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, 2000

                                       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.)

    594 Broadway, Suite 1001, New York, New York                     10012
    (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 9, 2000 was approximately $731,000
based on the last price at which the Common Stock was sold on June 9, 2000 of
$.1875 as reported by the National Quotation Bureau. 13,763,175 shares of Common
Stock were outstanding as of June 9, 2000.

The following documents are incorporated herein by reference:

      (1)   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");

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

      (3)   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, 2000

             PART I                                                       PAGE
             ------                                                       ----
ITEM1.       BUSINESS                                                        1

ITEM2.       PROPERTIES                                                     12

ITEM3.       LEGAL PROCEEDINGS                                              12

ITEM4.       SUBMISSION OF MATTERS TO A VOTE OF                             13
             SECURITY HOLDERS

             PART II

ITEM5.       MARKET FOR REGISTRANT'S COMMON EQUITY                          13
             AND RELATED STOCKHOLDER MATTERS

ITEM6.       SELECTED FINANCIAL DATA                                        15

ITEM7.       MANAGEMENT'S DISCUSSION AND
             ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATIONS                                      15

ITEM7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
             MARKET RISK                                                    22

ITEM8.       FINANCIAL STATEMENTS AND
             SUPPLEMENTARY DATA                                             22

ITEM9.       CHANGES IN AND DISAGREEMENTS WITH
             ACCOUNTANTS ON ACCOUNTING AND
             FINANCIAL DISCLOSURE                                           22

             PART III

ITEM10.      DIRECTORS AND EXECUTIVE OFFICERS OF
             THE REGISTRANT                                                 22

ITEM11.      EXECUTIVE COMPENSATION                                         23

ITEM12.      SECURITY OWNERSHIP OF CERTAIN
             BENEFICIAL OWNERS AND MANAGEMENT                               27

ITEM13.      CERTAIN RELATIONSHIPS AND RELATED
             TRANSACTIONS                                                   28

             PART IV

ITEM14.      EXHIBITS, FINANCIAL STATEMENTS
             SCHEDULES AND REPORTS ON FORM 8-K                              29


<PAGE>

                                     PART I

ITEM 1.  BUSINESS

Introduction

      SITI-Sites.com, Inc., a Delware corporation, and its subsidiary, Tropia,
Inc. ("Tropia"), a Delaware corporation (hereafter referred to collectively as
"SITI" or the "Company") is an Internet media company seeking to establish
websites for the marketing of products and services. The Company's four current
websites and an affiliated website relate entirely to the music industry, and
primarily to independent artists not affiliated with major record companies. The
Company intends 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 promotes and markets the music of selected
independent artists on its website www.Tropia.com. The Company next acquired
three music-related businesses, www.HungryBands.com (an e-commerce website and
business promoting and selling music by independent artists),
www.NewMediaMusic.com (an e-news/magazine business), and www.NewYorkExpo.com (a
music and Internet conference business), all in January, 2000. The terms of
these January, 2000 acquisitions are further described in "Note 10. Goodwill" to
the Consolidated financial statements referred to in "Part II Item 8. Financial
Statements and Supplementary Data."

      The Company is still in the early stages of developing its music sites and
business, and its revenues are negligible. It has written off all development
and operating costs. In addition, the Company made a $500,000 investment in a
music CD custom compilation and promotion company, Volatile Media, Inc., which
does business as EZCD.com. The investment has been written off as of March 31,
2000 because of uncertainties in EZCD's financing plans and ability to continue
operations. The Company also entered a content and technology sharing agreement
with EZCD.com pursuant to which they were to share music content and technology,
which has not yet been adequately performed by EZCD and which therefore may
result in litigation. (See "Item 1. - Business - Risk Factors, - EZCD
Investment Loss; - "Reliance on Artists and Independent Record Labels.")

      SITI currently employs a total of 20 employees and consultants, as
compared to 2 employees in January, 1999. As a result of recent financings and
incentive issuances to key employees and consultants, SITI's issued and
outstanding shares have increased to approximately 14,000,000 shares as of June
15, 2000.

      SITI-Sites.com, Inc. was incorporated in Delaware in 1984 under former
management and control persons. 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 new 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." (See Proxy Statement as
of December 14, 1999.) In addition, effective June 20, 2000, the Tropia
subsidiary was merged into the parent.

      As a result of the change of control and subsequent equity investments
(and option exercises) through June 15, 2000, the directors and senior executive
officers of the Company (along with family and associates) have invested or
committed approximately $3,900,000 in cash for equity in the Company. But
realistic evaluation of the slow market for CDs from emerging artists over the
past seven months, and the problems of other marketers of CDs in the Internet
music industry, have led to the conclusion that a more focused strategy, as
described below, is required for the Company to achieve substantial and
continuing revenues. Moreover, recent publicized difficulties of other Internet
marketing businesses in obtaining equity financing, which may continue
indefinitely, have led the Company's investor/management to conclude they must
finance its growth themselves, at least in the short term. They have therefore
structured their latest equity financing to hopefully provide for another two
years of business development expenses, and are focusing on meaningful revenue
streams, which however, are not expected to occur before March 31, 2001. (See
"Item 1. - Business - Risk Factors" and "Item 5. Recent Sales of Unregistered
Securities.")


<PAGE>

SITI's Business Plan

      The Company's business strategy in the music field is to build a database
marketing operation, which renders an array of specialized services to musical
artists and their fans, at modest fees on a continuing basis. A major investor
and member of senior management of the Company (Robert Ingenito) is highly
experienced in database marketing techniques he developed and practiced
successfully in several private and publicly owned businesses. This plan has
been underway since January, 2000.

      The Company considers its 3,000 musical artists and their fans, a
beginning group of prospects for sale of SITI's services. Negotiations are in
progress with other website-based music businesses which, if successful, could
add thousands of additional emerging artists and fans to this potential customer
pool. These musical artists are mostly emerging rock/pop groups, i.e.
independent and not affiliated with major record companies, in many genres and
locales, each comprising several artists and some fan following.

      The Company's software team has been revising and expanding its websites
to handle the various publications, and artist and fan services which will be
offered to its potential database. Revenue sources are expected to include
e-mail distribution of band communications to their fans, touring locations,
clubs and play dates, new record releases, promotion of bands at their own
websites, and hyperlinks to the various websites and stores where their music is
sold.

      SITI is adding two new streaming radio players to the existing embedded
radio on its Tropia website, now in late stages of software development, which
will play its emerging artists' music along with other content, in multiple
streams by genre preference. These Internet streaming radio channels, one of
which will have streaming video as well, are expected to become bases for sale
of promotional services for emerging artists, and advertising across multiple
listener preference communities.

      The implementation of the Company's business plan will occur, in part,
through its www.NewMediaMusic.com newsletter, a free e-magazine in operation
this past year, which contains current new media music news (i.e. digital music
coverage, discussions and interviews on key industry problems) and is seen by
thousands of industry professionals, artists and fans regularly. Large groups of
artists are being offered free subscriptions to this newsletter, to encourage
their future participation in promotional services, analysis of industry issues,
and merchandising services to be made available to them, through the Company's
band and fan registry. The software underlying the NewMediaMusic newsletter is
being revised for the addition of targeted, personalized information in each
viewer's interest area, and the newsletter services and archives are expected to
become additional revenue sources to SITI through service charges and
advertising revenues. This e-magazine will provide increasingly focused
information, and linkages for the Company's database of artists, fans and
affiliated websites in the music field.

      The initial source for these emerging artists are the Company's
www.Tropia.com and www.HungryBands.com music websites which play and sell CDs
and MP3 downloads. Additional groups of artists and fans are expected to be
added to SITI's music websites, or solely to its artist communication database,
from other established music websites or artist services websites.

      Further implementation of SITI's strategy is occurring through its
ownership of www.NewYorkExpo.com and its related Internet music exposition held
for the past two years in New York City. Scores of Internet music sites take
booths at these expos, join in the panels of experts, interact with each other
and with SITI's marketing development team, and provide current information to
thousands of emerging artists and fans. Some 6,000 people attended the March,
2000 Expo, and the 2001 Expo is being held at Madison Square Garden in response
to increased industry interest and participation now in discussion. These expos
place the Company at the fulcrum of providers of music services, equipment and
new technology, along with emerging digital music industry problems. The expo
relationships are considered a year-round source of prospects for content, and
strategic affiliation with the Company's core business of artist and fan
services.


<PAGE>

      No assurances can be given that the Company will successfully complete the
above-described content or database negotiations, or its ongoing software
development, or achieve the revenues sought from the described business plan.
(See "Item 1. Business - Risk Factors".)

Management Background

      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
(1978) with few assets, and becoming CEO in 1984. Raising some $200 million
during his 1980's 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 (53 plants) since his
retirement. He remained on the board until 1995, and is still a major securities
holder of Spartech. The core management team he previously assembled at Spartech
Corporation has remained in place, building it to its present value. 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.

      Robert Ingenito, Investor and Vice Chairman/President of the Company , is
a nationally known figure in the direct marketing industry, using databases for
"data mining" in customer development. He was the President and a principal of
Axciom Corporation (NASDAQ), an $800 million database management firm, when it
first went public (and a director along with Mr. Powers in the 1980's). Most
recently, Mr. Ingenito founded and managed 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 to Acxiom Corporation in 1999. Mr. Ingenito is
active in managing SITI's development strategy, and with other investors, has
invested $900,000 in SITI equity.

      John Iannitto, a recent investor, has joined the Company as Executive
Vice-President. He has a 25-year background in advertising, consumer product
management, marketing and promotions, operating his own successful agency, RSI
Marketing, for 20 years. Before starting his own marketing business, he was a
product manager at General Foods and Lever Brothers. His clients at RSI
Marketing include Johnson & Johnson (Personal Products), and also its joint
venture with Merck (Drug Products), McNeil Consumer Healthcare (Tylenol) and
Merial (Veterinary Products). Mr. Iannitto received his M.B.A. at Pace
University and his A.B. at St. Francis College in New York. His expertise is in
development of new product launch programs, and marketing established brands and
services. He will be active in management supervision of the New Media Music
newsletter expansion, intended to also generate artists and fans for the
Company's services business, the Company's 2001 New Media Music Expo, and other
new and ongoing projects of the Company.

      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 since 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.

      Paul Marshall is a key consultant who, through his company, acts as
Director of Technology for the Company, and is in charge of its websites, and
their underlying software. He heads a six-person team of software developers,
and a designer. For the past six months, he has been managing the integration of
all the Company's websites into a single format, adding the features necessary
for its artists and fan services operations, new radio and video features,
absorption of more artists into the database, new feature pages and linkages
with strategic affiliates. Mr. Marshall is a Columbia University graduate, was
trained at TIAA/CREEF in financial services software development, has been
developing and


<PAGE>

consulting on software for 15 years in the New York area, and founded Maxus
Systems, a virtual reality decisions support system. His consulting clients have
included large publishers, the Departments of the Navy and Defense, and
financial organizations.

      Ted Mazola is Vice President/Web Operations, and founded the Company's
division HungryBands.com, and co-founded the NewMediaMusic.com division. He was
employed in computer operations at Brooklyn Union Gas Company when he started
these two web businesses independently, and thereafter sold them to SITI for
stock. He studied engineering at the College of Staten Island, New York.

      Steve Zuckerman is Vice-President/New Media Development, and founded the
New York Music and Internet Expo division described above, and co-founded the
NewMediaMusic.com division which he sold to SITI for stock. He has 20 years
experience and contacts in the music industry, primarily in news gathering and
more recently, Internet business development.

      Philip Foxman is a consultant in marketing and, was the founding source of
the group of bands and record labels that make up the Tropia.com division. He is
an experienced musician, composer, music supervisor on films, with over 20 years
in music. After years on tour circuits in the U.S., U.K. and Australia, he has
many contacts among emerging artists, record labels and websites. Other former
"indie" musicians have recently joined the Company and are active in its artist
services efforts.

Traditional Methods for Distribution of Music

      Recorded music is recognized as one of the most popular forms of
entertainment. It is a $44 billion industry, approximately 20% of which is
independent music. Until the late 1990s, the distribution of music by the music
industry had remained relatively unchanged for many years. Artists were
generally required to sign exclusive contracts with record labels who would
develop, distribute and promote their recordings. The major record labels have,
to a great extent, controlled the type and quantity of music made available to
consumers. As a result, the number of artists served by the existing music
distribution system has been fairly small, compared to the number of artists who
desire to pursue their music as a career.

      Moreover, consolidation within the industry accelerated sharply during the
1990's, further reducing the number of distribution channels. Partly as a
consequence of these acquisitions, the major labels have confronted spiraling
costs, diminishing their already-low incentives to take risks with unknown
bands. Critics have noted that the industry has failed to develop any consistent
"breakout" artists or music styles since the hip-hop and alternative movements
emerged in the late 1980s.

The Internet and Digital Music

      The music industry is changing, however, due to the popularity of the
Internet and the advent of compressed digital music formats, including the MP3
format, which itself may be replaced by subsequent formats. The Internet has
grown rapidly in recent years, driven by the development of the World Wide Web,
intuitive web browsers and faster connections, the proliferation of multimedia
PCs and the emergence of compelling Web-based content. In recent years, with
more and more consumers buying multimedia PCs with a sound card, speakers and a
CD-ROM or DVD-ROM drive, people have increasingly used their computers to play
music.

      Many consumers have not been able to experience high quality Internet
audio and video because of their relatively low bandwidth Internet connections.
New platforms, such as cable and direct subscriber line modem and satellite data
broadcast, are being expanded to deliver high-speed access to digital media.
Growth will depend on the investment of billions of dollars by the
telecommunications industry in new infrastructure. In the meantime, high-speed
connections will largely remain limited to larger businesses, research
institutions and colleges.

<PAGE>

      Another impediment to the transmission of music over the Internet has been
the large size of music files. For example, a three-minute song can occupy more
than thirty megabytes of storage. Storing and transferring audio files can be
expensive and slow. To address this problem, compression formats have been
developed. One of the first widely accepted standards for the compression of
music was MP3, adopted by the Moving Picture Experts Group. The MP3 standard
offers at least 10:1 compression and audio integrity at near-CD quality. MP3
playback is currently available on most operating environments such as Microsoft
Windows 95, Windows 98, Windows NT and Mac OS, most major versions of UNIX
(including Linux, the platform for SITI's websites) and many other operating
environments. The development of compression formats such as MP3 and the
increased availability of higher bandwidth Internet connections have made it
practical to transmit music over the Internet.

