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, 2003

                                       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.)

111 Lake Avenue, Suite 7, Tuckahoe, New York                               10707
(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 May 16, 2003 was approximately $163,975
based on the last price at which the Common Stock was sold on May 16, 2003 of
$.025 as reported by the National Quotation Bureau. 23,418,178 shares of Common
Stock were outstanding as of May 16, 2003.

The following documents are incorporated herein by reference:

      (1)   Quarterly Report to security holders on Form 10-Q for the quarter
            ended December, 2002 (the "Form 10-Q for 12/31/02");

      (2)   Annual Report to security holders on Form 10-K for the year ended
            March 31, 2002 (the "Form 10-K for 2002");

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

Such documents are referred to in Parts I, II, III and IV of this Annual Report
on Form 10-K in several places. The registrant is now an inactive entity and its
report on Form 10-K for the year ended March 31, 2003 is unaudited.
(See Item 1. Business)


<PAGE>

                           ANNUAL REPORT ON FORM 10-K
                                 MARCH 31, 2003

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

ITEM 2.     PROPERTIES                                                      6

ITEM 3.     LEGAL PROCEEDINGS                                               6

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF
            SECURITY HOLDERS                                                6


            PART II

ITEM 5.     MARKET FOR THE REGISTRANT'S COMMON STOCK
            AND RELATED STOCKHOLDER MATTERS                                 7

ITEM 6.     SELECTED FINANCIAL DATA                                         8

ITEM 7.     MANAGEMENT'S DISCUSSION AND
            ANALYSIS OF FINANCIAL CONDITION
            AND STATUS OF LIQUIDATION                                       9

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     13

ITEM 8.     FINANCIAL STATEMENTS AND
            SUPPLEMENTARY DATA                                             13

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


            PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF
            THE REGISTRANT                                                 14

ITEM 11.    EXECUTIVE COMPENSATION                                         15

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


            PART IV

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


<PAGE>



Forward-Looking Statements

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

                                     PART I

ITEM 1. BUSINESS

Introduction

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

      In management's opinion, the Company is presently an inactive entity, as
described under Regulation 210.3-11 of the SEC accounting regulations,
authorizing unaudited financial statements in reports pursuant to the Securities
Exchange Act of 1934. The Company has therefore elected to file this Annual
Report on Form 10-K for the year ended March 31, 2003 with unaudited financial
statements. Further explanation of the underlying facts and such Regulation is
set forth below. See Inactive Entity.

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


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<PAGE>

      Certain former employees and directors purchased excess furniture and
equipment from the Company for a total of approximately $19,000. The balance of
the furniture was sold to an unrelated third party for approximately $5,000.

      In connection with the liquidation, the Company adopted the liquidation
basis of accounting effective January 1, 2002, whereby assets are valued at
their estimated realizable cash value and liabilities are stated at their
estimated settlement amounts. Uncertainties as to the precise net value of the
Company's assets (other than cash) and the ultimate amount of its liabilities
make it impracticable to predict the aggregate net value. Claims, liabilities
and future expenses for operations (including salaries, payroll taxes,
professional fees and miscellaneous office expense), although declining in the
aggregate, will continue to be incurred.

      Financing. The Company required a small financing to complete its employee
terminations, asset liquidation and provide for ongoing corporate expenses.
Major investors in the Company provided $110,000 in equity funds, purchasing
4,400,000 shares of common stock at $.025 per share, in a private offering as of
December 7, 2001 in varying amounts parallel to their respective option
holdings. Each purchasing investor was further required to surrender all of his
outstanding options to purchase common stock of the Company, acquired in making
each previous investment. These consisted of options for a total of 4,400,000
shares, previously exercisable at prices ranging from $.15 to $2.50 per share,
and expiring between 2003 and 2006. All of such options are now cancelled and
terminated, reducing all outstanding stock options by over 90%. This surrender
and cancellation was intended to make future merger, sale or other business
possibilities for the Company easier to achieve. The Company has options,
previously held by employees in 1998 (before current major investors purchased
control), which still remain outstanding, for the purchase of 415,577 shares,
exercisable at prices ranging from $.35 to $2.15 per share, expiring between
2004 and 2006. There were 20,118,178 shares of common stock outstanding as of
June 30, 2002 as a result of the financing described above.

      The Company's stock was trading at $.03 per share with nominal volume,
during the seven-day offer/closing period in December, 2001. The shares sold to
major investors were not registered under the Securities Act of 1933, were
purchased for investment and are not readily marketable, which factors generally
result in discounts in purchase value. There was also substantial business risk
to the purchasers because the Company has no continuing operations and was being
liquidated.

