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, 2001

                                       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 22, 2001 was approximately $415,000
based on the last price at which the Common Stock was sold on June 22, 2001 of
$.08 as reported by the National Quotation Bureau. 15,517,178 shares of Common
Stock were outstanding as of June 22, 2001.

The following documents are incorporated herein by reference:

      (1)   Annual Report to security holders on Form 10-K for the year ended
            March 31, 2000 (the "Form 10-K for 1999");
      (2)   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");
      (3)   Quarterly Report to security holders on Form 10-Q for the quarter
            ended December 31, 1999 (the "Form 10-Q for 12/31/99");
      (4)   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, 2001

          PART I                                                          PAGE
          ------                                                          ----
ITEM 1.   BUSINESS                                                           1

ITEM 2.   PROPERTIES                                                        12

ITEM 3.   LEGAL PROCEEDINGS                                                 12

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF                                13
          SECURITY HOLDERS

          PART II
          -------

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK                              13
          AND RELATED STOCKHOLDER MATTERS

ITEM 6.    SELECTED FINANCIAL DATA                                          15

ITEM 7.   MANAGEMENT'S DISCUSSION AND
          ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS                                         15

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        21

ITEM 8.   FINANCIAL STATEMENTS AND
          SUPPLEMENTARY DATA                                                21

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH
          ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE                                              21

          PART III
          --------

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF
          THE REGISTRANT                                                    22

ITEM 11.   EXECUTIVE COMPENSATION                                           23

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN
          BENEFICIAL OWNERS AND MANAGEMENT                                  26

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED
          TRANSACTIONS                                                      27

          PART IV
          -------

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS
          SCHEDULES AND REPORTS ON FORM 8-K                                 28

<PAGE>

                                     PART I

ITEM 1. BUSINESS

Introduction

      SITI-Sites.com, Inc., a Delaware corporation, and its various divisions
(hereafter referred to collectively as "SITI" or the "Company") is an Internet
media company with three websites for the marketing of news and services. The
Company's current websites relate entirely to the music industry, and
promotional services for 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 developing its software, music sites and business,
and its revenues are negligible (See SITI's Business Plan). It has written off
all development and operating costs. In addition, during fiscal 2000 the Company
made a $500,000 investment in a music CD custom compilation and promotion
company, Volatile Media, Inc., which did business as EZCD.com, now in bankruptcy
liquidation. The investment was previously written off at 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 was not adequately performed by EZCD and may result in litigation.

      The April 21-22, 2001 Music & Internet Expo also lost approximately
$350,000 and there are no present plans to hold it again. The Company has
decided to discontinue the operations of the New York Expo business segment.
(See "Item 1. - Business - Risk Factors - EZCD Investment Loss" and Note 1(b) to
the Consolidated Financial Statements.)

      As of June 1, 2001, SITI employed a total of 15 employees and consultants,
as compared to 2 employees in January, 1999. Full-time employees were reduced by
5 in early May, 2001 to reduce overhead. As a result of financings and incentive
issuances to key employees and consultants, SITI's issued and outstanding shares
have increased to approximately 15,500,000 shares as of June 15, 2001.

Corporate History

      SITI-Sites.com, Inc. was incorporated in Delaware in 1984 under management
and control persons who left in 1995. As a result of a second change of control
of the Company in December, 1998, the Company's senior management and Board of
Directors were replaced. The present 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.)

      As a result of the change of control and subsequent equity investments
(and option exercises) through June 15, 2001, the directors and senior executive
officers of the Company (along with family and associates) have invested
approximately $4,000,000 in cash for equity in the Company. 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 future growth themselves,
at least in the short term.


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<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, and to music and consumer products businesses, 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 and
major portions of the necessary software have been completed and are in use.
Portions of the artists' promotion services software, and the news content
sharing software are still being revised.

      The Company considers its 3,000 musical artists and their fans, a
beginning group of prospects for sale of SITI's artist promotion services.
Thousands of additional artists are available through database sources known to
the Company. 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 be fees for
targeted music news syndications for consumer product and music companies.
Revenue sources for artist promotion services are expected to include monthly
service fees for 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.

      The implementation of the Company's business plan is occurring, in part,
through its www.NewMediaMusic.com newsletter, a free e-magazine in operation
this past year and a half. It contains current new media music news (i.e.
digital music coverage, analysis and interviews on key industry problems) and is
seen by thousands of industry professionals, artists and fans regularly. E-mails
from readers and other comments on this newsletter indicate that it is a
respected source of news and analysis. Artists are being offered free
subscriptions to this newsletter, and to a new weekly artist edition thereof, 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 syndication to product marketers, service charges and advertising
revenues. This e-magazine in business, artist, fan and special market editions
will provide increasingly focused information, and linkages for the Company's
database of artists, fans and affiliated websites in the music field.

      SITI has added a new streaming radio player to the existing embedded radio
on its Tropia website, which will play its emerging artists' music along with
other content, in multiple streams by genre preference. These Internet streaming
radio channels are expected to become bases for sale of promotional services for
emerging artists, and product advertising across multiple listener preference
communities.

      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. The Company
is attracting a growing supply of music news and information from many sources
to enhance its database.

      Further implementation of SITI's strategy occurred through its ownership
of www.NewYorkExpo.com and its related Internet music exposition held for the
past two years in New York City. In May 2001, the Company decided to discontinue
the New York Expo due to insufficient sponsorship and attendance. Internet music
sites took booths at these expos, joined in the panels of experts, interacted
with each other and with SITI's marketing development team, and


                                       2
<PAGE>

provided current information to emerging artists and fans. The 2001 Expo was
held in April 2001 at Madison Square Garden, but resulted in losses because of
insufficient sponsorship and attendance. These Expos, however, placed the
Company at the fulcrum of providers of music services, equipment and new
technology, along with emerging digital music industry problems. Its founder,
Steven Zuckerman, has become a consultant to the Company and is no longer a
full-time employee.

      No assurances can be given that the Company will successfully complete the
above-described database developments, 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 (50 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.
He and his family have invested $2,700,000 in SITI equity.

      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 Axciom 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, Investor and Executive Vice-President of the Company, 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 is active in
management supervision of the New Media Music newsletter expansion, intended to
also generate artists and fans for the Company's services business, 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.


                                       3
<PAGE>

      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. Mr. Marshall began working as a full-time consultant with the
Company in May, 2001. He has been managing the software development, integration
of all the Company's websites into a single format, adding the features
necessary for its artists and fan services operations, new radio 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 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.

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.

      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


                                       4
<PAGE>

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. Now a series of hottest sounding compression formats are coming into
use, and will replace the MP3 format in the next few years.

      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 new radio player for all of its sites 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 (being acquired by Vivendi Universal), 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. (now owned by Vivendi Universal)) 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 news and analysis and its artist and fan services on a
database model that can sort and present blocks of information automatically, as
expanded by its affiliations, will set the Company apart from other websites
which base their business model only upon selling music over the Internet.

Intellectual Property

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

      1.    if the music, text, graphics or other content on its websites or CDs
            violates their copyright, trademark or other intellectual property
            rights;
      2.    if the artists or independent record labels associated with the
            websites violate their contractual obligations to others by
            providing content on the websites; or
      3.    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 its 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.

      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.


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<PAGE>

      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 music news and database services to businesses,
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.,
Napster.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:

      1.    Other providers of online music content such as EMusic.com, Inc. and
            Launch Media, Inc.
      2.    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.
      3.    Online destination sites, including online prerecorded music
            retailers like Amazon.com, Inc. and CDNow Inc.
      4.    Online "portals" like America Online, Inc., Excite, Inc.,
            InfoseekCorporation, Lycos, Inc. and Yahoo!, Inc.
      5.    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 Vivendi Universal., all of
            whom have entered the online commercial community with large
            resources and content.

      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.


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<PAGE>

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 1, 2001 the Company had 15 employees and consultants in
operations and general administration. SITI executives, Messrs. Powers, Ingenito
and Iannitto, have been working without cash compensation and, will continue to
do so for at least the year ended March 31, 2002. Mr. Ingenito and Iannitto,
will receive stock and options for their services over the next fiscal year.
(See "Item 11. - Executive Compensation - Employment Agreements.") The Company
has recorded an administrative expense and a capital contribution of $262,500 to
account for the value of these services provided by executive management of the
Company during the year ended March 31, 2001. 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 1998 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.