      In addition, the transmission of music over the Internet has been made
more desirable by the recent introduction of certain products to enable
consumers to move the audio content from a PC to a portable listening device.
Portable audio players capable of storing and playing back downloaded MP3 audio
files have been introduced and many new types are in development. The Company
believes that these types of products will be desirable for many listeners on
the website. The Company's existing radio player on its www.Tropia.com website,
and its two new radio players for all of its sites in development will make more
audio from many sources available to its site visitors.

      As a result, aside from the traditional music distribution channels there
are now other alternatives: complete digital music content and information
clearinghouses (such as MP3.com, which uses data compression technologies to
distribute and promote the music of a wide variety of artists), more traditional
record label structures (such as EMusic.com, Inc. (formerly known as GoodNoise
Corporation)) and a combination of both. Artists will now have much greater
control of their product, their marketing, their distribution channels, even
their pricing. But no matter how much the music industry may change, artists
will always need exposure. With musicians all over the world able to produce and
distribute their music globally, it will become increasingly important (and
difficult) to be seen and heard. The Company believes that its information
services and its artist and fan services, expanded by its music sites and
affiliations, will set the Company apart from other websites which base their
business model only upon selling music over the Internet.

      The Company is currently affiliated with EZCD.com, TVMV.com, Listen.com
and Tuneto.com for content, promotion and advertising sharing. It is currently
in content and technology sharing discussions with several other privately owned
website operations, on a confidential basis. No assurance can be given that
these negotiations will be completed, and if completed, that the relationships
will be successful or sources of revenue. (See "Item 1. Business - Risk
Factors")

Intellectual Property

      The Company may be liable to third parties for content on its websites and
CDs the Company distributes:

o     if the music, text, graphics or other content on its websites or CDs
      violates their copyright, trademark or other intellectual property rights;

o     if the artists or independent record labels associated with the websites
      violate their contractual obligations to others by providing content on
      the websites; or

o     if content distributed over its websites or if the CDs are deemed obscene
      or defamatory.

      The Company may also be subject to these types of liability for content
that is accessible from the websites through any links to other websites. The
Company attempts to minimize these types of liability by requiring
representations and warranties relating to its artists' ownership of and rights
to distribute and submit their content and by taking related measures to review
content on the websites. Artists also agree to indemnify the Company against
liability it might sustain due to the content they provide. It is the Company's
belief that the artist is responsible for the material he or she submits.
However, in the future, the Company could be found liable for content made
available on the websites.

<PAGE>

      Although the Company has not experienced a material loss due to
content-related liability to date, its websites are relatively new and the
Company cannot give assurances that its measures to limit this liability will
continue to be successful or that the Company will not be held liable for the
websites' content. Liability or alleged liability could harm the Company's
business by damaging its reputation, requiring it to incur legal costs and
diverting management's attention away from the Company's business. Moreover,
future claims may not be adequately covered by insurance.

      With respect to all of its websites, the Company's intellectual property
includes its trademarks and copyrights, proprietary software, and other
proprietary rights it may possess. The Company believes that its intellectual
property is important to its success and its competitive position and seeks to
protect it. However, its efforts may be inadequate.

      In addition, third parties may claim that the Company violated their
intellectual property rights. To the extent that such a claim is successful
against the Company, the Company may be required to pay damages, obtain a
license to use such third party's intellectual property or use non-infringing
methods to conduct its activities. It is possible that a license from such a
third party would not be available on commercially acceptable terms, or at all,
or that the Company would be unable to conduct its activities in a
non-infringing manner. (See "Item 1. Business - Risk Factors")

      There is also no assurance that the measures taken by the Company will
adequately protect the confidentiality of the Company's proprietary information
or that others will not independently develop products or technology that are
equivalent or superior to those of the Company. Any litigation regarding the
Company's or a third party's proprietary rights could be costly and divert
management's attention, result in the loss of certain of the Company's
proprietary rights, require the Company to seek licenses from third parties and
prevent the Company from selling its products and services, any one of which
could have a material adverse effect on the Company's business, results of
operations and financial condition. (See "Item 1. Business - Risk Factors")

Competition

      The market for the online promotion and distribution of music and
music-related products and services is highly competitive and rapidly changing,
with many large and small competitors. With no substantial barriers to entry on
the Internet, the Company expects that competition will continue to intensify,
including its niche in providing database services to artists and fans.

      The Company faces competitive pressures from other providers of online
music content which distribute free downloadable music, such as MP3.com, Inc.,
Riffage.com, Mjuice.com, Noisebox.com, and various other companies. These
competitors and several others offer services to emerging artists and their
fans, some of which will be offered by the Company.

      In addition, although they generally do not offer the ability to download
complete songs for free, the Company also potentially faces competition from:

o     Other providers of online music content such as EMusic.com, Inc. and
      Launch Media, Inc.

o     Companies offering MP3 or other audio compression formats, such as those
      of AT&T Corp., IBM Corporation, Liquid Audio, Inc., Microsoft Corporation,
      and RealNetworks, Inc. Some of these companies also offer customers the
      ability to download music from their websites.

o     Online destination sites, including online prerecorded music retailers
      like Amazon.com, Inc. and CDNow Inc.

o     Online "portals" like America Online, Inc., Excite, Inc.,
      InfoseekCorporation, Lycos, Inc. and Yahoo!, Inc.

o     Traditional music industry companies such as BMG Entertainment, a unit of
      Bertelsmann AG; EMI Group plc; Sony Corporation; Time Warner Inc. and
      Universal Music Group, a unit of The Seagram Company Ltd., some of whom
      have entered the online commercial community.


<PAGE>

      Many of the Company's existing and potential competitors have longer
operating histories, greater brand name recognition, larger artists on consumer
bases and significantly greater financial, technical and marketing resources.
The Company cannot give assurances that websites maintained by its existing and
potential competitors will not be perceived by consumers, artists, fans or
others as being superior to the Company's. The Company also cannot give
assurances that the Company will be able to maintain or increase its database of
artists and fans, its website traffic levels, purchase inquiries and number of
click-throughs on any online advertisements, or that competitors will not
experience greater growth than the Company does. Increased competition could
result in advertising price reduction, reduced margins or loss of market share,
any of which could harm the Company's business. In addition, because of the
rapidly changing structure of the Internet, the Company in the future may find
itself competing with suppliers of software critical to its business.

Government Regulation

      Laws and regulations directly applicable to Internet communications,
commerce and advertising, including laws relating to privacy, intellectual
property and content (such as obscenity, pornography, libel and defamation
laws), are becoming more prevalent. Although the Company's operations are
currently based in New York, the governments of other states, the United States
and foreign countries may attempt to regulate the Company's activities on the
Internet or to levy sales and other taxes relating to its activities. The
Company does not currently intend to collect sales, use or other taxes on the
sale of goods and services on its websites other than on sales in New York.
However, one or more states or foreign jurisdictions may seek to impose tax
collection obligations on companies that engage in online commerce. If they do,
these obligations could limit the growth of electronic commerce in general and
limit the Company's ability to profit from the sale of goods and services over
the Internet.

      The Company cannot predict how any of these laws and regulations might
affect its business. In addition, these uncertainties make it difficult to
ensure compliance with laws and regulations governing the Internet. These laws
and regulations could harm the Company by subjecting the Company to liability or
forcing the Company to change how it does business.

Employees and Consultants

      As of June 8, 2000 the Company had 20 employees and consultants in
operations and general administration. SITI executives, Messrs. Powers, and
Ingenito, have been working without cash compensation and, along with new
executive Iannitto, will continue to do so for at least the years ended March
31, 2001 and 2002. Mr. Ingenito and new executive Iannitto, will receive stock
and options for their services over the two fiscal years. (See "Item 11. -
Executive Compensation - Employment Agreements.") The Company has recorded an
administrative expense and a capital contribution of $112,500 to account for the
value of these services provided by executive management of the Company through
March 31, 2000. The Company's future performance depends in significant part on
its ability to continue to attract, retain and motivate, highly qualified
technical and management personnel, for whom competition is intense. The Company
may also continue to employ independent contractors and agents to support its
development, marketing and administrative organizations, and presently employs
four in such category. None of the Company's employees is represented by any
collective bargaining unit. The Company believes that its relations with its
employees, consultants and agents are good.

Prior Company History

      For a discussion of the Company's prior business, all of which operations
were discontinued after the change of control and resignation of all senior
management in December 1998, as well as its bankruptcy reorganization 1995-1997,
see the Form 10-K for 1999, "Item 1. Business - Prior Company History," "Item 1.
Business - Change of Control," and Item 3. Legal Proceedings - Other
Proceedings." These discussions must be considered in light of the new direction
and nature of the Company's business in the Form 10-K for 1999, and the Form10-Q
for 12/31/99,


<PAGE>

Risk Factors

      Risk factors may affect the Company's business, future operating results
and financial condition. In addition to the other information in this Annual
Report on Form10-K, and the Form 10-K for 1999, the following risk factors
should be considered in evaluating the Company's business and prospects.

      Limited Operating History in New Business

      The Company's senior management and Board of Directors were replaced in
December 1998 following the change of control transaction. The new senior
management and Board changed the direction and nature of the Company's business.
Prior to that time, the Company had engaged in other businesses and developed a
negative image which will need to be overcome. The Company does not expect the
former businesses to provide any material future revenues. (See the Form 10-K
for 1999, "Item 1. - Business - Prior Company History and Item 1. - Business -
Change of Control.")

      History of Losses; Anticipation of Future Losses

      The Company has not achieved profitability and expects to incur operating
losses for the foreseeable future. The Company anticipates that in the
foreseeable future it will depend substantially on revenue from the sale to
artists and fans of targeted information and services, and to a lesser extent,
CDs and merchandise over its websites. Neither CDs nor merchandise has been sold
in material amounts by any of its websites to date. The Company will need to
generate significant revenues to achieve and maintain profitability, and cannot
give assurances that it will be able to do so. Even if profitability is
achieved, the Company cannot give assurances that it can sustain or increase
profitability on a quarterly or annual basis in the future. (See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations.")

      EZCD Investment Loss

      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
not, thus far, been able to raise additional financing required under its
business plan, and the Company recently determined to write-off the entire
investment as of March 31, 2000 because of uncertainties as to 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.

      New Market

      The market for online music services, promotion and distribution is
relatively new and rapidly evolving. As a result, demand and market acceptance
for the Company's products and services are subject to a high degree of
uncertainty and risk. The Company is attempting to capitalize on a talent pool
of independent artists not currently served by the traditional recording
industry. There is no assurance that consumers will continue to be interested in
listening to or purchasing music from these artists. If this new market fails to
develop, develops more slowly than expected or becomes saturated with
competitors, or the Company's products and services do not achieve or sustain
market acceptance, the Company's business could be harmed. (See "Item 1. -
Business - Competition.")


<PAGE>

      Reliance on Artists and Independent Record Labels

      The Company will rely on artists and independent record labels to provide
music content for its websites, and information and services for revenue
streams. The Company's success depends on having websites that offers high
quality and diverse music choices, and services. The Company's failure to
attract and retain artists and record labels who can provide content would limit
the overall quality and quantity of the offerings on the websites and harm the
Company's business. The Company's artist and record label contracts are
non-exclusive. As a result, they can be terminated at any time. The Company's
retention of artists and record labels requires that the Company offer
sufficient benefits, such as artist services and artist-oriented content, to
encourage them to remain with the websites. If the Company is not able to
maintain its ability to serve and provide valuable tools to artists, artists and
record labels may leave the websites and remove their content. This could also
prevent the Company from attracting new artists. The loss of artists and the
inability to attract new artists would impair the Company's ability to generate
revenue. Since the Company's artists will be independent, they generally will
not be well known or have had a large following. In addition, if the Company
develops a bad reputation among independent artists and record labels, the
website's content could be adversely affected. In addition, there is a potential
for loss of access to the thousands of artists of the EZCD affiliate, regardless
of the existing content and technology sharing agreement, if EZCD is taken over
by another company, continues to default on its obligations (which continued
default could result in litigation) or ceases operations entirely. (See "Item 1.
- Business - Risk Factors - EZCD Investment Loss")

      Development of New Standards for the Electronic Delivery of Music

      The Company currently relies on MP3 technology for both brand identity and
as a delivery method for the digital distribution of music. The Company does not
own or control MP3 technology. The onset of competing industry standards for the
electronic delivery of music could significantly affect the way the Company
operates its business as well as the public's perception of the Company. For
example, some of the major recording studios have announced a plan to develop a
universal standard for the electronic delivery of music, called the Secured
Digital Music Initiative, or SDMI, and have announced their intention to make
this delivery method available by the end of 2000. In addition, major
corporations such as Microsoft Corporation, IBM Corporation, AT&T Corp. and Sony
Corporation have launched efforts to establish proprietary audio formats that
will compete with the MP3 format. Some competitive formats offer security and
rights-tracking features that MP3 technology does not currently offer.
Widespread industry and consumer acceptance of any of these audio formats could
significantly harm the Company's business if it is unable to adapt and respond
to such changing standards. Although the Company is not tied exclusively to the
use of MP3 technology or to any other specific standard for the electronic
delivery of music, if a proprietary music delivery format receives widespread
industry and consumer acceptance, the Company may be required to license
additional technology and information from third parties (which may be
competitors of the Company) in order to adopt such a format. The Company cannot
provide any assurance that this third-party technology and information will be
made available to the Company on commercially reasonable terms, if at all.

      MP3 technology is Controversial

      The traditional music industry has not embraced the development of the MP3
format to deliver music, in part because users of MP3 technology can download
and distribute unauthorized or "pirated" copies of copyrighted recorded music
over the Internet. Although the Company's philosophy of dealing only with
independent artists and independent record labels will not facilitate music
piracy and can support multiple audio compression and delivery technologies, the
Company may still face opposition from a number of different music industry
sources including record companies and studios, the Recording Industry
Association of America and certain artists, due to the Company's use of MP3
technology. In addition, adverse news or events relating to MP3 technology
generally may harm the Company's business.