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

      Other Financing in Fiscal 2003 (unaudited). The Company Chairman/CEO
Lawrence M. Powers and another investor, in order to finance ongoing corporate
expenses, purchased an additional 1,800,000 shares of common stock of the
Company (1,200,000 and 600,000 shares, respectively) as of July 26, 2002, at
$.025 per share. (This was the same price paid by six shareholder investors in
December, 2001, to finance ongoing corporate expenses at that time.) The
Company's stock was trading at $.05 per share during the week ending July 26,
2002 with nominal volume. The shares recently sold to these two existing
investors were not registered under the Securities Act of 1933, were purchased
for investment requiring "legended" certificates and are not readily marketable
because of such legending and the nominal trading volume in SITI stock, which
factors generally result in substantial discounts in purchase value. There are
also several other business risks to the purchasers, because the Company has no
ongoing operations, is in liquidation, and is seeking merger or sale
possibilities with operating businesses, to make use of the Company's publicly
traded status with approximately 5,400 shareholders. But current depressed stock
market conditions for "going public" increase the difficulties in arranging any
such transactions.

      The Company Chairman/CEO Lawrence M. Powers, in order to finance ongoing
corporate expenses, purchased an additional 1,500,000 shares of common stock of
the Company as of October 23, 2002, at $.02 per share. The Company's stock was
trading at $.02 per share for most of the three weeks preceding October 23, 2002
with nominal volume. The shares recently sold to Mr. Powers were not registered
under the Securities Act of 1933, were purchased for investment

                                       2
<PAGE>

requiring "legended" certificates and are not readily marketable because of such
legending and the nominal trading volume in SITI stock, which factors generally
result in substantial discounts in purchase value. The several other business
risks to the purchaser described above are continuing. As a result of this stock
purchase transaction completed October 28, 2002, the Company's outstanding
common stock increased as of such date from 21,918,178 shares to 23,418,178
shares.

Inactive Entity. As a result of the asset liquidation (and concurrent
satisfaction of all liabilities), the Company's sole activity for the past
eighteen months has been to search for merger or sale possibilities, where value
is perceived in its being a publicly traded corporate shell with 5,400
stockholders. Much of management's time (entirely by Chairman/CEO-controlling
shareholder, Lawrence M. Powers) has been spent, and several investigations and
negotiations have occurred, but none have come to fruition. The Company has
continued to file all required reports under the Securities Exchange Act of
1934, and the auditing and accounting expenses relating thereto have been its
primary operating costs (with transfer agent costs second), with no revenues to
support such expenses. Management has concluded that the Company is an inactive
entity, as defined in SEC accounting rules. A detailed analysis follows:

      SEC Accounting Regulation 210.3-11 was designed to deal with ongoing
auditing expenses of defined "inactive entities", in light of necessary
disclosure requirements for publicly-traded companies. Such Regulation contains
five separate prerequisites to treatment as an inactive entity. In substance,
they are accounting/regulatory tests for determining whether there is sufficient
business or securities-related activity to justify requiring audited financial
statements. Facts relating to the Company, as to each such Requirement (referred
to as "R (a) through (e)" ) follow:

      1.    Gross receipts from all sources in the fiscal year ended March 31,
            2003 were less than $100,000, R(a). Actual receipts were $92,000
            (see F-4, Financial Statements).

      2.    Expenditures for all purposes for the fiscal year ended March 31,
            2003 were also less than $100,000, R(c). Actual expenditures were
            $75,000 in fiscal 2003. (The accrued operating expenses in
            liquidation recorded for fiscal 2003 were $ 260,000. However, they
            included a valuation of $185,000 of unpaid management services,
            contributed to capital (in amounts similar to prior years), plus
            unpaid office rent also recorded as a contribution to capital.
            Neither such item required any cash outlay, or any issuance of stock
            by the Company, for such contribution of capital.)

      The underlying reasons for accounting tests R(a) and (c) are
self-evident--An auditing requirement should not deal with trifling matters of
receipts or expenditures, with a stated threshold of $100,000 for determining
their respective lack of materiality.

      3.    There was no unpaid debt, and therefore no need for the Company to
            undertake any reorganization, readjustment, succession, or
            bankruptcy, and there has been no material acquisition or
            disposition of plants, asset rights or leases since the prior fiscal
            year, R(d).

      The underlying purpose of test R(d), is that in reorganizations or
bankruptcy, the details of public shareholder's residual rights can easily be
lost in the pressure of creditors asserting their senior rights over assets, and
auditing can protect shareholders. But from 1998 through 2003, the Company's
operations were financed entirely by equity purchases, or contributions to
capital of services by management. When assets were liquidated, the Company only
had minor obligations, and no debt had been incurred that was not paid in full
during the Company's asset liquidation (completed in the prior fiscal year ended
March 31, 2002). Again, the underlying reason for the "no
reorganization/disposition" test R(d), to continue protection of shareholders,
by audit of even inconsequential assets and expenditures, does not exist.

      4.    No exchange upon which the Company's shares of common stock are
            listed, or governmental authority having jurisdiction, presently
            requires the furnishing to it or the publication of audited
            financial statements, R(e). The Company is not subject to any such
            listing agreement or governmental authority (such as a state agency
            or other federal regulatory agency, except the SEC).