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 present senior
management and Board changed the direction and nature of the Company's business,
and have had a difficult time in developing a workable revenue model in the
field of digital music.


                                       7
<PAGE>

Prior to that time, the Company had engaged in other businesses and developed a
negative image which needed 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 the syndication of
music news and analysis to other marketers. 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 from repackaging its news database for other
marketers and selling its artist promotion services, in order to achieve and
maintain profitability. The Company 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
been in bankruptcy liquidation since August 2000. The Company 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 general
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.")

      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. In addition, major corporations such as
Microsoft Corporation, Dolby, 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


                                       8
<PAGE>

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.

      News Gathering

      Several other companies provide digital music news and analysis such as
WebNoize, Insider, Reuters, The Wall Street Journal, the New York Times and many
magazines. Few of them are earning large revenues from marketing music news, and
subscription formats have not proven lucrative yet. The Company faces continuing
competition from all of these news sources.

      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.

      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.")


                                       9
<PAGE>

      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 nine months ended December 31, 2001. If
shareholders Powers and Ingenito remain satisfied with results of the software
and database content development now in process, they presently intend to invest
an additional $500,000 into equity of the Company in fiscal 2002. 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.")

      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. 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.


                                       10
<PAGE>

      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.

      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


                                       11
<PAGE>

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.

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 included
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 after their resignations during the third quarter of fiscal
2000. As a result of the agreement, all claims have been settled and they have
returned an additional 50,000 shares to the Company resulting in an increase in
treasury stock and a corresponding gain on litigation settlement of
approximately $19,000. In addition, the former officers have waived any and all
of their rights to the 158,333 escrowed shares related to the original
acquisition of Tropia.


                                       12
<PAGE>

      Defaults by EZCD.com and its officers as to its investment
representations, and its content and technology sharing agreement with the
Company could result in litigation or other legal complications, and attendant
costs and efforts by the Company's management to resolve such matters. EZCD.com
filed for bankruptcy liquidation in August, 2000 and the Company is making
claims in such proceeding.

      Other Proceedings

      From 1995-1997 the Company went through a bankruptcy reorganization, as
described in the Form 10-K for 1999, "Item 3. Legal Proceedings." In addition,
for a discussion of past securities related proceedings involving management of
the Company before the 1998 change of control, 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

      None.

                                     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 Common Stock for the fiscal years 2001 and 2000 are
set forth below. The National Quotation Bureau provided this information which
may not reflect actual transactions.


                                       13
<PAGE>

                             HIGH AND LOW BID PRICES

                            2001                                       2000
                         Low     High                              Low      High

First Quarter (6/00)    $0.13   $0.69     First Quarter (6/99)    $0.94    $2.50

Second Quarter (9/00)    0.16    0.25     Second Quarter (9/99)    1.00     2.25

Third Quarter (12/00)    0.11    0.19     Third Quarter (12/99)    0.56     1.38

Fourth Quarter (3/01)    0.09    0.15     Fourth Quarter (3/00)    0.53     1.13

      On June 22, 2001, the last reported bid and ask prices of the Common Stock
were $.08 and $.14, respectively.

      As of June 22, 2001 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,
2001, 2000 and 1999 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."

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

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

      All of the shares of Common Stock issued by the Company during the 2000
and 2001 fiscal years as described above and in the referenced Form 10-K for
1999 and the Form 10-Q for 12/31/00, were issued in reliance upon the exemption
from registration provided under Section 4(2) of the Securities Act, on the
basis that such transactions did not involve any public offering. The
stockholders who received such shares of the Company had access to all relevant
information regarding the Company necessary to evaluate the investment; 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.


                                       14
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

      The following table presents selected financial information relating to
the financial condition and results of continuing and discontinued operations of
the Company and should be read in conjunction with the consolidated financial
statements and notes included elsewhere in this Annual Report on Form 10-K.

                     CONTINUING AND DISCONTINUED OPERATIONS

<TABLE>
<CAPTION>
                                                                              For the Years Ended March 31,
                                                      ------------------------------------------------------------------------------
                                                           2001            2000              1999             1998            1997
------------------------------------------------------------------------------------------------------------------------------------
                                                                    (Amounts in thousands, except per share amounts)
<S>                                                      <C>              <C>              <C>              <C>              <C>
Summary of Operations:
Total revenues of continuing operations                     2                1                0                0                0
Loss from continuing operations                          (1,646)          (1,731)            (484)              --               --
Loss from continuing operations per
common share                                             (0.117)          (0.201)           (0.15)              --               --
Net income (loss) from continuing and
discontinued operations                                  (2,002)          (1,708)          (1,804)          (3,077)          (6,180)
Net income (loss) per share from
continuing and discontinued operations                   (0.143)          (0.198)           (0.56)           (2.33)           (6.04)
Weighted average common
  Shares outstanding                                     14,024            8,622            3,200(a)         1,325            1,022

Summary of Financial Position:
Total assets                                              1,096            1,541            1,030            1,600            6,043
Long-term debt                                               --               --               --               --               --
Stockholders' equity                                        903            1,371              887              678            2,161

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.

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 with three websites for the
marketing of news and services. The Company's 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. As of March 31, 2001,
the Company discontinued the operations of the New York Expo as a result of
increased losses associated with the production of the Expo. In addition, during
fiscal 2000, the Company made and wrote-off a $500,000 investment in a music CD
custom compilation and promotion company, Volatile Media, Inc., which did
business as EZCD.com, now in bankruptcy liquidation. Such investment was written
off at March 31, 2000 because of uncertainties in EZCD's financing plans and
ability to continue operations. The Company also entered a technology sharing
agreement with EZCD.com pursuant to which they were to share music content and
technology, which was not 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 15 employees and consultants. As a result of recent
financings and


                                       15
<PAGE>

incentive issuances to key employees and consultants, SITI's issued and
outstanding shares have increased to approximately 15,500,000 shares as of June
15, 2001.

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

      As a result of the change of control, subsequent equity investments and
option exercises through June, 2001, the directors and senior executive officers
of the Company (along with family and associates) have invested or committed
approximately $4,000,000 in cash for equity in the Company.

      In view of the Company's 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 addition, during fiscal 2001, the Company discontinued its New York Expo
business segment. In accordance with Accounting Principles Board, ("APB")
Statement #30, "Reporting the Effects of the Disposal of a Segment of a
Business," the fiscal 1999 and 2000 financial statements have been restated to
reflect the discontinued operations. All assets and liabilities of the
discontinued segment have been reflected as net liabilities of discontinued
operations.

                                                    Years Ended March 31,
--------------------------------------------------------------------------------
Continuing Operations:                          2001         2000          1999
--------------------------------------------------------------------------------
                                                   (Amounts in thousands)
Revenues                                      $     2      $     1      $     0
                                              ----------------------------------

Operating costs and expenses:
Cost of sales                                       1           --           --
Impairment of goodwill                            134           --           --
Selling, general and administrative             1,594        1,275          414
                                              ----------------------------------
Total operating costs and expenses              1,729        1,275          414
                                              ----------------------------------

Operating loss                                $(1,727)     $(1,274)     $  (414)
                                              ==================================

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 the data for
fiscal 2001 and 2000 are for a complete 12-month period.


                                       16
<PAGE>

CONSOLIDATED REVENUES FROM CONTINUING OPERATIONS

      During the fiscal years ended March 31, 2001 and 2000, SITI's revenues
were nominal. During the fiscal year ended March 31, 1999, 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

      During the fiscal year ended March 31, 2001, operating costs and expenses
increased approximately $454,000 or 36% as compared to the prior fiscal year as
a result of increased selling, general and administrative expenses of
approximately $319,000 or 25%. As a result of the Change of Control Transaction
and the discontinuance of operations during the 1999 fiscal year, the Company
experienced greater operating costs and expenses (primarily selling, general and
administrative expenses) for the 2000 fiscal year as compared to the same period
in the 1999 fiscal year by approximately $861,000.

