 was due to net loss for
the year.



                            Page 7 of 41 Pages
<PAGE>

Results of Operations

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

Net sales for the year ended December 31, 1999 as compared to 1998
decreased by 26%.  Management attributes this primarily to mergers and
acquisitions within the dental video component industry resulting in the
Company's major video dental customers substantially reducing their orders.


Cost of sales percentage increased to 82.4% for 1999 compared to 62.3% in
1998.  Management attributes this to fixed manufacturing overhead being
spread over lower sales volume, a $93,000 increase in the reserve for
obsolete inventory, and also due to other inventory adjustments (See Notes
12, 14 and 15 to the financial statements).


Selling, general and administrative expenses decreased to $829,073 in 1999
as compared to $1,037,890 in 1998, a decrease of $208,817.  Management
attributes this to a general decrease in the costs of marketing and
administrative expenses.


Item 7.  Financial Statements



                       VICON FIBER OPTICS CORP.
                         FINANCIAL STATEMENTS
                                (Restated)
                          FORM 10-KSB ITEM 7


                     YEAR ENDED DECEMBER 31, 1999















































                             Page 8 of 41 Pages
<PAGE>
          VICON FIBER OPTICS CORP. INDEX TO FINANCIAL STATEMENTS
                                (Restated)
                                                     PAGE

Independent Auditors' Report                         F-3

Financial Statements:
      Balance Sheet - December 31, 1999              F-4 - F-5

Financial Statements for each of the two years in the
      period ended December 31, 1999:
       Statements of Income                          F-6
       Statements of Shareholders' Equity            F-7
       Statements of Cash Flows                      F-8

Notes to Financial Statements                        F-9 - F-25














                                 F-2
                         Page 9 of 41 Pages
<PAGE>


                     INDEPENDENT AUDITORS' REPORT


                                (Restated)


To the Shareholders and Board of Directors
Vicon Fiber Optics Corp.
Pelham Manor, New York

       We have audited the Balance Sheet of Vicon Fiber Optics Corp. as of
December 31, 1999 and the related Statements of Income, Shareholders'
Equity and Cash Flows for each of the two years in the 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 referred to above present
fairly, in all material respects, the financial position of Vicon Fiber
Optics Corp. as of December 31, 1999 and the results of its operations and
its cash flows for each of the two years in the period ended December 31,
1999, in conformity with generally accepted accounting principles, and
after giving effect to the restatements for overstated inventory.

       In our original report, dated March 16, 2000, we expressed an
unqualified opinion on such financial statements, and our opinion on the
revised statements, as expressed herein, remains unqualified.

                                         Sheft Kahn & Company LLP
                                         CERTIFIED PUBLIC ACCOUNTANTS

March 16, 2000, except for the Notes, 12, 14 and 15 for which the date is
January 26,2001
Jericho, New York
                                         F-3
                            Page 10 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
<TABLE>
                               BALANCE SHEET

                             DECEMBER 31, 1999

                           (RESTATED) (NOTE 14)
<CAPTION>
                               ASSETS
<S>                                                       <C>
CURRENT ASSETS:
       Cash and cash equivalents (Note 1)                  $   354,379
       Accounts receivable - Net of allowance for
         uncollectible accounts of $7,500                      652,971
       Inventories (Note 3)                                    974,544
       Prepaid expenses and other current assets                23,603
       Deferred income taxes (Note 6)                          122,606
       Tax refunds receivable                                  105,159

          Total Current Assets                               2,233,262

PROPERTY, PLANT AND EQUIPMENT - Net of
       accumulated depreciation and
       amortization (Note 4)                                   383,625

OTHER ASSETS:
       Excess of cost over net assets of
         businesses acquired                                   260,607
       Deposits                                                  4,487
       Investment in joint venture (Note 9)                         0
       Cash surrender value of life insurance contract          96,027
       Investment (Note 13)                                          0

         Total Other Assets                                    361,121

         TOTAL ASSETS                                       $2,978,008

</TABLE>
See accompanying Notes to Financial Statements.
                                    F-4
                            Page 11 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
<TABLE>
                               BALANCE SHEET

                             DECEMBER 31, 1999
                                 (RESTATED)



                   LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
<S>                                                       <C>
CURRENT LIABILITIES:
      Current portion of long-term debt (Note 5)          $   102,006
      Accounts payable and accrued expenses                   174,327
      Income taxes payable (Note 6)                            25,609

         Total Current Liabilities                            301,942

LONG-TERM DEBT (Note 5)                                       347,492

Deferred income taxes payable (Note 6)                         62,877

         Total Liabilities                                    707,974

COMMITMENTS AND CONTINGENCIES (Note 7)

SHAREHOLDERS' EQUITY:
      Common stock - authorized 20,000,000 shares,
       $.01 par value, issued and outstanding
       8,679,069 shares                                        86,790
      Additional paid-in capital                            6,139,288
      Deficit                                            (  3,871,669)
      Deferred stock incentive (Note 8)                  (     84,375)

         Total Shareholders' Equity                         2,270,034

       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $2,978,008

</TABLE>


See accompanying Notes to Financial Statements.

                                    F-5
                            Page 12 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
<TABLE>
                     STATEMENTS OF INCOME (Restated)

                     FOR THE YEARS ENDED DECEMBER 31,

<CAPTION>

                                                     1999        1998
<S>                                              <C>         <C>
SALES                                             $2,475,032  $3,348,149

COST OF GOODS SOLD                                 2,039,946   2,087,380

       GROSS MARGIN                                  435,086   1,260,769

OPERATING EXPENSES:
      Selling, general and administrative expenses
             (Note 12)                               829,073   1,037,890
      Research and development                        32,335      56,136

       TOTAL OPERATING EXPENSES                      861,408   1,094,026

       INCOME (LOSS) FROM OPERATIONS              (  426,322)    166,743

OTHER INCOME (EXPENSES)
      Interest expense                            (   38,065) (   38,872)
      Interest income                                 11,132      20,585
      Loss on worthlessness of investment         (  500,000)       -

       TOTAL OTHER INCOME (EXPENSES)              (  526,933) (   18,287)

       INCOME (LOSS) BEFORE PROVISION
         FOR INCOME TAXES                         (  953,255)    148,456


PROVISION FOR INCOME TAXES (Note 6)               (  150,188)     51,958

       NET INCOME (LOSS)                          ($ 803,067)  $  96,498

INCOME (LOSS) PER COMMON SHARE:
       BASIC AND DILUTED                          ($     .09)  $     .01


AVERAGE NUMBER OF SHARES USED
      IN COMPUTATION:
       BASIC                                       8,679,069   8,600,476
       DILUTED                                     8,679,069   8,891,488

</TABLE>
See accompanying Notes to Financial Statements.

