UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

(Mark One)

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
      For the fiscal year ended March 31, 2002
                                       OR
|_|   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 0-15596

                              SITI-SITES.COM, INC.
             (Exact name of registrant as specified in its charter)

        Delaware                                         75-1940923
(State of incorporation)                       (IRS Employer Identification No.)

  115 Whitman Road, Yonkers, New York                                      10710
(Address of principal executive offices)                              (Zip Code)

                                 (212) 925-1181
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 |_|

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES |X| NO |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. |_|

The aggregate market value of the voting Common Stock (par value $0.001 per
share) held by non-affiliates as of June 14, 2002 was approximately $976,219
based on the last price at which the Common Stock was sold on June 14, 2002 of
$.17 as reported by the National Quotation Bureau. 20,118,178 shares of Common
Stock were outstanding as of June 14, 2002.

The following documents are incorporated herein by reference:

      (1)   Annual Report to security holders on Form 10-K for the year ended
            March 31, 2001 (the "Form 10-K for 2001");

      (2)   Quarterly Report to security holders on Form 10-Q for the quarter
            ended December 31, 2000 (the "Form 10-Q for 12/31/00");

      (3)   Annual Report to security holders on Form 10-K for the year ended
            March 31, 2000 (the "Form 10-K for 2000");

      (4)   Annual Report to security holders on Form 10-K for the year ended
            March 31, 1999, as amended by Amendment No. 1 on Form 10-K/A
            (collectively, the "Form 10-K for 1999");

      (5)   Quarterly Report to security holders on Form 10-Q for the quarter
            ended December 31, 1999 (the "Form 10-Q for 12/31/99");

      (6)   Definitive Proxy Statement on Schedule 14A relating to the Company's
            Annual Meeting on December 14, 1999 (the "Proxy Statement as of
            12/14/99");

Such documents are referred to in Parts I, II, III and IV of this Annual Report
on Form 10-K in several places.

<PAGE>

                           ANNUAL REPORT ON FORM 10-K
                                 MARCH 31, 2002

           PART I                                                           PAGE
                                                                            ----
ITEM 1.    BUSINESS                                                            1
ITEM 2.    PROPERTIES                                                          4

ITEM 3.    LEGAL PROCEEDINGS                                                   4

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

           PART II


ITEM 5.    MARKET FOR REGISTRANT'S COMMON STOCK                                5
           AND RELATED STOCKHOLDER MATTERS

ITEM 6.    SELECTED FINANCIAL DATA                                             7

ITEM 7.    MANAGEMENT'S DISCUSSION AND
           ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS                                           7

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                                                                              13
ITEM 8.    FINANCIAL STATEMENTS AND
           SUPPLEMENTARY DATA                                                 13

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH
           ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE                                               13

           PART III


ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF
           THE REGISTRANT                                                     14

ITEM 11.   EXECUTIVE COMPENSATION                                             15

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN
           BENEFICIAL OWNERS AND MANAGEMENT                                   18

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED
           TRANSACTIONS                                                       19

           PART IV


ITEM 14.   EXHIBITS, FINANCIAL STATEMENTS
           SCHEDULES AND REPORTS ON FORM 8-K                                  20

<PAGE>

Forward-Looking Statements

      This Annual Report on Form 10-K contains forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, including,
but not limited to statements related to pending discussions, business
objectives and strategy of the Company. Such forward-looking statements are
based on current expectations, estimates and projections about the Company's
industry, management's beliefs and certain assumptions made by the Company's
management. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed, forecasted, or
contemplated by any such forward-looking statements. Factors that could cause
actual events or results to differ materially include, among others, those set
forth in "Risk Factors." Given these uncertainties, investors are cautioned not
to place undue reliance on any such forward-looking statements. Unless required
by law, the Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. However, readers should carefully review the risk factors
set forth in other reports or documents the Company files from time to time with
the Securities and Exchange Commission (the "SEC"), particularly the Quarterly
Reports on Form 10-Q and any Current Reports on Form 8-K.

                                     PART I

ITEM 1. BUSINESS

Introduction

      Siti-Sites.com, Inc., a Delaware corporation, and its various divisions
(referred to collectively as "SITI" or the "Company") previously operated as an
Internet media company with three websites for the marketing of news and
services. The Company's websites related entirely to the music industry. SITI
incurred losses continuously since its inception in 1999. Following conclusion
of the second fiscal quarter ended September 30, 2001, management who were its
primary investors (investing approximately $4.1 million 1998-2002), intended to
continue operations by investing approximately $600,000 in further equity
capital in the Company. But on November 13, 2001 they determined that such
limited funding would not accomplish a meaningful result for the investors or
the Company and terminated discussions of such financing plan. The Company then
commenced procedures to prepare to liquidate its assets.

      Liquidation. The Company's only substantial liability, consisting of the
remaining nine months on its lease for office premises at 594 Broadway in New
York City, was amicably settled, and terminated as of December 31, 2001.
Concurrently office furniture and unnecessary computers were sold off
expeditiously, and all employees were terminated in November, 2001. A team of
two software consultants were paid in December and January, 2002, to complete
the Company's Artist Promotion System. Attempts were to be made to license
portions thereof, working with a marketing consultant. All three consultants had
worked for the Company during previous months, and could be helpful in enabling
the Company to realize any near-term value in such system. However,
complications in completing the software resulted in management terminating
these consulting relationships, with a view to restarting them, if possible,
when specific marketing or sale opportunities present themselves. The Company
shut down all of its websites effective February 1, 2002.

      In connection with the liquidation , the Company adopted the liquidation
basis of accounting effective January 1, 2002, whereby assets are valued at
their estimated realizable cash value and liabilities are stated at their
estimated settlement amounts. Uncertainties as to the precise net value of the
Company's assets (other than cash) and the ultimate amount of its liabilities
make it impracticable to predict the aggregate net value. Claims, liabilities
and future expenses


                                       1
<PAGE>

for operations (including salaries, payroll taxes, professional fees and
miscellaneous office expense), although declining in the aggregate, will
continue to be incurred.

      As a result of the termination of all non-essential employees, President
Robert Ingenito and Executive Vice-President John Iannitto resigned to pursue
their other business interests, but Mr. Ingenito remains a director of the
Company. Messrs. Ingenito, Iannitto, and Chairman/CEO Lawrence M. Powers each
purchased excess furniture and equipment from the Company for a total of
approximately $19,000, at itemized prices which were no less than could be
obtained by the Company on an arms-length basis from third parties. The balance
of the furniture was sold to an unrelated third party for approximately $5,000.

      Financing. The Company required a small financing to complete its employee
terminations, asset liquidation and provide for ongoing corporate expenses.
Major investors in the Company provided $110,000 in equity funds, purchasing
4,400,000 shares of common stock at $.025 per share, in a private offering as of
December 7, 2001.

      The Company's stock was trading at $.03 per share with nominal volume,
during the seven-day offer/closing period. The shares sold to major investors
were not registered under the Securities Act of 1933, were purchased for
investment and are not readily marketable, which factors generally result in
discounts in purchase value. There was also substantial business risk to the
purchasers because the Company has no continuing operations and was being
liquidated.

      The participating investors were Lawrence M. Powers, Robert Ingenito, John
DiNozzi, John Iannitto, Steven E. Gross and Colvil Investments, in varying
amounts parallel to their respective option holdings. Each purchasing investor
was further required to surrender all of his outstanding options to purchase
common stock of the Company, acquired in making each previous investment. These
consisted of options for a total of 4,400,000 shares, previously exercisable at
prices ranging from $.15 to $2.50 per share, and expiring between 2003 and 2006.
All of such options are now cancelled and terminated, reducing all outstanding
stock options by over 90%. This surrender and cancellation was intended to make
future merger, sale or other business possibilities for the Company easier to
achieve. The Company has options, previously held by employees in 1998 (before
current major investors purchased control), which still remain outstanding, for
the purchase of 415,577 shares, exercisable at prices ranging from $.35 to $2.15
per share, expiring between 2004 and 2006.

      In calendar 2002, the Company has been seeking merger or sale
possibilities with operating businesses who perceive value in a merger with the
Company as a publicly traded corporate shell with approximately 5,400
shareholders. Mr. Powers has been active in recent months developing contacts
for possible merger or sale transactions in which the Company or a subsidiary
formed for such purpose would become affiliated with an operating business
seeking to be publicly traded. The Company has neither debt, nor material
expenses or material ongoing liabilities, except as required to preserve the
corporate entity and make necessary SEC filings. There are 20,118,178 shares of
common stock now outstanding as a result of the recent financing described
above.

Management Background - 2002

      Lawrence M. Powers, Investor and Chairman/CEO of the Company, is a
businessman and securities lawyer who helped build several large public
companies as a lawyer, director and financial adviser, and later as a
chairman/chief executive officer. Most recently, he founded and built Spartech
Corporation (NYSE), now a $1 billion plastics manufacturing group assembled from
many small businesses, starting as Chairman of a previously bankrupt shell
corporation (1978) with few assets, which he reorganized with other investors,
becoming CEO in 1984. Raising some $200 million during his tenure, he, together
with the management team he assembled, built one of the largest plastic
processing companies in the U.S. by 1992 (12 plants). Spartech has now become a
world leader (44 plants) since his retirement. He remained on the board until
1995, and is still a substantial securities holder of Spartech. The core
management team he previously assembled at Spartech Corporation has remained in
place, building it to its present value.


                                       2
<PAGE>

Mr. Powers was educated at Yale Law School, and senior executive programs at
Harvard Business School (between 1980-1998) and most recently, in its
Information Technology management program. His specialty has, for decades, been
developing strategies and financing, combined with acquisitions and strategic
partnerships. He and his family have invested $2,750,000 in SITI equity.

      Toni Ann Tantillo is Chief Financial Officer, Vice President, Secretary
and Treasurer for the Company. She has served as the Company's Chief Financial
Officer since December 1999. Prior to her election, she worked as an independent
consultant to SITI after the change of control in December 1998. She was the
Controller of SITI from 1995 to December 1998, when such change of control
occurred. Ms. Tantillo, a Certified Public Accountant, was educated at Iona
College in New Rochelle, New York.

Employees and Consultants

      As of May 22, 2002, the Company had 1 employee in operations and general
administration. SITI executive, Mr. Powers, has been working without cash
compensation since 1998 and, will continue to do so for at least the year ended
March 31, 2003. Former executives, Mr. Ingenito and Iannitto, received stock and
options for their services over the past fiscal year. (See "Item 11. - Executive
Compensation - Employment Agreements.") The Company has recorded an
administrative expense and a capital contribution of $227,000 to account for the
value of these services provided by executive management of the Company during
the year ended March 31, 2002. None of the Company's employees were represented
by any collective bargaining unit, 1998-2002. The Company believes that its
relations with its past and present employees, consultants and agents are good.

Risk Factors

      The Company's plan is to continue to conclude its past business activities
and to seek a merger or sale to acquire other operating businesses which
perceive value in becoming a publicly traded corporation.

      Risk factors may affect the Company's liquidation of the current business
assets and affect opportunities to merge or sell to other operating businesses.
In addition to the other information in this Annual Report on Form10-K, and the
risk factors listed in the Forms10-K for 1999, 2000 and 2001, new and different
risk factors can be anticipated within any operating business which the Company
acquires, or becomes part of, through merger or sale. It is not possible to
identify these new and different risk factors until such transactions are
negotiated and completed, because the operating businesses will be in different
areas from the Internet music business described in prior Forms10-K.

      Future Mergers or Sales Will Cause Dilution or Adversely Affect Results

      As part of the Company's business strategy, the Company is seeking by
merger or sale to acquire other operating businesses which perceive value in
becoming a publicly traded corporation. The Company has no current agreements or
commitments with respect to any merger or acquisition transactions and there can
be no assurance that the Company will enter into any such agreements or
commitments. In the event of such future transactions, the Company will (i)
issue equity securities that would dilute current stockholders' percentage
ownership in the Company very substantially because the owners of the operating
business will require full control of the Company or subsidiary used in the
transaction; (ii) probably will incur substantial debt; or (iii) assume
contingent liabilities. Such actions could cause the Company's operating results
or the price of the Company's common stock to decline. In addition, the Company
may not be able to successfully integrate any businesses, products, technologies
or personnel that may thus be acquired in the future. The only certainty in any
such transaction is that the shareholders of the Company will own only a minor
portion of the operating business thus acquired, new management will operate
such business and it will be an entirely different operation from that described
in prior Forms10-K filed by SITI.


                                       3
<PAGE>

      The Company May Need to Obtain Additional Financing

      Management believes that current cash and cash equivalents will not be
sufficient to meet the Company's anticipated cash needs for working capital and
capital expenditures for the nine months ended December 31, 2002. If shareholder
Powers remains satisfied with the search for mergers or sales transactions
described above, and now in process, he presently intends to invest the amounts
necessary to continue such efforts in fiscal 2003.

      Market Listing; Volatility of Stock Price

      The Company's common stock has been traded on the OTC Bulletin Board and
there are approximately 3.5 million shares in the "public float" for trading
purposes. The market for the Company's common stock has been relatively illiquid
and subject to wide fluctuations. There can be no assurance that an active
public market for the common stock will develop or be sustained particularly
with the Company's future direction by merger or sale, with an as yet unknown
operating business, remaining uncertain. Further, the market price of the
Company's common stock may be highly volatile based on quarterly variations in
operating results, acquisitions by the Company, investment or other losses,
announcements of technological innovations or new products by the Company or its
competitors, or other events or factors.

ITEM 2. PROPERTIES

      During the first nine months of the fiscal year 2002, the Company's
headquarters occupied some 2,500 square feet of office space in an office
building located at Broadway and Houston Street in New York, New York. The
Company amicably terminated its lease and vacated the New York City premises in
December, 2001. During the last fiscal quarter of the current fiscal year,
management has operated the Company's administrative business out of their
personal offices, and finds the present arrangements sufficient. As a result of
the use of personal offices, the Company recorded a charge of $15,000 to rent
and paid in capital for the fiscal year ended March 31, 2002.

ITEM 3. LEGAL PROCEEDINGS

      As of the date of this report the Company knows of no pending or
threatened legal actions against the Company that would have a material impact
on the operations or financial condition of the Company.