<PAGE>

      Continued Development and Maintenance of the Internet and the Availability
      of Increased Bandwidth to Consumers

      The success of the Company's business will depend largely on the
development and maintenance of the Internet infrastructure to make the Internet
a viable commercial marketplace for the long term. This includes maintenance of
a reliable network with the necessary speed, data capacity and security, as well
as timely development of complementary products such as high-speed modems, for
providing reliable Internet access and services. Because global commerce on the
Internet and the online exchange of information is new and evolving, the Company
cannot predict whether the Internet will prove to be a viable commercial
marketplace in the long term. The success of the Company's business will rely on
the continued improvement of the Internet as a convenient means of consumer
interaction and commerce, as well as an efficient medium for the delivery and
distribution of music. The success of the Company's business will also depend on
the ability of its artists and consumers to continue to upload and download MP3
and other music files, as well as to conduct commercial transactions using its
websites, without significant delays that may be associated with decreased
availability of Internet bandwidth. Consumers will need to access the websites
over a high-bandwidth connection, such as cable or direct subscriber line modem
or satellite data broadcast. If such broadband distribution networks do not
achieve widespread consumer acceptance, the Company may be unable to effectively
distribute content in its most compelling format. There is no assurance that
broadband distribution networks will ever achieve consumer acceptance, and if
they do not, the Company's growth may be limited.

      Lack of "Name-Brand" Recognition

      Many consumers remain unfamiliar with shopping on the Internet. Concerns
about transaction security, potential credit-card or other fraud, service
problems and the like have resulted in a retail environment favoring
well-established retail names. Retailers who have established themselves in
brick-and-mortar stores (like the Gap), catalogue sales (like Lands End) or
early Internet sales (like Amazon) are able to leverage early success into new
markets. Consequently, the continuing entry of established music retailers into
the downloadable music business will pose a substantial competitive threat for
the Company's business. (See "Item 1. - Business - Competition.")

      Future Acquisitions May Cause Dilution or Adversely Affect Operating
      Results

      As part of the Company's business strategy, the Company may seek to
acquire other websites for the marketing of products and services over the
Internet. The Company has no current agreements or commitments with respect to
any such acquisition and there can be no assurance that the Company will enter
into any such agreements or commitments. In the event of such future
acquisitions, the Company could (i) issue equity securities that would dilute
current stockholders' percentage ownership in the Company; (ii) 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 be acquired in the
future.

      The Company May Need to Obtain Additional Financing

      Management believes that current cash and cash equivalents will be
sufficient to meet the Company's anticipated cash needs for working capital and
capital expenditures for the next twenty-four months. However, the Company's
ability to continue its operations is highly dependent on its future ability to
raise capital, upon the achievement of the business objectives described in
"Item 1. Business" and profitable operations therefrom, and the ability to
generate sufficient cash from operations and financing sources to (i) meet
obligations, (ii) fund more rapid expansion, (iii) develop new or enhance
existing services or products, (iv) respond to competitive pressures; and (v)
acquire complementary businesses, technologies, content or products. The Company
cannot give assurances that these objectives will be met, that acceptable
alternatives will be found or that additional financing will be available on
terms favorable to it, or at all. (See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources.")


<PAGE>

      Retention and Integration of Employees and Consultants

      The Company's future performance will be substantially dependent on the
continued services of its management and the Company's ability to retain and
motivate them. (See "Item 10. Directors and Executive Officers of the
Registrant.") The loss of the services of any of the Company's officers or
senior managers could harm the Company's business. The Company generally does
not have long-term employment agreements with its key personnel. Most of the
Company's management team joined the Company since December 1999. Most of these
individuals have not previously worked together and are currently being
integrated as a management team. If the Company's senior managers are unable to
work effectively as a team, the Company's business would be harmed. The
Company's future success will also depend on its ability to attract, train,
retain and motivate other highly skilled technical, managerial, marketing and
support personnel. Competition for these personnel is intense, especially for
engineers and web designers, and the Company may be unable to attract
sufficiently qualified personnel. The Company will need to integrate these
employees into its business. The Company's inability to hire, integrate and
retain qualified personnel in sufficient numbers may reduce the quality of the
Company's programs, products and services, and could harm the Company's
business.

      Continued Upgrading of Technology Infrastructure

      The Company must continue to add hardware and enhance software to
accommodate increased content and use of its websites. If the Company is unable
to increase the data storage and processing capacity of its systems at least as
fast as the growth in demand, its websites may become unstable and may fail to
operate for unknown periods of time. Unscheduled downtime could harm the
Company's business and also could discourage users of the websites and reduce
future revenues.

      Systems Failure

      Substantially all of the Company's hardware, operations and records are
currently located in SITI's offices at 594 Broadway in New York, at the offices
of Globix (a New York based service provider), and in the home offices of two of
its software developers. Fire, floods, earthquakes, power loss,
telecommunications failures, break-ins and similar events could damage these
systems and cause interruptions in the Company's services. Computer viruses,
electronic break-ins or other similar disruptive problems could result in
reductions or termination of the Company's services by its customers or
otherwise adversely affect the website or the Company's off premises providers.
The Company's business could be adversely affected if its systems were affected
by any of these occurrences. The Company's insurance policies may not adequately
compensate the Company for any losses that may occur due to any failures or
interruptions in its systems. The Company does not presently have any backup
systems or a formal disaster recovery plan. The websites must be able to
accommodate a high volume of traffic and may in the future experience slow
response times or decreased traffic for a variety of reasons. In addition, the
Company's customers depend on Internet service providers, online service
providers and other website operators for access to the Company's websites. Many
of them have experienced significant outages in the past, and could experience
outages, delays and other difficulties due to system failures unrelated to the
Company's systems. Moreover, the Internet network infrastructure may not be able
to support continued growth. Any of these problems could adversely affect the
Company's business.

      Web Security Concerns Could Hinder E-Commerce

      A significant barrier to e-commerce and communications over the Internet
has been the need for secure transmission of confidential information. Internet
usage may not increase at the rate the Company expects unless some of these
concerns are adequately addressed and found acceptable by the market. Internet
usage could also decline if any well-publicized compromise of security occurred.
The Company may incur significant costs to protect against the threat of
security breaches or to alleviate problems caused by such breaches. Any such
protections may not be available at a reasonable price or at all. If a third
person were able to misappropriate the personal information of the websites'
users, the users could sue or bring claims against the Company.

<PAGE>

      Government Regulation

      The Company's business is subject to rapidly changing laws and
regulations. These laws and regulations could harm the Company by subjecting it
to liability or forcing it to change how it does business. (See "Item 1. -
Business - Government Regulation.")

      Liability for Content

      The Company may be liable to third parties for content on its websites and
on the CDs the Company distributes or for content that is accessible from its
websites through links to other websites. The Company attempts to minimize these
types of liability. However, there can be no assurance that these measures will
be successful or that the Company will not be found liable for content.
Liability or alleged liability could harm the Company's business by damaging its
reputation, requiring the Company to incur legal costs in defense, exposing the
Company to awards of damages and costs and diverting management's attention away
from the Company's business. (See "Item 1. Business - Intellectual Property.")

      Inadequate Intellectual Property Protection

      The Company believes that its intellectual property is important to its
success and its competitive position and seeks to protect it. However, its
efforts may be inadequate. In addition, third parties may claim that the Company
violated their intellectual property rights. To the extent that such claim is
successful against the Company, the Company may be required to pay damages,
obtain a license to use such third party's intellectual property or use
non-infringing methods to conduct its activities. (See "Item 1. - Business -
Intellectual Property.")

      Market Listing; Volatility of Stock Price

      The Company's common stock has been traded on the OTC Bulletin Board. 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. 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.

      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.


<PAGE>

ITEM 2. PROPERTIES

      The Company's headquarters occupy 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 holds a lease for such offices expiring on August 31, 2002.
The Company moved its principal executive offices to this location in September,
1999. The Company's payment obligations under this lease were guaranteed by
Chairman/CEO, Lawrence M. Powers. In addition, the terms of the lease include an
initial month of free rent, and an escalation of rental payments over the
three-year period. This charge will be amortized over the life of the lease. The
Company believes that its properties and facilities are suitable and adequate
for its purposes for the foreseeable future. (See "Part IV - Item 14. Note 5 to
the Consolidated Financial Statements.")

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. 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. The continued default by
EZCD.com under its content and technology sharing agreement with the Company
could result in litigation, and attendant costs and efforts by the Company's
management to resolve such matter. (See "Item 1. Business - Risk Factors -
Reliance on Artists and Independent Record Labels.")

      Other Proceedings

      The Company went through a bankruptcy reorganization from 1995-1997, as
described in the Form 10-K for 1999, "Item 3. Legal Proceedings." In addition,
for a discussion of past securities related proceedings involving prior
management of the Company, see the Form 10-K for 1999, "Item 3. Legal
Proceedings."

      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

      For a discussion of matters submitted to a vote of security holders during
the 2000 fiscal year see the Form 10-Q for 12/31/99. There were no matters
submitted to a vote of security holders during the fourth quarter of the 2000
fiscal year.

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY 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. There are currently 12 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" in January, 2000. The range of high and low
closing bid prices for the


<PAGE>

Common Stock for the fiscal years 2000 and 1999 are set forth below. The
National Quotation Bureau provided this information which may not reflect actual
transactions.

                                 HIGH AND LOW BID PRICES

                             2000                                 1999
                          Low    High                          Low    High

First Quarter (6/99)     $0.94  $2.50  First Quarter         $0.75   $1.69
                                       (6/98)
Second Quarter (9/99)     1.00   2.25  Second Quarter         0.31    1.06
                                       (9/98)
Third Quarter (12/99)     0.56   1.38  Third Quarter          0.13    3.13
                                       (12/98)
Fourth Quarter (3/2000)   0.53   1.13  Fourth Quarter (3/99)  1.13    3.13

      On June 9, 2000, the last reported bid and ask prices of the Common Stock
were $.1875 and $.3438, respectively.

      As of June 9, 2000 there were approximately 5,000 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,
2000, 1999 and 1998 and the Company has no current plans to pay dividends in the
foreseeable future. The Company plans to retain earnings, if any, to finance
development and expansion of 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."

      In February 2000, SITI issued an aggregate of 159,500 shares of common
stock to certain of its employees and consultants in consideration of their
services to SITI.

      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 shares for
            $.50 per share, exercisable for five years.

      Messrs. Powers, Ingenito and Iannitto plan immediately to divide 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 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.

<PAGE>

             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.

      The Company is using proceeds from the foregoing transactions to fund its
current operations.

      All of the shares of Common Stock issued by the Company during the 2000
fiscal year as described above and in the referenced Form 10-K for 1999 and the
Form 10-Q for 12/31/99, 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; 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.

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.
<TABLE>
<CAPTION>
                     CONTINUING AND DISCONTINUED OPERATIONS
                          For the Years Ended March 31,
                          -----------------------------------------------------------
                                   2000       1999      1998       1997      1996
-------------------------------------------------------------------------------------
                       (Amounts in thousands, except per share amounts)
<S>                                     <C>       <C>       <C>       <C>       <C>
Summary of Operations:
Total revenues of continuing operations    93         0         0         0         0
Loss from continuing operations        (1,773)     (484)       --        --        --
Loss from continuing
operations per common share             (0.21)    (0.17)       --        --        --
Net income (loss) from
continuing and discontinued            (1,708)   (1,804)   (3,077)   (6,180)    2,942
operations
Net income (loss) per share
from continuing and                     (0.20)    (0.56)    (2.33)    (6.04)     2.88
discontinued operations
Weighted average common
  Shares outstanding                    8,622    3,200(a)   1,325     1,022     1,022

Summary of Financial Position:
Total assets                            1,578     1,030     1,600     6,043    16,105
Long-term debt                             --        --        --        --        --
Stockholders' equity                    1,371       887       678     2,161     2,089

Dividends per share                      None      None      None      None      None
</TABLE>
(a)   See Note 1(i) to Financial Statements regarding increase in outstanding
      shares in December, 1998.

<PAGE>

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

Organization and 1998 Change of Control

      The Company is an Internet media company seeking to establish websites for
the marketing of products and services. The Company's four current websites
relate entirely to the music industry. The Company intends 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 promotes
and markets 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. In addition, the Company made and wrote-off a $500,000 investment in a
music CD custom compilation and promotion company, Volatile Media, Inc., which
does business as EZCD.com. Such investment has been written off as of March 31,
2000 because of uncertainties in EZCD's financing plans and ability to continue
operations. The Company also entered a technology sharing agreement with
EZCD.com pursuant to which they were to share music content and technology,
which has not yet been adequately performed by EZCD. Such default could result
in litigation (See "Item 1. - Business - Risk Factors - EZCD Investment Loss;
- Reliance on Artists and Independent Record Labels.") SITI currently employs a
total of 20 employees and consultants, as compared to 2 employees in January,
1999. As a result of recent financings and incentive issuances to key employees
and consultants, SITI's issued and outstanding shares have increased to
approximately 14,000,000 shares as of June 15, 2000.

      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 new 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".

      As a result of the change of control, subsequent equity investments and
option exercises through June, 2000, the directors and senior executive officers
of the Company (along with family and associates) have invested or committed
approximately $3,900,000 in cash for equity in the Company.

      In view of the Company's new Internet business strategy and the rapidly
evolving nature of its business, 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, 1999 are discontinued operations. 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
since the Change of Control Transaction and its prior operations which were
discontinued December 31, 1998.