                                    F-6
                            Page 13 of 41 Pages
<PAGE>
                            VICON FIBER OPTICS CORP.
<TABLE>
               STATEMENTS OF SHAREHOLDERS' EQUITY (Restated)

                 FOR THE TWO YEARS ENDED DECEMBER 31, 1999

                                   (NOTE 14)

<CAPTION>







                                   TOTAL
                                  ADDITIONAL              DEFERRED     SHARE-
                         COMMON    PAID-IN                 STOCK      HOLDERS'
                          STOCK    CAPITAL    DEFICIT     INCENTIVE    EQUITY

<S>                     <C>       <C>        <C>         <C>         <C>
Balance - January 1,
  1998                   $85,290  $5,972,038 ($3,091,821)$     -      $2,965,507

Prior Period Adjustment                      (    73,279)                (73,279)

(NOTE 14)

Balance-January 1,1998    85,290   5,972,038  (3,165,100)       -      2,892,228

(Restated)

Net Income(Restated)         -         -          96,498       -          96,498

Issuance of Common Stock   1,500     167,250        -     ( 140,625)      28,125

Balance - December 31,
  1998                    86,790   6,139,288 ( 3,068,802) ( 140,625)   3,106,851
Net (Loss)(Restated)        -          -     (   803,067)      -        (803,067)

Amortization of stock
  incentive                 -          -            -        56,250       56,250

Balance - December 31,
  1999                    86,790  $6,139,288 ($3,871,669)  ($84,375)  $2,270,034

</TABLE>


See accompanying Notes to Financial Statements.




                                    F-7
                            Page 14 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
<TABLE>
                        STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31,
                             (Note 14)
<CAPTION>
                                                     1999         1998
                                                  (Restated)  (Restated)
<S>                                              <S>          <S>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                ($803,067)     $96,498
    Adjustments to reconcile net income to
    net cash provided by operating activities:
      Depreciation and amortization                   71,214       77,005
      Loss on write-off of investment in
        American Entertainment                       500,000        -
      Decrease in deferred stock incentive            56,250       28,125
      (Increase) decrease in accounts receivable     123,567      203,545
      (Increase) in inventory                        513,356    ( 292,210)
      (Increase) decrease in prepaid expenses
       and other current assets                        1,414    (   5,983)
      (Increase) decrease in deferred income taxes (  31,765)   (  11,324)
      (Decrease) increase in accounts payable and
       accrued expenses                            ( 391,684)     203,916
      Increase (decrease) in income taxes payable  (  63,264)   ( 161,718)
      (Increase) in income tax refunds             ( 105,159)       -
       Total Adjustments                             673,929       41,356
       Net Cash Provided by (Used in) Operating
         Activities                                ( 129,138)     137,854
CASH FLOWS FROM FINANCING ACTIVITIES:
  Purchase of property, plant and equipment        (  17,497)   (  77,221)
  (Increase) in cash surrender value of life insurance
    contract                                       (  18,592)   (  16,671)
  Investment in American Entertainment               -          ( 500,000)
       Net Cash Provided by (Used in) Investing
       Activities                                    (36,089)   ( 593,892)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of long-term debt                      (  85,374)   ( 123,551)
  Increase in long-term debt                         350,400         -
      Net Cash Provided by (Used in) Financing
      Activities                                     265,026    ( 123,551)

NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                99,799    ( 579,589)

CASH AND CASH EQUIVALENTS - Beginning                254,580      834,169

CASH AND CASH EQUIVALENTS - End                     $354,379     $254,580

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
  Cash paid during the years for:
    Interest                                       $  38,065   $   38,872
    Income taxes                                   $  50,000   $  225,000
</TABLE>
See accompanying Notes to Financial Statements.

                                    F-8
                            Page 15 of 41 Pages
<PAGE>

                         VICON FIBER OPTICS CORP.

                         STATEMENTS OF CASH FLOWS

                                (Restated)

     SUPPLEMENTAL SCHEDULE ON NONCASH INVENTORY AND FINANCING ACTIVITY



Year Ended December 31, 1998:



During 1998, the Company issued an aggregate of 150,000 shares of
restricted common stock to five key employees.  The value of the stock,
deemed to be deferred compensation was to be recognized over three years.
The transaction was recorded as follows:

(Increase in common sstock           ($  1,500)


(Increase) in paid-in capital        ( 167,250)


Increase in deferred stock incentive   168,750


                                      $  -0-





















                                      F-9

                            Page 16 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.

                       NOTES TO FINANCIAL STATEMENTS

                                (Restated)

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

         Vicon Fiber Optics Corp. (the "Company") was incorporated in 1969
         and derives the majority of its revenues from (1) the manufacture
         and sale of fiber optic illuminating systems and components for
         use in conjunction with dental equipment and instruments utilizing
         fiber optic elements, and (2) the manufacture and sale of
         decorative lamps utilizing fiber optics for illumination.

         A summary of the significant accounting policies followed by the
         Company in the preparation of the accompanying financial
         statements is set forth below:

         a)Cash and Cash Equivalents:

          For the purpose of the statement of cash flows, the Company
          considers cash and cash equivalents to include cash on hand,
          amounts due from banks, and any other highly liquid debt
          instruments purchased with a maturity of three months or less.

         b)Inventories:

         Inventories are valued at the lower of cost (on a first-in,
         first-out basis) or market.

         c)Property, Plant and Equipment:

           Property, plant and equipment is stated at cost.

           Depreciation of property, plant and equipment is computed on the
           straight-line basis for financial reporting purposes and on an
           accelerated basis for income tax purposes over the estimated
           useful lives  of the related assets.  Cost and the related
           accumulated depreciation are deducted from the accounts on
           retirement or disposal and any resulting gain or loss is
           reflected in income.  Betterments and major renewals or
           replacements are capitalized.


           d)Excess of Cost Over Net Assets of Businesses Acquired:

             Represents the excess of cost over net assets of acquired
             companies.

            These amounts are being amortized over forty years.

                                    F-9
                            Page 17 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
                      NOTES TO FINANCIAL STATEMENTS
                                (Restated)

NOTE 1 -   SUMMARY OF ACCOUNTING POLICIES (Continued)

         e)Revenue Recognition:

           Revenue is recognized on sales of products, generally at the
           time of shipment.


         f)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 disclosures of contingent assets
           and liabilities at the date of the financial statements and the
           reported amounts of revenues and expenses during the reporting
           period.  Actual results could differ from those estimates.


         g)Financial Instruments:


           The carrying values of all assets and liabilities deemed to be
           financial instruments in accordance with SFAS No. 107
           approximate their respective fair values.  Current market rates
           were used, together with credit worthiness and collateral, where
           applicable.


         h)Earnings Per Common Share:


           The Company adopted Statement of Financial Accounting Standards
           ("SFAS") No. 128, "Earnings Per Share" in 1998.  Basic earnings
           per share is calculated using the average number of shares of
           common stock outstanding during the year.  Diluted earnings per
           share is computed on the basis of the average number of common
           shares outstanding plus the effect of outstanding stock options
           using the "treasury stock method" and convertible debentures
           using the "if-converted" method.  Common stock equivalents
           consist of stock options.


         i)Accounting for Investments:


           Investments in which the Company has less than a 20% interest
           are carried at cost.  Dividends received are included in other
           income.