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<PAGE>

      The underlying purpose of test R(e) is that relaxing SEC auditing rules
should not interfere with the protective listing and auditing requirements of
established stock exchanges. But the Company is not presently bound by any stock
exchange auditing rule, and this test R(e) does not apply. If an auditing
requirement is imposed in the future by the National Quotation Bureau for the
Bulletin Board market, where the Company is reported, the Company presently
plans to continue filing and publishing, unaudited quarterly and annual SEC
reports, and take appropriate steps to leave the Bulletin Board and seek
quotation of its shares by broker-dealers in the "Pink Sheets" service. The
Company intends to continue to comply with all SEC accounting and other
requirements, except for audit of its financial statements.

      5.    Most of the "no sales/purchase of own stock" test in R(b) is met in
            fiscal 2003: The Company has not purchased any of its own stock, has
            not granted options therefor, nor levied any assessments upon
            outstanding stock. Neither has the Company sold any stock or other
            securities to the public since March 31, 2002 (nor has it sold any
            to the public in the past seven fiscal years), R(b). The Company,
            operating in liquidation since December, 2001, has no plans to do
            so. It could only undertake any such activity (the only corporate
            activity being sought is a potential merger or sale transaction
            which might create value for shareholders), after full compliance
            with the registration and reporting requirements, including
            resumption of audited financial statements, of the federal
            securities laws.

      However, the accounting test in R(b) does raise a minor issue as to
classification as an "inactive entity". The Company has been supported by
$60,000 in private stock purchases in fiscal 2003 from its principal shareholder
and executive, who may be deemed to own 48% of its outstanding shares,
beneficially with a family member (Chairman/CEO Lawrence M. Powers, who has also
been contributing his management efforts to capital since 1998). He purchased
such shares (described above in Other Financing in Fiscal 2003 (Unaudited)),
subject to "controlling person" and other restrictions on his (or family
members) future transfer or sale. One other shareholder invested $15,000 in
fiscal 2003 on a restricted basis similar to Mr. Powers, but for the foreseeable
future, Mr. Powers is the sole source of capital to the Company. These two
private stock purchasers were fully informed of the Company's financial
condition, and the continuing risks of its liquidated operations.

      The reason for the "no sales" test of R(b) is to prevent uninformed public
investors from being misled by sales or resales of stock or options, without
audited financial statements apprising them of the financial substance of their
investment. The accounting test of R(b) should not be strictly applied to the
Company, because its only two investors in fiscal 2003 were a management/control
person and a long-standing, sophisticated investor, with both receiving
"legended shares" restricted as to any future sale, and fully informed of the
Company's condition. Neither of such two private investors, required the
protection of an audit then or now. In light of the Company clearly meeting the
other four accounting tests of SEC Regulation 210.3-11 for an "inactive entity",
and the other facts indicating no current business operations of any kind and no
material obligations, in management's judgement, it should be deemed to be an
inactive entity.

      The Company has concluded that, under these circumstances, the purpose and
intentions of the cited Accounting Regulation for inactive entities are met, and
as an accounting regulation (unlike a statute) which is subject to professional
judgement as to varying factual situations, the SEC Regulation 210.3-11 must be
applied and interpreted in a reasonable and appropriate manner. The absence of
any material business activity makes any auditing effort futile, and a waste of
very limited Company resources. The Company plans to file and publish quarterly
and annual reports, but without audited statements, until the Company has found
an appropriate transaction benefiting shareholders, which justifies incurring a
continuing auditing expense for prior and future periods. In management's
opinion, the liquidated Company has been diligently trying to create "value" for
shareholders, and should be permitted to continue without this prohibitive
auditing expense.

Management Background - 2003

      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


                                       4
<PAGE>

executive officer. Most recently, he founded and built Spartech Corporation
(NYSE), now a $1 billion plastics manufacturing group assembled from many small
businesses, starting as Chairman of a previously bankrupt shell corporation
(1978) with few assets, which he reorganized with other investors, becoming CEO
in 1984. Raising some $200 million during his tenure, he, together with the
management team he assembled, built one of the largest plastic processing
companies in the U.S. by 1992 (12 plants). Spartech has now become a world
leader (44 plants) since his retirement. He remained on the board until 1995.
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 over $2.8 million in SITI equity.

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

Employees

      As of May 15, 2003, the Company had 1 employee in operations and general
administration (Ms. Tantillo). SITI executive, Mr. Powers, has been working
without cash compensation since 1998 and will continue to do so for at least the
year ended March 31, 2004. Former executives, Mr. Ingenito and Iannitto,
received stock and options for their services during the fiscal year ended March
31, 2002. (See "Item 11. - Executive Compensation - Employment Agreements.") The
Company has recorded an administrative expense and a capital contribution of
$125,000 to account for the value of services provided by executive management
(Mr. Powers) of the Company during the year ended March 31, 2003, as in prior
fiscal years. None of the Company's employees were represented by any collective
bargaining unit, 1998-2003. The Company believes that its relations with its
past and present employees are good.