CONTINUING OPERATIONS

      The following table sets forth certain financial data for continuing
operations for the periods indicated. As a result of the December 11, 1998
Change of Control Transaction described in the Form 10-K for 1999 "Item 1.
Business-Change of Control," the Company discontinued its previous operations.
In accordance with Accounting Principles Board,


<PAGE>

("APB") Statement #30, "Reporting the Effects of the Disposal of a Segment of a
Business," the prior years' financial statements have been restated to reflect
such discontinuation. All assets and liabilities of the discontinued segment
have been reflected as net liabilities of discontinued operations.
<TABLE>
<CAPTION>
                                                                       Years Ended March 31,
----------------------------------------------------------- ------------ -------------- ------------ --------------- ------------
Continuing Operations:                         2000              %         1999 (a)          %            1998            %
----------------------------------------------------------- ------------ -------------- ------------ --------------- ------------
                                                                       (Amounts in thousands)
<S>                                             <C>              <C>           <C>          <C>            <C>            <C>
Revenues                                           93              100%            0         -             0              -
                                           ---------------- --------------- ----------- ------------ --------------- ------------
Operating costs and expenses:
Cost of sales                                      55               59%            -         -             0              -
Selling, general and administrative             1,354            1,456%          414         -             0              -
                                           ---------------- --------------- ----------- ------------ --------------- ------------
Total operating costs and expenses              1,409            1,515%          414         -             0              -
                                           ---------------- --------------- ----------- ------------ --------------- ------------

Operating loss                                $(1,316)          (1,415%)       $(414)        -             -              -
                                           ================ =============== =========== ============ =============== ============
</TABLE>

The three-month reporting period for continuing operations begins January 1,
1999 and ends March 31, 1999 and is not a full fiscal year, whereas data for
fiscal 2000 is for a complete 12-month period.

CONSOLIDATED REVENUES FROM CONTINUING OPERATIONS

      During the fiscal year ended March 31, 2000, SITI recorded gross revenues
of approximately $93,000. These revenues are primarily associated with the March
2000 New York Expo which the Company sponsored. During the prior fiscal year,
the Company began to implement its new Internet business strategy, and there
were no revenues from continuing operations.

OPERATING COSTS AND EXPENSES FROM CONTINUING OPERATIONS

      As a result of the Change of Control Transaction and the discontinuance of
operations during the prior fiscal year, the Company experienced greater
operating costs and expenses for the current fiscal year as compared to the same
period in the prior year. During the fiscal year ended March 31, 2000, operating
costs and expenses amounted to approximately $1,409,000 consisting of
approximately $1,354,000 in selling, general and administrative expenses and
approximately $55,000 in cost of sales.

      For the fiscal year ended March 31, 2000, selling, general administrative
expenses consisted of approximately $339,000 in personnel and related expenses
to hire officers and staff to assist in the development of SITI. Legal fees
totaled approximately $171,000 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 $212,000 due to the printing and mailing costs associated with the
annual meeting of the shareholders in December 1999, the first held since 1995.
Outside services were approximately $207,000 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 $113,000 as a result of costs associated with the
prior year's audit. As a result of SITI's move from executives' personal offices
to an office in Manhattan in September 1999, the Company recorded approximately
$77,000 in rent expense for the fiscal year ended March 31, 2000. SITI
recognized approximately $77,000 in depreciation and amortization for the twelve
months ended March 31, 2000 as a result of the acquisitions of Tropia Inc.,
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. Pursuant
to SITI's purchase agreement for NewMediaMusic.com, founder Steve Zuckerman was
entitled to 75% of the expo's profit before interest and taxes. This amount
totaled approximately $23,000 and was accrued as commissions to him. The
remaining $101,000 in operating costs and expenses relate to several costs
associated in maintaining the office, such as telephone in the amount of
approximately $18,000; office supplies in the


<PAGE>

amount of approximately $15,000; server co-location fees of approximately
$17,000; and various expenses totaling approximately $51,000.

      The Company recorded approximately $55,000 for the year ended March 31,
2000 in cost of sales for certain expenses associated with the March 2000 Expo
such as facilities fees of approximately $18,000 as well as approximately
$14,000 for certain set-up fees. There were no cost of sales for the prior
fiscal year.

      The operating costs and expenses for the fiscal year ended March 31, 1999
were primarily composed of compensation to employees via stock and options (See
the Form 10-K for 1999 "Item 1. Business-Change of Control") and legal and
accounting fees incurred while the Company went through its transition resulting
from the December 11, 1998 Change of Control Transaction. (See "Operating Loss
from Continuing Operations.") In accordance with APB Statement #30, "Reporting
the Effects of the Disposal of a Segment of a Business," the prior years'
financial statements have been restated to reflect such discontinuation. All
assets and liabilities of the discontinued segment have been reflected as net
liabilities of discontinued operations.

OPERATING LOSS FROM CONTINUING OPERATIONS

      For the fiscal year ended March 31, 2000, SITI experienced an operating
loss from continuing operations of approximately $1,316,000 due to the Company's
efforts to grow in its industry. For the three months of continuing operations
in the prior fiscal year, the Company experienced an operating loss of
approximately $414,000 (the previous nine months represent operations
discontinued on January 1, 1999). The operating loss was primarily composed of
compensation to employees via stock and options (See the Form 10-K for 1999
"Item 1. Business-Change of Control") and legal and accounting fees incurred
while the Company went through its transition resulting from the December 11,
1998 Change of Control Transaction. The operating loss for fiscal 1999 is not
indicative of a full year's operations.

OTHER INCOME AND EXPENSE RELATED TO CONTINUING OPERATIONS

      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 1. Business - Risk Factors - EZCD Investment Loss.") 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 and stock purchases during the current fiscal year. The company had
no income from continuing operations during the fiscal years ended March 31,
1999 and 1998, respectively. The expenses were primarily compensation to
employees via stock and options as well as legal and accounting fees incurred
while the Company went through its transition resulting from the December 11,
1998 Change of Control Transaction.

LIQUIDITY AND CAPITAL RESOURCES

      As of March 31, 2000 the Company had working capital of $1,093,000 which
followed from the infusions of cash after the December, 1998 Change of Control
transaction. A total of approximately $3,900,000 in cash has been invested or
committed in the Company since 1998 (including $ 1,150,000 invested in June,
2000). The following information, to the extent that it relates to prior
discontinued operations, should not be relied on as an indicator of future
performance.

      Net cash used by operations decreased from $1,956,000 in fiscal 1999 to
approximately $937,000 in the current fiscal year. During the prior fiscal year,
SITI discontinued its prior operations resulting in a $1,925,000 use of cash for
discontinued operations. However, during the current fiscal year, cash was used
entirely to develop the Company's Internet business strategy (continuing
operations).

      Net cash used by operations decreased from approximately $3,012,000 in
fiscal 1998 (all discontinued operations) to $1,956,000 in fiscal 1999
(primarily discontinued operations). The Company called its employee loans
during the quarter ended December 31, 1998. These loans were collateralized by
the Company's Common Stock. The former employees elected to default on their
respective loans resulting in a write-off in employee loans and the purchase of


<PAGE>

treasury stock. These decreases were partially offset by the elimination of a
litigation reserve of $645,000 as well as the reduction in accounts payable and
accrued expenses of approximately $182,000 and $335,000, respectively, all in
connection with discontinued operations.

      Net cash provided by investing activities decreased from $273,000 in
fiscal 1999 to approximately $1,082,000 net cash used in investing activities in
the current fiscal year primarily due to the purchase of approximately $486,000
in marketable securities. In May 1999 the Company was reimbursed $23,000 as a
result of the termination of its agreement with Minutemeals.com, Inc. As of
March 31, 2000, the Company wrote-off its investment in Volatile Media, Inc.
(See "Item 1. Business - Risk Factors - EZCD - Investment Loss")

      There were essentially no financing activities during the fiscal year
ended March 31, 1998. As a result of the change of control in December, 1998 and
the exercise of options, net cash provided by financing activities for the
fiscal year ended March 31, 1999 totaled approximately $1,090,000, all used in
continuing operations. The Company received approximately $1,750,000 from the
proceeds of the recent financings. (See "Item 5. Market for the Registrant's
Common Equity and Related Stockholder Matters,") and certain options were
exercised for an aggregate of approximately $12,000 during the fiscal year ended
March 31, 2000.

      Capital expenditures amounted to approximately $119,000, $74,000 and
$199,000, respectively, for the twelve months ended March 31, 2000, March 31,
1999 and March 31, 1998. Capital expenditures in 2000 were for computer and
office equipment, used in continuing operations. For the fiscal years 1999 and
1998, capital expenditures relate entirely to discontinued operations terminated
in December, 1998.

      The Company currently is financing its daily operations through the
application of the proceeds of the investments in the Company since December
1998 (see "Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters"). Management believes that current cash and cash
equivalents will be sufficient to meet the Company's anticipated cash needs for
working capital and capital expenditures for the next twenty-four months.
Further, the Company's ability to continue its operations is highly dependent on
its future ability to raise capital, upon the achievement of the business
objectives described in "Item 1. Business" and profitable operations therefrom,
and the ability to generate sufficient cash from operations and financing
sources to (i) meet obligations, (ii) fund more rapid expansion, (iii) develop
new or enhance existing services or products, (iv) respond to competitive
pressures; and (v) acquire complementary businesses, technologies, content or
products. The Company cannot give assurances that these objectives will be met,
that acceptable alternatives will be found or that additional financing will be
available on terms favorable to it, or at all. If adequate funds are not
available or are not available on acceptable terms, the Company's ability to
fund expansion, take advantage of unanticipated opportunities, develop or
enhance services or products or otherwise respond to competitive pressures would
be significantly limited. If the Company raises additional funds by issuing
equity or convertible debt securities, the percentage ownership of its
stockholders will be reduced, and these securities may have rights, preferences
or privileges senior to those of such stockholders. Except as otherwise
disclosed therein, the accompanying consolidated financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the Company to
continue as a going concern.

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 FISCAL 1999 AND 1998 DISCONTINUED OPERATIONS

      The following discussion relates solely to discontinued businesses in
certain wireless data patents that preceded the Company's bankruptcy
reorganization (1995 to 1997) (see the Form 10-K for 1999 "Item 3. Legal
Proceedings"), the Company's unsuccessful software products for use in high
speed Internet data transmission (1997-1998) (see "Item 1


<PAGE>

Business- Prior Company History" in Form 10-K for 1999) and the change of
control transaction of December, 1998. This discussion should not be relied upon
as an indication of future performance and is presented as a separate discussion
in accordance with APB Statement #30, "Reporting the Effects of the Disposal of
a Segment of a Business." Further, in order to separate the effect of continuing
operations from the discontinued operations, the reporting period for
discontinued operations is the nine-month period ending December 31, 1998 and is
not a full fiscal year. The prior reporting period ending March 31, 1998
represents a full twelve-month fiscal year.

      The following table sets forth, for the periods indicated, the percentage
relationship that certain items bear to revenue from discontinued operations.
This summary provides trend data relating to the Company's discontinued
operations. Amounts set forth below also reflect the Company's Data One and
Computer Bay subsidiaries as operations which were discontinued prior to
December 11, 1998.

OPERATING RESULTS FROM FISCAL 1999 AND 1998 DISCONTINUED OPERATIONS

   Operating Results from Discontinued Operations

<TABLE>
<CAPTION>
                                            Period Ended December 31,          Year Ended March 31,
-------------------------------------------------------------------------------------------------------
                                                 1998 (a)          %            1998            %
-------------------------------------------------------------------------------------------------------
                                                               (Amounts in thousands)
<S>                                             <C>               <C>          <C>            <C>
Revenues                                        $ 2,324           100.0%       $ 1,833        100.0%
                                                ----------------------------------------------------
Operating costs and expenses:
  Cost of revenues                                   --            --               52          2.8%
  Selling, general and administrative             4,115           177.1%         5,015        273.6%
                                                ----------------------------------------------------
Total operating costs and expenses                4,115           177.1%         5,067        276.4%
                                                ----------------------------------------------------
Operating income (loss)                         $(1,791)          (77.1%)      $(3,234)      (176.4%)
                                                ----------------------------------------------------
Other income and (expenses)                         471            20.2%           157          8.5%
                                                ----------------------------------------------------
(Loss) from discontinued operations             $(1,320)          (56.9%)      $(3,077)      (167.9%)
                                                ----------------------------------------------------
</TABLE>

(a)   The nine-month reporting period for discontinued operations ends December
      31, 1998 and is not a full fiscal year, whereas data for 1998 is for a
      complete 12-month period.

CONSOLIDATED REVENUES FROM DISCONTINUED OPERATIONS

      Consolidated revenues from discontinued operations increased approximately
$491,000 or 27% for the nine month period ended December 31, 1998 as compared to
the prior year, due to a $626,000 or 37% increase in licensing revenues offset
by a $135,000 or 94% decrease in merchandise sales.

      The increase in licensing revenues for the nine months ended December 31,
1998, as compared to the twelve-month period in the prior fiscal year is
primarily due to the Company's recognition of approximately $1,350,000 in
revenues and $153,000 of accelerated royalty income. These amounts were
recognized in connection with an up-front fee pursuant to a license agreement
that the Company entered into during the 1999 fiscal year, and the
acceleration of a guaranteed payment pursuant to a licensing agreement. This
non-recurring increase was partially offset by the decrease associated with the
renegotiation of a license agreement which the Company entered into in the prior
fiscal year. No further revenue is expected from these licensing agreements. The
Company has no future obligations to provide goods or services under these
agreements. The Company is not currently aware of any significant unlicensed
manufacturers that are infringing the Company's discontinued wireless data
products and associated patents. Furthermore, the Company is no longer carrying
these assets at any value, and does not expect them to provide material future
revenues.


<PAGE>

      Merchandise sales decreased for the nine months ended December 31, 1998 as
compared to the twelve months ended March 31, 1998 because of (i) the continued
effects of a licensing agreement the Company entered into with a distributor,
which agreed to assume the Company's activation kit business during the quarter
ended December 31, 1997, and (ii) the discontinuance of the Company's prior
business in December 1998. Under the licensing agreement, the distributor had
committed to undertake specified marketing efforts intended to stimulate the
market for activated cellular capable modems and to pay the Company a royalty
for each activation kit it sells.

OPERATING COSTS AND EXPENSES FROM DISCONTINUED OPERATIONS

      Operating costs and expenses from discontinued operations decreased
approximately $952,000 or 19% for the nine months ended December 31, 1998 as
compared to the twelve months ended March 31, 1998, primarily due to a decrease
in selling, general and administrative expenses of approximately $900,000 or 18%
and a decrease in cost of sales of approximately $52,000 or 100%.