                                   F-10
                            Page 18 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
                       NOTES TO FINANCIAL STATEMENTS




                                (Restated)

NOTE 2 - MATTERS OF ECONOMIC INFLUENCE

         Major customers of the Company, expressed as a percentage of
         sales, are summarized as follows:

                                        Year Ended December 31,
         Customer                        1999           1998

         A                               15.80%        29.63%
         B                               14.10         14.18
         C                                8.10         11.69
         D                                7.80          7.60
         E                                5.60          7.50

                                         51.40%        70.60%

         Export sales (excluding North America), expressed as a percentage
         of sales are summarized as follows:
                                                  Year Ended December 31,
         Geographic Area                          1999              1998
         Europe                                   4.5%                1.3%
         Brazil                                    -                   .5

                                                  4.5%                1.8%
         Suppliers

         The Company uses only one source for some of its components, but
         believes that alternative or supplementary sources can readily be
         obtained.  None of the Company's suppliers are affiliated with the
         Company, and the Company has no contractual relationship with any
         of them except for purchase orders issued from time to time.  The
         Company believes that an adequate and reliable supply of raw
         materials is and will continue to be available for the manufacture
         it products.

NOTE 3 - INVENTORIES

         The composition of inventories at December 31, 1999 is as follows:


         Raw materials                                        $   582,431
         Work-in-process                                           57,665
         Finished goods                                           334,448
                                                               $  974,544


                                   F-11
                            Page 19 of 41 Pages
<PAGE>
                     VICON FIBER OPTICS CORP.

                  NOTES TO FINANCIAL STATEMENTS





                                (Restated)





NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment at December 31, 1999 is summarized
         as follows:
                                                           Estimated
                                                            Useful
                                                             Life

         Machinery and equipment             $491,426     3-10 years
         Furniture, fixtures and
          office equipment                    134,023     2-10 years
         Leasehold improvements               362,292     Useful Life or
                                                          Lease term,
                                                          whichever is
                                                          shorter
                                              987,741
         Accumulated depreciation
          and amortization                    604,116

                                             $383,625

         Depreciation and amortization expense for the years ended December
         31, 1999 and 1998 amounted to $59,134 and $64,925, respectively.

NOTE 5 - LONG-TERM DEBT
         Long-term debt at December 31, 1999 consists of the following:

         Note payable - Textron (A)                   $ 15,400
         Debentures payable (B)                        335,000
         Amounts due to the former Chairman
          of the Board and President of Saxton (C)      99,098

         Less:  Current portion                        102,006
                                                      $347,492

     (A)        Note payable - Textron represents a five-year note for the
                  purchase of equipment.  The note bears interest at
                  14.349% and will be paid at the rate of $411 per month.
                  Certain machinery is pledged as collateral pursuant to
                  this note.


                                   F-12
                            Page 20 of 41 Pages
<PAGE>
                        VICON FIBER OPTICS CORP.
                     NOTES TO FINANCIAL STATEMENTS

                                (Restated)

NOTE 5 - LONG-TERM DEBT (Continued)

         (B) Debentures - These are 8% convertible notes due August 2,
             2002. Interest will be paid semi-annually until conversion or
             maturity.  The notes may be converted at the rate of $1 for
             one common share but in increments of no less than $1,000.

         (C) In December 1989, pursuant to a stipulation of compromise and
             settlement, Vicon agreed to pay a total of $950,000 as
             follows:

             i) $100,000 to the former President of Saxton on January 1,
                1990

            ii) Commencing January 1, 1990 and monthly thereafter until
                December 1, 1997, $5,500 per month to the former Chairman
                of the Board of Saxton

           iii) Commencing January 1, 1998 and monthly thereafter until
                December 1, 2000, $8,944 per month to the former Chairman
                of the Board of Saxton

                In December 1989, the Company recorded a liability of
                $489,590 representing the present value of such payments
                discounted for interest imputed at 15 percent per annum.

            Aggregate annual maturities applicable to long-term debt are as
            follows:

                 Year Ending
                 December 31,                                    Amount
                   2000                                         $102,006
                   2001                                            3,103
                   2002                                          338,298
                   2003                                            3,493
                   2004                                            2,598
                                                                $449,498


            In December 1994 the Company established a credit facility with
            Marine Midland Bank.  Effective September 1998, the Credit
            Facility was increased to $2,000,000, the line of credit will
            maintain a sublimit of $1,000,000 to be used for direct debt
            drawdowns and $300,000 sublimit to be used for standby Letters
            of Credit.  The credit facility requires monthly payments of
            interest, computed at the bank's prime rate.  The credit lines
            are secured by an investment account maintained with the bank.
            In

                                   F-13
                               Page 21 of 41
<PAGE>
                         VICON FIBER OPTICS CORP.

                       NOTES TO FINANCIAL STATEMENTS

                                (Restated)

            addition, for all amounts to be borrowed in excess of 80% of
            the value of this account, the bank will require a UCC filing
            which grants the bank a first priority interest in the accounts
            receivable and inventory of the borrower. As of December
            31,1999, the bank had filed a UCC which placed a lien on
            virtually all of the Company's assets (excluding fixed assets).
            The line allows for advances to the extent of 70% of the
            Company's accounts receivable, and 40% of their inventory
            value.  At December 31, 1999, the Company had $2,000,000 unused
            lines of credit to be drawn as needed.

NOTE 6 - INCOME TAXES

         Under the provisions of SFAS 109 the Company recognizes deferred
         tax assets and liabilities for future tax consequences of events
         that have been previously recognized in the financial statements
         or income tax returns.  The measurement of deferred tax assets and
         liabilities is based on provisions of the enacted tax laws, and
         the effects of future changes in tax laws or rates are not
         anticipated. The net difference between the provision for income
         taxes and income taxes currently payable is reflected in the
         balance sheet as deferred income taxes.  Deferred tax assets and
         liabilities are classified as current and non-current based on the
         classification of the related asset or liability for financial
         reporting purposes or based on the expected reversal date for
         deferred income taxes not related to an asset or liability.

         Deferred income taxes consist of the following at December 31,
         1999:


         Temporary differences arising from the following:


                                                Classified As
Type                  Amount    Deferred Tax Short term Assets Long Term
Liability
Depreciation         $173,844     ($58,540)     $    -           ($58,540)
Reserve for bad debts    7,500       2,704         2,704               -
Section 263A costs      85,000      30,646        30,646               -
Obsolete inventory     247,563      89,256        89,256               -
                                   $64,066      $122,606         ($58,540)

                                   F-14
                               Page 22 of 41
<PAGE>
                         VICON FIBER OPTICS CORP.