Risk Factors

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

      Risk factors may affect the Company's liquidation of the current business
assets and affect opportunities to merge or sell to other operating businesses.
In addition to the other information in this Annual Report on Form10-K, and the
risk factors listed in the Forms10-K for 2001 and 2002, new and different risk
factors can be anticipated within any operating business which the Company
acquires, or becomes part of, through merger or sale. It is not possible to
identify these new and different risk factors until such transactions are
negotiated and completed, because the operating businesses will be in different
areas from the Internet music business described in prior Forms10-K. Reference
is made to Risk Factors in the Company's Form 10-K for 2002, incorporated herein
by reference.

      Future Mergers or Sales Will Cause Dilution or Adversely Affect Results

      As part of the Company's business strategy, the Company is seeking by
merger or sale to acquire other operating businesses which perceive value in
becoming a publicly traded corporation. The Company has no current agreements or
commitments with respect to any merger or acquisition transactions and there can
be no assurance that the Company will enter into any such agreements or
commitments. In the event of such future transactions, the Company will (i)
issue equity securities that would dilute current stockholders' percentage
ownership in the Company very substantially because the owners of the operating
business will require full control of the Company or subsidiary used in the
transaction; (ii) probably will incur substantial debt; or (iii) assume
contingent liabilities. Such actions could cause the Company's operating results
or the price of the Company's common stock to decline. In addition, the Company
may not be able to


                                       5
<PAGE>

successfully integrate any businesses, products, technologies or personnel that
may thus be acquired in the future. The only certainty in any such transaction
is that the shareholders of the Company will own only a minor portion of the
operating business thus acquired, new management will operate such business and
it will be an entirely different operation from that described in prior
Forms10-K filed by SITI.

      The Company May Need to Obtain Additional Financing

      Management believes that current cash and cash equivalents will not be
sufficient to meet the Company's anticipated cash needs for working capital and
capital expenditures for the nine months ended December 31, 2003. If shareholder
Powers remains satisfied with the search for mergers or sales transactions
described above, and now in process, he presently intends to invest the amounts
necessary to continue such efforts in fiscal 2004.

      Market Listing; Volatility of Stock Price

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

ITEM 2. PROPERTIES

      During the fiscal year 2003, the Company's management has operated the
Company's administrative business out of their personal offices, and finds the
present arrangements sufficient. As a result of the use of personal offices, the
Company recorded a charge of $60,000 as rental expense and increased paid in
capital by that amount for the fiscal year ended March 31, 2003.

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. In December, 2002 the
Company was sued for $3,750 in Civil Court, New York City by MetTel, a former
supplier of Internet access service. The suit was brought one year after the
Company terminated the service in November, 2001, returned the "router"
connecting the system and paid all outstanding bills into December, 2001.
Management believes this suit is without substance, and is not being pursued by
the claimant. Although the outcome of any legal proceedings cannot be predicted
with certainty, based on current knowledge of the applicable law and facts,
taking into consideration the opinion of the Company's general counsel that the
allegations lack merit and substance, and that the Company should prevail in
this litigation, management further believes that this lawsuit should not have a
material adverse effect on the net assets in liquidation. As of June 20, 2003,
the claimant has not pursued its claim by filing it in Court and purchasing an
"index number," or replied to the Company's counterclaim.

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


                                       6
<PAGE>

      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 net assets in liquidation.


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

      None.


                                     PART II

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

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

      In March, 1997, the Company's Reorganization Plan became effective, which
included a 75:1 reverse stock split. On that day, the Company's reorganized
common stock became eligible for trading under the symbol "SITI", which symbol
was modified by NASDAQ to "SITN.OB" in January, 2000. The range of high and low
closing bid prices for the Common Stock for the fiscal years 2003 and 2002 are
set forth below. The National Quotation Bureau provided this information which
may not reflect actual transactions.

                             HIGH AND LOW BID PRICES

                             2003                                     2002
                          Low    High                               Low    High
First Quarter (6/02)    $0.03   $0.22     First Quarter (6/01)    $0.07   $0.12
Second Quarter (9/02)    0.03    0.10     Second Quarter (9/01)    0.06    0.11
Third Quarter (12/02)    0.02    0.04     Third Quarter (12/01)    0.01    0.06
Fourth Quarter (3/03)    0.03    0.04     Fourth Quarter (3/02)    0.01    0.04

      On May 16, 2003, the last reported bid and ask prices of the Common Stock
were $.025 and $.035, respectively.

      As of May 16, 2003 there were approximately 5,400 holders of record of the
Company's Common Stock (which amounts do not include the number of shareholders
whose shares are held of record by brokerage houses but include each brokerage
house as one shareholder).

      The Company has paid no dividends for the fiscal years ended March 31,
2003, 2002 and 2001 and the Company has no current plans to pay dividends in the
foreseeable future. The Company plans to retain earnings, if any, to finance the
Company's operations. Payment of cash dividends, if any, in the future will be
determined by the Company's Board of Directors in light of future earnings,
capital requirements, financial condition and other relevant considerations.