      Defaults by EZCD.com as to its investment representations, and its content
and technology sharing agreement with the Company could result in litigation or
other legal complications, and attendant costs and efforts by the Company's
management to resolve such matters. EZCD.com filed for bankruptcy liquidation in
August, 2000 and the Company is making creditor claims in such proceeding which
have been rejected by the trustee therein and will require a trial. There is
little likelihood of any material recovery.

      From time to time in previous years, the Company had been a party to other
legal actions and proceedings incidental to its business. As of the date of this
report, however, the Company knows of no other pending or threatened legal
actions that could have a material impact on the operations or financial
condition of the Company.

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

      None.


                                       4
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

      The common stock of the Company, par value $0.001 per share (the "Common
Stock"), was traded in the NASDAQ System from 1987 through April, 1995. NASDAQ
delisted the Company from the National Market System because the Company failed
to meet certain net tangible asset and bid and ask price criteria in April, 1995
as it went into reorganization. The stock is currently being traded on the NASD
OTC Bulletin Board under the symbol SITN.OB. There are currently 9 registered
market makers for the Common Stock.

      In March, 1997, the Company's Reorganization Plan became effective, which
included a 75:1 reverse stock split. On that day, the Company's reorganized
common stock became eligible for trading under the symbol "SITI", which symbol
was modified by NASDAQ to "SITN.OB" in January, 2000. The range of high and low
closing bid prices for the Common Stock for the fiscal years 2002 and 2001 are
set forth below. The National Quotation Bureau provided this information which
may not reflect actual transactions.

                             HIGH AND LOW BID PRICES

                             2002                                      2001
                          Low    High                               Low    High
First Quarter (6/01)    $0.07   $0.12     First Quarter (6/00)    $0.13   $0.69
Second Quarter (9/01)    0.06    0.11     Second Quarter (9/00)    0.16    0.25
Third Quarter (12/01)    0.01    0.06     Third Quarter (12/00)    0.11    0.19
Fourth Quarter (3/02)    0.01    0.04     Fourth Quarter (3/01)    0.09    0.15

      On June 14, 2002, the last reported bid and ask prices of the Common Stock
were $.15 and $.22, respectively.

      As of June 14, 2002 there were approximately 5,400 holders of record of
the Company's Common Stock (which amounts do not include the number of
shareholders whose shares are held of record by brokerage houses but include
each brokerage house as one shareholder).

      The Company has paid no dividends for the fiscal years ended March 31,
2002, 2001 and 2000 and the Company has no current plans to pay dividends in the
foreseeable future. The Company plans to retain earnings, if any, to finance the
Company's operations. Payment of cash dividends, if any, in the future will be
determined by the Company's Board of Directors in light of future earnings,
capital requirements, financial condition and other relevant considerations.

Recent Sales of Unregistered Securities

      For a discussion of sales of unregistered securities by the Company during
the portion of its 2000 fiscal year ending prior to February, 2000 see the Form
10-K for 1999, "Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters - Recent Sales of Unregistered Securities" and the Form 10-Q
for 12/31/99, "Part I. Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Part II. Item 2. Changes in
Securities."


                                       5
<PAGE>

      For a discussion of sales of unregistered securities by the Company during
the remaining portion of its 2000 fiscal year see the Form 10-K for 2000, "Item
5. Market for the Registrant's Common Equity and Related Stockholder Matters -
Recent Sales of Unregistered Securities."

      For a discussion of sales of unregistered securities by the Company during
the 2001 fiscal year ending prior to January 1, 2001, see the Form 10-Q for
12/31/00, "Part II. Item 2. Changes in Securities."

      As a result of the November 28, 2001 offer to key investors, the following
shares were purchased at $.025 per share :

              Lawrence M. Powers - 850,000 shares;
              Barclay V. Powers - 850,000 shares;
              Robert Ingenito and John DiNozzi, collectively - 1,300,000 shares;
              John Iannitto - 700,000 shares;
              Steven E. Gross - 500,000 shares; and
              Colvil Investments - 200,000 shares.

      All of the shares of Common Stock issued by the Company during the 2000,
2001 and 2002 fiscal years as described above and in the referenced Form 10-K
for 1999 and the Form 10-Q for 12/31/00, were issued in reliance upon the
exemption from registration provided under Section 4(2) of the Securities Act,
on the basis that such transactions did not involve any public offering. The
stockholders who received such shares of the Company had access to all relevant
information regarding the Company necessary to evaluate the investment, and each
such stockholder represented that the Common Stock was being acquired for
investment only. There was no general solicitation or advertising involved, and
the Company used reasonable care to ensure that such stockholders were not
underwriters.


                                       6
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

      The following table presents selected financial information relating to
the financial condition and results of continuing and discontinued operations of
the Company and should be read in conjunction with the consolidated financial
statements and notes included elsewhere in this Annual Report on Form 10-K.
Effective January 1, 2002, the Company adopted the liquidation basis of
accounting and as a result the selected financial data from fiscal 2002 only
reflects operating activity through December 31, 2001.

                     CONTINUING AND DISCONTINUED OPERATIONS
<TABLE>
<CAPTION>
                                                                  For the Years Ended March 31,
                                            --------------------------------------------------------------------------
                                             Nine months        2001           2000            1999           1998
                                                ended
                                             December 31,
                                                 2001
----------------------------------------------------------------------------------------------------------------------
                                   (Amounts in thousands, except per share amounts)
Summary of Operations:
<S>                                            <C>            <C>            <C>            <C>            <C>
Total revenues of continuing operations             0              0              0              0              0
Loss from continuing operations                  (555)          (721)        (1,248)          (484)            --
Loss from continuing operations per
common share                                    (0.03)         (0.05)         (0.15)         (0.15)            --
Net income (loss) from continuing and
discontinued operations                        (1,159)        (2,002)        (1,708)        (1,804)        (3,077)
Net income (loss) per share from
continuing and discontinued operations          (0.07)         (0.14)         (0.20)         (0.56)         (2.33)
Weighted average common
  Shares outstanding                           15,697         14,024          8,622          3,200          1,325

Summary of Financial Position:
Total assets                                       99          1,090          1,532          1,030          1,600
Long-term debt                                     --             --             --             --             --
Stockholders' equity                               64            903          1,371            887            678

Dividends per share                              None           None           None           None           None
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Organization and 1998 Change of Control

      SITI has been seeking merger or sale possibilities with operating
businesses who perceive value in a merger with the Company as a publicly traded
corporate shell. The Company was an Internet media company with three websites
for the marketing of news and services. The Company's websites related entirely
to the music industry. The Company intended to develop these websites further by
entering into strategic partnerships and affiliations. As part of this strategy,
in June, 1999 the Company acquired Tropia, which promoted and marketed the music
of selected independent artists on its website www.Tropia.com. The Company next
acquired three music-related websites, HungryBands.com (an e-commerce website
and business promoting and selling music by independent artists),
NewMediaMusic.com (an e-news/magazine business), and NewYorkExpo.com (a music
and Internet conference business), all in January, 2000. As of December 31,
2001, the Company discontinued the operations of its New Media Music and
HungryBands divisions because they were not viable businesses. As of March 31,
2001, the Company discontinued the operations of the New York Expo as a result
of increased losses associated with the production of the Expo. In addition,
during fiscal 2000, the Company made and wrote-off a $500,000 investment in a
music CD custom compilation and promotion company, Volatile Media, Inc., which


                                       7
<PAGE>

did business as EZCD.com, now in bankruptcy liquidation. Such investment was
written off at March 31, 2000 because of uncertainties in EZCD's financing plans
and ability to continue operations.

      SITI's history under former management and control persons goes back to
1984 when it was incorporated in Delaware. As a result of a change of control of
the Company in December, 1998, the Company's senior management and Board of
Directors were replaced. The current senior management and Board of Directors
changed the strategic direction of the Company from being a developer of
patented communication technologies to that of an Internet media company. All
prior business operations of the Company were discontinued. The Company changed
its corporate name to SITI-Sites.com, Inc. from Spectrum Information
Technologies, Inc. after its Annual Meeting of Stockholders on December 14,
1999, and its former stock symbol "SITI" is now "SITN.OB".

      In view of the Company's determination to seek other business
opportunities to create shareholder value, the following information relating to
the results of the Company's prior discontinued operations should not be relied
upon as an indication of future performance. All of the Company's operations
prior to January 1, 2002 are discontinued operations and the Company adopted the
liquidation basis accounting effective January 1, 2002. The following
information should also be read in conjunction with the consolidated financial
statements and the notes thereto, included elsewhere in this Annual Report on
Form 10-K.

SUMMARY OF OPERATIONS: CONTINUING AND DISCONTINUED

      The following discussion relates to the Company's continuing operations
prior to the decision to liquidate.

CONTINUING OPERATIONS

      The following table sets forth certain financial data for continuing
operations for the periods indicated. During fiscal 2001 and 2002, the Company
discontinued its New York Expo, HungryBands and New Media Music business
segments. In accordance with Accounting Principles Board, ("APB") Statement #30,
"Reporting the Effects of the Disposal of a Segment of a Business," the prior
fiscal years' financial statements have been restated to reflect the
discontinued operations. All assets and liabilities of the discontinued segment
have been reflected as net liabilities of discontinued operations.

                                                       Years Ended March 31,
--------------------------------------------------------------------------------
  Continuing Operations:              Nine months       2001           2000
                                         ended
                                       December
                                       31, 2001
--------------------------------------------------------------------------------
                                               (Amounts in thousands)
Revenues                              $         0    $         0    $         0
                                      -----------    -----------    -----------

Operating costs and expenses:
Cost of sales                                  --             --             --

Impairment of goodwill                         --            134             --
Selling, general and administrative           343            668            791
                                      -----------    -----------    -----------
Total operating costs and expenses            343            802            791
                                      -----------    -----------    -----------

Operating loss                        $      (343)   $      (802)   $      (791)
                                      ===========    ===========    ===========

CONSOLIDATED REVENUES FROM CONTINUING OPERATIONS

      During the nine months ended December 31, 2001 and fiscal years ended
March 31, 2001 and 2000, SITI's revenues were nominal.


                                       8
<PAGE>

OPERATING COSTS AND EXPENSES FROM CONTINUING OPERATIONS

Nine months ended December 31, 2001 (the last period in which the Company had
operations). - During the nine months ended December 31, 2001, operating costs
and expenses totaled approximately $343,000, of which $151,000 was personnel and
related expenses. Rent totaled approximately $46,000 for the nine months ended
December 31, 2001. Accounting expenses for the nine months ended December 31,
2001 amounted to $26,000 and there were no legal fees for the same period as a
result of a decline in general corporate matters. The remaining operating costs
of approximately $120,000 represented general costs to maintain the Company's
office and fund its ongoing operations for the nine months ended December 31,
2001.

Year ended March 31, 2001 Compared to Year ended March 31, 2000. - For the
fiscal year ended March 31, 2001 operating costs and expenses increased
approximately $11,000 or 1% as compared to the fiscal year ended March 31, 2000
as a result of a $134,000 impairment of goodwill in fiscal 2001 offset by a
$123,000 or 16% decrease in selling general and administrative expenses.

      The decrease in selling, general and administrative expenses of
approximately $123,000 or 16% for the twelve months ended March 31, 2001 as
compared to the same periods in the prior fiscal year is primarily due to
declines of approximately $59,000 or 50% and $9,000 or 9%, respectively, in
legal and accounting fees as a result of a decline in general corporate
organizational matters. Rent and real estate taxes decreased approximately
$29,000 or 62% for the twelve months ended March 31, 2001 as compared to the
twelve months ended March 31, 2000 as a result of the discontinuing of its
operations. During the fiscal year ended March 31, 2000, the Company held its
Annual Meeting of Stockholders which resulted in costs of approximately $202,000
for printing, mailing and transfer agent services. No meeting was held after
that date because there were no organizational changes thereafter and management
determined further meetings at high costs to be wasteful for a start-up
business. Decreases listed above were partially offset by an increase in
personnel and related expenses of approximately $43,000 or 36% for the twelve
months ended March 31, 2001 as compared to the twelve months ended March 31,
2000. Insurance expense increased approximately $39,000 or 975% for fiscal 2001
as compared to fiscal 2000. Outside services increased approximately $9,000 or
15% for the twelve months ended March 31, 2001 as compared to the twelve months
ended March 31, 2000. These increases in personnel and related expenses,
insurance expense and outside services are due to the hiring of staff and
officers to assist in the development of management's prior business plan. As a
result of the Company's acquisitions during the 2000 fiscal year as well as the
outfitting of offices, the Company recorded increased depreciation and
amortization of approximately $17,000 or 23% for the fiscal 2001 year as
compared to the fiscal year ended March 31, 2000. For the twelve months ended
March 31, 2001, website expenses increased approximately $29,000 or 100% as
compared to the same period in the prior fiscal year as a result of the
Company's increased activity associated with its websites. The remaining
increase of approximately $39,000 in selling, general and administrative
expenses for the twelve months ended March 31, 2001 as compared to the prior
fiscal year is due to expansion associated with management's prior business
plan. The Company also wrote off goodwill of $134,000 which was considered
impaired based on continuing negative cash flows for the remaining amortization
period.

      For the fiscal year ended March 31, 2000, selling, general and
administrative expenses consisted of approximately $121,000 in personnel and
related expenses to hire officers and staff. Legal fees totaled approximately
$119,000 for the twelve months ended March 31, 2000 resulting from corporate
organizational matters and acquisition negotiations. For the fiscal year ended
March 31, 2000, other expenses amounted to approximately $202,000 due to the
printing, mailing and transfer agent costs associated with the annual meeting of
the shareholders in December 1999, the first held since 1995. Outside services
were approximately $60,000 for the twelve months ended March 31, 2000, primarily
for accounting and other consultants before corporate offices were rented. For
the twelve months ended March 31, 2000, accounting expenses totaled
approximately $103,000 as a result of costs associated with the fiscal 1999
audit. As a result of SITI's move from executives' personal offices to an office
in Manhattan in September 1999, the Company recorded approximately $47,000 in
rent expense for the fiscal year ended March 31, 2000. SITI recognized
approximately $75,000 in depreciation and amortization for the twelve months
ended March 31, 2000 as a result of the acquisitions of Tropia Inc.,


                                       9
<PAGE>

HungryBands.com, NewMediaMusic.com and NewYorkExpo.com. For the twelve months
ended March 31, 2000, SITI recognized approximately $34,000 in expenses for its
transfer agent, public relations and costs of issuing press releases. The
remaining $30,000 in operating costs and expenses relate to several costs
associated in maintaining the office, such as telephone in the amount of
approximately $9,000; office supplies in the amount of approximately $6,000; and
various expenses totaling approximately $15,000.