                      NOTES TO FINANCIAL STATEMENTS

                                (Restated)

NOTE 6 - INCOME TAXES (Continued)

         The provision for income taxes for the years ended December 31,
         1999 and 1998 consisted of the following:

                                                  1999      1998
               Current - Federal               ( $105,159) $ 65,842
               Current - State                 (    1,580)   11,770
               Adjustment                      (   11,684)  (14,330)
                 Total Current                 (  118,423)   63,282

                 Total Deferred                 (  31,765)  (11,324)

                   Total                       ($ 150,188) $ 51,958

         A reconciliation of income tax (benefit) expense computed at
         statutory rates to above amounts at effective rates is as follows:

                                               1999                 1998
         Income tax expense at
           statutory rates                   ($324,107)           $ 41,148
         State and local, net of
           federal benefit                   ( 33,124 )              4,768
         Non-deductible expenses
          and over-under accrual               238,808              17,366

         Current Income tax expense at
           effective rates                   ($118,423)           $ 63,282

NOTE 7 - COMMITMENTS AND CONTINGENCIES

         Leases

         On July 31, 1998, the Company renegotiated its lease and is now
         obligated under the terms of a new lease, expiring on July 31,
         2001, which calls for annual rent of $89,040. The total rent
         expense under operating leases charged to operations for the years
         ended December 31, 1999 and 1998 was $90,293 and $87,730,
         respectively.

         The Company also has three leases totaling $1,378 per month
         through January 2001.


                                   F-15
                            Page 23 of 41 Pages
<PAGE>
                      VICON FIBER OPTICS CORP.
                   NOTES TO FINANCIAL STATEMENTS

                                (Restated)





NOTE 7 - COMMITMENTS AND CONTINGENCIES (CONTINUED)


         As at December 31, 1999, the future lease expenditures are as
         follows:
         2000                              $101,984
         2001                                52,899
         2002 - Thereafter                     -
                                           $154,883

         Letters of Credit

         As at December 31, 1999, the Company had no outstanding letters.

         Employment Agreement(See Notes 14 and 15)
         The Company has entered into an employment contract with its
         President/Chief Executive Officer through 2003, providing for base
         salary equal to his current base salary with annual cost of living
         adjustments.

NOTE 8 - STOCK OPTION PLAN (See Notes 14 and 15)

         Effective May 11, 1984, the 1984 Stock Option Plan for Incentive
         Stock Options and Non Qualified Options (the "Plan") was adopted.

         The Plan provided for granting to key employees and others who
         were not employees but had made or were expected to make
         contributions to the success of the Company, the option to
         purchase Company common stock.  Options for an aggregate of up to
         400,000 shares of common stock may have been granted under the
         plan.

         At a Special Board of Directors meeting held on March 20, 1996,
         the Board of Directors adopted the 1996 Incentive Stock Option
         Plan for Key Employees (the "1996 Plan"), which was ratified by
         the stockholders on May 30, 1996.  Subject to adjustment as
         provided below, 1,000,000 shares of Common Stock (the "Shares")
         will be available for issuance under the 1996 Plan.  No awards
         under the Plan ("Awards") may be granted after March 20, 2006.
         Awards may be (1) incentive stock options ("ISOs") within the
         meaning of Section 422 of the Internal Revenue Service of 1986, as
         amended (the "Code"), (2) non-qualified stock options, or (3)
         shares subject to certain restrictions ("restricted stock").

                                   F-16
                            Page 24 of 41 Pages
<PAGE>
                     VICON FIBER OPTICS CORP.
                  NOTES TO FINANCIAL STATEMENTS
                                (Restated)

NOTE 8 - STOCK OPTION PLAN (CONTINUED)

         The purchase price of Shares covered by an Award ("Options") will
         be 100% of the fair market value of the Common Stock on the date
         of the grant.  The fair market value of a share of Common Stock
         will be the simple average of the high and low sales prices on the
         date of grant. The term of each Option will be determined by the
         Committee, but cannot be more than 10 years from the date of the
         grant.  If the original term is less than ten years from the date
         of grant, the term may be extended prior to expiration, with the
         approval of the employee, but not beyond 10 years from the date of
         original grant. The vesting period and all other terms and
         conditions of each Option will be determined by the Committee;
         provided that, except as described below, no Option may be
         exercised prior to the completion of at least six (6) months of
         continuous employment from the date of grant.  The Committee may
         impose restrictions, including a holding period, on Shares
         received upon the exercise of Options.

         Restricted Stock - Awards of restricted stock are subject to such
         restrictions as the Committee determines, including, but not
         limited to: a vesting schedule based upon the recipient's
         continuous employment and conditions based on performance
         requirements.  Except as described below, no restricted stock
         Award may vest in whole or in part prior to the completion of the
         number of years of continuous employment after the date of grant
         established by the Committee, and restricted stock Awards shall be
         forfeited to the extent any restriction is not met.  Until all
         conditions associated with restricted stock are met, restricted
         stock may  not be sold, pledged, or otherwise disposed of.  Except
         for these limitations, recipients of restricted stock are entitled
         to all rights of a Stockholder, including the right to vote and
         receive dividends or other distributions on such restricted stock.

         If the employment of a recipient of a restricted stock Award
         terminates by reason of death, total and permanent disability,
         retirement, or discharge other than for cause before all
         applicable restrictions have been met, the Committee may remove
         the restrictions.

         During 1998, the Company issued an aggregate of 150,000 shares of
         common stock to five key employees.  The Company accounted for the
         issuance of restricted stock with an estimated fair value of
         $168,750 by recording as current compensation of $28,125 and
         deferred compensation of $140,625 to be recognized over the three
         year restriction on the stock.
                                   F-17
                            Page 25 of 39 Pages
<PAGE>
                          VICON FIBER OPTICS CORP.
                       NOTES TO FINANCIAL STATEMENTS
                                (Restated)

NOTE 8 - STOCK OPTION PLAN (CONTINUED)

        The 1996 Plan terminates on March 20, 2006.  The Board of Directors
        may at any time terminate, amend or modify the 1996 Plan.  However,
        stockholder approval is required for amendments which materially
        increase the benefits to Award recipients, increase the aggregate
        number of Shares which may be issued under the 1996 Plan, or
        materially modify eligibility requirements.

        The Committee may at any time amend the terms of any Award,
        including accelerating the date of exercise of any Option,
        terminating stock restrictions, or converting the Option into a non-
        qualified Option; but no such amendment may materially adversely
        affect a recipient's rights without his consent.