                                       7
<PAGE>

Recent Sales of Unregistered Securities

      For a discussion of sales of unregistered securities by the Company during
the 2001 fiscal year see the Form 10-K for 2001, "Part II. Item 2. Changes in
Securities."

      For a discussion of sales of unregistered securities by the Company during
the 2002 fiscal year see the Form 10-K for 2002, "Part II. Item 2. Changes in
Securities."

      For a discussion of sales of unregistered securities by the Company during
the 2003 fiscal year ending prior to January 1, 2003 see "Item 1. Business".

      All of the shares of Common Stock issued by the Company during the 2001,
2002 and 2003 fiscal years as described above, were issued in reliance upon the
exemption from registration provided under Section 4(2) of the Securities Act,
on the basis that such transactions did not involve any public offering. The
stockholders who received such shares of the Company had access to all relevant
information regarding the Company necessary to evaluate the investment, and each
such stockholder represented that the Common Stock was being acquired for
investment only. There was no general solicitation or advertising involved, and
the Company used reasonable care to ensure that such stockholders were not
underwriters.

ITEM 6. SELECTED FINANCIAL DATA

      The following selected financial data of the Company as of and for the
periods indicated below are derived from the financial statements of the
Company. The information presented below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included as Item 7, the financial statements and related footnotes
included as Item 8 in the Form 10-K and the footnotes accompanying the tables.
Effective January 1, 2002, the Company adopted the liquidation basis of
accounting and as a result the selected financial data from fiscal 2002 only
reflects operating activity through December 31, 2001.


STATEMENT OF CHANGES IN NET ASSETS DATA (LIQUIDATION BASIS OF ACCOUNTING)

                                                --------------------------------
                                                For the year           For the
                                                   ended            three months
                                                  March 31,          ended March
                                                    2003              31, 2002
--------------------------------------------------------------------------------
            (Amounts in thousands, except per share amounts)

Net assets in liquidation at beginning of period     11                  64
Reduction to net assets in liquidation:
     Operating expenses and accrual of
estimated costs                                    (260)                (110)
Addition to net assets in liquidation:

     Issuance of common stock                        75                   3

     Refund of charges                               17                  --
     Contribution of management's
services and rent                                   185                  46
     Insurance recovery from World Trade
Center attack                                        --                   8
Net assets in liquidation at end of period           28                  11


                                       8
<PAGE>

                     CONTINUING AND DISCONTINUED OPERATIONS
                              (GOING CONCERN BASIS)

                                                --------------------------------
                                                Nine months
                                                   ended
                                                December 31,
                                                 2001 (Last         For the Year
                                                 period of              Ended
                                                    full              March 31,
                                                 operations)            2001
--------------------------------------------------------------------------------
            (Amounts in thousands, except per share amounts)
Summary of Operations:
Total revenues of continuing operations               0                   0
Loss from continuing operations                     (555)               (721)
Loss from continuing operations per
common share                                       (0.03)              (0.05)
Net income (loss) from continuing and
discontinued operations                            (1,159)             (2,002)
Net income (loss) per share from
continuing and discontinued operations             (0.07)              (0.14)
Weighted average common
  Shares outstanding                               15,697              14,024

Summary of Financial Position:
Total assets                                         99                 1,090
Long-term debt                                       --                  --
Stockholders' equity                                 64                  903

Dividends per share                                 None                None

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND STATUS
OF LIQUIDATION

Organization

      SITI has been seeking merger or sale possibilities with operating
businesses who perceive value in a merger with the Company as a publicly traded
corporate shell. The Company was an Internet media company with three websites
for the marketing of news and services. The Company's websites related entirely
to the music industry. The Company changed its corporate name to SITI-Sites.com,
Inc. from Spectrum Information Technologies, Inc. after its Annual Meeting of
Stockholders on December 14, 1999, and its former stock symbol "SITI" is now
"SITN.OB".

      In view of the Company's determination to seek other business
opportunities to create shareholder value, the following information relating to
the results of the Company's prior discontinued operations should not be relied
upon as an indication of future performance. All of the Company's operations
prior to January 1, 2002 are discontinued operations and the Company adopted the
liquidation basis of accounting, effective January 1, 2002. (See Status of
Liquidation).

STATUS OF LIQUIDATION

      The Company Chairman/CEO Lawrence M. Powers and another investor, in order
to finance ongoing corporate expenses, purchased an additional 1,800,000 shares
of common stock of the Company (1,200,000 and 600,000 shares, respectively) as
of July 26, 2002, at $.025 per share. (This was the same price paid by six
shareholder investors in


                                       9
<PAGE>

December, 2001, to finance ongoing corporate expenses at that time.) The
Company's stock was trading at $.05 per share during the week ending July 26,
2002 with nominal volume. The shares recently sold to these two existing
investors were not registered under the Securities Act of 1933, were purchased
for investment requiring "legended" certificates and are not readily marketable
because of such legending and the nominal trading volume in SITI stock, which
factors generally result in substantial discounts in purchase value. There are
also several other business risks to the purchasers, because the Company has no
ongoing operations, is in liquidation, and is seeking merger or sale
possibilities with operating businesses, to make use of the Company's publicly
traded status with approximately 5,400 shareholders. But current depressed stock
market conditions for "going public" increase the difficulties in arranging any
such transactions. As a result of this stock purchase transaction completed
August 5, 2002, the Company's outstanding common stock increased as of such date
from 20,118,178 shares to 21,918,178 shares.