      The increase in selling, general and administrative expenses of
approximately $319,000 or 25% for the twelve months ended March 31, 2001 as
compared to the same periods in the prior fiscal year is primarily due to
increased personnel and related expenses of approximately $479,000 or 161%.
Insurance expense increased approximately $39,000 or 975% for fiscal 2001 as
compared to fiscal 2000. These increases in personnel and related expenses and
insurance expense are due to the hiring of staff and officers. As a result of
the Company's acquisitions during the prior fiscal year as well as the
outfitting of offices, the Company recorded increased depreciation and
amortization of approximately $37,000 or 47% for the fiscal 2001 year as
compared to the fiscal year ended March 31, 2000. For the twelve months ended
March 31, 2001, co-location fees and website expenses increased approximately
$14,000 or 82% and $30,000 or 300%, respectively, as compared to the same period
in the prior fiscal year as a result of the Company's increased activity
associated with its websites. Also, the Company wrote off certain licensing
agreements during the quarter ended June 30, 2000 that were entered into in the
prior fiscal year. These agreements were determined to no longer be of value,
and the Company recorded a charge of approximately $28,000, resulting in an
increase from the prior fiscal year of approximately $20,000 or 250%. These
increases were partially offset by a decline of $170,000 or 82% in other
expenses for the fiscal year ended March 31, 2001 as compared to the fiscal year
ended March 31, 2000. During the prior fiscal year, the Company held its Annual
Meeting of Stockholders which resulted in costs of approximately $200,000 and no
meeting was held during the current fiscal year. Legal fees for the year ended
March 31, 2001 decreased approximately $111,000 or 65% as compared to the same
period in the prior fiscal year as a result of a decline in corporate
organizational matters. Accounting expenses decreased approximately $19,000 or
17% for the fiscal year ended March 31, 2001 as compared to the fiscal year
ended March 31, 2000. The Company also wrote off goodwill of $134,000 which was
considered impaired based on continuing negative cash flows for the remaining
amortization period.

      For the fiscal year ended March 31, 2000, selling, general and
administrative expenses consisted of approximately $298,000 in personnel and
related expenses to hire officers and staff. 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 $207,000 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 $73,000 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. The remaining $95,000 in
operating costs and expenses relate to several costs associated in maintaining
the office, such as


                                       17
<PAGE>

telephone in the amount of approximately $17,000; office supplies in the amount
of approximately $14,000; server co-location fees of approximately $17,000; and
various expenses totaling approximately $47,000.

      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.")

OPERATING LOSS FROM CONTINUING OPERATIONS

      The Company's operating loss for the twelve months ended March 31, 2001
increased approximately $453,000 or 36% to $1,727,000 for the twelve months
ended March 31, 2001 as compared to a $1,274,000 operating loss during the prior
fiscal year. This increased loss is directly related to increased operating
costs and expenses for the current fiscal year.

      For the fiscal year ended March 31, 2000, SITI experienced an operating
loss from continuing operations of approximately $1,274,000 due to the Company's
efforts to grow in its industry. For the three months of continuing operations
in the fiscal year 1999, 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

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

      For the fiscal year ended March 31, 2000, SITI recognized approximately
$457,000 in other expenses primarily due to the $500,000 loss on the investment
in EZCD. (See "Item 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 year ended March 31,
1999. 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, 2001 the Company had working capital of $782,000 as
compared to $1,093,000 for the prior fiscal year. The $311,000 decline is
primarily due to a decrease in the Company's cash balances offset by a decrease
in payables and accrued expenses for the fiscal year ended March 31, 2001 as
compared to the prior fiscal year. The increased working capital for the prior
fiscal year was due to the infusions of cash after the December, 1998 Change of
Control transaction. A total of approximately $4,000,000 in cash has been
invested in the Company since 1998. The following information, to the extent
that it relates to prior discontinued operations, should not be relied on as an
indicator of future performance.


                                       18
<PAGE>

      Net cash used by operations increased $412,000 for the twelve months ended
March 31, 2001 as compared to the twelve months ended March 31, 2000 as a result
of the Company experiencing an increase in operating loss of approximately
$453,000. Also, net cash used by discontinued operations increased approximately
$297,000 for the fiscal year ended March 31, 2001 as compared to fiscal 2000.

      Net cash used by operations decreased from $1,956,000 in fiscal 1999 to
approximately $973,000 in fiscal 2000. During the 1999 fiscal year, SITI
discontinued its prior operations resulting in a $1,925,000 use of cash for
discontinued operations. However, during the 2000 fiscal year, cash was used
entirely to develop the Company's Internet business strategy (continuing
operations).

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

      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 and the $500,000 investment in EZCD. 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")

      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 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.
As a result of the June 2000 financings the company received approximately
$1,150,000 in proceeds for the fiscal year ended March 31, 2001.

      Capital expenditures amounted to approximately $47,000, $119,000 and
$74,000, respectively, for the twelve months ended March 31, 2001, March 31,
2000 and March 31, 1999. Capital expenditures in 2001 and 2000 were for computer
and office equipment, used in continuing operations. For the fiscal year ended
March 31, 1999, 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 nine months. If
shareholders Powers and Ingenito remain satisfied with results of the software
and database content development now in process, they presently intend to invest
a total of $500,000 in equity of the Company in fiscal 2002. 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


                                       19
<PAGE>

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 DISCONTINUED OPERATIONS

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

OPERATING RESULTS FROM DISCONTINUED OPERATIONS

      Operating Results from Discontinued Operations

<TABLE>
<CAPTION>
                                               Fiscal Year   Ended March 31,  Period Ended Dec. 31,
                                                   2001           2000              1998 (a)
                                               ----------------------------------------------------
<S>                                                <C>             <C>             <C>
Revenues                                             78             93              2,324
                                               ----------------------------------------------------
Operating costs and expenses

     Cost of sales                                  133             55                 --
     Selling, general & administrative              301             88              4,115
                                               ----------------------------------------------------
Total operating costs and expenses                  434            143              4,115
                                               ----------------------------------------------------

Operating income (loss)                            (356)           (50)            (1,791)

Other income and (expenses)                           0             73                471

                                               ----------------------------------------------------
Income(loss) from discontinued operations          (356)            23             (1,320)
                                               ====================================================
</TABLE>

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


                                       20
<PAGE>

REVENUES FROM DISCONTINUED OPERATIONS

      During the fiscal year ended March 31, 2001, SITI's revenues from the
discontinued operation were approximately $78,000 as compared to the same period
in the prior fiscal year where SITI recorded gross revenues of approximately
$93,000 from the March 2000 New York Expo sponsored by the Company. The $15,000
decline in revenues is due to decreased ticket sales and sponsorship associated
with the April 21-22, 2001 Expo as compared to the March 2000 Expo.

OPERATING COSTS AND EXPENSES FROM DISCONTINUED OPERATIONS

      During the fiscal year ended March 31, 2001, operating costs and expenses
from discontinued operations increased approximately $291,000 or 203% as
compared to the twelve months ended March 31, 2000. This increase is primarily
due to a $78,000 or 142% increase in cost of sales and an increase of
approximately $213,000 or 242% in selling, general and administrative expenses.

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

      The increase in selling, general and administrative expenses of
approximately $213,000 or 242% for fiscal 2001 as compared to fiscal 2000 is
primarily due to the $185,000 or 456% increase in personnel and related
expenses. This increase is due to the hiring of staff and executives to assist
in the production of the New York Expo. This increase was partially offset by a
decrease in commissions of approximately $27,000 or 118% for the year ended
March 31, 2001 as compared to the year ended March 31, 2000. Commissions
declined as a direct result of the losses incurred in connection with the April
21-22, 2001 Expo.