        Awards may provide for the adjustment of the number and class of
        Shares covered by the Award, Options prices, and the number of
        Shares as to which Options are exercisable in the event of stock
        dividends, stock splits, recapitalization, reorganizations, or
        other changes in the capitalization of the Corporation. The number
        and class of Shares available under the 1996 Plan may also be
        adjusted in the event of any such change in capitalization.

        Certain Federal Income Tax Consequences

        An employee to whom an ISO is granted will not recognize income at
        the time of grant or exercise of the ISO (except that the
        alternative minimum tax may apply), and no federal income tax
        deduction will be allowable to the Corporation upon the grant or
        exercise of the ISO. When the employee sells shares received upon
        the exercise of an ISO more than one year after the date of
        exercise and more than two years after the date of grant of the
        ISO, the employee will normally recognize a long-term capital gain
        or loss equal to the difference, if any, between the sale price of
        such Shares and the option exercise price.  If the employee does
        not hold such Shares for these periods, when the employee sells
        such Shares the employee will recognize ordinary compensation
        income and possibly capital gain or loss in such amounts as are
        prescribed by the Code and the regulations thereunder.  Subject to
        applicable provisions of the Code and the regulations thereunder,
        in the event of a disposition prior to the end of the statutory
        holding periods noted above, the Corporation will generally be
        entitled to a federal income tax deduction in the amount of such
        ordinary compensation income.
                                   F-18
                            Page 26 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
                       NOTES TO FINANCIAL STATEMENTS
                                (Restated)
NOTE 8 - STOCK OPTION PLAN (CONTINUED)

   An employee to whom a non-qualified stock option (which is treated as
   an option for federal income tax purposes) is granted will not
   recognize income at the time of grant of such option.  When the
   employee exercises such option, the employee will recognize ordinary
   compensation income equal to the difference, if any, between the option
   price paid and the fair market value, as of the date of exercise, of
   the Shares received by the employee.  The tax basis of such Shares to
   such employee will be equal to the fair market value on the date of
   exercise, and the employee's holding period for such Shares will
   commence on the date on which the employee recognized taxable income in
   respect of such shares.  Subject to applicable provisions of the Code
   and the regulations thereunder, the Corporation will generally be
   entitled to a federal income tax deduction in respect of non-qualified
   stock options in an amount equal to the ordinary compensation income
   recognized by the employee. Any compensation includable in the gross
   income of an employee in respect of a non-qualified option will be
   subject to appropriate federal income and employment taxes.

   At the Special Board of Directors meeting held on March 20, 1996, the
   Board granted 50,000 stock options with an exercise price $.96 to
   Leonard Scrivo and 165,000 stock options with an exercise price of $.87
   to various other employees.  At the March 20, 1996 meeting, the Board
   of Directors, as part of a consulting agreement, also granted non-
   qualified options to Stanley A. Youdelman to purchase 20,000 Shares at
   $.87 per share.  On June 28, 1996 the Company granted options to
   purchase 125,000 shares at $.875 and on July 5, 1996 the Company sold
   options to purchase 175,000 shares for $1,750.

   As of April 1, 1998, five year warrants to purchase 100,000 shares each
   of common stock of the Company at $1.00 per share were issued to
   Messrs. Allan Borkowski, Robert Figliozzi, Michael Funke, Thomas Furey,
   Jr., Mike Scrivo and Kenneth Zimmerman upon their election as directors
   of the Company.

   In April 1998, five year warrants to purchase 100,000 shares each of
   common stock of the Company at $1.00 per share were issued to Messrs.
   Allan Borkowski, Robert Figliozzi, James Leonard, and Dr. Stanley
   Youdelman, in consideration for entering into consulting agreements by
   each of the above individuals.

   In April 1998, five year warrants to purchase an aggregate of 435,000
   common shares of the Company at prices of $1.00 to $1.10 were issued to
   three officers and two former employees.

   In April 1999, five year warrants to purchase 700,000 shares of common
   stock at $1.00 per share were issued to the following: Zackary Liebman
   and Barry Hawk - 125,000 each, Allan Borkowski and Robert Figliozzi -
   100,000 each, James Leonard, Michael Scrivo, Michael Funke, Thomas
   Furey, Jr., and Kenneth Zimmerman - 50,000 each.
                                   F-19
                            Page 27 of 39 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
                       NOTES TO FINANCIAL STATEMENTS
                                (Restated)


NOTE 8 - STOCK OPTION PLAN (CONTINUED)

  The following summarizes the stock options outstanding under these
  plans as of December 31, 1999:

                         Number          Per Share
                           Of              Option
   Date Granted          Shares             Price              Expiration

   March 1996           185,000             .87                     2001
   March 1996            50,000             .96                     2001
   June 1996            300,000            .875                     2001
   April 1998         1,285,000            1.00                     2003
   April 1998           150,000            1.10                     2003
   April 1999           700,000            1.00                     2004

                      2,670,000

   The following summarizes the activity of shares under option for the
   two years ended December 31, 1999:

                          Number     Per Share
                            Of        Option
                          Shares       Price          Value


   Balance - January 1,
      1998                535,000   $. 87 - $.875  $  471,450
     Granted            1,435,000    1.00 -  1.10   1,450,000
     Exercised               -            -              -
     Expired                 -            -              -
     Cancelled               -            -              -
   Balance - December 31,
      1998              1,970,000     .87 -  1.10   1,921,450
     Granted              700,000            1.00     700,000
     Exercised               -            -              -
     Expired                 -            -              -
     Cancelled               -            -              -
   Balance - December 31,
     1999               2,670,000   $ .87 - $1.10  $2,621,450



                                   F-20
                             Page 28 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
                       NOTES TO FINANCIAL STATEMENTS
                                (Restated)

NOTE 8 - STOCK OPTION PLAN (CONTINUED)

   Pro Forma Disclosure

   The Company has adopted the disclosure-only provisions of Statement of
   Financial Accounting Standards No. 123, "Accounting for Stock Based
   Compensation", issued in October 1995.  Accordingly, compensation cost
   has been recorded based on the intrinsic value of the option only.  The
   Company recognized $56,250 and $28,125 compensation cost in 1999 and
   1998, respectively, for stock-based employee compensation awards.  The
   pro forma compensation cost, net of income taxes, for stock-based
   employee compensation awards was $1,274,009 and $641,794 in 1999 and
   1998, respectively.  If the Company had elected to recognize
   compensation cost based on the fair value of the options granted at
   grant date as prescribed by SFAS No. 123, net income and earnings per
   share would have been changed to the pro forma amounts indicated in the
   table below:

                             1999                      1998
                   As Reported  Pro Forma    As Reported  Pro Forma
   Net income     ($803,067)  ($2,077,076)     $96,498   ($545,296)

   Diluted earnings
     per share        ($.09)        ($.24)         $.01       ($.06)

    The above pro forma amounts, for purposes of SFAS No. 123, reflects
   the portion of the estimated fair value of awards earned in 1999 and
   1998.  For purposes of pro forma disclosures, the estimated fair value
   of the options is amortized over the options' vesting period (for stock
   options).  The effects on pro forma disclosures of applying SFAS 123 are
   not likely to be representative of the effects on pro forma disclosures
   of future years.  Because SFAS 123 is applicable only to options granted
   subsequent to August 31, 1995, the effect will not be fully reflected
   until 2000.