      The decrease in selling, general and administrative expenses for the nine
months ended December 31, 1998 as compared to the prior fiscal year was
primarily due to a decrease in outside services (mainly the independent
contractors retained to assist in the development of the Company's software
product) of $792,000 or 66%, due to the completion of this product. Selling,
general and administrative expenses further decreased as a result of the
Company's change in control. As a result of this change, all existing SITI
employees were terminated and the facilities in Purchase, New York, as well as
all other offices, were closed in December 1998.

OPERATING LOSS FROM DISCONTINUED OPERATIONS

      The Company's operating loss decreased $1,443,000, or 45%, to $1,791,000
for the nine months ended December 31, 1998 as compared to the twelve-month
period in the prior fiscal year. This decrease was primarily due to decreased
selling, general administrative expenses of $900,000 or 18% and increased
licensing revenues of $626,000 or 37%.

OTHER INCOME AND EXPENSE RELATED TO DISCONTINUED OPERATIONS

      Other income increased approximately $314,000 or 200% for the nine-month
period ended December 31, 1998 as compared to the year ended March 31, 1998 as a
result of the elimination of the litigation reserve, which resulted in the
recognition of approximately $416,000 in income. This increase was partially
offset by a $130,000 or 82% decline in interest income for the period reported,
as compared to the same period in the prior fiscal year. Interest income
decreased because the Company had lower cash balances than during the prior
fiscal year.

      In addition, as discussed in the Form 10-K for 1999 "Item 1. Business -
Change of Control," on December 11, 1998, the Company entered into a Stock
Purchase Agreement with Powers & Co., the principal of which is Lawrence M.
Powers. Pursuant to this Stock Purchase Agreement, Lawrence M. Powers, through
Powers & Co., purchased 3,000,000 shares of the Company's common stock (which
totaled approximately 54.9% of the outstanding aggregate shares of voting stock
of the Company at the time) and an option to acquire an additional 1,800,000
shares of the Company's common stock at an exercise price of $0.15 per share,
for an aggregate purchase price of $600,000. As a result of this transaction and
subsequent investments and option exercises, an aggregate of $1,007,000 of new
equity was invested in the Company. Giving effect to this change of control
transaction, and losses from continuing and discontinued operations, resulted in
a net loss of $1,804,000 for the fiscal year ending March 31, 1999 as compared
to a net losses of $3,077,000 in the fiscal year ending March 31, 1998.

      In view of the Company's new Internet business strategy since 1998 and the
rapidly evolving nature of its business, information relating to the results of
the Company's prior discontinued operations should not be relied upon as an
indication of future performance.

<PAGE>

YEAR 2000 READINESS DISCLOSURE

      Reflecting the work completed on the Company's year 2000 assessment
program, the Company's computer systems and business processes successfully
handled the date change from December 31, 1999 to January 1, 2000. The Company
is not aware of any significant year 2000 problems encountered internally or
with third parties with which it does business. The Company was not required to
spend material amounts on this matter. Based on operations since January 1,
2000, the Company does not expect any significant impact to its ongoing
operations as a result of the year 2000 issue.

      However, although remote, it is possible that the full impact of year 2000
issues has not been fully recognized and no assurances can be given that year
2000 problems will not emerge. To the extent any Year 2000 issues arise, that
could expose the Company to certain risks, such as the nonperformance by third
parties of obligations to the Company.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The company had no short-term investments as of March 31, 2000, except for
certain 90-day bonds the Company has purchased. These investments are classified
as available for sale securities whereby any unrealized gain or loss is recorded
on the balance sheet as a separate component of stockholders' equity. Market
risk relating to the Company's interest bearing cash equivalents held as of
March 31, 2000 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

       Effective August 31, 1999, the Board of Directors of the Company engaged
the accounting firm of Edward Isaacs & Company LLP as independent auditors for
the Company. Edward Isaacs & Company LLP replaced the firm of BDO Seidman LLP,
whose engagement was terminated (upon the expiration of their engagement) by the
Company's Board of Directors effective as of August 31, 1999. (See Proxy
Statement as of 12/14/99.)


<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            68    Chairman, Chief Executive Officer

      Robert Ingenito               57    Vice Chairman of the Board, President

      John Iannitto                 51    Executive Vice President

      Barclay V.  Powers            37    Director

      Toni Ann Tantillo             33    Chief Financial Officer, Vice
                                          President, Secretary and Treasurer

      Theodore Mazola               29    Vice President, Technical Director

      Steven Zuckerman              41    Vice President, New Media Development

Business Experience of Directors and Executive Officers

      Lawrence M. Powers, 68, 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 53 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 the
time). The management team he assembled has continued successfully. He remained
on the board of Spartech until 1995, and is still a major 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.

      Robert Ingenito,57, 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 ($32 million in sales).
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.

      John Iannitto, 51, has served the Company as Executive Vice-President
since June, 2000. He has a 25-year background in advertising, consumer product
management, marketing and promotions, operating his own successful agency, RSI
Marketing, for 20 years. Before starting his own marketing business, he was a
product manager at General Foods and Lever Brothers. His clients at RSI
Marketing include Johnson & Johnson (Personal Products), and also its joint
venture with Merck (Drug Products), McNeil Consumer Healthcare (Tylenol) and
Merial (Veterinary Products). Mr.


<PAGE>

Iannitto received his M.B.A. at Pace University and his A.B. at St. Francis
College in New York. His expertise is in development of new product launch
programs, and marketing established brands and services. He will be active in
management supervision of the New Media Music newsletter expansion, intended to
also generate artists and fans for the Company's services business, the
Company's 2001 New Media Music Expo, and other new and ongoing projects of the
Company.

      Barclay V. Powers, 37, 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 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.

      Toni Ann Tantillo, 33, 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 since 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.

      Ted Mazola, 29, has served as the Company's Vice President/Technical
Director since January, 2000. He founded the Company's division HungryBands.com,
and co-founded the NewMediaMusic.com division. Prior to his election, he was
employed in computer operations at Brooklyn Union Gas Company when he started
these two web businesses and sold them to SITI.

      Steve Zuckerman, 41, has served as the Company's Vice President/New Media
Development since January, 2000. He founded the New York Music and Internet Expo
division described above, and co-founded the New Media Music.com division which
he sold to SITI for stock therein. He has 20 years experience and contacts in
the music industry, primarily in news gathering and more recently, Internet
business development.

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 1999 fiscal year, all Reporting Persons timely complied
with all applicable Section 16(a) filing requirements except as set forth below.

      Mr. Lawrence M. Powers was delinquent in filing a Form 4. Mr. Barclay
Powers was delinquent in filing a Form 4. Mr. Robert Ingenito was delinquent in
filing a Form 4. Mr. Theodore Mazola was delinquent in filing a Form 3. Mr.
Steven Zuckerman was delinquent in filing a Form 3.

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 2000, who served as Chief Executive Officer and during the Company's
1999 fiscal year, where he was the Chief Executive Officer for approximately
three months, and four individuals who were among the highest paid employees for
the fiscal year ended March 31, 2000. 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 no executive officers serving as such at
the end of its 2000 fiscal year whose aggregate compensation exceeded $100,000.


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

                                                                              Other       Restricted     Shares                All
Name and                                                                      Annual      Stock          Underlying   LTIP     other
Principal Position                      Year       Salary         Bonus       Comp.       Awards         Options      Payouts  Comp.
------------------                      ----       ------         -----       ------      ----------     --------     -------  -----
<S>                                     <C>        <C>             <C>          <C>          <C>          <C>          <C>       <C>
Lawrence M. Powers                      2000       75,000(1)      -0-          -0-          -0-          -0-          -0-       -0-
Chairman and Chief                      1999       18,250(1)(5)   -0-          -0-          -0-          -0-          -0-       -0-
Executive Officer                       1998       -0-            -0-          -0-          -0-          -0-          -0-       -0-

Robert Ingenito                         2000       25,000(1)      -0-          -0-          -0-          -0-          -0-       -0-
Vice-Chairman and                       1999       -0-            -0-          -0-          -0-          -0-          -0-       -0-
President                               1998       -0-            -0-          -0-          -0-          -0-          -0-       -0-

Jon M. Gerber                           2000       59,231(2)      -0-          -0-          -0-          -0-          -0-       -0-
Former Executive Vice-,                 1999       12,500(1)      -0-          -0-          -0-          -0-          -0-       -0-
President, Secretary,                   1998       -0-            -0-          -0-          -0-          -0-          -0-       -0-
Treasurer and Director

Toni Ann Tantillo                       2000       12,980(5)      14,100(3)    11,700(4)    -0-          -0-          -0-       -0-
Chief Financial Officer,                1999       -0-            -0-          -0-          -0-          -0-          -0-       -0-
Vice President,                         1998       -0-            -0-          -0-          -0-          -0-          -0-       -0-
Secretary and Treasurer

Theodore Mazola                         2000       22,231(5)      -0-          -0-          -0-          -0-          -0-       -0-
Vice-President,                         1999       -0-            -0-          -0-          -0-          -0-          -0-       -0-
Technical Director                      1998       -0-            -0-          -0-          -0-          -0-          -0-       -0-

Steven Zuckerman                        2000       21,250(5)      -0-          -0-          -0-          -0-          -0-       -0-
Vice-President,                         1999       -0-            -0-          -0-          -0-          -0-          -0-       -0-
Technical Director                      1998       -0-            -0-          -0-          -0-          -0-          -0-       -0-

Jonathan Blank                          2000       17,500(5)      -0-          -0-          -0-          -0-          -0-       -0-
Former Chief Executive                  1999       -0-            -0-          -0-          -0-          -0-          -0-       -0-
Officer - Tropia, Inc.                  1998       -0-            -0-          -0-          -0-          -0-          -0-       -0-
</TABLE>

(1) This amount represents Mr. Powers', Mr. Ingenito's and Mr. Gerber's
contribution of services charged against earnings. No compensation was paid by
the Company to Messrs. Powers or Ingenito with respect to these services. Mr.
Ingenito's contribution began in January 2000.

(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 current 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.


<PAGE>

(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 election as
officer. Mr. Blank left the Company in December, 1999.

Option Grants in Last Year

      No options were granted during the fiscal year ended March 31, 2000.
Certain of the Named Individuals did purchase options as referred to in "Item 5.
Market for the Registrant's Common Equity and Related Stockholder Matters."

Option Exercises and Year-End Values

      There were no options exercised by the Named Executive Officers during the
2000 fiscal year. Further, there were no options awarded as compensation held by
each of the Named Executive Officers at March 31, 2000. Any options held by such
individuals were purchased pursuant to 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 its agreement with Mr.
Zuckerman regarding his retention of 15% of the 2001 Expo's earnings before
interest and taxes (See "Note 10 to the Consolidated Financial Statements.") and
the agreements described below.

      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 stock and options 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)

      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 9, 2000, 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


<PAGE>

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)             61.3%
47 Beech Road
Englewood, NJ 07631

Robert Ingenito                         2,450,000(2)(5)         17.8%
80 Ruland Road
Melville, NY 11747-6200

Barclay V. Powers                       4,218,333               30.6%
665 Walther Way
Los Angeles, CA 90049

John Iannitto                           1,500,000(3)(5)(6)      10.9%
D/B/A RSI Marketing
171 Madison Avenue
New York, NY 10016

Jon M. Gerber (former officer)            190,000                1.4%
3333 Henry Hudson Parkway
Riverdale, NY

Toni Ann Tantillo                          30,834                  *
115 Whitman Road
Yonkers, NY  10710

Theodore Mazola                            80,000                  *
36 Fieldway Avenue
Staten Island, NY  10308

Steven Zuckerman                           30,000                  *
519 Bloomfield Avenue
Apt #6G
Caldwell, NJ

Jonathan Blank (former officer)          195,833(4)             1.4%
4239 Coolidge Avenue
Los Angeles, CA 90066

Current Directors and                  12,527,500(7)              91%
Executive Officers as a
Group (7 persons):
----------------------
* Less than 1%


<PAGE>

(1) Consists of 6,736,666 shares and options to purchase an additional 1,700,000
shares of SITI's common stock. Shares and options held by Mr. Lawrence Powers
also include 3,368,333 shares and options to purchase an additional 850,000
shares held by his son, Barclay V. Powers, as to which Lawrence Powers disclaims
voting or investment thereon.

(2) Consists of 1,600,000 shares and options to purchase an additional 850,000
shares of SITI's common stock.

(3) Consists of 1,000,000 shares and options to purchase an additional 500,000
shares of SITI's common stock.

(4) Amount is net of 50,000 shares returned to the Company pursuant to a
settlement agreement. (See "Item 3. - Legal Proceedings.")

(5) Does not include stock or options payable under their employment
arrangements for fiscal 2001 and 2002. (See "Item 11. - Executive Compensation -
Employment Agreements.")

(6) Represents shares and options held by RSI Marketing, a sole proprietorship
owned by John Iannitto.

(7) Consists of a total of 9,477,500 shares and options to purchase an
additional 3,050,000 shares of SITI's common stock.

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 has been counsel to the
Company.

FINANCING IN FISCAL 2000

      For a discussion of sales of unregistered securities by the Company to
certain members of management 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."

      In February, 2000, SITI issued an aggregate of 159,500 additional shares
of its common stock to certain of its employees and consultants in consideration
of their services to SITI.

      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 plan immediately to divide 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.