OPERATING LOSS FROM DISCONTINUED OPERATION

      For the fiscal year ended March 31, 2001, the Company's operating loss
associated with its discontinued operation increased approximately $379,000 or
1,648% as compared to the same period in the prior fiscal year primarily due to
the increased operating expenses and decreased revenues associated with the
April 21-22, 2001 Expo.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The company had no short-term investments as of March 31, 2001, 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, 2001 is considered to be immaterial.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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

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


                                       21
<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        69        Chairman, Chief Executive Officer

    Robert Ingenito           58        Vice Chairman of the Board, President

    John Iannitto             52        Executive Vice President

    Barclay V.  Powers        38        Director

    Toni Ann Tantillo         34        Chief Financial Officer, Vice President,
                                        Secretary and Treasurer

    Theodore Mazola           30        Vice President, Technical Director

Business Experience of Directors and Executive Officers

      Lawrence M. Powers, 69, 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 50 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,58, has served as a Director of the Company since the
change of control transaction in December, 1998. Mr. Ingenito was a founder and,
since 1989, served as Chief Executive Officer of Access Communications and
Access Direct, two established data service companies. Access Direct produces
high volume, highly segmented mail correlated to its clients segmented
databases; Access Communications produces critical documents from on-line
transmissions from its clients and was sold in 1999. Prior to that, he was the
President and a principal of Axciom Corporation (NYSE) when it went public in
1982. Axciom has become an $800 million database management firm, and purchased
Access Communications in 1999.

      John Iannitto, 52, 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. 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.


                                       22
<PAGE>

      Barclay V. Powers, 38, 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, 34, 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, 30, 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.

Compliance with Section 16 of the Exchange Act

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

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 2001 and 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, 2001. The table also includes two
individuals who were among the highest paid employees for the 2000 fiscal year
but were not executive officers at the end of such fiscal year (collectively,
the "Named Executive Officers"). The Company had one executive officers serving
as such at the end of its 2001 fiscal year whose aggregate compensation exceeded
$100,000.


                                       23
<PAGE>

                           Summary Compensation Table

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

                                                                         Other     Restricted    Shares
Name and                                                                 Annual      Stock      Underlying                 All other
Principal Position            Year       Salary            Bonus          Comp.      Awards      Options     LTIP Payouts    Comp.
------------------            ----      ---------          -----         ------    ----------   ----------   ------------  ---------
<S>                           <C>       <C>              <C>           <C>             <C>          <C>          <C>          <C>
Lawrence M. Powers            2001      125,000(1)           -0-           -0-         -0-          -0-          -0-          -0-
Chairman and Chief            2000       75,000(1)           -0-           -0-         -0-          -0-          -0-          -0-
Executive Officer             1999       18,250(1)(5)        -0-           -0-         -0-          -0-          -0-          -0-

Robert Ingenito               2001      100,000(1)           -0-           -0-         -0-          -0-          -0-          -0-
Vice-Chairman and             2000       25,000(1)           -0-           -0-         -0-          -0-          -0-          -0-
President                     1999           -0-             -0-           -0-         -0-          -0-          -0-          -0-

Jon M. Gerber                 2001           -0-             -0-           -0-         -0-          -0-          -0-          -0-
Former Executive Vice-,       2000       59,231(2)           -0-           -0-         -0-          -0-          -0-          -0-
President, Secretary,         1999       12,500(1)           -0-           -0-         -0-          -0-          -0-          -0-
Treasurer and Director

Toni Ann Tantillo             2001       69,874           1,375(6)         -0-         -0-          -0-          -0-          -0-
Chief Financial Officer,      2000       12,980(5)       14,100(3)     11,700(4)       -0-          -0-          -0-          -0-
Vice President,               1999           -0-             -0-           -0-         -0-          -0-          -0-          -0-
Secretary and Treasurer

Theodore Mazola               2001       68,000           2,000(6)         -0-         -0-          -0-          -0-          -0-
Vice-President,               2000       22,231(5)           -0-           -0-         -0-          -0-          -0-          -0-
Technical Director            1999           -0-             -0-           -0-         -0-          -0-          -0-          -0-

Steven Zuckerman              2001       68,000(7)       16,813(6)         -0-         -0-          -0-          -0-          -0-
Vice-President,               2000       21,250(5)           -0-           -0-         -0-          -0-          -0-          -0-
Technical Director            1999           -0-             -0-           -0-         -0-          -0-          -0-          -0-

Jonathan Blank                2001           -0-             -0-           -0-         -0-          -0-          -0-          -0-
Former Chief Executive        2000       17,500(5)           -0-           -0-         -0-          -0-          -0-          -0-
Officer - Tropia, Inc.        1999           -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 2000 fiscal year, and left the Company in September,
1999.

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


                                       24
<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.

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

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

Option Grants in Last Year

      There were no options granted during the fiscal years ended March 31, 2001
and 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
2001 fiscal year. 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 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 options and have
granted shares as follows:

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

Robert Ingenito   300,000 shares    Options to purchase 300,000 shares at $.50
                                    per share, exercisable for five years
                                    (until 6/30/2006)
John Iannitto     200,000 shares    Options to purchase 200,000 shares at $.50
                                    per share, exercisable for five years
                                    (until 6/30/2006)

      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.


                                       25
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information, as of June 22, 2001, as to the
beneficial ownership of the Company's common stock (including shares which may
be acquired within sixty days pursuant to stock options) by (1) each person or
group of affiliated persons known by the Company to own beneficially more than
5% of the outstanding shares of the Company's common stock, (2) the Named
Executive Officers, (3) each of the Company's directors, and (4) all directors
and executive officers of the Company as a group. Unless otherwise noted, the
Company believes that all persons named in the table have sole voting and
investment power with respect to all shares of common stock beneficially owned.

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

Lawrence M. Powers                     8,436,666(1)               54.4%
47 Beech Road
Englewood, NJ 07631

Robert Ingenito                        3,166,667(2)(4)            20.4%
80 Ruland Road
Melville, NY 11747-6200

Barclay V. Powers                      4,818,333                  31.1%
665 Walther Way
Los Angeles, CA 90049

John Iannitto                          1,700,000(3)(4)(5)         11.0%
D/B/A RSI Marketing
171 Madison Avenue
New York, NY 10016

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

Theodore Mazola                          200,000                   1.3%
36 Fieldway Avenue
Staten Island, NY 10308

Steven Zuckerman                         200,000                   1.3%
519 Bloomfield Avenue
Apt #6G
Caldwell, NJ

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

Current Directors and                 12,517,500(6)               80.7%
Executive Officers as a
Group (7 persons):

----------


                                       26
<PAGE>

* Less than 1%

(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 3,968,333 shares and options to purchase an additional 850,000
shares held by his son, Barclay V. Powers, as to which Lawrence Powers disclaims
voting power or investment therein.

(2) Consists of 2,166,667 shares and options to purchase an additional 1,000,000
shares of SITI's common stock. Shares held by Mr. Ingenito also include 841,667
shares and options to purchase and additional 400,000 shares held by John
DiNozzi.

(3) Consists of 1,200,000 shares and options to purchase an additional 500,000
shares of SITI's common stock.

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

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

(6) Consists of a total of 9,717,500 shares and options to purchase an
additional 2,800,000 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 was counsel to the
Company until March 31, 2000.

FINANCING IN FISCAL 2001

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

      (a)   Mr. Powers would invest $500,000 for 2,000,000 shares of common
            stock, together with options, to purchase an additional 1,000,000
            shares for $.50 per share, exercisable for five years.
      (b)   Messrs. Ingenito and Iannitto would each invest $250,000 for
            1,000,000 shares of common stock, respectively, together with
            options, respectively, to purchase an additional 500,000 for shares
            for $.50 per share, exercisable for five years.