                                   F-21
                             Page 29 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.

                       NOTES TO FINANCIAL STATEMENTS


                                (Restated)


NOTE 8 - STOCK OPTION PLAN (CONTINUED)

   The Company used the Black-Scholes model to value stock options for pro
   forma presentation.  The assumptions used to estimate the value of the
   options included in the pro forma amounts and the weighted average
   estimated fair value of options granted are as follows:

                                         Stock Option Plan Shares
                                            1999          1998

   Average expected life (years)           2.63             3.3
   Expected volatility                   149.84%         143.89%
   Risk-free interest rate
     (zero coupon U.S. Treasury
     note)                                  6.6%            5.6%
   Weighted average fair value at
   grant - Exercise price
   equal to market price                   $.72            $.49

   The Black-Scholes option valuation model was developed for use in
   estimating the fair value of traded options which have no vesting
   restrictions and are fully transferable.  In addition, the Black-Scholes
   model requires the input of highly subjective assumptions, including the
   expected stock price volatility and option life. Because the Company's
   stock options granted to employees have characteristics significantly
   different from those of traded options, and because changes in the
   subjective input assumptions can materially affect the fair value
   estimate, in management's opinion, existing models do not necessarily
   provide a reliable measure of the fair value of its stock options
   granted to employees.  For purposes of this model, no dividends have
   been assumed.




                                   F-22
                             Page 30 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.

                       NOTES TO FINANCIAL STATEMENTS


                                (Restated)


NOTE 9 - JOINT VENTURE AGREEMENT

     On March 17, 1992, the Company entered into a joint venture agreement
     with China Anshan Television Broadcasting Equipment Group Company, in
     accordance with the Foreign Joint Venture Enterprise Ordinance of the
     People's Republic of China and other related statutes.  The Company
     has a 25% interest in the joint venture. The joint venture company,
     Anshan Vicon Fiber Optic Products, Ltd., a Chinese corporation located
     at Anshan, Liao Ning Province, People's Republic of China, will
     manufacture certain of the Company's products.  The manufacturing of
     these products in China should significantly reduce the cost of these
     products to Vicon. During 1993, Vicon effected a technology transfer
     to the joint venture company in China.  The manufacturing facility in
     China was effectively abandoned in 1997, and the Company wrote off its
     investment accordingly.

NOTE 10 - FAIR VALUES OF FINANCIAL INSTRUMENTS

     Disclosure of fair value information about certain financial
     instruments, whether or not recognized in the balance sheet for which
     it is practicable to estimate that value, is required by Statement of
     Financial Accounting Standards (SFAS) 107, Disclosure About Fair Value
     of Financial Instruments.  The following methods and assumptions were
     used in estimating fair values:

      Cash and cash equivalents: The carrying amount reported in the
     balance sheet approximates fair value.



















                                   F-23
                             Page 31 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.
                       NOTES TO FINANCIAL STATEMENTS

                                (Restated)

NOTE 10 - FAIR VALUES OF FINANCIAL INSTRUMENTS  (CONTINUED)

   Short and long-term debt:  The carrying amounts of the Company's
   borrowings under its revolving credit agreements, as well as all short-
   term borrowings, approximate their fair values.  The fair values of the
   Company's long-term debt were estimated using discounted cash flow
   analysis, based on the Company's current incremental borrowing rates for
   similar arrangements.

      The carrying amounts and fair values of the Company's financial
   instruments at December 31, 1999 are as follows:

                                            Carrying
                                            Amounts  Fair Value

   Cash and cash equivalents               $354,379    $354,379
   Short and long-term debt                 449,498     449,498

NOTE 11 - CONCENTRATION OF CREDIT RISK

   The Company invests its excess cash in deposits with HSBC Bank.  The
   investment generally matures within six months and; therefore, is
   subject to little risk.  The Company has not incurred losses related
   to this investment.  As at December 31, 1999, $283,644 was invested at
   an interest rate that varies daily.  Deposits with HSBC Bank are insured
   under the FDIC for up to $500,000.

NOTE 12 - SEC Inquiry and UCC OBLIGATION

   In early October, 2000, present management notified the Northeast
   Regional office of the Securities and Exchange Commission ("NRO") of
   suspected discrepancies and/or irregularities in prior financial
   statements, filed by prior management. By letter dated October 19,2000,
   and in response to such notification, the NRO confirmed that it had
   initiated an informal inquiry into alleged inventory discrepancies and
   unauthorized payments to certain prior officers of the Company.

   In connection with the above, the Company concluded that included as
   expenses in the financial statements for the 12 month periods ended
   December 31, 1999, and December 31, 1998, were approximately $101,000
   and $85,000, respectively, in payments recorded as expenses or expense
   reimbursements to, or for the benefit of certain former officers of the
   Company. The minutes of the Board of Directors do not reflect any
   approval by the Board for these payments.  Because of the preliminary
   nature of this matter, counsel is unable to express any opinion as to
   the probable outcome thereof.

                               F-24
                            Page 32 of 41 Pages
<PAGE>

                         VICON FIBER OPTICS CORP.

                       NOTES TO FINANCIAL STATEMENTS

                                (Restated)


   During 1998, an action was commenced against a customer of the Company
   for selling the Company's manufactured products, allegedly infringing on
   Plaintiff's patents covering "illuminator or dental handpiece".
   According to Counsel for the Company, in accordance with the Uniform
   Commercial Code, the Company, as the manufacturer, was obligated to
   indemnify and hold the customer harmless from any damages and settlement
   amounts incident to the litigation. Subsequent to December 31, 1998, the
   Company settled its obligation for $100,000 and  recorded  a charge to
   general and administrative expenses.


NOTE 13 - INVESTMENT IN AMERICAN ENTERTAINMENT GROUP, INC.

   On July 2, 1998, the Company acquired 250,000 shares of common stock
   (approximately 9%) of American Entertainment Group, Inc. ("AEG") at
   $2.00 per share for a total of $500,000 in cash.  AEG does business as
   "Another Universe" through two subsidiaries.  One operates six retail
   stores and the other is an internet retailer and direct response
   marketer of entertainment-themed collectibles, licensed products and
   gifts.  It was anticipated that Another Universe would incorporate
   Vicon's Fantasia product line of decorative fiber optics lamps into its
   marketing programs.  As of December 31, 1999, AEG has sustained
   significant losses and has a significant deficit.  In January of 2000,
   the Company sold off its internet and direct response marketing
   subsidiary.  The Company has, therefore, determined that the value of
   its investment is $-0-.