OPERATING LOSS FROM CONTINUING OPERATIONS

      The Company's operating loss for the twelve months ended March 31, 2001
increased approximately $11,000 or 1% to $802,000 for the twelve months ended
March 31, 2001 as compared to a $791,000 operating loss during the prior fiscal
year. This increased loss is directly related to increased operating costs and
expenses for the current fiscal year.

OTHER INCOME AND EXPENSE RELATED TO CONTINUING OPERATIONS

      Other expenses (net of income) decreased approximately $538,000 or 118%
for fiscal 2001, as compared to fiscal 2000, primarily due to the $500,000 loss
on the investment in EZCD the Company recorded during fiscal 2000. This decrease
is further attributed to a $19,000 gain associated with a settlement agreement
between the Company and former officers of Tropia as well as a $28,000 gain on
the sale of marketable securities. These decreases were partially offset by a
$10,000 or 24% decline in interest income for the fiscal year ended March 31,
2001 as compared to the fiscal year ended March 31, 2000. This decrease is
directly related to decreased cash balances.

      For the fiscal year ended March 31, 2000, SITI recognized approximately
$457,000 in other expenses primarily due to the $500,000 loss on the investment
in EZCD. (See "Item 3. Legal Proceedings.") This loss was partially offset by
interest income of $43,000. This interest income is a result of the investment
of increased cash balances resulting from private placements during the current
fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

      As of March 31, 2002 the Company had working capital of $11,000 as
compared to $782,000 for the prior fiscal year. The $771,000 decline is
primarily due to a decrease in the Company's cash balances offset by a decrease
in payables and accrued expenses for the fiscal year ended March 31, 2002 as
compared to the prior fiscal year. The increased working capital for the prior
fiscal year was due to the several infusions of cash after the December, 1998
Change of Control transaction.

      Net cash used by operations decreased $535,000 for the nine months ended
December 31, 2001 as compared to the twelve months ended March 31, 2001 as a
result of the discontinuing of operations. Net cash used by operations increased
$376,000 for the twelve months ended March 31, 2001 as compared to the twelve
months ended March 31, 2000 as a result of the Company experiencing an increase
in operating loss of approximately $294,000. Net cash used by discontinued
operations decreased approximately $303,000 for the nine months ended December
31, 2001 as compared to fiscal 2001. Also, net cash used by discontinued
operations increased approximately $364,000 for the fiscal year ended March 31,
2001 as compared to fiscal 2000.

      Net cash used by investing activities decreased from $153,000 in fiscal
2001 to a $491,000 provision of cash for the nine months ended December 31, 2001
as a result of the sale of assets. Net cash used by investing activities
decreased from a $1,082,000 for fiscal 2000 to $153,000 for the twelve months
ended March 31, 2001 as compared to the prior fiscal year. This decrease is
primarily due to the EZCD investment of $500,000 during the prior fiscal year.
Also, during fiscal 2000, the Company purchased marketable securities totaling
approximately $486,000. During the current fiscal year, the Company sold the
securities as well as additional securities that it had purchased.

      The Company received approximately $1,750,000 from the proceeds of the
financings. (See "Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters,") and certain options were exercised for an aggregate


                                       10
<PAGE>

of approximately $12,000 during the fiscal year ended March 31, 2000. As a
result of the June 2000 financings the company received approximately $1,150,000
in proceeds for the fiscal year ended March 31, 2001. Pursuant to the November
28, 2001 offer to key investors, the Company received approximately $110,000 for
the issuance of common stock.

      Capital expenditures amounted to approximately $2,000, $47,000 and
$119,000, respectively, for the nine months ended December 31, 2001 and the
twelve months ended March 31, 2001 and March 31, 2000. Capital expenditures were
for computer and office equipment, used in continuing operations.

      No assurances could be given that the Company would successfully complete
the database developments, or its ongoing software development, or achieve the
revenues sought from the former business plan. By November, 2001 all available
capital had been consumed. (See Note 1, describing the Company's plan for
liquidation of these operations). As a result, effective January 1, 2002, the
Company adopted the liquidation basis of accounting. Under the liquidation basis
of accounting, assets are stated at their estimated net realizable values and
liabilities are stated at their estimated settlement amounts, which estimates
will be periodically reviewed and adjusted.

      The valuation of assets at their net realizable value and liabilities at
their anticipated settlement amounts necessarily requires many estimates and
assumptions. In addition, there are substantial risks and uncertainties
associated with carrying out the liquidation of the Corporation's existing
operations. The valuations presented in the accompanying Statement of Net Assets
in Liquidation represent estimates, based on present facts and circumstances, of
the net realizable values of assets and costs associated with carrying out the
dissolution and liquidation plan based on the assumptions set forth below. The
actual values and costs are expected to differ from the amounts shown herein and
could be greater or lesser than the amounts recorded. Accordingly, it is not
possible to predict the aggregate amount that will ultimately be distributable
to shareholders and no assurance can be given that the amount to be received in
liquidation will equal or exceed the net assets in liquidation per share in the
accompanying Statement of Net assets in Liquidation or the price or prices at
which the Common Stock has generally traded or is expected to trade in the
future. The cautionary statements regarding estimates of net assets in
liquidation set forth in the Forward-Looking Statements portion of this report
are incorporated herein by reference.

INFLATION

      The Company does not believe that the relatively moderate rates of
inflation in recent years have had a significant effect on its net revenue and
profitability.

SUMMARY OF DISCONTINUED OPERATIONS

      As a result of the losses incurred relating to the April 21-22, 2001 Expo,
the Company discontinued the operations associated with the segment. For a full
discussion of the Company's discontinued operations for the fiscal year ended
March 31, 1999, see the Form 10-K for 1999. Below is a table representing
operating results from the discontinued operations.


                                       11
<PAGE>

OPERATING RESULTS FROM DISCONTINUED OPERATIONS

                                            Nine months
                                              ended      Year ended  Year ended
                                             December     March 31,   March 31,
                                             31, 2001       2001        2000
                                            -----------------------------------
Revenues                                        0              80            93
                                            -----------------------------------

Operating costs and expenses


     Cost of sales                             44             133            55

     Selling, general & administrative        560           1,228           571
                                            -----------------------------------

Total operating costs and expenses            604           1,361           626
                                            -----------------------------------


Operating income (loss)                      (604)         (1,281)         (533)


Other income and (expenses)                     0               0            73

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

Income(loss) from discontinued operations    (604)         (1,281)         (460)
                                            ===================================

REVENUES FROM DISCONTINUED OPERATIONS

      During the nine months ended December 31, 2001, revenues from discontinued
operations were nominal. During the fiscal year ended March 31, 2001, SITI's
revenues from the discontinued operation were approximately $80,000 as compared
to the same period in the prior fiscal year where SITI recorded gross revenues
of approximately $93,000 from the March 2000 New York Expo sponsored by the
Company. The $13,000 decline in revenues is due to decreased ticket sales and
sponsorship associated with the April 21-22, 2001 Expo as compared to the March
2000 Expo.

OPERATING COSTS AND EXPENSES FROM DISCONTINUED OPERATIONS

      Operating costs and expenses from discontinued operations decreased
approximately $757,000 or 56% for the nine months ended December 31, 2001 as
compared to the fiscal year ended March 31, 2001 primarily due to a $668,000 or
54% decrease in selling, general and administrative expenses as well as a
$89,000 or 67% decrease in cost of sales. During the fiscal year ended March 31,
2001, operating costs and expenses from discontinued operations increased
approximately $735,000 or 117% as compared to the twelve months ended March 31,
2000. This increase is primarily due to a $78,000 or 142% increase in cost of
sales and an increase of approximately $657,000 or 115% in selling, general and
administrative expenses.

      The $89,000 or 67% decrease in cost of sales as of December 31, 2001 is
directly related to the termination of the New York Expo in fiscal 2001. The
increase of approximately $78,000 or 142% in cost of sales for the twelve months
ended March 31, 2001 as compared to the twelve months ended March 31, 2000 is
directly related to the increased costs associated in sponsoring the expanded
New York Expo in 2001.

      The decrease in selling, general and administrative expenses for the nine
months ended December 31, 2001 as compared to the twelve months ended March 31,
2001 is primarily due to the decrease in personnel and related expenses


                                       12
<PAGE>

and outside services of approximately $461,000 or 55% and $52,000 or 36%,
respectively. These decreases were primarily due to the termination of staff and
consultants during the current fiscal year as a result of the discontinuing of
the Company's operations. The remaining decline in selling, general and
administrative expenses of approximately $155,000 is directly related to the
discontinuing of the Company's divisions, termination of employees and
liquidation of assets. The increase in selling, general and administrative
expenses of approximately $657,000 or 115% for fiscal 2001 as compared to fiscal
2000 is primarily due to the $626,000 or 287% increase in personnel and related
expenses. This increase is due to the hiring of staff and executives to assist
in the production of the New York Expo. This increase was partially offset by a
decrease in commissions of approximately $27,000 or 118% for the year ended
March 31, 2001 as compared to the year ended March 31, 2000. Commissions
declined as a direct result of the losses incurred in connection with the April
21-22, 2001 Expo. The remaining $58,000 increase in selling, general and
administrative expenses for fiscal 2001 as compared to fiscal 2000 is primarily
due to increased costs associated with operating the Company's prior divisions.

OPERATING LOSS FROM DISCONTINUED OPERATION

      For the fiscal period ended December 31, 2001, the Company's operating
loss associated with its discontinued operations decreased approximately
$677,000 or 53% as compared to fiscal 2001 due to decreased operating expenses
offset by decreased revenues. For the fiscal year ended March 31, 2001, the
Company's operating loss associated with its discontinued operations increased
approximately $748,000 or 140% as compared to the same period in the prior
fiscal year primarily due to the increased operating expenses and decreased
revenues associated with its discontinued segments.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The company had no short-term investments as of March 31, 2002. Market
risk relating to the Company's interest bearing cash equivalents held as of
March 31, 2001 is considered to be immaterial.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Information called for by this item is set forth in the Company's
consolidated financial statements and supplementary data contained in this
report, and can be found at the pages listed in the following index on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

      On October 2, 2000, the Registrant was notified that Edward Isaacs &
Company LLP had merged with McGladrey & Pullen, LLP and that the successor firm
would replace Edward Isaacs & Company LLP as the auditor for the Registrant.
McGladrey & Pullen, LLP was appointed as the Registrant's new auditor.


                                       13
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Directors and Executive Officers of the Company

      The following table sets forth information with respect to the directors
and executive officers of the Company:

             Name           Age   Position with the Company

      Lawrence M. Powers    70    Chairman of the Board, Chief Executive Officer

      Barclay V.  Powers    39    Director

      Robert Ingenito       59    Director

      Toni Ann Tantillo     35    Chief Financial Officer, Vice President,
                                  Secretary and Treasurer

Business Experience of Directors and Executive Officers

      Lawrence M. Powers, 70, has served as the Company's Chairman of the Board
and Chief Executive Officer since the change of control transaction in December,
1998. Mr. Powers has been a private investor since 1992. Beginning in 1978 and
continuing to his retirement in 1992, he built Spartech Corporation (NYSE), from
a previously bankrupt corporation with few assets, into what has become a $1
billion plastics manufacturing group operating 44 plants. Raising some $200
million during his tenure, he and Spartech's key managers built one of the
largest plastic processing companies in the U.S. by 1992 (12 plants at athe
time). The management team he assembled has continued successfully. He remained
on the board of Spartech until 1995, and is still a substantial securities
holder of Spartech. Mr. Powers, a securities lawyer in New York from 1957
through 1981, was educated at Yale Law School and senior executive programs at
Harvard Business School. Mr. Powers is the father of Barclay V. Powers, a
Director of the Company.

      Barclay V. Powers, 39, has served as a Director of the Company since 1999.
He is a graduate of Columbia University, and was an executive associate for five
years to the Chairman/CEO of Spartech, specializing in marketing projects,
acquisitions and joint ventures. Since 1992 he has been an independent film
producer, making and marketing documentaries and a feature film, all aimed at
the college youth market. Barclay Powers is the son of Lawrence M. Powers,
Chairman and CEO of the Company.

      Robert Ingenito, 59, has served as a Director of the Company since the
change of control transaction in December, 1998. Mr. Ingenito was a founder and,
since 1989, served as Chief Executive Officer of Access Communications and
Access Direct, two established data service companies. Access Direct produces
high volume, highly segmented mail correlated to its clients segmented
databases; Access Communications produces critical documents from on-line
transmissions from its clients and was sold in 1999. Prior to that, he was the
President and a principal of Axciom Corporation (NYSE) when it went public in
1982. Axciom has become an $800 million database management firm, and purchased
Access Communications in 1999.

      Toni Ann Tantillo, 35, has served as the Company's Chief Financial
Officer, Vice President, Secretary and Treasurer since December 1999. Prior to
her election, she worked as an independent consultant to SITI after the change
of control in December 1998. From 1995 to December, 1998, Ms. Tantillo was the
Asst. Controller and Controller of SITI. Ms. Tantillo, a Certified Public
Accountant was educated at Iona College in New Rochelle, New York.


                                       14
<PAGE>

Compliance with Section 16 of the Exchange Act

      Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who beneficially own more than 10%
of the Company's common stock (collectively, "Reporting Persons"), to file
reports of ownership and changes in ownership with the SEC. Reporting Persons
are required by SEC regulations to furnish the Company with copies of all such
reports. To the Company's knowledge, based on a review of such reports to the
Company and certain representations of the Reporting Persons, the Company
believes that during the 2001 fiscal year, all Reporting Persons timely complied
with all applicable Section 16(a) filing requirements.