      The Company Chairman/CEO Lawrence M. Powers, in order to finance ongoing
corporate expenses, purchased an additional 1,500,000 shares of common stock of
the Company as of October 23, 2002, at $.02 per share. The Company's stock was
trading at $.02 per share for most of the three weeks preceding October 23, 2002
with nominal volume. The shares recently sold to Mr. Powers were not registered
under the Securities Act of 1933, were purchased for investment requiring
"legended" certificates and are not readily marketable because of such legending
and the nominal trading volume in SITI stock, which factors generally result in
substantial discounts in purchase value. The several other business risks to the
purchaser described above are continuing. As a result of this stock purchase
transaction completed October 28, 2002, the Company's outstanding common stock
increased as of such date from 21,918,178 shares to 23,418,178 shares.

SUMMARY OF OPERATIONS: CONTINUING AND DISCONTINUED

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

CONTINUING OPERATIONS

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

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

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

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


                                       10
<PAGE>

CONSOLIDATED REVENUES FROM CONTINUING OPERATIONS

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

OPERATING COSTS AND EXPENSES FROM CONTINUING OPERATIONS

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

Year ended March 31, 2001 - For a full discussion of activity related to the
fiscal year ended March 31, 2001, see the Forms 10-K for 2002 and 2001. All such
activities for this fiscal year have ceased.

LIQUIDITY AND CAPITAL RESOURCES

      The Company's primary objective is to conserve its cash while it is
seeking merger or sale possibilities. As of March 31, 2003, the Company had net
assets of approximately $28,000. Chairman/CEO Powers invested $30,000 and
another existing investor invested $15,000 in the Company as of July 26, 2002,
resulting in the issuance of 1,800,000 shares of common stock. As of October 23,
2002, Chairman/CEO Powers invested an additional $30,000 in the Company,
resulting in the issuance of an additional 1,500,000 shares of common stock.

      As of March 31, 2003, the Company's total assets were approximately
$41,000, represented primarily by cash. During the fiscal year ended March 31,
2003, the Company incurred approximately $260,000 in operating expenses
consisting primarily of management's contribution of their services and rent of
approximately $185,000. Accounting fees totaled approximately $28,000 for the
twelve months ended March 31, 2003. Stock transfer agent fees totaled
approximately $24,000 for the twelve months ended March 31, 2003. Salary and
related expenses to one employee for the twelve months ended March 31, 2003 were
approximately $15,000. The remaining $8,000 in operating expenses paid during
the fiscal year ended March 31, 2003 related primarily to general office
expenses. As of March 31, 2003, the Company's liabilities were approximately
$13,000 consisting primarily of its obligations for professional fees associated
with its fiscal 2003 accounting needs. Management, primarily the Chairman/CEO,
continues to work without any cash compensation. Management further continues to
use personal offices to continue its plan.


                                       11
<PAGE>

LIQUIDATION BASIS OF ACCOUNTING

      The financial statements for the fiscal periods ending prior to and
including December 31, 2001 were prepared on the going concern basis of
accounting, which contemplates realization of assets and satisfaction of
liabilities in the normal course of business. As a result of Management's Plan
for Liquidation and the imminent nature of the liquidation, the Company adopted
the liquidation basis of accounting effective January 1, 2002. Under the
liquidation basis of accounting, assets are stated at their estimated net
realizable values and liabilities are stated at their estimated settlement
amounts, which estimates will be periodically reviewed and adjusted. Since the
Company is in liquidation without continuing operations, the need to present
quarterly Statements of Operations and Comprehensive Loss as well as a Statement
of Cash Flows is eliminated. However, the prior year's financial statements are
presented since the Company did not adopt this method of accounting until
January 1, 2002.

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

INFLATION

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

SUMMARY OF DISCONTINUED OPERATIONS

      As a result of the losses incurred relating to the April 21-22, 2001 Expo,
the Company discontinued the operations associated with the segment. For a full
discussion of the Company's discontinued operations for the fiscal years ended
March 31, 2002 and 2001, see the Forms 10-K for 2002 and 2001, respectively.
Below is a table representing operating results from the discontinued
operations.


                                       12
<PAGE>

OPERATING RESULTS FROM DISCONTINUED OPERATIONS

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

Operating costs and expenses

     Cost of sales                                     44                133
     Selling, general & administrative                560              1,228
                                                    ----------------------------
Total operating costs and expenses                    604              1,361
                                                    ----------------------------


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

Other income and (expenses)                             0                  0

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


      For a full discussion of operating results from discontinued operations
see the Forms 10-K for 2002 and 2001.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The company had no short-term investments as of March 31, 2003 and 2002.