                                   F-25
                             Page 33 of 41 Pages
<PAGE>
                         VICON FIBER OPTICS CORP.

                       NOTES TO FINANCIAL STATEMENTS

                                (Restated)

NOTE 14-RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

During the third quarter of 2000,Vicon discovered errors in the prior three
years' financial statements resulting from the overstatement of the
inventory value in 1999 and 1998 by including approximately $180,000 and
$34,000 respectively, worth of inventory items which did not exist. In
addition, the financial statements did not reflect the appropriate value
for inventory as it pertains to the future usefulness and/or realizable
value of much of the slow moving inventory for the years ended December 31,
1999, 1998, and 1997; and as such understated the value of the obsolete
inventory by approximately $197,000, $103,000, and $81,000, respectively.

The financial statements also incorrectly reported the status of a joint
venture the Company had been involved in, and did not write off the
investment of approximately $27,000 due to the abandonment of the project
and related equipment as of December 31, 1997.

The accompanying financial statements for 1999 and 1998 have been restated
to correct such errors. The effect of the restatements was to decrease net
income for 1999 and 1998 by approximately $174,000 and $19,000 or ($.02)
and ($.00) per share.

Retained earnings (deficit) at the beginning of 1998 has been decreased by
$73,279 to correct such errors in prior years.

NOTE 15  SUBSEQUENT EVENT

During the third quarter of 2000,certain senior management were suspended
from Vicon, and certain stock options and restricted stock were terminated.



Item 8.  Disagreements with Accountants on Accounting and Financial
Disclosure

None.


                                   F-26


                            Page 34 of 41 Pages

<PAGE>
                                 PART III


Item 9.  Directors and Executive Officers

Leonard Scrivo, Age 62: Director, President, Chief Executive Officer and
Treasurer of the Company.  Director and Officer since 1969.  It should be
noted that Leonard Scrivo resigned as an officer, employee, and Board
member in July, 2000.

Les Wasser, Age 56: Director, Secretary and Controller of the Company.
Certified Public Accountant.  Director since June 1990.  It should be noted
that Mr. Wasser resigned as a Board member in October, 2000, and ceased
being an employee of the Company in February, 2001.

Michael Scrivo, Age 34: Director, Vice-President Operations. Director since
April 23, 1998.  Employed by the Company since 1988.  Son of Leonard
Scrivo.  It should be noted that Michael Scrivo resigned as an officer,
employee and Board member in October, 2000.

Allan Borkowski, Age 59: Director since April 23, 1998.  Business and
financial consultant for more than the past five years.  Principal
stockholder and President of ASB Consultants, Inc. a privately held
business consulting firm.  Since June, 1982 he has been Chairman and Chief
Executive Officer of Optivest Technologies Corp., a privately held business
development company.  Formerly, Chairman of the Board of Selvac Corp.
through June 1996 and Director of Mehl/Biophile International Corp. until
February 1997.

Robert J. Figliozzi, Age 62: Director since April 23, 1998. Executive Vice
President of Mehl/ Biophile International Corp. from April 1997 to July
1998. >From August 1994 to April 1997, Vice President of World Fuel
Corporation, an aviation and fueling services corporation listed on the New
York Stock Exchange. Prior thereto, he was Senior Managing Director and
Director of Research of Stamford Securities Corporation, a brokerage firm
and member of the New York Stock Exchange.

Michael J. Funke, Age 56: Director since April 23, 1998.  Editor/Publisher
of the MJF/Ruta Financial Newsletter.  Private investment consultant and
financial advisor since 1992.  Consultant to the Company since July 1996.
Employed 1967-1992 by IBM in numerous management and consulting positions.
MBA from The Wharton School.

Thomas E. Furey, Jr. Age 59: Director since April 23, 1998.  Employed by
IBM since 1963.  Presently worldwide general manager for technology
development, architecture and implementation for the Olympic Games.  Prior
to this position he was general manager of IBM's Worldwide Network
Computing Solutions Unit and has been a leader in the development of IBM's
most advanced hardware and software systems.

                                   F-27

                            Page 35 of 41 Pages
<PAGE>
Kenneth Zimmerman, Age 48: Director since April 23, 1998.  Founder and
Chief Executive Officer, President and sole stockholder of Kenar
Enterprises, Ltd., a privately held women's apparel manufacturer and
retailer for the past twenty-one years, which has declared bankruptcy.
Director of Chic by H.I.S., Inc. listed on the New York Stock Exchange.

Zachary Liebman, Age 40: Director.  Elected to the Board at a special
meeting of the Board of Directors on December 15, 1998.  Mr. Liebman is a
Managing Director in Crestwood Capital Group Corp., which is a consulting
firm in assisting emerging growth companies in raising capital, management
placements and marketing strategies.  Mr. Liebman is a partner in Arthur
Miller's Talent Management, Inc., an agency dealing with casting for
industrial films and movies.

Barry Hawk.  Elected to the Board at a special meeting of the Board of
Directors on December 15, 1998.  Mr. Hawk is presently the Vice President
of Corporate Development for Ferro Foods, Corp., a large specialty food and
restaurant supplier serving the Northeast and Mid-Atlantic region.  Mr.
Hawk is a Founder and Managing Director of Crestwood Capital Group, Corp.
In that capacity, he advises companies on investment banking, strategic
planning, corporate finance, mergers and acquisitions.  Mr. Hawk has
developed an expertise in innovative financing techniques and structures
for both public and private companies.  Prior to that, Mr. Hawk served as
President of Win Capital Corp., an N.A.S.D. member Broker/Dealer with three
offices nationwide.  Mr. Hawk graduated from Yeshiva University with Honors
with a BA. in Political Science and Economics and from the University of
Maryland School of Law.


Item 10.  Executive Compensation

A.  The following summary compensation table sets forth information
concerning the annual and long-term compensation for the years ended
December 31, 1998, 1997 and 1996, of those persons who were, (i) serving as
the chief executive officer of the Company or acting in a similar capacity
during the year ended December 31, 1998 and (ii) the other most highly
compensated executive officers of the Company, whose annual base salary and
bonus compensation was in excess of $100,000 (the named executive
officers):


                                           Annual   Long-Term Incentive
                                     Compensation          Plans
                                                    Restricted Stock Name
Name and Principal Position    Year   Total $ (1)   Shares(#)  Options(#)
Leonard Scrivo                 1999      $109,000           0            0
President, CEO                 1998       116,192      75,000      150,000
Chairman of the Board          1997       101,481           0            0






                            Page 36 of 41 Pages
<PAGE>


A.   Option grants in last fiscal year for named executive officers: None

B.   Options exercised during the last fiscal year:  None.

C.   Fiscal year end option values for named executive officers:

                                Unexercised Value of Unexercised in-
Name                            Options (#) the-money Options ($)
Leonard Scrivo                      200,000           $137,000

Directors' Compensation

No director receives any compensation for attending Board meetings.