ITEM 11. EXECUTIVE COMPENSATION

Compensation of Executive Officers

      The following table sets forth the total annual compensation paid, or
accrued by the Company for services in all capacities for Mr. Lawrence M. Powers
in fiscal 2002, 2001 and 2000, who served as Chief Executive Officer, and during
fiscal 1999, when he was Chief Executive Officer for three months; and four
individuals who were among the highest paid employees for the fiscal year ended
March 31, 2001. The table also includes two individuals who were among the
highest paid employees for the 2000 fiscal year but were not executive officers
at the end of such fiscal year (collectively, the "Named Executive Officers").
The Company had one executive officer serving as such at the end of fiscal 2001
whose aggregate compensation exceeded $100,000. Note that Messrs. Powers,
Ingenito and Iannitto were not paid any cash compensation in fiscal 2002, 2001
and 2000 and the amounts shown were waived and merely accrued by the Company
(See Note 1 to table).


                                       15
<PAGE>

                           Summary Compensation Table
<TABLE>
<CAPTION>
                                                                                   Long-Term Compensation Payouts
                                       Annual Compensation
                                                                        Grants & Awards

                                                                          Other       Restricted  Shares
Name and                                                                  Annual      Stock       Underlying   LTIP       All other
Principal Position               Year       Salary           Bonus        Comp.       Awards      Options      Payouts    Comp
------------------               ----       ------           -----        -----       ------      -------      -------    ----
<S>                              <C>       <C>               <C>          <C>         <C>         <C>          <C>        <C>
Lawrence M. Powers               2002      125,000(1)          -0-          -0-          -0-          -0-          -0-          -0-
Chairman and Chief               2001      125,000(1)          -0-          -0-          -0-          -0-          -0-          -0-
Executive Officer                2000       75,000(1)          -0-          -0-          -0-          -0-          -0-          -0-

Robert Ingenito                  2002       67,333(1)          -0-          -0-          -0-          -0-          -0-          -0-
Director                         2001      100,000(1)          -0-          -0-          -0-          -0-          -0-          -0-
                                 2000       25,000(1)          -0-          -0-          -0-          -0-          -0-          -0-

John Iannitto                    2002       49,750(1)          -0-          -0-          -0-          -0-          -0-          -0-
Former Vice-President            2001       75,000(1)          -0-          -0-          -0-          -0-          -0-          -0-
                                 2000          -0-             -0-          -0-          -0-          -0-          -0-          -0-

Jon M. Gerber                    2002          -0-             -0-          -0-          -0-          -0-          -0-          -0-
Former Executive Vice-           2001          -0-             -0-          -0-          -0-          -0-          -0-          -0-
President, Secretary,            2000       59,231(2)          -0-          -0-          -0-          -0-          -0-          -0-
Treasurer and Director

Toni Ann Tantillo                2002       65,325             -0-          -0-          -0-          -0-          -0-          -0-
Chief Financial Officer,         2001       69,874           1,375(6)       -0-          -0-          -0-          -0-          -0-
Vice-President,                  2000       12,980(5)       14,100(3)    11,700(4)       -0-          -0-          -0-          -0-
Secretary and Treasurer

Theodore Mazola                  2002       60,729             -0-          -0-          -0-          -0-          -0-          -0-
Former Vice-President,           2001       68,000           2,000(6)       -0-          -0-          -0-          -0-          -0-
Technical Director               2000       22,231(5)          -0-          -0-          -0-          -0-          -0-          -0-

Steven Zuckerman                 2002        5,000(7)          -0-          -0-          -0-          -0-          -0-          -0-
Former Vice-President,           2001       68,000(7)       16,813(6)       -0-          -0-          -0-          -0-          -0-
Technical Director               2000       21,250(5)          -0-          -0-          -0-          -0-          -0-          -0-

Jonathan Blank                   2002          -0-             -0-          -0-          -0-          -0-          -0-          -0-
Former Chief Executive           2001          -0-             -0-          -0-          -0-          -0-          -0-          -0-
Officer - Tropia, Inc.           2000       17,500(5)          -0-          -0-          -0-          -0-          -0-          -0-
</TABLE>


                                       16
<PAGE>

(1) Amounts include Mr. Powers', Mr. Ingenito's and Mr. Iannitto's contribution
of services charged against earnings. No compensation was paid by the Company to
Messrs. Powers, Ingenito or Iannitto with respect to these services during the
fiscal year ended March 31, 2000. During fiscal 2001, Messrs. Ingenito and
Iannitto received stock compensation valued at approximately $22,000 and
$15,000, respectively. During fiscal 2002, Messrs. Ingenito and Iannitto
received stock options for their services and approximately $9,000 and $6,000,
respectively, was charged to compensation for these options. However, Mr. Powers
did not receive any compensation for his services during fiscal 2002 and 2001.

(2) Included in this amount is Mr. Gerber's contribution through for the first
quarter of the current fiscal year. Mr. Gerber began collecting a salary during
the second quarter of the 2000 fiscal year, and left the Company in September,
1999.

(3) Represents the dollar value associated with a stock bonus granted based upon
performance in February, 2000.

(4) Represents compensation as an independent consultant for the period December
1, 1999 to January 31, 2000.

(5) Represents partial year compensation based upon individual's election as
officer. Mr. Blank left the Company in December, 1999.

(6) Represents the dollar value associated with a stock bonus granted based upon
performance for the 2001 fiscal year.

(7) Mr. Zuckerman became a consultant in May, 2001 and his salary and bonus
arrangements were terminated.

Option Grants in Last Year

      During fiscal 2002 options were granted to Mr. Ingenito and Mr. Iannitto
pursuant to their Employment Agreement. However, pursuant to the November 28,
2001 offer to key investors, these options were cancelled. There were no options
granted during the fiscal years ended March 31, 2001 and March 31, 2000.

Option Exercises and Year-End Values

      There were no options exercised by the Named Executive Officers during the
2002 fiscal year. Any options held by such individuals were purchased in
connection with stock purchase agreements. (See "Item 5. Market for the
Registrant's Common Equity and Related Stockholder Matters.")

Compensation of Directors

      At present, the Board does not award compensation to its directors.

Employment Agreements

      At present the Company does not maintain employment agreements or other
arrangements with its executive officers, except for the agreements described
below:


                                       17
<PAGE>

      In connection with the ongoing services of Messrs. Ingenito and Iannitto,
they have agreed that the Company will not pay them cash compensation for the
fiscal years ended March 31, 2001 and 2002, but will grant options and have
granted shares as follows:

                           Fiscal 2001        Fiscal 2002
                           -----------        -----------

      Robert Ingenito      300,000 shares     Options to purchase 300,000 shares
                                              at $.50 per share, exercisable for
                                              five years (until 6/30/2006)

      John Iannitto        200,000 shares     Options to purchase 200,000 shares
                                              at $.50 per share, exercisable for
                                              five years (until 6/30/2006)

      However, as a result of their withdrawal as executives and their stock
purchase on November 28, 2001, all options granted, or to be granted for the
2002 fiscal year, were cancelled. Mr. Powers does not expect to receive any cash
compensation, stock or options for his services for such two fiscal years.

      At present, the Company does not have a Compensation Committee.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information, as of June 7, 2002, as to the
beneficial ownership of the Company's common stock (including shares which may
be acquired within sixty days pursuant to stock options) by (1) each person or
group of affiliated persons known by the Company to own beneficially more than
5% of the outstanding shares of the Company's common stock, (2) the Named
Executive Officers, (3) each of the Company's directors, and (4) all directors
and executive officers of the Company as a group. Unless otherwise noted, the
Company believes that all persons named in the table have sole voting and
investment power with respect to all shares of common stock beneficially owned.

                                   Shares of Common Stock     Beneficially Owned
Name of Owner                            Number                Percent of Class
--------------------------------------------------------------------------------

Lawrence M. Powers                      8,436,666(1)                 41.9%
47 Beech Road
Englewood, NJ 07631

Robert Ingenito (former officer)        1,300,000(2)(4)               6.5%
80 Ruland Road
Melville, NY 11747-6200

Barclay V. Powers                       4,818,333                    24.0%
665 Walther Way
Los Angeles, CA 90049

John Iannitto (former officer)          1,900,000(3)(4)(5)            9.4%
D/B/A RSI Marketing
171 Madison Avenue
New York, NY 10016

Ronald J. Palumberi                     2,166,667(7)                 10.8%
9 Sandpiper Court
Shoreham, NY 11786


                                       18
<PAGE>

Toni Ann Tantillo                          55,834                       *
115 Whitman Road
Yonkers, NY 10710

Theodore Mazola (former officer)          300,000                     1.5%
36 Fieldway Avenue
Staten Island, NY 10308

Steven Zuckerman (former officer)         200,000                     1.0%
519 Bloomfield Avenue
Apt #6G
Caldwell, NJ

Jonathan Blank (former officer)            16,546                       *
4239 Coolidge Avenue
Los Angeles, CA 90066

Current Directors and                   9,792,500(6)                 48.7%
Executive Officers as a
Group (3 persons):

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

* Less than 1%

(1) Consists solely of shares. All options were cancelled pursuant to the
November 28, 2001 offer to key investors. Shares and options held by Mr.
Lawrence Powers also include 4,818,333 shares held by his son, Barclay V.
Powers, as to which Lawrence Powers disclaims voting or investment power
therein.

(2) Consists solely of shares. All options were cancelled pursuant to the
November 28, 2001 offer to key investors. Shares held by Mr. Ingenito also
include 650,000 shares held by John DiNozzi.

(3) Consists solely of shares. All options were cancelled pursuant to the
November 28, 2001 offer to key investors.

(4) Does not include options payable under their employment arrangements for
fiscal 2002. (See "Item 11. - Executive Compensation - Employment Agreements.")

(5) Consists solely of shares held by RSI Marketing, a sole proprietorship owned
by John Iannitto. All options were cancelled pursuant to the November 28, 2001
offer to key investors.

(6) Consists solely of shares.

(7) Consists solely of shares purchased from Robert Ingenito and John Dinozzi..

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Steven Gross, an investor, was formerly a law partner of Mr. Powers. Mr.
Gross is now a senior partner of Sills Cummis Radin Tischman Epstein & Gross,
P.A., a large law firm based in Newark, NJ. His law firm was counsel to the
Company until March 31, 2000.


                                       19
<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

(a)   The following documents are filed as part of this Annual Report on Form
      10-K:

      1.    Consolidated Financial Statements:

                  The consolidated financial statements filed as a part of this
                  report are listed in the "Index to Consolidated Financial
                  Statements" at Item 8.

      2.    Consolidated Financial Statement Schedules:

                  The consolidated financial statement schedule filed as part of
                  this report is listed in the "Index to Consolidated Financial
                  Statements " at Item 8.

                  Schedules other than that listed on the accompanying Index to
                  Consolidated Financial Statements are omitted for the reason
                  that they are either not required, not applicable, or the
                  required information is included in the consolidated financial
                  statements or notes thereto.

      3.    Exhibits

      2.1   Acquisition Agreement Between the Company and Tropia, Inc. (4)

      3.1   Certificate of Incorporation of SITI-Sites.com, Inc. as amended. (3)

      3.2   Amended and Restated Bylaws of SITI-Sites.com, Inc., as amended (3)

      3.3   Restated Certificate of Incorporation of the Company (3)

      3.4   Restated Bylaws of the Company. (3)

      10.1  Investment and Business Development Agreement Among the Company,
            Minutemeals.com, Inc., Joseph Langhan and Donald Moore, dated March
            19, 1999 (5)

      10.2  Stock Purchase Agreement Between the Company and Powers & Co. dated
            December 11, 1998 (5)

      10.3  Stock Purchase Agreement Between the Company and Robert Ingenito
            dated December 12, 1998 (5)

      10.4  Stock Purchase Agreement Between the Company and Steven Gross dated
            December 12, 1998 (5)

      10.5  Option Agreement Entered Into Between the Company and Maurice W.
            Schonfeld (5)

      10.6  Termination Agreement Dated as of May 28, 1999 Among the Company,
            Minutemeals.com, Inc., Joseph Langhan, and Donald Moore (5)

      10.7  Stock Purchase Agreement dated July 26, 1999 (Powers) (3)

      10.8  Content and Technology Sharing Agreement dated December 23, 1999,
            between the Company and Volatile Media, Inc. (6)

      10.9  Stock Purchase Agreement dated December 23, 1999 (Powers and
            Ingenito) (2)

      10.10 Option Agreement dated December 23, 1999 Entered Into Between the
            Company and Lawrence M. Powers (2)

      10.11 Option Agreement dated December 23, 1999 Entered Into Between the
            Company and Robert Ingenito (2)

      10.12 Subscription Agreement dated February 8, 2000 Between the Company
            and Volatile Media, Inc. (6)

      10.13 SITI-Sites.com, Inc. 1999 Stock Option Plan (6)

      10.14 Purchase Agreement dated January 3, 2000, between the Company and
            Theodore Mazola (7)

      10.15 Purchase Agreement-2 dated January 3, 2000, among the Company and
            Theodore Mazola and Steven Zuckerman(7)

      10.16 Letter Agreement dated January 3, 2000, executed by New York Music
            Expo, Inc. in favor of the Company(7)


                                       20
<PAGE>

      10.17 Settlement Agreement Dated May 1, 2000 Among the Company and
            Jonathan Blank, Ari Blank and Arjun Nayyer (2)

      10.18 Stock Purchase Agreement dated June 8, 2000 (Powers, Ingenito and
            Iannitto) (2)

      10.19 Employment Arrangements Agreement dated June 12, 2000 Entered Into
            Between the Company and Messrs. Robert Ingenito and John Iannitto
            (2)

      10.20 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
            Company and Lawrence Powers (2)

      10.21 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
            Company and Robert Ingenito (2)

      10.22 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
            Company and John Iannitto (2)

      10.23 Stock Purchase Agreement dated June 13, 2000 (Colvil Investments,
            LLC purchase) (2)

      10.24 Stock Option Agreement Dated June 13, 2000, Entered Into Between the
            Company and Colvil Investments, LLC (2)

      10.25 Stock Purchase Agreement dated June 16, 2000 (Steven Gross purchase)
            (2)

      10.26 Stock Option Agreement Dated June 16, 2000, Entered Into Between the
            Company and Steven Gross (2)

Notes:

      (1)   Filed Herewith.

      (2)   Previously Filed as an Exhibit to the Company's Annual Report on
            Form 10-K for the Fiscal Year ended March 31, 2000, and incorporated
            herein by reference

      (3)   Previously Filed as an Exhibit to the Company's Definitive Proxy
            Statement Effective December 14, 1999, and incorporated herein by
            reference.