<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. (3)
<PAGE>

3.1   Certificate of Incorporation of SITI-Sites.com, Inc. as amended. (2)
3.2   Amended and Restated Bylaws of SITI-Sites.com, Inc., as amended (2)
3.3   Restated Certificate of Incorporation of the Company (2)
3.4   Restated Bylaws of the Company. (2)
10.1  Investment and Business Development Agreement Among the Company,
      Minutemeals.com, Inc., Joseph Langhan and Donald Moore, dated March 19,
      1999 (4)
10.2  Stock Purchase Agreement Between the Company and Powers & Co. dated
      December 11, 1998 (4)
10.3  Stock Purchase Agreement Between the Company and Robert Ingenito dated
      December 12, 1998 (4)
10.4  Stock Purchase Agreement Between the Company and Steven Gross dated
      December 12, 1998 (4)
10.5  Option Agreement Entered Into Between the Company and Maurice W. Schonfeld
      (4)
10.6  Termination Agreement Dated as of May 28, 1999 Among the Company,
      Minutemeals.com, Inc., Joseph Langhan, and Donald Moore (4)
10.7  Stock Purchase Agreement dated July 26, 1999 (Powers) (2)
10.8  Content and Technology Sharing Agreement dated December 23, 1999, between
      the Company and Volatile Media, Inc. (5)
10.9  Stock Purchase Agreement dated December 23, 1999 (Powers and Ingenito) (1)
10.10 Option Agreement dated December 23, 1999 Entered Into Between the Company
      and Lawrence M. Powers (1)
10.11 Option Agreement dated December 23, 1999 Entered Into Between the Company
      and Robert Ingenito (1)
10.12 Subscription Agreement dated February 8, 2000 Between the Company and
      Volatile Media, Inc. (5)
10.13 SITI-Sites.com, Inc. 1999 Stock Option Plan (5)
10.14 Purchase Agreement dated January 3, 2000, between the Company and Theodore
      Mazola (6)
10.15 Purchase Agreement-2 dated January 3, 2000, among the Company and Theodore
      Mazola and Steven Zuckerman(6)
10.16 Lettter Agreement dated January 3, 2000, executed by New York Music Expo,
      Inc. in favor of the Company(6)
10.17 Settlement Agreement Dated May 1, 2000 Among the Company and Jonathan
      Blank, Ari Blank and Arjun Nayyer (1)
10.18 Stock Purchase Agreement dated June 8, 2000 (Powers, Ingenito and
      Iannitto) (1)
10.19 Employment Arrangements Agreement dated June 12, 2000 Entered Into Between
      the Company and Messrs. Robert Ingenito and John Iannitto (1)
10.20 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
      Company and Lawrence Powers (1)
10.21 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
      Company and Robert Ingenito (1)
10.22 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
      Company and John Iannitto (1)
10.23 Stock Purchase Agreement dated June 13, 2000 (Colvil Investments, LLC
      purchase) (1)
10.24 Stock Option Agreement Dated June 13, 2000, Entered Into Between the
      Company and Colvil Investments, LLC (1)
10.25 Stock Purchase Agreement dated June 16, 2000 (Steven Gross purchase) (1)
10.26 Stock Option Agreement Dated June 16, 2000, Entered Into Between the
      Company and Steven Gross (1)

23.1  Consent of Edward Isaacs and Company, LLP (1)
23.2  Consent of BDO Seidman, LLP (1)
27.1  Financial Data Schedule (1)

Notes:

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


<PAGE>

(4)   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.
(5)   Previously Filed as an Exhibit to the Company's Quarterly Report on Form
      10-Q for the quarter ended December 31, 1999.
(6)   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:

            The Company filed a Current Report on Form 8-K dated January 18,
            2000 announcing the acquisitions of HungryBands.com,
            NewMediaMusic.com and NewYorkExpo.com in "Item 2. Acquisition and
            Disposition of Assets" as well as the investment in Volatile Media,
            Inc. and certain sales or transfers of the Company's common stock in
            "Item 5. Other Events."


<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 21, 2000                 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 21, 2000                 By  /s/ Lawrence M. Powers
                                          -----------------------------------
                                                  Lawrence M. Powers
                                             (Chief Executive Officer and
                                               Chairman of the Board of
                                                      Directors)

Dated:  June 21, 2000                 By  /s/ Robert Ingenito
                                          -----------------------------------
                                                   Robert Ingenito
                                           (President and Vice-Chairman of
                                               the Board of Directors)

Dated:  June 21, 2000                 By  /s/ Barclay V. Powers
                                          -----------------------------------
                                                  Barclay V. Powers
                                                      (Director)


<PAGE>
                       SITI-Sites.com, Inc. and Subsidiary
                   Index to Consolidated Financial Statements
                        And Financial Statement Schedule
<TABLE>
<S>                                                                                               <C>
Report of Independent Certified Public Accountants                                                F-2

Report of Independent Certified Public Accountants                                                F-3

Consolidated Balance Sheets as of March 31, 2000 and 1999                                         F-4

Consolidated Financial Statements for Each of the Three Years in the Period Ended March 31, 2000

Consolidated Statements of Operations and Comprehensive Loss                                      F-5

Consolidated Statements of Stockholders' Equity                                                   F-6

Consolidated Statements of Cash Flows                                                             F-7

Notes to Consolidated Financial Statements                                                 F-8 - F-23
</TABLE>

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

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 financial position of SITI-Sites.com,
Inc. and subsidiary at March 31,2000, and the consolidated results of their
operations and their cash flows for the year then ended, in conformity with
generally accepted accounting principles.

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


<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 balance sheets of SITI-Sites.com,
Inc. and Subsidiary as of March 31, 1999, and the related consolidated
statements of operations and comprehensive loss, stockholders' equity and cash
flows for each of the two years in the period ended March 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of SITI-Sites.com,
Inc. and Subsidiary at March 31, 1999, and the consolidated results of their
operations and their cash flows for each of the two years in the period ended
March 31, 1999 in conformity with generally accepted accounting principles.

The Company has experienced significant losses from continuing operations for
the three years ended March 31, 1999, largely due to professional fees incurred
in its 1997 bankruptcy reorganization, and in defending itself in the numerous
litigation cases prior to January 26, 1995 discussed in Note 6 to the
consolidated financial statements and the decline in its prior business. In
December 1998, new investors invested in excess of $1 million for a controlling
interest in the Company. As a result of this change of control transaction, the
Company's senior management and Board of Directors were replaced, the Company's
prior business was discontinued and the Company changed the direction and nature
of the Company's business. The Company is now seeking to establish several
websites for the marketing of products and services over the Internet. However,
because of significant recurring losses, the Company's change of control, the
discontinuance of its prior business and its new strategic direction, there
remains a substantial doubt about the Company's ability to continue as a going
concern. The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of the uncertainties discussed herein.

/s/ BDO Seidman, LLP
BDO Seidman, LLP

New York, New York
June 11, 1999


<PAGE>

SITI-Sites.com, Inc. and Subsidiary
Consolidated Balance Sheets
(Amounts in thousands)

March 31,                                                     2000         1999
-------------------------------------------------------------------------------
Assets
Current assets:
  Cash and cash equivalents                                 $   750     $ 1,007
  Marketable securities                                         490          --
  Receivables and other assets                                   60          --
                                                            -------     -------
            Total current assets                              1,300       1,007
                                                            -------     -------

  Property  and  Equipment,  net  of  accumulated               109
    depreciation
  Investment in Minutemeals.com                                  --          23

Intangibles:
     Goodwill                                                   236          --
      Less: Accumulated amortization                            (67)         --
                                                            -------     -------
Intangibles, net                                                169          --
                                                            -------     -------

            Total assets                                    $ 1,578     $ 1,030
                                                            =======     =======

Liabilities and Stockholders' Equity:
Current Liabilities
  Accounts payable and accrued liabilities                  $   137     $    24
  Accrued legal fees                                             70          51
  Net liabilities of discontinued operations                     --          68
                                                            -------     -------
            Total current liabilities                           207         143
                                                            -------     -------

            Total liabilities                                   207         143
                                                            -------     -------

Commitments and contingencies

Stockholders' Equity:
 Preferred stock $.001 par value, 5,000 shares
 and 1,500 shares authorized, respectively, and
 none issued and outstanding                                     -            -

 Common stock, $.001 par value, 35,000 shares
 and 10,000 shares authorized, respectively, and
 9,812 and 7,904 issued and outstanding, respectively            10           8
 Paid-in capital                                             75,938      73,752
 Accumulated deficit                                        (74,270)    (72,562)
                                                            -------     -------
                                                              1,678       1,198
 Treasury stock, 62 shares at cost, respectively               (311)       (311)
 Accumulated Other Comprehensive Income                           4           -
                                                            -------     -------
            Total stockholders' equity                        1,371         887
                                                            -------     -------

Total liabilities and stockholders' equity                  $ 1,578     $ 1,030
                                                            =======     =======

See accompanying notes to consolidated financial statements.

<PAGE>

SITI-Sites.com, Inc. and Subsidiary
Consolidated Statements of Operations and Comprehensive Loss
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Year ended March 31,                                                             2000          1999          1998
-------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>           <C>           <C>
Revenues                                                                        $    93       $    --       $    --
                                                                                -------       -------       -------

Operating costs and expenses:
  Cost of sales                                                                      55            --            --
  Selling, general and administrative expenses                                    1,354           414            --
                                                                                -------       -------       -------
             Total operating costs and expenses                                   1,409           414            --
                                                                                -------       -------       -------

Operating loss                                                                   (1,316)         (414)           --
                                                                                -------       -------       -------
Other income (expense):
   Loss on investment in Minutemeals.com                                             --           (82)           --
   Loss on investment in Volatile Media (EZCD.com)                                 (500)           --            --
   Interest income                                                                   43            12            --
                                                                                -------       -------       -------
   Total other income (expense), net                                               (457)          (70)           --
                                                                                -------       -------       -------
Loss from continuing operations                                                  (1,773)         (484)           --
                                                                                -------       -------       -------
Discontinued operations:
   Income(loss) from discontinued operations                                         65        (1,320)       (3,077)
                                                                                -------       -------       -------
Income (loss) from discontinued operations                                           65        (1,320)       (3,077)
                                                                                -------       -------       -------

Net loss                                                                        $(1,708)      $(1,804)      $(3,077)
                                                                                -------       -------       -------
   Other Comprehensive Income, net of tax                                             4             3            27
                                                                                -------       -------       -------
Comprehensive loss                                                              $(1,704)      $(1,801)      $(3,050)
                                                                                =======       =======       =======

Basic and diluted loss per common share:
   Loss  from continuing operations                                             $  (.21)      $  (.17)      $    --
   Income (loss) on discontinued operations                                         .01          (.39)        (2.33)
                                                                                -------       -------       -------
Net loss per common share                                                       $  (.20)      $  (.56)      $ (2.33)
                                                                                =======       =======       =======
Weighted Average Number of Common Shares used in
basic and diluted calculation (see note 1 (i) to financial
statements)                                                                       8,622         3,200         1,325
                                                                                =======       =======       =======
</TABLE>
See accompanying notes to consolidated financial statements


<PAGE>


SITI-Sites.com, Inc. and Subsidiary
Consolidated Statements of Stockholders' Equity
(Amounts in thousands)
<TABLE>
<CAPTION>
                                                      Class A Convertible
                                                        Preferred Stock                 Common Stock
                                                 ------------------------------    -----------------------

                                                                                                            Paid-in
                                                      Shares             $           Shares        $        Capital

                                                 -----------------------------------------------------------------------
<S>                                                         <C>              <C>         <C>        <C>        <C>
Balance, March 31, 1997                                     1,022            $ 1         1,022      $ 1        $ 70,170

Net loss                                                        -              -             -        -               -
Unrealized gain on marketable securities                        -              -             -        -               -
Issuance of Class A convertible Preferred stock                67              -             -        -             300
Conversion of Class A convertible Preferred
stock to common                                              (276)             -           276        -               -
Issuance of common stock                                        -              -           259        1           1,270
Purchase of treasury stock                                      -              -             -        -               -
                                                 -----------------------------------------------------------------------
Balance, March 31, 1998                                       813            $ 1         1,557      $ 2        $ 71,740

Net loss                                                        -              -             -        -               -
Conversion of Class A convertible Preferred                  (813)            (1)          813        1               -
stock to common stock
Unrealized gain on marketable securities                        -              -             -        -               -
Issuance of common stock and options                            -              -         5,534        5           1,716
Purchase of treasury stock                                      -              -             -        -               -
Contribution of services by management                          -              -             -        -              31
Contribution of administrative services                         -              -             -        -             250
Contribution of rent by management                                                                                   15
                                                 -----------------------------------------------------------------------
Balance, March 31, 1999                                         -            $ -         7,904       $8        $ 73,752

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

                                                 =======================================================================
Balance, March 31, 2000                                         -            $ -         9,812     $ 10        $ 75,938
                                                 =======================================================================
<CAPTION>
                                                                       Treasury Stock

                                                                       ----------------
                                                                                              Accumulated
                                                    Accumulated                                  Other
                                                      Deficit       Shares          $        Comprehensive          Total
                                                                                                 Income
                                                 -------------------------------------------------------------------------------
<S>                                                     <C>               <C>       <C>                <C>               <C>
Balance, March 31, 1997                                 $ (67,681)           1      $(300)             $(30)             $ 2,161

Net loss                                                   (3,077)           -           -                 -             (3,077)
Unrealized gain on marketable securities                         -           -           -                27                  27
Issuance of Class A convertible Preferred stock                  -           -           -                 -                 300
Conversion of Class A convertible Preferred
stock to common                                                  -           -           -                 -                   -
Issuance of common stock                                         -           -           -                 -               1,271
Purchase of treasury stock                                       -           3         (4)                 -                 (4)
                                                 -------------------------------------------------------------------------------
Balance, March 31, 1998                                 $ (70,758)           4      $(304)             $ (3)               $ 678

Net loss                                                   (1,804)           -           -                 -             (1,804)
Conversion of Class A convertible Preferred                      -           -           -                 -                   -
stock to common stock
Unrealized gain on marketable securities                         -           -           -                 3                   3
Issuance of common stock and options                             -           -           -                 -               1,721
Purchase of treasury stock                                       -          58         (7)                 -                 (7)
Contribution of services by management                           -           -           -                 -                  31
Contribution of administrative services                          -           -           -                 -                 250
Contribution of rent by management                                                                                            15
                                                 -------------------------------------------------------------------------------
Balance, March 31, 1999                                 $ (72,562)          62      $(311)               $ -               $ 887

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

                                                 ===============================================================================
Balance, March 31, 2000                                 $ (74,270)          62      $(311)               $ 4             $ 1,371
                                                 ===============================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