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


                                       27
<PAGE>

                                     PART IV

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

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

      1.    Consolidated Financial Statements:

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

      2.    Consolidated Financial Statement Schedules:

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

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

      3.    Exhibits

      2.1   Acquisition Agreement Between the Company and Tropia, Inc. (4)
      3.1   Certificate of Incorporation of SITI-Sites.com, Inc. as amended. (3)
      3.2   Amended and Restated Bylaws of SITI-Sites.com, Inc., as amended (3)
      3.3   Restated Certificate of Incorporation of the Company (3)
      3.4   Restated Bylaws of the Company. (3)
      10.1  Investment and Business Development Agreement Among the Company,
            Minutemeals.com, Inc., Joseph Langhan and Donald Moore, dated March
            19, 1999 (5)
      10.2  Stock Purchase Agreement Between the Company and Powers & Co. dated
            December 11, 1998 (5)
      10.3  Stock Purchase Agreement Between the Company and Robert Ingenito
            dated December 12, 1998 (5)
      10.4  Stock Purchase Agreement Between the Company and Steven Gross dated
            December 12, 1998 (5)
      10.5  Option Agreement Entered Into Between the Company and Maurice W.
            Schonfeld (5)
      10.6  Termination Agreement Dated as of May 28, 1999 Among the Company,
            Minutemeals.com, Inc., Joseph Langhan, and Donald Moore (5)
      10.7  Stock Purchase Agreement dated July 26, 1999 (Powers) (3)
      10.8  Content and Technology Sharing Agreement dated December 23, 1999,
            between the Company and Volatile Media, Inc. (6)
      10.9  Stock Purchase Agreement dated December 23, 1999 (Powers and
            Ingenito) (2)
      10.10 Option Agreement dated December 23, 1999 Entered Into Between the
            Company and Lawrence M. Powers (2)
      10.11 Option Agreement dated December 23, 1999 Entered Into Between the
            Company and Robert Ingenito (2)
      10.12 Subscription Agreement dated February 8, 2000 Between the Company
            and Volatile Media, Inc. (6)
      10.13 SITI-Sites.com, Inc. 1999 Stock Option Plan (6)
      10.14 Purchase Agreement dated January 3, 2000, between the Company and
            Theodore Mazola (7)
      10.15 Purchase Agreement-2 dated January 3, 2000, among the Company and
            Theodore Mazola and Steven Zuckerman(7)
      10.16 Letter Agreement dated January 3, 2000, executed by New York Music
            Expo, Inc. in favor of the Company(7)


                                       28
<PAGE>

      10.17 Settlement Agreement Dated May 1, 2000 Among the Company and
            Jonathan Blank, Ari Blank and Arjun Nayyer (2)
      10.18 Stock Purchase Agreement dated June 8, 2000 (Powers, Ingenito and
            Iannitto) (2)
      10.19 Employment Arrangements Agreement dated June 12, 2000 Entered Into
            Between the Company and Messrs. Robert Ingenito and John Iannitto(2)
      10.20 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
            Company and Lawrence Powers (2)
      10.21 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
            Company and Robert Ingenito (2)
      10.22 Stock Option Agreement Dated June 8, 2000, Entered Into Between the
            Company and John Iannitto (2)
      10.23 Stock Purchase Agreement dated June 13, 2000 (Colvil Investments,
            LLC purchase) (2)
      10.24 Stock Option Agreement Dated June 13, 2000, Entered Into Between the
            Company and Colvil Investments, LLC (2)
      10.25 Stock Purchase Agreement dated June 16, 2000 (Steven Gross
            purchase) (2)
      10.26 Stock Option Agreement Dated June 16, 2000, Entered Into Between the
            Company and Steven Gross (2)

Notes:

      (1)   Filed Herewith.
      (2)   Previously Filed as an Exhibit to the Company's Annual Report on
            Form 10-K for the Fiscal Year ended March 31, 2000, and incorporated
            herein by reference
      (3)   Previously Filed as an Exhibit to the Company's Definitive Proxy
            Statement Effective December 14, 1999, and incorporated herein by
            reference.
      (4)   Previously Filed as an Exhibit to the Company's Quarterly Report on
            Form 10-Q for the Quarter ended June 30, 1999, and incorporated
            herein by reference.
      (5)   Previously Filed as an Exhibit to the Company's Annual Report on
            Form 10-K for the Fiscal Year ended March 31, 1999, and incorporated
            herein by reference.
      (6)   Previously Filed as an Exhibit to the Company's Quarterly Report on
            Form 10-Q for the quarter ended December 31, 1999.
      (7)   Previously Filed as an Exhibit to the Company's Current Report on
            Form 8-K dated January 18, 2000.

(b)  Reports on Form 8-K:

            There were no reports filed on Form 8-K for the three months ended
March 31, 2001.


                                       29
<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: July 6, 2001             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: July 6, 2001             By /s/ Lawrence M. Powers
                                   ---------------------------------------------
                                                Lawrence M. Powers
                                         (Chief Executive Officer and
                                       Chairman of the Board of Directors)


Dated: July 6, 2001             By /s/ Robert Ingenito
                                   ---------------------------------------------
                                                   Robert Ingenito
                                       (President and Vice-Chairman of the Board
                                                    of Directors)


Dated: July 6, 2001             By /s/ Barclay V. Powers
                                   ---------------------------------------------
                                                  Barclay V. Powers
                                                      (Director)


                                       30
<PAGE>

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

Report of Independent Certified Public Accountants                           F-2

Report of Independent Certified Public Accountants                           F-3

Report of Independent Certified Public Accountants                           F-4

Consolidated Balance Sheets as of  March 31, 2001 and 2000                   F-5

Consolidated Financial Statements for Each of the Three Years in the Period
Ended March 31, 2001

Consolidated Statements of Operations and Comprehensive Loss                 F-6

Consolidated Statements of Stockholders' Equity                              F-7

Consolidated Statements of Cash Flows                                        F-8

Notes to Consolidated Financial Statements                            F-9 - F-26


                                      F-1
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

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

We have audited the consolidated balance sheet of Siti-Sites.com, Inc. and
subsidiary as of March 31, 2001, and the related consolidated statements of
operations and comprehensive loss, stockholders' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Siti-Sites.com, Inc.
and subsidiary as of March 31,2001, and the results of their operations and
their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1c to
the financial statements, the Company has suffered recurring losses from
operations and cash may not be sufficient to meet the needs of the Company for
the next year. This raises substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 1c. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


/s/ McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
White Plains, New York
June 8, 2001


                                      F-2
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated 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
accounting principles generally accepted in the United States of America.


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


                                      F-3
<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 (not separately
shown herein) of SITI-Sites.com, Inc. (formerly known as "Spectrum Information
Technologies, Inc.") and Subsidiary as of March 31, 1999, 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audit 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 the year then ended in conformity with
accounting principles generally accepted in the United States of America.

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


                                      F-4
<PAGE>

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

March 31,                                                      2001        2000
--------------------------------------------------------------------------------
Assets
Current assets:
 Cash and cash equivalents                                 $    326    $    714
 Marketable securities                                          624         491
 Receivables and other assets                                    25          52
 Net assets of discontinued operation                            --           6
                                                           --------    --------
               Total current assets                             975       1,263
                                                           --------    --------

Equipment, net of accumulated depreciation                      121         109

Intangibles:
 Goodwill                                                       289         236
 Less:Accumulated amortization                                 (289)        (67)
                                                           --------    --------
Intangibles, net                                                 --         169
                                                           --------    --------

               Total assets                                $  1,096    $  1,541
                                                           ========    ========
Liabilities and Stockholders' Equity:
Current Liabilities
 Accounts payable and accrued liabilities                  $    114    $    100
 Accrued legal fees                                              --          70
 Net liabilities of discontinued operation                       79          --
                                                           --------    --------
               Total current liabilities                        193         170
                                                           --------    --------

               Total liabilities                                193         170
                                                           --------    --------

Commitments and contingencies

Stockholders' Equity:
Preferred stock $.001 par value, 5,000 shares authorized,
respectively, and none issued and outstanding                    --          --
Common stock, $.001 par value, 35,000 shares authorized,
respectively, and 15,517 and 9,812 issued and outstanding,
respectively                                                     16          10
 Paid-in capital                                             77,486      75,938
 Accumulated deficit                                        (76,272)    (74,270)
                                                           --------    --------
                                                              1,230       1,678
 Treasury stock, 112 and 62 shares at cost, respectively       (330)       (311)
 Accumulated Other Comprehensive Income                           3           4
                                                           --------    --------
               Total stockholders' equity                       903       1,371
                                                           --------    --------

Total liabilities and stockholders' equity                 $  1,096    $  1,541
                                                           ========    ========

See accompanying notes to consolidated financial statements.