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

      The Registrant has notified its auditors, McGladrey & Pullen, LLP that it
was planning to change its status to an Inactive Registrant which would no
longer require their services as auditors (subject to further review by
management of applicable regulations, discussed herein at page 3 "Inactive
Entity", while the Form 10-K was being prepared).

      On June 25, 2003, the Registrant formerly notified McGladrey & Pullen, LLP
that it was terminating McGladrey & Pullen, LLP as auditors for the Company.


                                       13
<PAGE>

                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Directors and Executive Officers of the Company

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

       Name           Age    Position with the Company

Lawrence M. Powers    71     Chairman of the Board, Chief Executive Officer

Barclay V.  Powers    40     Director

Robert Ingenito       60     Director

Toni Ann Tantillo     36     Chief Financial Officer, Vice President, Secretary
                             and Treasurer


Business Experience of Directors and Executive Officers

      Lawrence M. Powers, 71, has served as the Company's Chairman of the Board
and Chief Executive Officer since the change of control transaction in December,
1998. Mr. Powers has been a private investor since 1992. Beginning in 1978 and
continuing to his retirement in 1992, he built Spartech Corporation (NYSE), from
a previously bankrupt corporation with few assets, into what has become a $1
billion plastics manufacturing group operating 44 plants. Raising some $200
million during his tenure, he and Spartech's key managers built one of the
largest plastic processing companies in the U.S. by 1992 (12 plants at the
time). The management team he assembled has continued successfully. He remained
on the board of Spartech until 1995. Mr. Powers, a securities lawyer in New York
from 1957 through 1981, was educated at Yale Law School and senior executive
programs at Harvard Business School. Mr. Powers is the father of Barclay V.
Powers, a Director of the Company.

      Barclay V. Powers, 40, has served as a Director of the Company since 1999.
He is a graduate of Columbia University, and was an executive associate for five
years to the Chairman/CEO of Spartech, specializing in marketing projects,
acquisitions and joint ventures. Since 1992 he has been an independent film
producer, making and marketing documentaries and a feature film, all aimed at
the college youth market. Barclay Powers is the son of Lawrence M. Powers,
Chairman and CEO of the Company.

      Robert Ingenito, 60, has served as a Director of the Company since the
change of control transaction in December, 1998. Mr. Ingenito was a founder and,
since 1989, served as Chief Executive Officer of Access Communications and
Access Direct, two established data service companies. Access Direct produces
high volume, highly segmented mail correlated to its clients segmented
databases; Access Communications produces critical documents from on-line
transmissions from its clients and was sold in 1999. Prior to that, he was the
President and a principal of Axciom Corporation (NYSE) when it went public in
1982. Axciom has become an $800 million database management firm, and purchased
Access Communications in 1999.

      Toni Ann Tantillo, 36, has served as the Company's Chief Financial
Officer, Vice President, Secretary and Treasurer since December 1999. Prior to
her election, she worked as an independent consultant to SITI after the change
of control in December 1998. From 1995 to December, 1998, Ms. Tantillo was the
Asst. Controller and Controller of SITI. Ms. Tantillo, a Certified Public
Accountant was educated at Iona College in New Rochelle, New York.


                                       14
<PAGE>

Compliance with Section 16 of the Exchange Act

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

ITEM 11. EXECUTIVE COMPENSATION

Compensation of Executive Officers

      The following table sets forth the total annual compensation paid, or
accrued by the Company for services in all capacities for Mr. Lawrence M. Powers
in fiscal 2003, 2002 and 2001, who served as Chief Executive Officer and four
individuals who were among the highest paid employees for the fiscal year ended
March 31, 2001. The table also includes two individuals who were among the
highest paid employees for the 2000 fiscal year but were not executive officers
at the end of such fiscal year (collectively, the "Named Executive Officers").
The Company had one executive officer serving as such at the end of fiscal 2001
whose aggregate compensation exceeded $100,000. Note that Messrs. Powers,
Ingenito and Iannitto were not paid any cash compensation in fiscal 2003, 2002
and 2001 and the amounts shown were waived and merely accrued by the Company
(See Note 1 to table).