      (4)   Previously Filed as an Exhibit to the Company's Quarterly Report on
            Form 10-Q for the Quarter ended June 30, 1999, and incorporated
            herein by reference.

      (5)   Previously Filed as an Exhibit to the Company's Annual Report on
            Form 10-K for the Fiscal Year ended March 31, 1999, and incorporated
            herein by reference.

      (6)   Previously Filed as an Exhibit to the Company's Quarterly Report on
            Form 10-Q for the quarter ended December 31, 1999.

      (7)   Previously Filed as an Exhibit to the Company's Current Report on
            Form 8-K dated January 18, 2000.

(b)   Reports on Form 8-K:

      There were no reports filed on Form 8-K for the three months ended March
31, 2002.


                                       21
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                              SITI-SITES.COM, INC.

Dated:  June 28, 2002         By    /s/ Toni Ann Tantillo
                                    -------------------------------------------
                                        Toni Ann Tantillo
                                      (Chief Financial Officer, Vice President,
                                              Secretary and Treasurer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Dated:  June 28, 2002         By    /s/ Lawrence M. Powers
                                    --------------------------------------------
                                                  Lawrence M. Powers
                                            (Chief Executive Officer and
                                         Chairman of the Board of Directors)

Dated:  June 28, 2002         By    /s/ Robert Ingenito
                                    --------------------------------------------
                                                   Robert Ingenito
                                                      (Director)

Dated:  June 28, 2002         By    /s/ Barclay V. Powers
                                    --------------------------------------------
                                                  Barclay V. Powers
                                                      (Director)


                                       22
<PAGE>

                       SITI-Sites.com, Inc. and Subsidiary
                   Index to Consolidated Financial Statements
                        And Financial Statement Schedule

Report of Independent Certified Public Accountants                           F-2

Report of Independent Certified Public Accountants                           F-3

Statement of Assets in Liquidation as of March 31, 2002 and Balance
Sheet (Going Concern) as of March 31, 2001                                   F-4

Statement of Changes in Net Assets in Liquidation for the Three Months
ended March 31, 2002                                                         F-5

Consolidated Financial Statements For the Nine Months ended December
31, 2001 and Years Ended March 31, 2001 and 2000 (Going Concern Basis)
Consolidated Statements of Operations and Comprehensive Loss For the
Nine Months ended December 31, 2001 and years ended March 31, 2001
and 2000 (Going Concern Basis)                                               F-6

Consolidated Statements of Stockholders' Equity For the Nine Months
ended December 31, 2001 and Years ended March 31, 2001 and 2000
(Going Concern Basis)                                                        F-7

Consolidated Statements of Cash Flows For the Nine Months ended
December 31, 2001 and Years ended March 31, 2001 and 2000 (Going
Concern Basis)                                                               F-8

Notes to Consolidated Financial Statements                            F-9 - F-24


                                      F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors
Siti-Sites.com,Inc.
Yonkers, New York

We have audited the accompanying consolidated balance sheet of Siti-Sites.com,
Inc. and subsidiary as of March 31, 2001, and the related consolidated
statements of operations and comprehensive loss, stockholders' equity and cash
flows for the year then ended, and the statements of operations and
comprehensive loss, stockholders' equity and cash flows for the period from
April 1, 2001 to December 31, 2001. In addition, we have audited the
accompanying statement of net assets in liquidation as of March 31, 2002, and
the related statement of changes in net assets in liquidation for the period
from January 1, 2002 to March 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

As described in Note 1a to the financial statements, the stockholders of the
Company approved a plan of liquidation and commenced liquidation shortly
thereafter. As a result, the Company has changed its basis of accounting for
periods subsequent to December 31, 2001 from the going concern basis to a
liquidation basis.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Siti-Sites.com, Inc.
and subsidiary as of March 31, 2001, the results of its operations and its cash
flows for the year then ended and for the period from April 1, 2001 to December
31, 2001, its net assets in liquidation as of March 31, 2002, and the changes in
its net assets in liquidation for the period from January 1, 2002 to March 31,
2002 in conformity with accounting principles generally accepted in the United
States of America applied on the basis described in the preceding paragraph.

/s/ McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
White Plains, New York
May 21, 2002


                                      F-2
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
SITI-Sites.com, Inc.
New York, New York

We have audited the accompanying consolidated statements of operations and
comprehensive loss, stockholders' equity, and cash flows for the year ended
March 31, 2000 of SITI-Sites.com, Inc and subsidiary ("The Company"). These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows for
the year ended March 31, 2000 of SITI-Sites.com, Inc. and subsidiary, in
conformity with accounting principles generally accepted in the United States of
America.

EDWARD ISAACS & COMPANY LLP
White Plains, New York
May 25, 2000


                                      F-3
<PAGE>

SITI-Sites.com, Inc.
(Amounts in thousands)

<TABLE>
<CAPTION>
                                                                 Statement of Net    Balance Sheet
                                                                    Assets in       (Going Concern
                                                                 Liquidation March   Basis) March
                                                                     31, 2002          31, 2001
--------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>
Assets
Current assets:
  Cash and cash equivalents                                       $           39    $          320
  Marketable securities                                                       --               624
  Receivables and other assets                                                 4                25
                                                                  --------------    --------------
         Total current assets
                                                                              43               969
                                                                  --------------    --------------

Property and Equipment, net                                                   --               121
                                                                  --------------    --------------

Intangibles:
     Goodwill                                                                 --               289
      Less:  Accumulated amortization                                         --              (289)
                                                                  --------------    --------------
Intangibles, net                                                              --                --
                                                                  --------------    --------------

         Total assets                                             $           43    $        1,090
                                                                  ==============    ==============

Liabilities and Stockholders' Equity:
Current Liabilities
  Accounts payable and accrued liabilities                        $           32    $           81
  Net liabilities of discontinued operation                                   --               106
                                                                  --------------    --------------
         Total current liabilities                                            32               187
                                                                  --------------    --------------

         Total liabilities                                                    32               187
                                                                  --------------    --------------

Commitments and contingencies

Stockholders' Equity: (Net Assets in Liquidation)
Preferred stock $.001 par value, 5,000
shares authorized and none issued and outstanding                             --                --
Common stock, $.001 par value, 35,000 shares  authorized,
respectively, and 20,118 and 15,517, issued and outstanding,
respectively                                                                                    16
 Paid-in capital                                                                            77,486
 Accumulated deficit                                                                       (76,272)
                                                                  --------------    --------------

                                                                                             1,230
 Treasury stock, 112 shares at cost, respectively                                             (330)
 Accumulated Other Comprehensive Income                                                          3
                                                                  --------------    --------------
         Total stockholders' equity (Net Assets in Liquidation)               11               903
                                                                  --------------    --------------

Total liabilities and stockholders' equity                        $           43    $        1,090
                                                                  ==============    ==============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

SITI-Sites.com, Inc.
Statement of Changes in Net Assets in Liquidation
Three months ended March 31, 2002
(Amounts in thousands)

Net assets in liquidation at January 1, 2002         $  64
Reductions to net assets in liquidation:
     Operating expenses and accrual of estimated
costs                                                 (110)
     Issuance of common stock                            3
     Contribution of management's sevices and rent      46
     Insurance recovery from World Trade Center
          attack                                         8
                                                     -----
Net assets in liquidation at March 31, 2002          $  11
                                                     =====

See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>

SITI-Sites.com, Inc.
Statements of Operations and Comprehensive Loss (Going Concern Basis)
For the nine months ended December 31, 2001 and the years ended
March 31, 2001 and 2000
(Amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                          Nine months        Year ended        Year ended
                                                                ended         March 31,         March 31,
                                                             December              2001              2000
                                                             31, 2001
---------------------------------------------------------------------------------------------------------
<S>                                                    <C>               <C>               <C>
  Revenues                                             $           --    $           --    $           --
                                                       --------------    --------------    --------------

Operating costs and expenses:
  Impairment of goodwill                                           --               134                --
  Selling, general and administrative expenses                    343               668               791
                                                       --------------    --------------    --------------
           Total operating costs and expenses                     343               802               791
                                                       --------------    --------------    --------------

Operating loss                                                   (343)             (802)             (791)
                                                       --------------    --------------    --------------

Other income (expense):
   Interest income                                                 --                32                42
   Gain on litigation settlement                                   --                19                 1
   Gain on sale of marketable securities                           --                28                --
   Impairment provision on assets                                (157)               --                --
   Loss on disposal of equipment                                  (74)               --                --
   Other income                                                    19                 2                --
   Loss on investment in Volatile Media (EZCD.com)                 --                --              (500)
                                                       --------------    --------------    --------------
   Total other income (expense), net                             (212)               81              (457)
                                                       --------------    --------------    --------------
Loss from continuing operations                                  (555)             (721)           (1,248)
                                                       --------------    --------------    --------------

Discontinued operations:
   Income from discontinued operations                             --                --                65
   Loss from discontinued operations - all divisions             (604)           (1,281)             (525)
                                                       --------------    --------------    --------------
 Loss from discontinued operations                               (604)           (1,281)             (460)
                                                       --------------    --------------    --------------

Net loss                                               $       (1,159)   $       (2,002)   $       (1,708)
   Other Comprehensive Income (Loss), net                          (3)               (1)                4
                                                       --------------    --------------    --------------
Comprehensive loss                                     $       (1,162)   $       (2,003)   $       (1,704)
                                                       ==============    ==============    ==============

Basic and diluted loss per common share:
   Loss  from continuing operations                    $         (.03)   $         (.05)   $         (.15)
   Loss from discontinued operations                             (.04)             (.09)             (.05)
                                                       --------------    --------------    --------------
Net loss per common share                              $         (.07)   $         (.14)   $         (.20)
                                                       ==============    ==============    ==============
Weighted Average Number of Common Shares used in
basic and diluted calculation (see note 1 (i) to
financial statements)                                          15,697            14,024             8,622
                                                       ==============    ==============    ==============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>

SITI-Sites.com, Inc. and Subsidiary
Consolidated Statements of Stockholders' Equity (Going Concern Basis)
(Amounts in thousands)

<TABLE>
<CAPTION>
                                        Class A Convertible                                      Treasury
                                          Preferred Stock    Common Stock                          Stock
                                        ------------------- --------------                     -------------
                                                                                                              Accumulated
                                                                           Paid-in  Accumulated                  Other
                                         Shares       $     Shares     $   Capital   Deficit   Shares    $    Comprehensive  Total
                                                                                                                 Income
                                        --------  --------  -------  ----- -------   --------  ------  -----  ------------- -------

                                        --------  --------  -------  ----- -------   --------  ------  -----  ------------- -------
<S>                                     <C>       <C>         <C>    <C>   <C>       <C>           <C> <C>    <C>           <C>
Balance, March 31, 1999                       --  $     --    7,904  $   8 $73,752   $(72,562)     62  $(311)        $  --  $   887

Net loss                                      --        --       --     --      --     (1,708)     --     --            --   (1,708)
Issuance of common stock and options          --        --    1,908      2   2,048         --      --     --            --    2,050
Unrealized gain on marketable securities      --        --       --     --      --         --      --     --             4        4
Contribution of services by management        --        --       --     --     113         --      --     --            --      113
Contribution of rent by management                                              25                                               25

                                        --------  --------  -------  ----- -------   --------  ------  -----  ------------- -------
Balance, March 31, 2000                       --  $     --    9,812  $  10 $75,938   $(74,270)     62  $(311)        $   4  $ 1,371

Net loss                                      --        --       --     --      --     (2,002)     --     --            --   (2,002)
Issuance of common stock                      --        --    5,705      6   1,280         --      --     --            --    1,286
Unrealized gain on marketable securities      --        --       --     --      --         --      --     --            (1)      (1)
Contribution of services by management        --        --       --     --     268         --      --     --            --      268
Settlement agreement                                                                               60    (19)                   (19)
                                        --------  --------  -------  ----- -------   --------  ------  -----  ------------- -------
Balance, March 31, 2001                       --  $     --   15,517  $  16 $77,486   $(76,272)    112  $(330)        $   3  $   903

Net loss                                      --        --       --     --      --     (1,159)     --     --            --   (1,159)
Issuance of common stock                      --        --    4,501      4     123         --      --     --            --      127
Unrealized gain on marketable securities      --        --       --     --      --         --      --     --            (3)      (3)
Contribution of services by management        --        --       --     --     196         --      --     --            --      196
                                        --------  --------  -------  ----- -------   --------  ------  -----  ------------- -------
Balance,December 31, 2001                     --  $     --   20,018  $  20 $77,805   $(77,431)    112  $(330)        $  --  $    64
                                        ========  ========  =======  ===== =======   ========  ======  =====  ============= =======
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>

SITI-Sites.com, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Going Concern Basis)
Nine months ended December 31, 2001 and the years ended March 31, 2001 and 2000
(Amounts in thousands)

<TABLE>
<CAPTION>
                                                                    Nine months      Year ended      Year ended
                                                                          ended       March 31,       March 31,
                                                                   December 31,            2001            2000
                                                                           2001
---------------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>             <C>
Cash flow from operating activities:
Net loss                                                           $     (1,159)   $     (2,002)   $     (1,708)
Adjustments to reconcile net loss to net cash used by continuing
activities:
Loss on Volatile Media, Inc. (EZCD.com)                                      --              --             500
Impairment provision on assets                                              157             134              --
Gain on litigation settlement                                                --             (19)             --
Gain on sale of marketable securities                                        (5)            (29)             --
Depreciation and amortization                                                 8              92              75
Loss on sale of assets                                                       74              --              --
Compensation to employees and consultants  via stock and options              8               6              14
Contribution of services by management                                       65              53              57
Contribution of rent by management                                           --              --              25
(Increase)decrease  in:
Receivables and other assets                                                 18               5             (30)
  Increase(decrease)  in:
  Accounts payable                                                           (5)              3             (25)
  Accrued liabilities                                                       (90)            (81)             87
 (Income)loss on discontinued operations                                    604           1,281             460
                                                                   ------------    ------------    ------------
Net cash used by continuing operations                                     (325)           (557)           (545)
Net cash provided (used) by discontinued operations                        (510)           (813)           (449)
---------------------------------------------------------------------------------------------------------------
Net cash used by operating activities                                      (835)         (1,370)           (994)
---------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capitalization of Artist Promotion Services                                (157)             --              --
Proceeds from sale of marketable securities                                 626           2,233              --
Proceeds from sale of property and equipment                                 24              --              --
Purchase of marketable securities                                            --          (2,339)           (486)
Investment in Volatile Media, Inc. (EZCD.com)                                --              --            (500)
Recovery of investment in Minutemeals.com                                    --              --              23
Purchase of property and equipment                                           (2)            (47)           (119)
---------------------------------------------------------------------------------------------------------------
Net cash (used) provided by investing activities                            491            (153)         (1,082)
---------------------------------------------------------------------------------------------------------------
Cash flow from financing activities:
Proceeds from the issuance of common stock                                  110           1,150           1,750
Proceeds from the exercise of stock options and warrants                     --              --              12
---------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                            110           1,150           1,762
---------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                                  (234)           (373)           (314)
Cash and cash equivalents, beginning of period                              320             693           1,007
---------------------------------------------------------------------------------------------------------------
Total cash and cash equivalents, end of period (excluding cash
amounts in net assets of discontinued operations)                  $         86    $        320    $        693
                                                                   ============    ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-8
<PAGE>

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (a)   MANAGEMENT'S PLAN FOR LIQUIDATION

      Siti-Sites.com, Inc., a Delaware corporation, and its various divisions
(referred to collectively as "SITI" or the "Company") previously operated as an
Internet media company with three websites for the marketing of news and
services. The Company's websites related entirely to the music industry. SITI
incurred losses continuously since its inception in 1999. Following conclusion
of the second fiscal quarter ended September 30, 2001, management who were its
primary investors (investing approximately $4.1 million 1998-2002), intended to
continue operations by investing approximately $600,000 in further equity
capital in the Company. But on November 13, 2001 they determined that such
limited funding would not accomplish a meaningful result for the investors or
the Company and terminated discussions of such financing plan. The Company then
commenced procedures to prepare to liquidate its assets.