                                      F-5
<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,                                        2001           2000           1999
----------------------------------------------------------------------------------------------
<S>                                                     <C>            <C>            <C>
Revenues                                                $      2       $      1       $     --
                                                        --------       --------       --------

Operating costs and expenses:
 Cost of sales                                                 1             --             --
 Impairment of goodwill                                      134             --             --
 Selling, general and administrative expenses              1,594          1,275            414
                                                        --------       --------       --------
        Total operating costs and expenses                 1,729          1,275            414
                                                        --------       --------       --------

Operating loss                                            (1,727)        (1,274)          (414)
                                                        --------       --------       --------

Other income (expense):
 Interest income                                              32             42             12
 Gain on litigation settlement                                19              1             --
 Gain on sale of marketable securities                        28             --             --
 Loss on investment in Minutemeals.com                        --             --            (82)
 Other income                                                  2             --             --
 Loss on investment in Volatile Media (EZCD.com)              --           (500)            --
                                                        --------       --------       --------
 Total other income (expense), net                            81           (457)           (70)
                                                        --------       --------       --------
Loss from continuing operations                           (1,646)        (1,731)          (484)
                                                        --------       --------       --------

Discontinued operations:
 Income (loss) from discontinued operations                   --             65         (1,320)
 Income (loss) from discontinued operations - Expo          (356)           (42)
                                                        --------       --------       --------
Income (loss) from discontinued operations                  (356)            23         (1,320)
                                                        --------       --------       --------

Net loss                                                $ (2,002)      $ (1,708)      $ (1,804)
 Other Comprehensive Income (Loss), net                       (1)             4              3
                                                        --------       --------       --------
Comprehensive loss                                      $ (2,003)      $ (1,704)      $ (1,801)
                                                        ========       ========       ========

Basic and diluted loss per common share:
 Lossfrom continuing operations                         $  (.117)      $  (.201)      $  (.151)
 Income (loss) on discontinued operations                  (.025)          .003          (.413)
                                                        --------       --------       --------
Net loss per common share                               $  (.143)      $  (.198)      $  (.564)
                                                        ========       ========       ========
Weighted Average Number of Common Shares used in
basic and diluted calculation (see note 1 (i) to
financial statements)                                     14,024          8,622          3,200
                                                        ========       ========       ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<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     Accumulated
                                                 Shares           $           Shares           $          Capital       Deficit

                                              -------------------------------------------------------------------------------------
<S>                                                 <C>      <C>               <C>         <C>           <C>           <C>
Balance, March 31, 1998                            813       $      1          1,557       $      2      $ 71,740      $(70,758)

Net loss                                            --             --             --             --            --        (1,804)
Conversion of Class A convertible                 (813)            (1)           813              1            --            --
Preferred 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      $(72,562)

Net loss                                            --             --             --             --            --        (1,708)
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      $(74,270)

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

<CAPTION>
                                                         Treasury
                                                           Stock
                                                   ---------------------
                                                                            Accumulated
                                                                               Other
                                                    Shares         $        Comprehensive     Total
                                                                               Income
                                              -------------------------------------------------------
<S>                                                   <C>      <C>            <C>            <C>
Balance, March 31, 1998                                 4      $   (304)      $     (3)      $    678

Net loss                                               --            --             --         (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                                62      $   (311)      $     --       $    887

Net loss                                               --            --             --         (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                                62      $   (311)      $      4       $  1,371

Net loss                                               --            --             --         (2,002)
Issuance of common stock                               --            --             --          1,286
Unrealized gain on marketable securities               --            --             (1)            (1)
Contribution of services by management                 --            --             --            268
Settlement agreement                                   60           (19)                          (19)
                                              =======================================================
Balance, March 31, 2001                               112      $   (330)      $      3       $    903
                                              =======================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>

SITI-Sites.com, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Amounts in thousands)

<TABLE>
<CAPTION>
Year ended March 31,                                                                         2001             2000             1999
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>              <C>              <C>
Cash flow from operating activities:
Net loss                                                                                  $(2,002)         $(1,708)         $(1,804)
Adjustments to reconcile net loss to net cash used by continuing
activities:
Loss on Volatile Media, Inc. (EZCD.com)                                                        --              500               --
Gain on litigation settlement                                                                 (19)              --               --
Gain on sale of marketable securities                                                         (28)              --               --
Depreciation/amortization, including goodwill impairment                                      249               77               --
Compensation to employees and consultantsvia stock and options                                 68               75              250
Contribution of services by management                                                        210              113               31
Contribution of rent by management                                                             --               25               15
(Increase)decrease in:
Receivables and other assets                                                                   27              (52)              --
 Increase(decrease) in:
 Accounts payable                                                                             (95)              75                4
 Accrued liabilities                                                                           38               (4)              71
 Net liabilities of discontinued operation                                                     85              (74)              --
 (Income)loss on discontinued operations                                                      356              (23)           1,320
 Loss on investment in Minutemeals.com                                                         --               --               82
                                                                                          -------          -------          -------
Net cash used by continuing operations                                                     (1,111)            (996)             (31)
Net cash provided (used) by discontinued operations                                          (274)              23           (1,925)
------------------------------------------------------------------------------------------------------------------------------------
Net cash used by operating activities                                                      (1,385)            (973)          (1,956)
------------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sale of marketable securities                                                 2,233               --              449
Proceeds from sale of property and equipment                                                   --               --                3
Purchase of marketable securities                                                          (2,339)            (486)              --
Investment in Volatile Media, Inc. (EZCD.com)                                                  --             (500)              --
Recovery of investment in Minutemeals.com                                                      --               23               --
Purchase of property and equipment                                                            (47)            (119)             (74)
Investment in Minutemeals.com                                                                  --               --             (105)
------------------------------------------------------------------------------------------------------------------------------------
Net cash (used) provided by investing activities                                             (153)          (1,082)             273
------------------------------------------------------------------------------------------------------------------------------------
Cash flow from financing activities:
Proceeds from the issuance of common stock                                                  1,150            1,750              800
Proceeds from the exercise of stock options and warrants                                       --               12              297
Purchase of treasury stock                                                                     --               --               (7)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                                            1,150            1,762            1,090
------------------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                                                    (388)            (257)            (593)
Cash and cash equivalents, beginning of year                                                  714            1,007            1,600
------------------------------------------------------------------------------------------------------------------------------------
Total cash and cash equivalents, end of year (excluding cash
amounts in net assets of discontinued operations)                                         $   326          $   714          $ 1,007
                                                                                          =======          =======          =======
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-8
<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (a) BUSINESS

      SITI-Sites.com, Inc., a Delaware corporation, and its various divisions,
(referred to collectively as "SITI" or the "Company") operate as an Internet
media company with three websites for the marketing of news and services. The
Company's 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, Inc. which promotes and markets the music of selected
independent artists on its website www.Tropia.com. On June 20, 2000, Tropia,
Inc. was merged into SITI-Sites.com, Inc. 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. As a result of the loss associated
with 2001 Expo and the inability to produce significant revenue, the Company
wrote off approximately $113,000 of goodwill and discontinued its New York Expo
division effective March 31, 2001. (See Notes 1(b) and 10.) In fiscal 2000, the
Company had made a $500,000 investment in a custom music CD compilation and
promotion company, Volatile Media, Inc., which did business as EZCD.com, now in
bankruptcy liquidation. The investment was written off at 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.

(b) DISCONTINUED OPERATIONS

      As a result of the losses associated with the April 21-22, 2001 Music and
Internet Expo, the Company discontinued these operations resulting in a loss of
approximately $356,000 and $42,000, respectively, for the fiscal 2001 and 2000.

      As a result of the December 11, 1998 Change of Control Transaction
described in Note 1(a), the Company discontinued its previous 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 discontinuations. All assets and liabilities of the discontinued
segments have been reflected as net assets or liabilities of discontinued
operations. The following table reflects the net assets and liabilities:


                                      F-9
<PAGE>

            For the periods ended, March 31,       2001        2000
                                                 ------------------
                                                (Amounts in thousands)
            Cash                                     33          36
            Customer deposits                        28           7
            Refunds receivable                       --
            Prepaid expenses and other               --
            Accounts payable                         --          --
            Accrued expenses                       (140)        (37)
                                                 ------------------
                            Total                   (79)          6
                                                 ==================

      Operating results from discontinued operations are as follows:

      New York Expo.com:

<TABLE>
<CAPTION>
            For the periods ended, March 31,                      2001        2000
                                                               -------------------
                                                              (Amounts in thousands)
<S>                                                              <C>         <C>
            Revenues                                             $  78       $  93
                                                               -------------------

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

      Operations prior to 1998 Change of Control:

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

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

      (c) MANAGEMENT'S PLAN

            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 nine months. If certain shareholders remain
satisfied with results of the software and database content development now in
process, these shareholders presently intend to invest a total of $500,000 into
equity of the Company in fiscal 2002. There can be no assurance that the
shareholders will remain satisfied with the results or that they will invest the
additional equity in the Company.