<PAGE>

SITI-Sites.com, Inc. and Subsidiary
Consolidated Statements of Cash Flows

(Amounts in thousands)
<TABLE>
<CAPTION>
Year ended March 31,                                                                   2000          1999          1998
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>           <C>           <C>
Cash flow from operating activities:
Net loss                                                                            $(1,708)      $(1,804)      $(3,077)
Adjustments to reconcile net loss to net cash used by continuing
activities:
Loss on Volatile Media, Inc. (EZCD.com)                                                 500             -             -
Compensation to employees and consultants  via stock and options                         75           250             -
Contribution of services by management                                                  113            31             -
Contribution of rent by management                                                       25            15
Depreciation/amortization                                                                77             -
(Increase) in receivables and other assets                                              (60)            -             -
  Increase(decrease)  in:
  Accounts payable                                                                      113             4             -
  Accrued liabilities                                                                    (4)           71             -
 Net liabilities of discontinued operation                                              (68)            -             -
 (Income)loss on discontinued operations                                                (65)        1,320         3,077
 Loss on investment in Minutemeals.com                                                    -            82             -
                                                                           -------------------  ------------  ---------
Net cash used by continuing operations                                               (1,002)          (31)            -

Net cash provided (used) by discontinued operations                                      65        (1,925)        (3,012)
------------------------------------------------------------------------------------------------------------------------
Net cash used by operating activities                                                  (937)       (1,956)        (3,012)
------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sale of marketable securities                                               -           449         1,759
Proceeds from sale of property and equipment                                              -             3             3
Purchase of marketable securities                                                      (486)            -             -
Investment in Volatile Media, Inc. (EZCD.com)                                          (500)            -             -
Recovery of investment in Minutemeals.com                                                23             -             -
Purchase of property and equipment                                                     (119)          (74)         (199)
Investment in Minutemeals.com                                                             -          (105)            -
Issuance of employee loans                                                                -             -           (79)
------------------------------------------------------------------------------------------------------------------------
Net cash (used) provided by investing activities                                    (1,082)           273         1,484
------------------------------------------------------------------------------------------------------------------------
Cash flow from financing activities:
Proceeds from the issuance of common stock                                            1,750           800             -
Proceeds from the exercise of stock options and warrants                                 12           297             -
Purchase of treasury stock                                                                -            (7)           (4)
------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                                      1,762         1,090            (4)
------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                                              (257)         (593)       (1,532)
Cash and cash equivalents, beginning of year                                          1,007         1,600         3,132
------------------------------------------------------------------------------------------------------------------------
Total cash and cash equivalents, end of year (including cash amounts in net
assets of discontinued operations)                                                     $750        $1,007        $1,600
                                                                                       ====        ======        ======
</TABLE>
See accompanying notes to consolidated financial statements.


<PAGE>


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (a) BUSINESS

      SITI-Sites.com, Inc., a Delaware corporation, and its wholly-owned
subsidiary, Tropia, Inc., a Delaware corporation, ("Tropia"), (referred to
collectively as "SITI" or the "Company") operate as an Internet media company
seeking to establish websites for the marketing of products and services. The
Company's four current websites and an affiliated website relate entirely to the
music industry. The Company intends 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 promotes and markets the music
of selected independent artists on its website www.Tropia.com. The Company next
acquired three music-related websites, www.HungryBands.com (an e-commerce
website and business promoting and selling music by independent artists),
www.NewMediaMusic.com (an e-news/magazine business), and www.NewYorkExpo.com (a
music and Internet conference business), all in January, 2000. In addition, the
Company made a $500,000 investment in a custom music CD compilation and
promotion company, Volatile Media, Inc., which does business as EZCD.com. Such
investment has been written off as of March 31, 2000. (See Note 12 - Other
Agreements).

      The authorized shares have been increased to 35,000,000 common shares and
5,000,000 preferred shares as described in the Proxy Statement as of 12/14/99.

      SITI-Sites.com, Inc. was incorporated in Delaware in 1984 under former
management and control persons. 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 new 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.

(b) DISCONTINUED OPERATIONS - FISCAL 2000, 1999 AND 1998

      As a result of the December 11, 1998 Change of Control Transaction
described in Note 1(a), the Company discontinued its operations resulting in a
loss of $1,320,000 from the discontinued operations for the fiscal year ended
March 31, 1999. In accordance with Accounting Principles Board, ("APB")
Statement #30, "Reporting the Effects of the Disposal of a Segment of a
Business," the prior years' financial statements have been restated to reflect
such discontinuation. All assets and liabilities of the discontinued segment
have been reflected as net liabilities of discontinued operations. The following
table reflects the net liabilities:


For the periods ended, March 31,            2000                   1999
                                          -------------------------------
                                               (Amounts in thousands)
Refunds receivable                            -                       12
Prepaid expenses and other                    -                        8
Accounts payable                              -                       (3)
Accrued expenses                              -                      (85)
                                          -------------------------------
                Total                         -                      (68)
                                          ===============================


<PAGE>

         Operating results from discontinued operations are as follows:

<TABLE>
<CAPTION>
For the periods ended, March 31,                                2000           1999        1998
                                                            ---------------------------------------
                                                                   (Amounts in thousands)
<S>                                                          <C>            <C>          <C>
Revenues                                                     $    -         $ 2,324      $ 1,833
                                                            ---------------------------------------

Operating costs and expenses:
   Cost of Sales                                                  -              -            52
   Selling, general and administrative expenses                   8          4,115         5,015
                                                            ---------------------------------------
                 Total operating costs and expenses               8          4,115         5,067
                                                            ---------------------------------------
Operating Loss                                                   (8)        (1,791)       (3,234)
Other income and (expenses)                                      73            471           157
                                                            ---------------------------------------
Income (loss) from discontinued operations                     $ 65       $ (1,320)     $ (3,077)
                                                            =======================================
</TABLE>

      (c) MANAGEMENT'S PLAN

      The Company's management believes that sufficient cash resources exist
both internally and from additional capital infusions from external sources that
the anticipated cash needs for working capital and capital expenditures will be
sufficiently met over the next fiscal year. (See Note 15 for additional capital
infusions subsequent to year-end.)

      (d) USE OF ESTIMATES

      In preparing financial statements in conformity with generally accepted
accounting principles, 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.

      (e) PRINCIPLES OF CONSOLIDATION

      The accompanying consolidated financial statements include the accounts
and results of operations of the Company's Tropia subsidiary (which was merged
with and into the parent on June 20, 2000) and the Company's HungryBands.com,
NewMediaMusic.com and NewYorkExpo.com divisions. All significant intercompany
accounts and transactions have been eliminated in consolidation.

      (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.


<PAGE>

      (h) REVENUE RECOGNITION

      Sales of product from discontinued operations for fiscal 1999 and 1998
were recognized upon shipment to the customer. Deferred revenue on licensing
agreements was recognized when earned based on each individual agreement. During
the fiscal year ending March 31, 1999 several licensing agreements were
renegotiated to provide for lump sum final payments versus ongoing royalties. As
these renegotiated agreements did not require the Company to provide future
products or services, revenue was recognized upon completion of the terms of the
agreements. These revenues are shown in Note 1(b).

      Revenues from continuing operations in fiscal 2000 through ticket sales by
the NewYorkExpo division are recognized when earned and any monies received
therefrom is deferred until the date of the trade show.

      (i) LOSS PER COMMON SHARE

      Loss per share for the fiscal years ended March 31, 2000, March 31, 1999
and March 31, 1998 was 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
2000, 1999 and 1998 are approximately 8,622,000, 3,200,000 and 1,325,000,
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. Because of the substantial sales of common stock and
options in December 1998, the weighted average number of 3,200,000 shares of
common stock is not fully reflective of the 7,904,345 shares outstanding as of
March 31, 1999.

      (j) PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

      Property and equipment are recorded at cost. Depreciation is recorded
using the straight-line method over the estimated useful lives of the assets of
3 to 7 years. (See Note 13)

      Goodwill is recorded based upon the excess of the purchase price over the
fair market value of assets purchased and is amortized over a three year period
(See Note 10).

      (k) COMPREHENSIVE INCOME

      Comprehensive income is comprised of net income 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 income is comprised of unrealized holding gains on
marketable securities.

2. INVESTMENT IN MARKETABLE SECURITIES

      As of March 31, 2000, the Company's equity reflects income of
approximately $4,000 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. There were no realized gains
for the fiscal years ended March 31, 2000 and March 31, 1999.


<PAGE>
      Marketable securities as of March 31, 2000 were comprised of investments
in government securities which consisted primarily of U.S. Treasury Notes. The
aggregate cost, fair value and unrealized holding gains for U.S. Treasury Notes
held at March 31, 2000 are as follows:
<TABLE>
<CAPTION>
                                                                     Aggregate                Gross Unrealized
                                                 Cost Basis          Fair Value                 Holding Gain
--------------------------------------------------------------------------------------------------------------------
March 31, 2000:                                                   (Amounts in thousands)
<S>                                                     <C>               <C>                         <C>
Government securities, maturing
Between 1 and 3 years                                  $486               $490                        $4
                                              ======================================================================
</TABLE>
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. During the fiscal year ended March 31, 1998
approximately 276,000 shares 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) 1991 AND 1992 STOCK OPTION PLANS

            The Company had two Stock Option Plans (the "1991 and 1992 Plans")
covering the issuance of incentive and non-qualified stock options to key
employees, consultants and non-employee directors of the Company and its
subsidiaries, but such Plans are no longer in operation. The aggregate number of
shares of common stock granted under the 1991 and 1992 Plans was 294,560 shares.
All of the options available under these plans had been awarded prior to the
Company's reorganization and were treated in accordance with the 75:1 reverse
split set forth in the Plan. No options are presently outstanding with the 1991
and 1992 Plans.

Additional information follows:
<TABLE>
<CAPTION>
                                                                          Shares Subject to     Weighted Average
                                                                               Options           Exercise Price
                                                                        ---------------------------------------------
<S>                                                                                <C>               <C>
Outstanding at March 31, 1997 at $75.00 - $337.50 per share                        53,897            $173.37
           Extinguished at $84.38 - $225.00 per share                              (7,999)           $178.13
                                                                        ---------------------------------------------
Outstanding at March 31, 1998 at $84.38 - $337.50 per share                        45,898            $172.54
           Extinguished at $84.38 - $225.00 per share                                   -                 $-
                                                                        ---------------------------------------------
Outstanding at March 31, 1999 at $84.38 - $337.50 per share                        45,898            $172.54
                 Extinguished at $84.38 - $337.50 per share                       (45,898)           $172.54
                                                                        ---------------------------------------------
Outstanding at March 31, 2000 at $84.38 - $337.50 per share                             -                 $-
                                                                        =============================================
</TABLE>
      (ii) 1996 INCENTIVE DEFERRAL PLAN

            As part of a Bankruptcy Court approved success fee to employees,
officers and all non-executive directors for confirming a plan of
reorganization, the Company also issued Reorganized SITI Common Stock pursuant
to the two incentive compensation programs described in the Company's Plan of
Reorganization. The 1996 Incentive Deferral Plan (no longer in operation)
authorized the issuance of 207,925 shares of Reorganized SITI Common Stock to
officers and employees who were in the employ of the Company on March 31, 1997
(the "Effective Date"). During the first quarter of fiscal 1998, the Company
specifically awarded 194,790 of these 207,925 shares to be distributed in three
equal installments


<PAGE>

of 64,930 during August 1997, February 1998 and August 1998. These distributions
were utilized to decrease the Reserve for Chapter 11 and other stock claims. The
remaining 13,135 shares have not been allocated for distribution. This Incentive
Deferral Plan provides that Participants may elect to satisfy certain income tax
withholding requirements by remitting to the Company cash or, subject to certain
conditions, shares of Reorganized SITI Common Stock or by instructing the
Company to withhold shares payable to the Participant. In addition, the
Incentive Deferral Plan provides that the Compensation Committee may, in its
absolute discretion, make loans to Participants to assist them in meeting income
tax liabilities arising in connection with awards under the Plan. During fiscal
1998, the Company purchased 3,131 shares of treasury stock for approximately
$4,000 and issued approximately $79,000 of officers and employee loans with
variable interest rates in order to pay the withholding taxes attributable to
these awards. These loans were collateralized by the stock issued in conjunction
with the loan and were payable on demand within 30 days. 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.

            (iii) 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:
<TABLE>
<CAPTION>

                                                                                 Shares Subject to  Weighted Average
                                                                                 Options             Exercise Price
                                                                                 ------------------------------------
<S>                                                                                       <C>           <C>
Outstanding at March 31, 1998 at $1.50-$2.15 per share                                    206,315       $2.09
Granted at $0.75 to $1.3125                                                                15,750       $0.88
Exercised at $0.75 to $2.15 per share                                                     (45,364)      $1.79
Extinguished at $0.75 to $2.15 per share                                                 (101,124)      $1.97
                                                                                 ------------------------------------
Outstanding at March 31, 1999 at $1.69-$2.15 per share                                     75,577       $2.14
Granted, exercised and extinguished                                                             -       $   -
                                                                                 ------------------------------------
Outstanding at March 31, 2000 at $1.69-$2.15 per share                                     75,577       $2.14
                                                                                 ====================================
</TABLE>

The following table summarizes information about stock options outstanding and
exercisable at March 31, 2000:
<TABLE>
<CAPTION>
                                 Outstanding and
                                 Exercisable at March    Weighted Average Remaining           Weighted Average
Range of Exercise Prices         31, 2000                Contractual Life (Years)             Exercise Price
-------------------------------- ----------------------- ------------------------------------ -------------------------
<S>                                <C>                       <C>                              <C>
$1.69 to $2.15                     75,577                    4.37                             $2.14
</TABLE>


<PAGE>

            (iv) 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 2000. During fiscal 1999 and 1998, respectively,
47,500 and 10,000 options were granted.
<TABLE>
<CAPTION>
                                                                                    Shares Subject to  Weighted Average
                                                                                         Options         Exercise Price
                                                                                  -------------------------------------
<S>                                                                                          <C>                 <C>
Outstanding at March 31, 1998 at $2.15 per share                                             10,000              $2.15
Granted at $0.875 per share                                                                  47,500              $0.88
Exercised at $0.875 to $2.15                                                                (10,000)             $0.88
Extinguished at $0.875 per share                                                             (7,500)             $0.88
                                                                                 -------------------------------------
Outstanding at March 31, 1999 at $0.875 -$2.15 per share                                     40,000              $1.19
Granted, exercised and extinguished                                                               -               $  -
                                                                                 -------------------------------------
Outstanding at March 31, 2000 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, 2000:

<TABLE>
<CAPTION>
Range of Exercise Prices         Outstanding and         Weighted Average Remaining           Weighted Average
                                 Exercisable at          Contractual Life (Years)             Exercise Price
                                 March 31, 2000
--------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                    <C>                      <C>
    $0.875 to $2.15                  40,000                                 8.15                     $1.19
</TABLE>

            (v) 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, but
no options or shares have been issued from such plans through March 31, 2000.