      Liquidation. The Company's only substantial liability, consisting of the
remaining nine months on its lease for office premises at 594 Broadway in New
York City, was amicably settled, and terminated as of December 31, 2001.
Concurrently office furniture and unnecessary computers were sold, and all
employees were terminated in November, 2001. A team of two software consultants
were paid in December, 2001 and January, 2002, to complete the Company's Artist
Promotion System. Attempts were to be made to license portions thereof, working
with a marketing consultant. However, complications in completing the software
resulted in management terminating these consulting relationships, with a view
to restarting them, if possible, when specific marketing or sale opportunities
present themselves. The Company shut down all of its websites effective February
1, 2002.

      Certain former employees and directors purchased excess furniture and
equipment from the Company for a total of approximately $19,000, at itemized
prices which were no less than could be obtained by the Company on an
arms-length basis from third parties. The balance of the furniture was sold to
an unrelated third party for approximately $5,000.

      Financing. The Company required a small financing to complete its employee
terminations, asset liquidation and provide for ongoing corporate expenses.
Major investors in the Company provided $110,000 in equity funds, purchasing
4,400,000 shares of common stock at $.025 per share, in a private offering as of
December 7, 2001in varying amounts parallel to their respective option holdings.
Each purchasing investor was further required to surrender all of his
outstanding options to purchase common stock of the Company, acquired in making
each previous investment. These consisted of options for a total of 4,400,000
shares, previously exercisable at prices ranging from $.15 to $2.50 per share,
and expiring between 2003 and 2006. All of such options are now cancelled and
terminated, reducing all outstanding stock options by over 90%. This surrender
and cancellation was intended to make future merger, sale or other business
possibilities for the Company easier to achieve. The Company has options,
previously held by employees in 1998 (before current major investors purchased
control), which still remain outstanding, for the purchase of 415,577 shares,
exercisable at prices ranging from $.35 to $2.15 per share, expiring between
2004 and 2006. There are approximately 20,118,000 shares of common stock now
outstanding as a result of the recent financing described above.

      The Company's stock was trading at $.03 per share with nominal volume,
during the seven-day offer/closing period. The shares sold to major investors
were not registered under the Securities Act of 1933, were purchased for
investment and are not readily marketable, which factors generally result in
discounts in purchase value. There was also substantial business risk to the
purchasers because the Company has no continuing operations and was being
liquidated.


                                      F-9
<PAGE>

      In calendar 2002, the Company has been seeking merger or sale
possibilities with operating businesses who perceive value in a merger with the
Company as a publicly traded corporate shell with approximately 5,400
shareholders.

      (b)   CHANGE TO LIQUIDATION BASIS OF ACCOUNTING

            During the quarter ended December 31, 2001, the Corporation decided
to liquidate its operations and adopted the liquidation basis of accounting
effective January 1,2002. Under the liquidation basis of accounting, assets are
stated at their estimated net realizable values and liabilities are stated at
their estimated settlement amounts, which estimates will be periodically
reviewed and adjusted.

            The valuation of assets at their net realizable value and
liabilities at their anticipated settlement amounts necessarily requires many
estimates and assumptions. In addition, there are substantial risks and
uncertainties associated with carrying out the liquidation of the Corporation's
existing operations. The valuations presented in the accompanying Statement of
Net Assets in Liquidation represent estimates, based on present facts and
circumstances, of the net realizable values of assets and costs associated with
carrying out the dissolution and liquidation plan based on the assumptions set
forth below. The actual values and costs are expected to differ from the amounts
shown herein and could be greater or lesser than the amounts recorded.
Accordingly, it is not possible to predict the aggregate amount that will
ultimately be distributable to shareholders and no assurance can be given that
the amount to be received in liquidation will equal or exceed the net assets in
liquidation per share in the accompanying Statement of Net assets in Liquidation
or the price or prices at which the Common Stock has generally traded or is
expected to trade in the future. The cautionary statements regarding estimates
of net assets in liquidation set forth in the Forward-Looking Statements portion
of this report are incorporated herein by reference.

      (c)   RECENT HISTORY

      The accompanying financial statements reflect all adjustments which, in
the opinion of management, are necessary for a fair presentation of the results
of operations for the periods shown.

      (d)   DISCONTINUED OPERATIONS

      In the year ended March 31, 2001, the Company discontinued the operations
of the New York Expo due to the continuing losses associated with the April
21-22, 2001 Music and Internet Expo, resulting in a loss of approximately
$44,000, $356,000 and $42,000, respectively, for the nine months ended December
31, 2001 and the fiscal years ended March 31, 2001 and 2000.

      In November 2001, as a result of the Company's inability to complete the
necessary software and marketing plans, the Company discontinued the remaining
operations of the Hungry Bands and New Media Music. The divisions had losses of
approximately $201,000, $349,000 and $462,000 for Hungry Bands and $359,000,
$576,000 and $20,000 for New Media Music, respectively, for the nine months
ended December 31, 2001 and the twelve months ended March 31, 2001 and 2000. In
accordance with Accounting Principles Board, ("APB") Statement #30, "Reporting
the Effects of the Disposal of a Segment of a Business," the prior periods'
financial statements have been restated to reflect such discontinuation. All
assets and liabilities of the discontinued segments have been reflected as net
assets or liabilities of discontinued operations. The following table reflects
the net liabilities as of March 31, 2002 and 2001:


                                      F-10
<PAGE>

      New York Expo

                As of March 31,                        2002          2001
                                                   -----------------------------
                                                      (Amounts in thousands)
                Cash                                    --            33
                Customer deposits                       --            28
                Accounts payable                        --             -
                Accrued expenses                        --          (140)
                                                   -----------------------------
                                Total                   --           (79)
                                                   =============================

      Hungry Bands

                For the periods ended, March 31,       2002          2001
                                                   -----------------------------
                                                      (Amounts in thousands)
                Cash                                    --             4
                Accrued expenses                        --            (4)
                                                   -----------------------------
                                Total                   --            (0)
                                                   =============================

      New Media Music

                For the periods ended, March 31,       2002          2001
                                                   -----------------------------
                                                      (Amounts in thousands)
                Cash                                    --             2
                Accounts payable                        --            (3)
                Accrued expenses                        --           (26)
                                                   -----------------------------
                                Total                   --           (27)
                                                   =============================

      Operating results from discontinued operations are as follows:

      New York Expo:

<TABLE>
<CAPTION>
                                                      Nine months     Twelve       Twelve
                                                         ended        months       months
                                                     December 31,  ended March  ended March
                                                         2001        31, 2001     31, 2000
                                                     ----------------------------------------
<S>                                                  <C>           <C>          <C>
Revenues                                             $      --     $       78   $       93
                                                     ----------------------------------------

Operating costs and expenses:
   Cost of Sales                                             44           133           55
   Selling, general and administrative expenses              --           301           80
                                                     ----------------------------------------
                 Total operating costs and expenses          44           434          135
                                                     ----------------------------------------
Operating Loss                                              (44)         (356)         (42)
Other income and (expenses)                                  --            --
                                                     ----------------------------------------
Income (loss) from discontinued operations           $      (44)     $   (356)    $    (42)
                                                     ========================================
</TABLE>


                                      F-11
<PAGE>

Hungry Bands

<TABLE>
<CAPTION>
                                                            Nine months        Twelve          Twelve
                                                               ended           months          months
                                                            December 31,    ended March     ended March
                                                                2001          31, 2001        31, 2000
                                                           ---------------------------------------------
<S>                                                         <C>             <C>             <C>
      Revenues                                              $         --    $          1    $         --
                                                           ---------------------------------------------

      Operating costs and expenses:
         Cost of Sales                                                --              --              --
         Selling, general and administrative expenses                201             350             462
                                                           ---------------------------------------------
                       Total operating costs and expenses            201             350             462
                                                           ---------------------------------------------
      Operating Loss                                                (201)           (350)           (462)
      Other income and (expenses)                                     --              --              --
                                                           ---------------------------------------------
      Loss from discontinued operations                     $       (201)   $       (349)   $       (462)
                                                           =============================================
</TABLE>

New Media Music

<TABLE>
<CAPTION>
                                                             Nine months        Twelve          Twelve
                                                                ended           months          months
                                                            December 31,     ended March     ended March
                                                                2001           31, 2001        31, 2000
                                                           ---------------------------------------------

                                                           ---------------------------------------------
<S>                                                         <C>             <C>             <C>
      Revenues                                              $         --    $          1    $         --
                                                           ---------------------------------------------

      Operating costs and expenses:
         Cost of Sales                                                --              --              --
         Selling, general and administrative expenses                359             577              20
                                                           ---------------------------------------------
                       Total operating costs and expenses            359             577              20
                                                           ---------------------------------------------
      Operating Loss                                                (359)           (577)            (20)
      Other income and (expenses)                                     --              --              --
                                                           ---------------------------------------------
      Loss from discontinued operations                     $       (359)   $       (576)   $        (20)
                                                           =============================================
</TABLE>

Operations prior to 1998 Change of Control:

      For the periods ended, March 31,                                 2000
                                                            ----------------
                                                              (Amounts in
                                                               thousands)
      Revenues                                              $             --
                                                            ----------------

      Operating costs and expenses:
         Cost of Sales                                                    --
         Selling, general and administrative expenses                      8
                                                            ----------------
                       Total operating costs and expenses                  8
                                                            ----------------
      Operating Loss                                                      (8)
      Other income and (expenses)                                         73
                                                            ----------------
      Income (loss) from discontinued operations            $             65
                                                            ================


                                      F-12
<PAGE>

      (e)   USE OF ESTIMATES

      In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.

      (f)   CASH AND CASH EQUIVALENTS

      Cash and cash equivalents include the Company's cash balances and
short-term investments that mature in 90 days or less from the original date of
maturity. Cash and cash equivalents are carried at cost plus accrued interest,
which approximates market.

      (g)   MARKETABLE SECURITIES

      The Company does not intend to hold its investments to maturity, and
classifies these securities as available-for-sale and carries them at fair
value. Unrealized holding gains and losses (determined by specific
identification) on investments classified as available-for-sale, are carried as
a separate component of stockholders' equity.

      (h)   REVENUE RECOGNITION

      Revenues from CD sales were recognized upon shipment to the customer.

      (i)   LOSS PER COMMON SHARE

      Loss per share for the nine months ended December 31, 2001 and the twelve
months ended March 31, 2001 and 2000 were based on the weighted average number
of common shares and common stock equivalents (convertible preferred shares,
stock options and warrants), if applicable, assumed to be outstanding during the
year. The weighted average number of shares used in the computation of loss per
share for the nine months ended December 31, 2001 and the fiscal years ended
March 31, 2001 and 2000 are approximately 15,697,000, 14,024,000 and 8,622,000,
respectively.

      Common stock equivalents were not included in the computation of weighted
average shares outstanding for all periods presented because such inclusion
would be anti-dilutive.

      (j)   PROPERTY AND EQUIPMENT

      Property and Equipment is recorded at cost. Depreciation is recorded using
the straight-line method over the estimated useful lives of the assets of 3 to 7
years. During the quarter ended December 31, 2001, the Company considered the
value of The Artist Promotion System impaired and sold its fixed assets as a
result of management's liquidation plan, and as a result, recorded charges of
approximately $157,000 and $74,000, respectively.

      (k)   INTANGIBLES

      The carrying amount of goodwill is reviewed if facts and circumstances
suggest that it may be impaired. If this review indicates that goodwill will not
be recoverable, as determined based on the estimated undiscounted cash flows of
the entity acquired over the remaining amortization period, the carrying amount
of goodwill is decreased by the estimated shortfall of cash flows. In the last
quarter of


                                      F-13
<PAGE>

fiscal 2001, the Company determined its goodwill was impaired based on
continuing negative cash flows over the remaining amortization period and
wrote-off approximately $134,000.

      (l)   COMPREHENSIVE LOSS

      Comprehensive loss is comprised of net loss and all changes to
stockholders' equity, except those resulting from investments by owners (changes
in paid in capital) and distributions to owners (dividends). For all periods
presented, comprehensive loss is comprised of unrealized holding gains or losses
on marketable securities.

      (m)   WEBSITE EXPENSES

      In March 2000, the Emerging Issues Task Force of the Financial Accounting
Standards Board issued consensuses on an emerging accounting issue entitled
"Accounting for Web Site Development Costs" (Issue 00-2). These consensuses
addressed costs incurred in the planning stage, the application and
infrastructure development stage, graphics development stage, the content
development stage, and the operating stage. The consensuses call for
capitalization or expense treatment of various costs depending on certain
criteria. The consensuses are applicable for costs incurred for fiscal quarters
beginning after June 30, 2000 and allows a company to adopt the consensuses as a
cumulative effect of a change in accounting principles.