                                      F-10
<PAGE>

      (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.

      (h) REVENUE RECOGNITION

            Sales of product from discontinued operations for fiscal 1999 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).

      (i) LOSS PER COMMON SHARE

            Loss per share for the fiscal years ended March 31, 2001, March 31,
2000 and March 31, 1999 was based on the weighted average number of common
shares.

         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 for the year ended March 31, 1999 is not fully reflective
of the 7,904,345 shares outstanding as of March 31, 1999.

      (j) EQUIPMENT

            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)


                                      F-11
<PAGE>

      (k) INTANGIBLES

            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).

            The carrying amount of goodwill is reviewed if facts and
circumstances suggest that it may be impaired. If this review indicates that
goodwill will not be recoverable, as determined based on the estimated
undiscounted cash flows of the entity acquired over the remaining amortization
period, the carrying amount of goodwill is decreased by the estimated shortfall
of cash flows. In the last quarter of fiscal 2001, the Company determined its
goodwill was impaired based on continuing negative cash flows over the remaining
amortization period and wrote off approximately $134,000.

      (l) COMPREHENSIVE LOSS

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

            Other comprehensive loss for the year ended March 31, 2001 is net of
the reclassification adjustment of $28,000 for realized gains recognized in net
loss for the year then ended.

      (m) WEBSITE EXPENSES

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

            The web site development costs incurred during the year ended March
31, 2001 were associated with the operating stage and were expensed as provided
for in Issue 00-2. Web site development costs incurred through June 30, 2000
were expensed and the Company has elected to not capitalize any previously
eligible costs.

2. INVESTMENT IN MARKETABLE SECURITIES

      As of March 31, 2001, and 2000 the Company's equity reflects accumulated
income of approximately $3,000 and $4,000, respectively, which represents the
recognition of unrealized holding gains for the Company's investments determined
to be available for sale, previously carried at the lower of cost or market.
During the fiscal year ended March 31, 2001, the Company realized approximately
$28,000 in gains associated with the sale of marketable securities. There were
no realized gains for the fiscal years ended March 31, 2000 and March 31, 1999.

      Marketable securities as of March 31, 2001 were comprised of investments
in government securities which consisted primarily of Federal Home Loan Bank
Discount Notes. The aggregate cost, fair value and unrealized holding gains for
those Notes held at March 31, 2001 are as follows:


                                      F-12
<PAGE>

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

      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                                 $487             $491                    $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.

      (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. No options are
presently outstanding with the 1991 and 1992 Plans.

Additional information follows:

<TABLE>
<CAPTION>
                                                                         Shares Subject      Weighted Average
                                                                           to Options         Exercise Price
                                                                        ------------------ ---------------------
<S>                                                                              <C>             <C>
         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, 2001 at $84.38 - $337.50 per share                 --          $    --
                                                                        ========================================
</TABLE>


                                      F-13
<PAGE>

      (ii) 1996 INCENTIVE DEFERRAL PLAN

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

      (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>
                                                                                       Weighted
                                                                     Shares Subject    Average
                                                                       to Options   Exercise Price
                                                                     -----------------------------
<S>                                                                      <C>             <C>
            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
            Extinguished at $2.15 per share                             (34,077)         $2.15
                                                                        ----------------------
            Outstanding at March 31, 2001 at $1.69-$2.15 per share       41,500          $2.13
                                                                        ======================
</TABLE>

            The following table summarizes information about stock options
            outstanding and exercisable at March 31, 2001:

<TABLE>
<CAPTION>
                                        Outstanding and      Weighted Average Remaining     Weighted Average
            Range of Exercise Prices    Exercisable at       Contractual Life (Years)       Exercise Price
                                        March 31, 2001
            -------------------------------------------------------------------------------------------------
<S>                                       <C>                    <C>                        <C>
            $1.69 to $2.15                41,500                 6.39                       $2.13
</TABLE>


                                      F-14
<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 2001 and 2000.

<TABLE>
<CAPTION>
                                                                          Shares     Weighted
                                                                          Subject    Average
                                                                            to       Exercise
                                                                          Options     Price
                                                                         --------------------
<S>                                                                       <C>         <C>
            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
            Granted, exercised and extinguished                               --      $  --
                                                                          -----------------
            Outstanding at March 31, 2001 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,
            2001:

<TABLE>
<CAPTION>
            Range of Exercise Prices    Outstanding and      Weighted Average Remaining     Weighted Average
                                        Exercisable at       Contractual Life (Years)       Exercise Price
                                        March 31, 2001
            ------------------------------------------------------------------------------------------------------
<S>                                          <C>                         <C>                   <C>
                 $0.875 to $2.15             40,000                      7.15                  $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, 2001 and
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.


                                      F-15
<PAGE>

            Additional information as follows:

<TABLE>
<CAPTION>
                                                                Weighted
                                                                 Average      Shares
                                                                 Exercise   Subject to
                                                                  Price      Options
                                                                ----------------------
<S>                                                               <C>        <C>
            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
            Granted, exercised and extinguished                   $0.00            0
                                                                  ------------------
            Outstanding at March 31, 2001 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, 2001:

<TABLE>
<CAPTION>
            Range of Exercise Prices    Outstanding and      Weighted Average Remaining     Weighted Average
                                        Exercisable at       Contractual Life (Years)       Exercise Price
                                        March 31, 2001
            -------------------------------------------------------------------------------------------------
<S>              <C>                          <C>                        <C>                        <C>
                 $0.35 per share              300,000                    2.71                       $0.35
</TABLE>

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

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

            SFAS No. 123 of the Financial Accounting Standards Board,
"Accounting for Stock-Based Compensation", which is effective for transactions
entered into after December 15, 1995, requires the Company to provide pro forma
information regarding net income and earnings per share as if compensation cost
for the Company's stock option plans and stock-based compensation had been
determined in accordance with the fair value method prescribed by SFAS No. 123.
There were no stock options granted to employees during the fiscal years ended
March 31, 2001 and 2000. However, there were 1,005,000 shares issued as
compensation during the fiscal year ended March 31, 2001. There were 315,750
stock options granted during the fiscal year ended March 31, 1999.

            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 2001 and 1999: no dividends
paid; expected volatility of 304.3% and 46.1%, respectively; weighted-average
risk free interest rate of 5.01% and 5.46%, respectively; and expected lives of
1-10 years.


                                      F-16
<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:

<TABLE>
<CAPTION>
                                               2001                   2000                    1999
                                                       (In thousands, except per share data)
                                             -------------------------------------------------------
<S>                                          <C>                    <C>                     <C>
            Net Income:
               As reported                   $(2,002)               $(1,708)                $(1,804)
               Pro forma                     $(2,004)               $(1,708)                $(1,835)

            Basic and diluted earnings per share:
               As reported                   $(0.143)               $(0.20)                  $(0.56)
               Pro forma                     $(0.143)               $(0.20)                  $(0.57)
</TABLE>

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

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

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

5. COMMITMENTS AND CONTINGENCIES

      The Company's headquarters 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 2001, 2000, and 1999 was approximately $90,000,
$94,000 and $161,000, respectively. For the fiscal year ended March 31, 1999 the
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, had 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 the rents were not in fact paid. These amounts
have, however, been included in Administrative Expenses and as an addition to
Paid in Capital.


                                      F-17
<PAGE>

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

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

Total                                                             $ 104
                                                                  =====

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:

      March 31,                                             2001          2000
      -------------------------------------------------------------------------
                                                          (Amounts in thousands)
      Tax benefit of net operating loss carryforwards
      including current year loss                         $1,483          $659
      Tax benefit of write-off of investment                  --           200
      Valuation allowance                                 (1,483)         (859)
      -----------------------------------------------------------        -----
                                                          $   --          $ --
                                                          ======          ====

      The Company's expectation of continued operating losses for the
foreseeable future makes realization of the benefit of any of the deferred tax
assets unlikely at this time. Therefore, at March 31, 2001, the Company recorded
a deferred tax asset with a valuation allowance of equal value. The change in
the valuation allowance for the two years in the period ended March 31, 2001 was
$624,000 and $680,000.