            (vi) 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 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.


<PAGE>

Additional information as follows:
<TABLE>
<CAPTION>
                                                                                 Weighted Average   Shares Subject
                                                                                  Exercise Price       to Options
                                                                                 -----------------------------------
<S>                                                                                    <C>             <C>
Outstanding at March 31, 1998                                                          $0.00              0
                                                                                 -----------------------------------
Granted at $0.35 per share                                                             $0.35           300,000
                                                                                 -----------------------------------
Outstanding at March 31, 1999 at $0.35 per share                                       $0.35          300,000
Granted, exercised and extinguished                                                    $0.00              0
                                                                                 -----------------------------------
Outstanding at March 31, 2000 at $0.35 per share                                       $0.35          300,000
                                                                                 ===================================
</TABLE>

The following table summarizes information about severance
stock options outstanding and exercisable at March 31, 2000:

<TABLE>
<CAPTION>
Range of Exercise Prices         Outstanding and         Weighted Average Remaining           Weighted Average
                                 Exercisable at          Contractual Life (Years)             Exercise Price
                                 March 31, 2000
-------------------------------- ----------------------- ------------------------------------ -------------------------
    <S>                             <C>                             <C>                            <C>
    $0.35 per share                 300,000                         3.71                           $0.35
</TABLE>

            (vii) PRO FORMA EFFECT OF 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 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 year ended March 31, 2000. There were
315,750 stock options granted during the fiscal year ended March 31, 1999 and
209,815 stock options granted during the fiscal year ended March 31, 1998 of
which 3,500 were canceled.

            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 1999 and 1998, respectively: no
dividends paid; expected volatility of 46.1% and 46.5%, respectively;
weighted-average risk free interest rate of 5.46% and 5.67%, respectively; and
expected lives of 1-10 years.


<PAGE>

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


                                     2000              1999              1998
                                         (In thousands, except per share data)
                                 ----------------------------------------------
Net Income:
   As reported                     $(1,708)          $(1,804)          $(3,077)
   Pro forma                       $(1,708)          $(1,835)          $(3,116)

Basic and diluted earnings per share:
   As reported                     $(0.20)           $(0.56)           $(2.33)
   Pro forma                       $(0.20)           $(0.57)           $(2.36)


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 maturity.

5. COMMITMENTS AND CONTINGENCIES

      The Company's headquarters occupy 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 holds a lease for such offices expiring on August 31, 2002.
The Company moved its principal executive offices to this location in September,
1999. The Company's payment obligations under this lease were guaranteed by
Chairman/CEO, Lawrence M. Powers. In addition, the terms of the lease include an
initial month of free rent, and an escalation of rental payments over the
three-year period. This charge will be amortized over the life of the lease. The
Company believes that its properties and facilities are suitable and adequate
for its purposes for the foreseeable future.

      Total rent expense for 2000, 1999, and 1998 was approximately $94,000,
$161,000 and $167,000, respectively. For fiscal years ended March 31, 1999 and
1998, such rent is included in the loss from discontinued operations. The rent
which would have been paid under more normal circumstances, after vacating the
Purchase New York facility on December 31, 1998, has been estimated to be
$25,000 and $15,000 for the period April 1999 through August 1999 and January 1,
1999 through March 31, 1999, respectively, although no such rents were in fact
paid. These amounts have, however, been included in Administrative Expenses and
as an addition to Paid in Capital.


<PAGE>

      Future minimum annual rental commitments for all noncancellable operating
leases are as follows:

Years Ended March 31,
----------------------------------------------------------
                                    (Amounts in thousands)
2001                                                 $ 73
2002                                                   73
2003                                                   31
----------------------------------------------------------

Total                                               $ 177
                                 =========================

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>
March 31,                                                           2000          1999
--------------------------------------------------------------------------------------------
                                                                    (Amounts in thousands)
<S>                                                               <C>                  <C>
Tax benefit of net operating loss carryforwards including
current year loss                                                 $ 659                $179
Tax benefit of write-off of investment                              200                   -
Valuation allowance                                                (859)               (179)
------------------------------------------------------------------------------  ------------
                                                                  $   -                 $ -
                                                               ===============  ============
</TABLE>

      The Company's expectation of continued operating losses for the
foreseeable future makes realization of the benefit of any of the deferred tax
assets an unknown factor at this time. Therefore, at March 31, 2000, the Company
recorded a deferred tax asset with a valuation allowance of equal value. The
change in the valuation allowance for the three years in the period ended March
31, 2000 was $680,000, $22,194,000 and $4,951,000.

      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 and fiscal
2021 - $1,295,000.


<PAGE>

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

                                                             Year Ended
                                                           March 31, 2000
                                                          ----------------
                                                             (Amounts in
                                                              thousands)

Net loss                                                  $    (1,708)
                                                          ================

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

Total Tax Provision                                       $         -
                                                          ================

7. LITIGATION

      As of the date of this report the Company knows of no pending or
threatened legal actions that would have a material impact on the operations or
financial condition of the Company. A recent dispute with the developers and
former owners of Tropia was settled in May, 2000, requiring one of them to
return 50,000 shares of his common stock to the Company. Releases were exchanged
with the Company as part of the settlement.

      The continuing defualt by EZCD.com under its content and technology
sharing agreement with the Company could result in litigation, with attendant
costs and efforts by the Company's management to resolve such matter. (See Note
D.)

      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 the Company knows of no pending or threatened legal actions that could
have a material impact on the operations or financial condition of the Company.
(See "Note 15 - Subsequent Events" regarding a settlement agreement by and
between the former owners of Tropia and the Company.)

8.    STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                          Years ended March 31,
                                                                                -------------------------------------
                                                                                       2000         1999        1998
                                                                                -------------------------------------
                                                                                         (Amounts in thousands)
<S>                                                                                   <C>         <C>        <C>
Supplemental disclosures of cash flow information:
    Cash paid during the year for income taxes                                        $   3       $   10    $     14

Non-cash transactions:
    Class A Preferred Stock issuance                                                  $   -       $    -    $  6,434
    Conversion of Class A Preferred Stock to Common     Stock                         $   -       $    1    $    276
    Issuance of stock pursuant to the plan or reorganization                          $   -       $  591    $      -
    Compensation to consultants and employees via stock and options                   $   75      $  283    $      -
    Contribution by management (rent and compensation)                                $  138      $   46    $      -
    Tropia acquisition                                                                $  153      $    -    $      -
    HungryBands.com, NewMediaMusic.com and NewYorkExpo.com acquisitions               $   58      $    -    $      -
</TABLE>


<PAGE>

9.   SEGMENT INFORMATION

           The Company has divided its operations into 4 reportable segments:
Tropia, HungryBands, NewMediaMusic and NewYorkExpo.

           The reporting segments follow the same accounting policies used for
the Company's consolidated financial statements as described in the summary of
significant accounting policies. Management evaluates a segment's performance
based upon profit or loss from operations before income taxes. Intersegment
sales or transfers are recorded based on prevailing market prices. The Company
determines its reporting segment based upon its varying product lines.

           Following is a tabulation of business segment information for the
current fiscal year. No prior year data is available as SITI acquired these
segments during the current fiscal year.
<TABLE>
<CAPTION>
                                          Hungry        NewMedia       NewYork                    Inter-
                            Tropia        Bands          Music          Expo        Corporate     segment       Total
                            ------        -----          -----          ----        ---------     -------       -----
  Year ended March
      31, 2000                                            (Amounts in thousands)
---------------------
<S>                          <C>            <C>             <C>          <C>           <C>            <C>      <C>
Sales                                                                     93                                       93
Operating loss               (442)          (21)            (21)         (42)          (790)                   (1,316)

Interest Income                                                                          43                        43

Other Expense                                                                          (500)                     (500)
Income from
discontinued
operations                                                                               65                        65
Net loss                     (442)          (21)            (21)         (42)        (1,182)            0      (1,708)
Assets                                                                                1,578                     1,578
Depreciation and
amortization                    3             0               0            0             74                        77
</TABLE>

NOTE 10. GOODWILL

      On June 23, 1999, the Company acquired Tropia, which operates an MP3 music
site that promotes and distributes the music of independent artists through its
website located at www.Tropia.com. Pursuant to the acquisition agreement, the
Company initially provided $100,000 of capital to Tropia and agreed to provide
approximately $800,000 of additional capital during the 12 months following the
acquisition. Through February 2000, the Company contributed approximately
$400,000 to Tropia operations. The acquisition was effected by merging Siti-II,
Inc., a Delaware corporation and a wholly-owned subsidiary of SITI, with and
into Tropia.

      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 were 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


<PAGE>

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 15)

      In accordance with Accounting Principles Board ("APB") No. 16, the
aggregate purchase price of $306,786 was allocated to the assets and liabilities
of Tropia, based upon their fair market values as follows:

        Computer software                            $    748
        Accrued expenses                               (6,075)
                                                    -----------
        Net liabilities acquired                       (5,327)
        Goodwill                                      312,113
                                                    -----------
             Aggregate Purchase Price                $306,786
                                                    ===========

      In October, 1999, the Company had authorized the issuance of an aggregate
of 140,845 additional shares of the Company's common stock to Ari Blank, Arjun
Nayyar and Red Hat Productions, Inc. (with Jonathan Blank to receive all shares
allocated to Red Hat Productions, Inc.), as well as the issuance of 24,155
additional shares of the Company's common stock to Jonathan Blank. But early in
November 1999, Arjun Nayyar and Ari Blank, the developers of the website,
announced, that they were resigning to pursue other interests, and Jonathan
Blank also left the Company at such time, requiring a cutback in Tropia's
expansion and capital consumption. As a result, as of December 1, 1999, the
Company reduced its purchase price and goodwill by approximately $153,000,
representing the dollar value of the acquisition shares held in escrow which
would have been delivered if they had continued their services for one year
after closing. In connection with their resignation, the three individuals were
informed that, since they determined not to be present to continue with Tropia's
development and operations, none of the foregoing acquisition, or subsequent,
shares would be delivered to them. Their rights to such shares were in dispute
in connection with various claims and their activities since their resignations,
but all claims have been settled and they have returned an additional 50,000
shares as described above (See Note 15). The remaining shares held by these
three individuals from the acquisition, total approximately 108,000 shares.

      On January 3, 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,
payable in three installments through June, 2000 to its founder and owner Ted
Mazola, as certain operating goals are achieved. HungryBands.com had
approximately 1,600 bands signed-up or linked into its website, and added 1,000
new bands. As of March 31, 2000, 50,000 shares have been issued to Mr. Mazola.
The remaining 100,000 shares are expected to be distributed to Mr. Mazola in
fiscal 2001. At such time, the Company will adjust goodwill for such
distribution. A value of $26,563 (50,000 shares) was initially allocated towards
the purchase price.


<PAGE>

      In accordance with Accounting Principles Board ("APB") No. 16, the
aggregate purchase price of $26,563 was allocated to the assets and liabilities
of HungryBands.com, based upon their fair market values as follows:

            Other assets                                  $   700
            Software                                          240
                                                        ----------
            Net assets acquired                               940
            Goodwill                                       25,623
                                                        ----------
                 Aggregate Purchase Price                 $26,563
                                                        ==========

      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 an upcoming March, 2000 Expo (in
which he retained a 75% interest). Messrs. Mazola and Zuckerman recently joined
SITI as Vice-President/Technology and Vice-President/NewMedia Development,
respectively.

      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 fair market values
as follows:

           Cash                                         $  30,416
           Receivables                                     15,175
           Other assets                                    15,750
           Deferred Income                                (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.


<PAGE>

NOTE 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 will be amortized over the
life of the contract.

      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.

      Throughout the current fiscal year, 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 twelve months ended March 31, 2000.

NOTE 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
not, thus far, been able to raise additional financing required under its
business plan, and the Company decided to write-off the entire investment
because of uncertainties as to 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
these affiliates' banner advertising. As of March 31, 2000, revenues from such
advertising have been nominal.

NOTE 13. FIXED ASSETS

      As of March 31, 2000, property, plant and equipment consisted of the
following:

                                           (Amounts in thousands)

           Computer Equipment and Furniture         $  115
           Computer Software                             4
           Accumulated Depreciation                    (10)
                                                    -------
           Property, plant and Equipment, net       $  109
                                                    =======


<PAGE>

NOTE 14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      As of March 31, 2000 and 1999, accounts payable and accrued liabilities
were comprised of the following:

                                              2000         1999
                                            ---------------------
                                            (Amounts in thousands)
        Accrued audit and tax fees           $   54       $  18
        Deferred Rent                             7           0
        Accrued expenses                         76           6
                                             ------       -----
                                             $  137       $  24
                                             ======       =====

NOTE 15. SUBSEQUENT EVENTS (UNAUDITED)

      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 are not expected to exceed $25,000
payable in installments based upon certain prescribed performance objectives.
The first installment ($8,333) was paid upon execution.

      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.

      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 plan immediately to divide 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.

      As a result of recent financings and incentive issuances to key employees
and consultants, SITI's issued and outstanding shares have increased to
approximately 14,000,000 shares as of June 15, 2000.


<PAGE>

      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>

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.

      On June 20, 2000, Tropia was merged with and into SITI-Sites.com, Inc.