      The web site development costs incurred during the nine months ended
December 31, 2001 that were associated with the testing stage were capitalized
and subsequently expensed as a result of management's liquidation plan in the
amount of approximately $157,000 (See Note 1(j)). The expenses associated with
operating the website were expensed. Web site development costs incurred through
March 31, 2001 and 2000 were expensed and the Company had elected to not
capitalize any previously eligible costs.

      (n)   TERRORIST ATTACK OF SEPTEMBER 11, 2001

      Due to the Company's proximity to the terrorist attack on September 11,
2001 on the World Trade Center in New York City, the office was closed for one
week. All costs related to this attack have been paid or accrued and have been
included in operating costs and expenses for the nine months ended December 31,
2001. The Company filed an insurance claim and the amount of the expense
recovery was approximately $8,360.

      (o)   SIGNIFICANT ESTIMATES

      The Company has adjusted all assets to their expected net realizable value
on a liquidation basis based on management's best estimate. In addition, all
liabilities expected to be incurred with respect to the discontinued operations
have been accrued by management based on its estimates.

2.    INVESTMENT IN MARKETABLE SECURITIES

      As of March 31, 2001 the Company's equity reflects accumulated other
comprehensive income of approximately $3,000 which represents the recognition of
unrealized holding gains for the Company's investments determined to be
available for sale, previously carried at the lower of cost or market. During
the fiscal year ended March 31, 2001, the Company realized approximately $28,000
in gains associated with the sale of marketable securities. There were no
realized gains for the fiscal year ended March 31, 2000.

      As of March 31, 2002, there were no marketable securities. As of March 31,
2001 marketable securities were comprised of investments in government
securities which consisted primarily of Federal


                                      F-14
<PAGE>

Home Loan Bank Discount Notes.
The aggregate cost, fair value and unrealized holding gains for those Notes held
at March 31, 2001 are as follows:

                                                Aggregate   Gross Unrealized
                                  Cost Basis   Fair Value     Holding Gain
----------------------------------------------------------------------------
March 31, 2001:                           (Amounts in thousands)
Government securities, maturing
Between 1 and 3 years                  $ 621        $ 624                $ 3
                                  ==========================================

3.    STOCKHOLDERS' EQUITY

      (a)   CLASS A CONVERTIBLE PREFERRED STOCK

      Shares of Class A Convertible Preferred Stock were convertible to common
stock on a one-to-one basis upon the request of the holder and were
automatically converted on March 31, 1999. Until March 31, 1999, holders of such
shares had a liquidation preference in bankruptcy and had the same voting rights
as the common stockholders. During the fiscal year ended March 31, 1999 all
shares previously not converted (approximately 813,000), were converted from
preferred stock to common stock.

      (b)   STOCK AND OPTION ISSUANCES

      The Company has issued common stock and options under the provisions of:

      (i)   1996 INCENTIVE DEFERRAL PLAN

      During fiscal 1999, the Company reacquired 57,341 shares of treasury stock
collateralizing the officer and employee loans with a fair value of
approximately $7,000 resulting in a bad debt expense of $73,000.

      (ii)  1996 STOCK INCENTIVE PLAN

      The 1996 Stock Incentive Plan authorized the issuance of 276,079 shares of
Reorganized SITI Common Stock, or options to purchase such common stock, to
employees, officers, and directors of the Company. Pursuant to this Plan, the
three non-executive directors who were in the employ of the Company on the
Effective Date were specifically allocated an aggregate of 34,077 shares to be
distributed as follows: 300 shares on the Effective Date, 11,259 during June
1998, 11,259 during November 1998 and 11,259 during June 1999. During fiscal
1998, 7,400 shares with a fair market value of $9,250 were distributed to
employees and directors of the Company as additional compensation. Total
options, under the plan, granted to employees and officers of the Company with
various vesting periods and performance criteria totaled 209,815, and such Plan
is no longer in operation.

      Additional information as follows:

                                                                       Weighted
                                                         Shares        Average
                                                         Subject       Exercise
                                                         to Options    Price
                                                         ----------    --------
Outstanding at March 31, 2000 at $1.69-$2.15 per share       75,577    $   2.14
 Extinguished at $2.15 per share                            (34,077)   $   2.15
                                                         ----------    --------
Outstanding at March 31, 2001 at $1.69-$2.15 per share       41,500    $   2.13
 Granted, exercised and extinguished                             --         $--
                                                         ----------    --------
Outstanding at March 31, 2002 at $1.69-$2.15 per share       41,500    $   2.13
                                                         ==========    ========


                                      F-15
<PAGE>

      The following table summarizes information about stock options outstanding
      and exercisable at March 31, 2002:

<TABLE>
<CAPTION>
                           Outstanding and   Weighted Average Remaining   Weighted Average
Range of Exercise          Exercisable at    Contractual Life             Exercise
Prices                     March 31, 2002    (Years)                      Price
------------------------------------------------------------------------------------------
<C>                             <C>                     <C>                     <C>
$1.69 to $2.15                  41,500                  5.39                    $2.13
</TABLE>

      (iii) 1998 CONSULTANT STOCK INCENTIVE PLAN

      The 1998 Consultant Stock Incentive Plan authorizes the issuance of
100,000 shares of Reorganized SITI Common Stock, or options to purchase such
Common Stock, to non-employees and consultants of the Company. There were no
options granted during fiscal 2002, 2001 and 2000.

<TABLE>
<CAPTION>
                                                           Shares Subject   Weighted
                                                             to Options     Average
                                                                            Exercise
                                                                             Price
                                                           -------------- ------------
<S>                                                               <C>           <C>
Outstanding at March 31, 2000 at $0.875 -$2.15 per share          40,000        $1.19
Granted, exercised and extinguished                                   --        $  --
                                                           -------------- ------------
Outstanding at March 31, 2001 at $0.875 -$2.15 per share          40,000        $1.19
Granted, exercised and extinguished                                   --        $  --
                                                           -------------- ------------
Outstanding at March 31, 2002 at $0.875 -$2.15 per share          40,000        $1.19
                                                           ============== ============
</TABLE>

      The following table summarizes information about non-employee and
      consultant stock options outstanding and exercisable at March 31, 2002:

Range of Exercise  Outstanding and      Weighted Average        Weighted Average
Prices             Exercisable at       Remaining Contractual   Exercise Price
                   March 31, 2002       Life (Years)
--------------------------------------------------------------------------------
$0.875 to $2.15        40,000                 6.15                   $1.19

      (iv) 1999 STOCK OPTION PLAN

      As of December 14, 1999, the Company's shareholders approved new option
plans and a stock incentive plan, for employees, consultants and non-employee
directors all described in the Proxy Statement as of 12/14/99. In fiscal 2002,
500,000 options were issued pursuant to certain employment agreements. However,
pursuant to the November 28, 2001 offer to key investors, these options were
cancelled. No options or shares were issued from such plans during fiscal 2001.

                                                                     Weighted
                                                          Shares      Average
                                                        Subject to    Exercise
                                                         Options       Price
                                                         --------      -----
      Outstanding at March 31, 2001 at $0.50 per share          0      $0.00
      Granted at $0.50 per share                          500,000      $0.50
      Cancelled at $0.50 per share                       (500,000)     $0.50
                                                         --------      -----
      Outstanding at March 31, 2002 at $0.50 per share          0      $0.00
                                                         ========      =====

      (v) SEVERANCE OPTIONS

      In connection with the change of control transaction described in Note
1(a), the Company's prior management granted options to acquire an aggregate of
300,000 shares of Reorganized SITI Common


                                      F-16
<PAGE>


Stock as part of a severance package for employees, officers and/or directors of
the Company who were resigning and executing settlement agreements in connection
with the change of control transaction. This plan was implemented concurrently
with the December 11, 1998 stock purchase agreement between the Company and
Powers & Co. (a sole proprietorship owned by Lawrence M. Powers) and the option
agreements were executed on December 11, 1998.

      Additional information as follows:

                                                         Weighted
                                                          Average    Shares
                                                         Exercise   Subject to
                                                           Price     Options
                                                           -----     -------
      Outstanding at March 31, 2000 at $0.35 per share     $0.35     300,000
      Granted, exercised and extinguished                  $0.00           0
                                                           -----     -------
      Outstanding at March 31, 2001 at $0.35 per share     $0.35     300,000
      Granted, exercised and extinguished                  $0.00           0
                                                           -----     -------
      Outstanding at March 31, 2002 at $0.35 per share     $0.35     300,000
                                                           =====     =======

      The following table summarizes information about severance stock options
      outstanding and exercisable at March 31, 2002:

Range of Exercise    Outstanding and      Weighted Average      Weighted Average
Prices                Exercisable at   Remaining Contractual       Exercise
                      March 31, 2002       Life (Years)             Price
-----------------   ----------------   ---------------------   ----------------

 $0.35 per share         300,000                1.70                $0.35

      (vii) PRO FORMA EFFECT OF SHARES AND OPTIONS GRANTED TO EMPLOYEES

      The Company applies the Accounting Principles Board ("APB") Opinion 25,
"Accounting for Stock Issued to Employees," and related Interpretations in
accounting for their stock option plans. Under APB Opinion 25, no compensation
cost is recognized if the exercise price of the Company's employee stock options
equals the market price of the underlying stock on the date of the grant.

      SFAS No. 123 of the Financial Accounting Standards Board, "Accounting for
Stock-Based Compensation", which is effective for transactions entered into
after December 15, 1995, requires the Company to provide pro forma information
regarding net income and earnings per share as if compensation cost for the
Company's stock option plans and stock-based compensation had been determined in
accordance with the fair value method prescribed by SFAS No. 123. There were no
stock options granted to employees during the fiscal years ended March 31, 2001
and 2000. However, there were 1,005,000 shares issued as compensation during the
fiscal year ended March 31, 2001. There were 500,000 stock options granted
during the fiscal year ended March 31, 2002.

      The Company estimates the fair value of each stock option at the grant
date by using the Black Scholes option-pricing model with the following
weighted-average assumptions used for grants in 2002 and 2001: no dividends
paid; expected volatility of 241.1% and 304.3%, respectively; weighted-average
risk free interest rate of 5.43% and 5.01%, respectively; and expected lives of
1-10 years.


                                      F-17
<PAGE>


      Under the accounting provisions of SFAS No. 123, the Company's net loss
and loss per share would have been increased to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>
                                                Nine months       Year ended       Year ended
                                                  ended         March 31, 2001   March 31, 2000
                                             December 31, 2001
                                                    (In thousands, except per share data)
                                             --------------------------------------------------
<S>                                          <C>               <C>                <C>
      Net Loss:
         As reported                         $   (1,159)       $   (2,002)        $   (1,708)
         Pro forma                           $   (1,165)       $   (2,004)        $   (1,708)

      Basic and diluted loss per share:
         As reported                         $    (0.07)       $    (0.14)        $    (0.20)
         Pro forma                           $    (0.07)       $   (0.143)        $    (0.20)

</TABLE>

4.    CONCENTRATIONS OF CREDIT RISK, FAIR VALUE OF FINANCIAL INSTRUMENTS

      Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash investments.
The Company currently invests most of its excess cash investments in discounted
notes with financial institutions. At times, such investments were in excess of
the FDIC insurance limit.

      The carrying amount of these investments approximates the fair value due
to their short-term maturity.

5.    COMMITMENTS AND CONTINGENCIES

      The Company's headquarters occupied some 2,500 square feet of office space
in an office building located at Broadway and Houston Street in New York, New
York until December 31, 2001, when the lease was amicably terminated.

      Total rent expense for the nine months ended December 31, 2001 and the
year ended March 31, , 2001 and 2000 was approximately $47,000, $18,000 and
$47,000, respectively.

6.    INCOME TAXES

      Deferred income taxes are provided for temporary differences between
amounts reported for financial statement and income tax purposes. Deferred tax
assets consist of:

<TABLE>
<CAPTION>
                                                          Nine months    Year ended March
                                                                ended            31, 2001
                                                         December 31,
                                                                 2001
     -------------------------------------------------------------------------------------
                                                                  (Amounts in thousands)
<S>                                                           <C>                 <C>
      Tax benefit of net operating loss carryforwards
      including current year loss                             $ 1,868             $ 1,483
      Valuation allowance                                      (1,868)             (1,483)
      ---------------------------------------------------------------             -------
                                                              $    --             $    --
                                                              =======             =======
</TABLE>



                                      F-18
<PAGE>

      The Company's expectation of continued operating losses for the
foreseeable future makes realization of the benefit of any of the deferred tax
assets unlikely at this time. Therefore, at December 31, 2001, the Company
recorded a deferred tax asset with a valuation allowance of equal value. The
change in the valuation allowance for the nine months ended December 31, 2001
was approximately $385,000. The change in the valuation allowance for the year
ended March 31, 2001, was approximately $624,000.

      Due to the change in control of ownership in December 1998, the Company's
net operating loss carryforwards from prior years up to the date of the change
of control were terminated. The Company has the following net operating loss
carryforwards expiring in the years noted: fiscal 2020 - $358,000; fiscal 2021 -
$1,295,000; fiscal 2022 - $ 2,061,000; and fiscal 2023 - $963,000.

      The differences between the statutory Federal income tax rate of 34% and
the income taxes reported in the statements of operations are as follows:

<TABLE>
<CAPTION>
                                                          Nine months ended     Year Ended     Year Ended
                                                          December 31, 2001   March 31, 2001   March 31, 2000
                                                          -----------------   --------------   --------------
                                                                 (Amounts in thousands)

<S>                                                             <C>               <C>             <C>
      Net loss                                                  $(1,159)          $(2,002)        $(1,708)
                                                                =======           =======         =======

      Statutory rate ....................................       $  (394)          $  (681)        $  (581)
      State and local tax - net of federal tax benefit ..           (69)             (119)           (103)
      Loss from which no tax benefit was provided .......           463               800             684
                                                                -------           -------         -------

      Total Tax Provision                                       $    --           $    --         $    --
                                                                =======           =======         =======
</TABLE>

7.    LITIGATION

      As of the date of this report the Company knows of no pending or
threatened legal actions against the Company that would have a material impact
on the operations or financial condition of the Company.