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


                                      F-18
<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:

<TABLE>
<CAPTION>
                                                          Year Ended      Year Ended
                                                        March 31, 2000  March 31, 2001
                                                        ------------------------------
                                                            (Amounts in thousands)
<S>                                                         <C>           <C>
      Net loss                                              $(1,708)      $(2,002)
                                                            =====================

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

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

7. LITIGATION

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

      On May 1, 2000, the former officers of Tropia (Jonathan Blank, Ari Blank
and Arjun Nayyer) entered into a settlement agreement with the Company in
connection with various claims and their activities since their resignations
during the third quarter of the fiscal 2000. As a result of the agreement, all
claims have been settled and they have returned an additional 50,000 shares to
the Company resulting in an increase in treasury stock and a corresponding gain
on litigation settlement of approximately $18,750. 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.

      Continuing defaults by EZCD.com as to its investment representations, and
its content and technology sharing agreement with the Company could result in
litigation or other legal complications, and attendant costs and efforts by the
Company's management to resolve such matters. EZCD.com filed for bankruptcy
liquidation in August, 2000 and the Company is making claims in such proceeding.

      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.


                                      F-19
<PAGE>

8. STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  Years ended March 31,
                                                                               ---------------------------
                                                                                2001        2000      1999
                                                                               ---------------------------
                                                                                 (Amounts in thousands)
<S>                                                                            <C>         <C>        <C>
      Supplemental disclosures of cash flow information:
         Cash paid during the year for income taxes                            $  10       $   3      $ 10

      Non-cash transactions:
          Conversion of Class A Preferred Stock to Common Stock                $  --       $  --      $  1
          Issuance of stock pursuant to the plan or reorganization             $  --       $  --      $591
          Compensation to consultants and employees via stock and options      $  68       $  75      $283
          Contribution by management (rent and compensation)                   $ 210       $ 138      $ 46
          Gain on litigation                                                   $ (19)      $  --      $ --
          Tropia acquisition                                                   $  --       $ 153      $ --
          HungryBands.com, NewMediaMusic.com and NewYorkExpo.com
          acquisitions                                                         $  53       $  58      $ --
      Discontinued Operations Non-cash transactions:
      Depreciation                                                             $   8       $  --      $ --
      Compensation to employees via stock                                      $  16       $  --      $ --
      Contribution of services                                                 $  58       $  --      $ --
</TABLE>

9. SEGMENT INFORMATION

      The Company has divided its operations into 3 reportable segments:
Tropia/HungryBands, NewMediaMusic and Corporate.

      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 fiscal
years ended March 31, 2001 and March 31, 2000.


                                      F-20
<PAGE>

                      Tropia/        NewMedia              Inter-
                    Hungry Bands      Music    Corporate   Segment     Total
                    ------------      -----    ---------   -------     -----
  Year ended
   March 31,
     2001
---------------

Sales                      1             1                                  2
Operating loss          (350)         (576)       (801)                (1,727)
Interest Income                                     32                     32
Other Expense                                       --                     --
Loss from
discontinued
operations                                        (356)                  (356)
Net loss                (350)         (576)     (1,076)        0       (2,002)
Assets                                           1,096                  1,096
Depreciation and
amortization               8            16         225                    249

                      Tropia/        NewMedia              Inter-
                    Hungry Bands      Music    Corporate   Segment     Total
                    ------------      -----    ---------   -------     -----
  Year ended
   March 31,
     2000                           (Amounts in thousands)
---------------

Sales                     1                                                 1
Operating loss          (463)          (21)       (790)                (1,274)
Interest Income                                     42                     42
Other Expense                                     (500)                  (500)
Income from
discontinued
operations                                          23                     23
Net loss                (463)          (21)     (1,224)        0       (1,708)
Assets                                           1,541                  1,541
Depreciation and
amortization               3             0          74                     77

10. GOODWILL

      In June, 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. The acquisition was accounted for as a
purchase for financial statement purposes and, accordingly, Tropia's results are
included in the consolidated financial statements since the date of acquisition.
Tropia was acquired for an aggregate of 316,666 shares of the Company's common
stock (valued at $306,786), with 158,333 shares delivered at closing, and
158,333 shares held in escrow to be delivered one year after the closing (if
certain performance goals were achieved), to Jonathan Blank, Tropia's former
CEO, Arjun Nayyar, Tropia's former Technical Director, and Ari Blank, Tropia's
former Design Director. Such individuals have since waived


                                      F-21
<PAGE>

any rights to the escrowed 158,333 shares, and have returned 50,000 of the
shares delivered to them at the 1999 closing. (See Note 12)

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

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

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

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

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

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

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

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


                                      F-22
<PAGE>

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

11. LICENSING AGREEMENTS

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

      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, 2001 and 2000.

12. OTHER AGREEMENTS

      Investment in Volatile Media

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

      Other

      The Company also entered into other agreements with certain companies
(TVMV.com and Listen.com) for content and technology sharing. Pursuant to these
sharing agreements, SITI is to receive a certain percentage of revenues from the
banner advertising. As of March 31, 2001 and 2000, revenues from such
advertising have been nominal.

      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.


                                      F-23
<PAGE>

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

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

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

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

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

                        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.

      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.

13. EQUIPMENT

      As of March 31, 2001 and 2000, equipment consisted of the following:

                                                (Amounts in thousands)
                                                   2001        2000
                                                  -----------------

            Computer Equipment and Furniture      $ 159         115
            Computer Software                         7           4
            Accumulated Depreciation                (45)        (10)
                                                  -----------------
            Equipment, net                        $ 121         109
                                                  =================


                                      F-24
<PAGE>

14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      As of March 31, 2001 and 2000, accounts payable and accrued liabilities
were comprised of the following:

                                                 2001      2000
                                                 --------------
                                             (Amounts in thousands)

                 Accrued audit and tax fees      $ 60      $ 54
                 Accounts payable                   5         0
                 Deferred Rent                      8         6
                 Accrued expenses                  41        40
                                                 ----      ----
                                                 $114      $100
                                                 ====      ====

15. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

      The following is a summary of unaudited quarterly results of operations
for the years ended March 31, 2001 and 2000.

(In thousands except per share data)

<TABLE>
<CAPTION>
                                                            Quarter Ended
2000                                           Mar. 31   Dec. 31    Sept. 30    June 30
---------------------------------------------------------------------------------------
<S>                                           <C>        <C>        <C>        <C>
Net sales                                          1          0          0          0
Cost of sales                                      0          0          0          0
---------------------------------------------------------------------------------------
Gross profit                                       1          0          0          0
---------------------------------------------------------------------------------------
Loss from continuing operations                 (740)      (475)      (366)      (150)
Income (loss) from discontinued operations       (42)         6         35         24
---------------------------------------------------------------------------------------
Net loss                                        (782)      (469)      (331)      (126)
Income (loss) per common share:
Continuing operations                         (0.067)    (0.056)    (0.045)    (0.019)
Discontinued operations                       (0.004)     0.001      0.004      0.003
---------------------------------------------------------------------------------------
Total                                         (0.071)    (0.055)    (0.041)    (0.016)
=======================================================================================
</TABLE>


                                      F-25
<PAGE>

<TABLE>
<CAPTION>
                                                              Quarter Ended
2001                                          Mar. 31      Dec. 31    Sept. 30     June 30
-------------------------------------------------------------------------------------------
<S>                                           <C>         <C>         <C>          <C>
Net sales                                          1           1           0            0
Cost of sales                                      0           1           0            0
-------------------------------------------------------------------------------------------
Gross profit                                       1           0           0            0
-------------------------------------------------------------------------------------------
Loss from continuing operations                 (497)       (420)       (316)        (413)
Loss from discontinued operations               (144)        (24)       (121)         (67)
-------------------------------------------------------------------------------------------
Net loss                                        (641)       (444)       (437)        (480)
Loss per common share:
Continuing operations                         (0.032)     (0.028)     (0.021)      (0.038)
Discontinued operations                       (0.009)     (0.001)     (0.008)      (0.006)
-------------------------------------------------------------------------------------------
Total                                         (0.041)     (0.029)     (0.029)      (0.044)
===========================================================================================
</TABLE>


                                      F-26