Employment Contracts of Named Executive Officers



     An employment agreement was entered into as of April 3, 1998 between
     the Corporation and Leonard Scrivo for a term of five years, with a
     provision after a change in control, providing for the payment to Mr.
     Scrivo of base salary equal to his current base salary, with annual
     minimum adjustments of 5% plus a percentage equal to increase in the
     CPI.  However, as previously noted on Page 35, Leonard Scrivo resigned
     as an officer, employee, and Board member of the Company in July,
     2000.

Item 11.  Security Ownership and Certain Beneficial Owners and Management

The following table sets forth as of December 31, 1999 the shares of Common
Stock of the Company owned by each director of the Company, the officers
and directors of the Company as a group and each person known to the
Company to own 5% or more of the outstanding shares of Common Stock of the
Company:























                            Page 37 of 41 Pages

<PAGE>

Name                        Number of       Approximate % of
                          Shares Owned     Outstanding Shares


Leonard Scrivo              1,042,978                     12.0%

Les Wasser                    130,000                      1.5%
Michael Scrivo (1)            155,000                      1.8%
Allan Borkowski (2)(3)        241,000                      2.8%
Robert Figliozzi (2)                0                        0%
Michael J. Funke (4)           30,100                      0.3%

Thomas E. Furey, Jr. (1)       20,000                      0.2%

Kenneth Zimmerman (1)               0                        0%

Zachary Liebman (6)                 0                        0%

Barry Hawk (6)                      0                        0%

Directors and Executive     1,619,078                     18.7%
Officers as a group
(1)(2)(3)(4)(5)

Donald J. Unger               980,000                     11.3%

Joseph Cooper                 557,478                      6.4%

*    less than 1%



(1)  Does not include warrants currently exercisable to purchase 150,000
     shares of common stock.


(2)  Does not include warrants exercisable to purchase 300,000 shares of
     common stock at $1.00 per share.


(3)  Includes 80,000 shares owned by members of his family in which Mr.
     Borkowski disclaims any beneficial interest.


(4)  Does not include warrants exercisable to purchase 325,000 shares of
     common stock.


(5)  Includes 200,000 shares owned by members of his family in which Mr.
     Unger disclaims any beneficial interest.


(6)  Does not include warrants exercisable to purchase 125,000 shares of

     common stock at $1.00 per share.

                            Page 38 of 41 Pages

<PAGE>

Item 12.  Certain Relationships and Related Transactions: None


                                  PART IV

Item 13.  Exhibits and Reports on Form 8-K


     On July 26, 2000, the Company filed a Form 8K with the Securities
Exchange Commission stating that Leonard Scrivo had resigned from the
Company, and that Robert J. Figliozzi had been selected by the Board of
Directors to be its acting Chairman.  Additionally, it stated that Michael
Scrivo had been appointed as the Company's Chief Operating Officer.  On
October 11, 2000, the Company filed a Form 8K with the Securities and
Exchange Commission stating that Company management had uncovered certain
financial reporting irregularities affecting the financial statements of
the Company for the fiscal years 1999 and 1998.  This 8K filing also
disclosed that Leonard Scrivo and Michael Scrivo had been suspended from
association with the Company as of October 5, 2000, and that Michael Scrivo
had resigned from the Company as an officer, employee, and Director on
October 6, 2000.

(a)(1)  Financial Statements

    The following statements of Vicon Fiber Optics Corp. are included in
Part II, Item 7:

                                                  Page
Audit Report of Sheft Kahn & Company LLP            10
Financial Statements:
Balance Sheet - December 31, 1999                11-12
Statements of Operations - Years ended
 December 31, 1999 and 1998                         13
Statements of Shareholders Equity -
Years ended December 31, 1999 and 1998              14
Statements of Cash Flows - Years ended
December 31, 1999 and 1998                          15
Notes to Financial Statements                    16-32

(a)  Form 8-K filed July 17, 1998 incorporated herein by reference.






                             Page 39 of 41 Pages
<PAGE>

(b)  Exhibits
3.1          Articles of Incorporation, as amended
             (filed as Exhibit 3.1 to Form 10, Registration No. 0-11057,
             filed on June 13, 1983, and incorporated herein by reference).
3.2          By-laws (filed as Exhibit 3.2 to Form 10, Registration No.
             0-11057, incorporated herein by reference).
4.1          Certificate for Common Stock, $.10 par value (filed as
             Exhibit 4.1 to Form 10, Registration No. 0-11057,
             incorporated herein by reference).
4.2          Certificate for Convertible Subordinated Notes, due
             December 31, 1986, and Agreement (filed as Exhibit 4.2 to Form
             10, Registration No. 0-11057, incorporated herein by
             reference).
4.3          Warrant to Purchase Common Stock, $.10 par value (expiring
             December 31, 1986) (filed as Exhibit 4.3 to Form 10,
             Registration No. 0-11057, incorporated herein by reference).
4.4          Form of 12% Convertible Subordinated Note (filed as Exhibit
             4.4 to Company's Annual Report on Form 10-K for the year ended
             December 31, 1986 (the "1986 10-K"), incorporated herein by
             reference).
4.6          Certificate of Amendment of Certificate of Incorporation to
             increase the authorized capital stock of the Company to twenty
             million shares and to change the par value to $.01 per share.
             (Filed as Exhibit 4.6 to the 1992 Form 10-KSB).

















                            Page 40 of 41 Pages

<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.

                                 VICON FIBER OPTICS CORP.

                                 By /s/Arthur W. Levine
                                 Arthur W. Levine, President


                           Date  March 16, 2001



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

Signature                Title                        Date

/s/Arthur W. Levine      Director, President, Chief March 16,2001
ARTHUR W. LEVINE         Executive Officer and Chief
                         Financial Officer

/s/Robert J. Figliozzi   Director                   March 16, 2001
ROBERT J. FIGLIOZZI


/s/Allan Borkowski       Director                   March 16, 2001
ALLAN BORKOWSKI

/s/Michael J. Funke      Director                   March 16, 2001
MICHAEL J. FUNKE

/s/Zachary Liebman       Director                   March 16, 2001
ZACHARY LIEBMAN

/s/Kenneth Zimmerman     Director                   March 16, 2001
KENNETH ZIMMERMAN

/s/Thomas Furey          Director                  March 16, 2001
THOMAS FUREY

/s/Barry Hawk            Director                   March 16, 2001
BARRY HAWK


                             Page 41 of 41 Pages
<PAGE>