      On May 1, 2000, the former officers of Tropia (Jonathan Blank, Ari Blank
and Arjun Nayyer) entered into a settlement agreement with the Company in
connection with various claims and their activities since their resignations
during the third quarter of fiscal 2000. As a result of the agreement, all
claims have been settled and they have returned an additional 50,000 shares to
the Company resulting in an increase in treasury stock and a corresponding gain
on litigation settlement of approximately $19,000. In addition, the former
officers have waived any and all of their rights to the 158,333 escrowed shares
related to the original acquisition of Tropia.

      Defaults by EZCD.com as to its investment representations, and its content
and technology sharing agreement with the Company could result in litigation or
other legal complications, and attendant costs and efforts by the Company's
management to resolve such matters. EZCD.com filed for bankruptcy liquidation in
August, 2000 and the Company is making creditor claims in such proceeding which
have been rejected by the trustee therein and will require a trial. There is
little likelihood of any material recovery.

      From time to time in previous years, the Company had been a party to other
legal actions and proceedings incidental to its business. As of the date of this
report, however, the Company knows of no


                                      F-19
<PAGE>


other pending or threatened legal actions that could have a material impact on
the operations or financial condition of the Company.

8.    STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                   Nine months       Year ended       Year ended
                                                                                ended December   March 31, 2001   March 31, 2000
                                                                                      31, 2001
                                                                              ----------------   --------------   --------------
                                                                                           (Amounts in thousands)
<S>                                                                                      <C>              <C>              <C>
      Supplemental disclosures of cash flow information:
         Cash paid during the year for income taxes                                      $   8            $  10            $   3

      Non-cash transactions:
          Compensation to consultants and employees via stock and options                $   8            $   6            $  14
          Contribution by management (rent and compensation)                             $  65            $  53            $  82
          Gain on litigation                                                             $  --            $ (19)           $  --
          Tropia acquisition                                                             $  --            $  --            $ 153
          HungryBands.com, NewMediaMusic.com and NewYorkExpo.com
          acquisitions                                                                   $  --            $  53            $  58
      Discontinued Operations Non-cash transactions:
            Depreciation                                                                 $  16            $  30            $   2
            Compensation to employees via stock                                          $  10            $  77            $  61
            Contribution of services and rent                                            $ 131            $ 215            $  56
</TABLE>

9.    SEGMENT INFORMATION

      As a result of the discontinuing of its operations, there are no
reportable business segments.

10.   GOODWILL

      In June, 1999, the Company acquired Tropia, which operated an MP3 music
site that promoted and distributed the music of independent artists through its
website located at www.Tropia.com. The acquisition was accounted for as a
purchase for financial statement purposes and, accordingly, Tropia's results are
included in the consolidated financial statements since the date of acquisition.
Tropia was acquired for an aggregate of 316,666 shares of the Company's common
stock (valued at $306,786), with 158,333 shares delivered at closing, and
158,333 shares held in escrow to be delivered one year after the closing (if
certain performance goals were achieved), to Jonathan Blank, Tropia's former
CEO, Arjun Nayyar, Tropia's former Technical Director, and Ari Blank, Tropia's
former Design Director. Such individuals have since waived any rights to the
escrowed 158,333 shares, and have returned 50,000 of the shares delivered to
them at the 1999 closing. (See Note 12)

      In accordance with Accounting Principles Board ("APB") No. 16, the
adjusted aggregate purchase price of $153,393 was allocated to the assets and
liabilities of Tropia, based upon their estimated fair values as follows:

      Computer software                                         $     748
      Accrued expenses                                             (6,075)
                                                                ---------
      Net liabilities acquired                                     (5,327)
      Goodwill                                                    158,720
                                                                ---------
           Aggregate Purchase Price                             $ 153,393
                                                                =========


                                      F-20
<PAGE>

      In January 2000, SITI acquired all of the assets and certain liabilities
relating to three music-related websites (i) HungryBands.com
(www.HungryBands.com), an e-commerce website and business promoting and selling
music by independent artists, (ii) NewMediaMusic.com (www.NewMediaMusic.com), an
e-news/magazine business devoted to new Internet music, news releases by artists
and record labels, interviews and other information useful to fans and artists,
and (iii) NewYorkExpo.com (www.NewYorkExpo.com), a music and Internet conference
business. The acquired assets consisted primarily of intangible assets.

      HungryBands.com was acquired for 150,000 shares of SITI common stock. In
accordance with Accounting Principles Board ("APB") No. 16, the aggregate
purchase price of $79,688 was allocated to the assets and liabilities of
HungryBands.com, based upon their estimated fair values as follows:

      Other assets                                                 $   700
      Software                                                         240
                                                                   -------
      Net assets acquired                                              940
      Goodwill                                                      78,748
                                                                   -------
           Aggregate Purchase Price                                $79,688
                                                                   =======

SITI acquired NewMediaMusic.com from Mr. Mazola and Steve Zuckerman, and
NewYorkExpo.com from New York Music Expo, Inc., a New Jersey corporation which
is wholly-owned by Mr. Zuckerman, for a total of 60,000 shares (approximately
$31,875) of SITI common stock. In addition, Mr. Zuckerman was granted a 15%
interest for three years in the operating profits of NewYorkExpo.com's music and
Internet conference business, after completing the March, 2000 Expo (in which he
retained a 75% interest). In accordance with Accounting Principles Board ("APB")
No. 16, the aggregate purchase price of $31,875 was allocated to the assets and
liabilities of NewMediaMusic.com and New York Expo.com, based upon their
estimated fair values as follows:

      Cash                                                       $ 30,416
      Receivables                                                  15,175
      Other assets                                                 15,750
      Customer deposits                                           (71,300)
      Due to S. Zuckerman                                         (10,041)
                                                                 --------
      Net liabilities acquired                                    (20,000)
      Goodwill                                                     51,875
                                                                 --------
           Aggregate Purchase Price                              $ 31,875
                                                                 ========

      The proforma results of operations for the acquisitions, had the
acquisitions occurred at the beginning of fiscal year 2000, are not significant,
and accordingly, have not been provided.

      As a result of management's review of the carrying amount of goodwill, on
March 31, 2001, the Company wrote-off $134,000 of goodwill as a result of the
losses associated with the 2001 Expo, the discontinuation of the New York Expo
business segment, and the estimated future undiscounted cash flows associated
with the remaining entities. Of the $134,000, approximately $21,000 relates to
the NewYork Expo and the remaining $113,000 relates to the other divisions
acquired as described above.


                                      F-21
<PAGE>

11.   LICENSING AGREEMENTS

      On September 29, 1999 the Company entered into an agreement with Jad
Records ("Jad") authorizing the Company's use and free digital distribution for
a two-year period of a certain recording performed by Bob Marley. The Company
remitted $25,000 to Jad for such rights. These costs were written off during the
prior fiscal year and are part of discontinued operations.

      In addition, on September 29, 1999, the Company entered into an agreement
with Ezone Corporation ("Ezone") for the license of certain electronic games and
media ("Games") to the Company for a two-year period. Pursuant to the license
agreement, the Company paid Ezone $5,000 and granted Ezone an option to purchase
5,000 shares of the Company's Common Stock at a strike price of $1.125 per share
upon the delivery of the Games to the Company. These charges are part of
discontinued operations.

      Throughout the prior fiscal years, the Company has entered into certain
royalty agreements with artists whereby, the Company is obligated to reimburse
the artists $5.00 per sale of an artist's CD. Such sales have been nominal for
the nine months ended December 31, 2001 and the twelve months ended March 31,
2001 and 2000 and are part of discontinued operations.

12.   OTHER AGREEMENTS

      Investment in Volatile Media

      The Company invested $500,000 in January, 2000 in its strategic affiliate
EZCD.com, coupled with an agreement for content and technology sharing. EZCD has
been in bankruptcy liquidation since August 2000 and, as a result, the Company
decided to write-off the entire investment because of such uncertainties
associated with EZCD's future operations. Such risk factor is endemic to
investing in start-up Internet companies, in the music field or elsewhere, and
such risk has been increased by the recent drop in today's value of several
Internet music companies and the resulting attrition in their financing sources.
(See Note 7.)

      Other

      The Company also entered into other agreements with certain companies
(TVMV.com and Listen.com) for content and technology sharing. Pursuant to these
sharing agreements, SITI is to receive a certain percentage of revenues from the
banner advertising. As of December 31, 2001 and March 31, 2001, revenues from
such advertising have been nominal and are part of discontinued operations.

      On April 9, 2000, SITI entered into a Business Development Agreement with
Mediaviewer.com to develop an improved radio player whereby the costs to develop
such player are funded by SITI. These costs were not expected to exceed $25,000
payable in installments based upon certain prescribed performance objectives.
This agreement has been terminated and is part pf discontinued operations.

      On May 1, 2000, the former officers of Tropia (Jonathan Blank, Ari Blank
and Arjun Nayyer) entered into a settlement agreement with the Company in
connection with various claims and their activities since their resignations
during the third quarter of the current fiscal year. As a result of the
agreement, all claims have been settled and they have returned an additional
50,000 shares to the Company. In addition, the former officers have waived any
and all of their rights to the 158,333 escrowed shares related to the original
acquisition of Tropia. The 50,000 returned shares are valued at approximately
$18,750.


                                      F-22
<PAGE>


      As of June 8, 2000, principal investors, directors and executives,
Lawrence M. Powers, Robert Ingenito and John Iannitto, agreed with the Company
to invest an additional $1,000,000 for common stock and options, on the
following basis:

      (a)   Mr. Powers would invest $500,000 for 2,000,000 shares of common
            stock, together with options, to purchase an additional 1,000,000
            shares for $.50 per share, exercisable for five years.

      (b)   Messrs. Ingenito and Iannitto would each invest $250,000 for
            1,000,000 shares of common stock, respectively, together with
            options, respectively, to purchase an additional 500,000 for shares
            for $.50 per share, exercisable for five years.

      Messrs. Powers, Ingenito and Iannitto divided their respective investments
further among family members and business associates, consisting of Barclay V.
Powers, John DiNozzi and Mr. Iannitto's son (a minor) in varying amounts by gift
or by assignment.

On June 12, 2000, the Company entered into employment arrangements with Messrs.
Ingenito and Iannitto. In connection with their ongoing services, Messrs.
Ingenito and Iannitto, have agreed that the Company will not pay them cash
compensation for the fiscal years ended March 31, 2001 and 2002, but will grant
stock and options as follows:

<TABLE>
<CAPTION>
                          Fiscal 2001     Fiscal 2002
                          -----------     -----------

<S>                       <C>             <C>
      Robert Ingenito     300,000 shares  Options to purchase 300,000 shares at $.50
                                          per share, exercisable for five years (until 6/30/2006)

      John Iannitto       200,000 shares  Options to purchase 200,000 shares at $.50
                                          per share, exercisable for five years (until 6/30/2006)
</TABLE>

      However, as a result of their withdrawal as executives and their stock
purchase on November 28, 2001, all options granted, or to be granted for the
2002 fiscal year, were cancelled. Mr. Powers does not expect to receive any cash
compensation, stock or options for his services for such two fiscal years.

      On June 13, 2000, the Company entered into a stock purchase agreement with
Colvil Investments, LLC, ("Colvil") whereby Colvil agreed to invest $100,000 for
400,000 shares of the Company's common stock, together with options, to purchase
an additional 200,000 shares for $.50 per share, exercisable for five years.

      On June 16, 2000, the Company entered into a stock purchase agreement with
Steven Gross whereby Mr. Gross agreed to invest $50,000 for 200,000 shares of
the Company's common stock, together with options, to purchase an additional
100,000 shares for $.50 per share, exercisable for five years.


                                      F-23
<PAGE>


13.   EQUIPMENT

      As of March 31, 2002 and 2001, equipment consisted of the following:

                                                       (Amounts in thousands)
                                                         2002        2001
                                                        ----------------------

      Computer Equipment and Furniture                  $  --         159
      Computer Software                                    --           7
      Accumulated Depreciation                             --         (45)
                                                        -----        ----
      Equipment, net                                    $  --         121
                                                        =====        ====

14.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      As of March 31, 2002 and 2001, accounts payable and accrued liabilities
were comprised of the following: 2002 2001 (Amounts in thousands)

      Accrued audit and tax fees                         $25           $60
      Accounts payable                                     0             2
      Deferred Rent                                        0             8
      Accrued expenses                                     7            11
                                                         ---           ---
                                                         $32           $81
                                                         ===           ===

15.   QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

      The following is a summary of unaudited quarterly results of operations
for the nine months ended December 31, 2001 and the fiscal year ended March 31,
2001.

(In thousands except per share data)
                                                Quarter Ended
Nine months ended December 31, 2001      Dec. 31   Sept. 30    June 30
----------------------------------------------------------------------

Net sales                                      0          0          0
Cost of sales                                  0          0          0
----------------------------------------------------------------------
Gross profit                                   0          0          0
----------------------------------------------------------------------
Loss from continuing operations             (369)       (24)      (163)
Loss from discontinued operations           (173)      (174)      (257)
----------------------------------------------------------------------
Net loss                                    (542)      (198)      (420)
Loss per common share:
Continuing operations                     (0.023)    (0.002)    (0.011)
Discontinued operations                   (0.011)    (0.011)    (0.017)
----------------------------------------------------------------------
Total                                     (0.034)    (0.013)    (0.027)
======================================================================


                                      F-24
<PAGE>


                                                  Quarter Ended
2001                                Mar. 31     Dec. 31   Sept. 30   June 30
----------------------------------------------------------------------------
Net sales                                 0          0          0          0
Cost of sales                             0          0          0          0
----------------------------------------------------------------------------
Gross profit                              0          0          0          0
----------------------------------------------------------------------------
Loss from continuing operations        (274)      (194)      (102)      (151)
Loss from discontinued operations      (367)      (250)      (335)      (329)
----------------------------------------------------------------------------
Net loss                               (641)      (444)      (437)      (480)
Loss per common share:
Continuing operations                (0.018)    (0.013)    (0.017)    (0.014)
Discontinued operations              (0.024)    (0.017)    (0.023)    (0.030)
----------------------------------------------------------------------------
Total                                (0.042)    (0.030)    (0.030)    (0.044)
============================================================================


                                      F-25