                                       15
<PAGE>
<TABLE>
<CAPTION>
                                                              Summary Compensation Table
                                                                                        Long-Term Compensation Payouts
                               Annual Compensation
                                                                                Grants & Awards

                                                                  Other          Restricted Shares
Name and                                                          Annual        Stock        Underlying   LTIP        All other
Principal Position           Year       Salary      Bonus         Comp.         Awards       Options      Payouts     Comp
------------------           ----       ------      -----         -----         ------       -------      -------     ----
<S>                          <C>      <C>           <C>           <C>           <C>           <C>         <C>         <C>
Lawrence M. Powers           2003     125,000(1)      -0-           -0-           -0-           -0-         -0-        -0-
Chairman and Chief           2002     125,000(1)      -0-           -0-           -0-           -0-         -0-        -0-
Executive Officer            2001     125,000(1)      -0-           -0-           -0-           -0-         -0-        -0-

Robert Ingenito (4)          2003         -0-         -0-           -0-           -0-           -0-         -0-        -0-
Director                     2002      67,333(1)      -0-           -0-           -0-           -0-         -0-        -0-
                             2001     100,000(1)      -0-           -0-           -0-           -0-         -0-        -0-

John Iannitto (4)            2003         -0-         -0-           -0-           -0-           -0-         -0-        -0-
Former Vice-President        2002      49,750(1)      -0-           -0-           -0-           -0-         -0-        -0-
                             2001      75,000(1)      -0-           -0-           -0-           -0-         -0-        -0-

Toni Ann Tantillo            2003      13,000         -0-           -0-           -0-           -0-         -0-        -0-
Chief Financial Officer,     2002      65,325         -0-           -0-           -0-           -0-         -0-        -0-
Vice-President,              2001      69,874        1,375(2)       -0-           -0-           -0-         -0-        -0-
Secretary and Treasurer

Theodore Mazola (4)          2003         -0-         -0-           -0-           -0-           -0-         -0-        -0-
Former Vice-President,       2002      60,729         -0-           -0-           -0-           -0-         -0-        -0-
Technical Director           2001      68,000        2,000(2)       -0-           -0-           -0-         -0-        -0-

Steven Zuckerman (4)         2003         -0-         -0-           -0-           -0-           -0-         -0-        -0-
Former Vice-President,       2002       5,000(3)      -0-           -0-           -0-           -0-         -0-        -0-
Technical Director           2001      68,000(3)    16,813(2)       -0-           -0-           -0-         -0-        -0-
</TABLE>

(1) Amounts include Mr. Powers', Mr. Ingenito's and Mr. Iannitto's contribution
of services charged against earnings. During fiscal 2001, Messrs. Ingenito and
Iannitto received stock compensation valued at approximately $22,000 and
$15,000, respectively. During fiscal 2002, Messrs. Ingenito and Iannitto
received stock options for their services and approximately $9,000 and $6,000,
respectively, was charged to compensation for these options. However, Mr. Powers
did not receive any compensation for his services during fiscal 2002 and 2001.

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

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

(4) Effective with the liquidation, these executive officers were terminated and
received no compensation for fiscal 2003. Mr. Ingenito remains as an
uncompensated director.


                                       16
<PAGE>

Option Grants in Last Year

      During fiscal 2002 options were granted to Mr. Ingenito and Mr. Iannitto
pursuant to their Employment Agreement. However, pursuant to the November 28,
2001 offer to key investors, these options were cancelled. There were no options
granted during the fiscal years ended March 31, 2003 and March 31, 2001.

Option Exercises and Year-End Values

      There were no options exercised by the Named Executive Officers during the
2003 fiscal year. Any options held by such individuals were purchased in
connection with stock purchase agreements. (See "Item 5. Market for the
Registrant's Common Equity and Related Stockholder Matters.")

Compensation of Directors

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

Employment Agreements

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

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

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

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

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


      However, as a result of their withdrawal as executives and their stock
purchase on November 28, 2001, all options granted, or to be granted for the
2002 fiscal year, were cancelled. Mr. Powers does not expect to receive any cash
compensation, stock or options for his services for such two fiscal years, or
for fiscal 2003 and 2004.

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


                                       17
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information, as of May 9, 2003, 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                    11,136,666(1)                  47.6%
47 Beech Road
Englewood, NJ 07631

Robert Ingenito (former officer)       3,466,667(2)(4)               14.8%
80 Ruland Road
Melville, NY 11747-6200

Barclay V. Powers                      4,818,333                     20.6%
665 Walther Way
Los Angeles, CA 90049

John Iannitto (former officer)         1,900,000(3)(4)(5)             8.1%
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 (former officer)         300,000                      1.3%
36 Fieldway Avenue
Staten Island, NY  10308


Current Directors and                 14,659,167(6)                  62.6%
Executive Officers as a
Group (3 persons):
----------------------
* Less than 1%

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

(2) Consists solely of shares. All options were cancelled pursuant to the
November 28, 2001 offer to key investors. Shares held by Mr. Ingenito also
include 1,566,667 shares held by John DiNozzi.


                                       18
<PAGE>

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

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

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

(6)   Consists solely of shares.


                                       19
<PAGE>

                                     PART IV

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

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

      1.    Consolidated Financial Statements:

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

      2.    Consolidated Financial Statement Schedules:

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

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

      3.    Exhibits

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

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

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

            3.3   Restated Certificate of Incorporation of the Company (3)

            3.4   Restated Bylaws of the Company. (3)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


                                       20
<PAGE>

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

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

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

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

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

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

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

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

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

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

            99    Certification Pursuant To 18 U.S.C. Section 1350, As Adopted
                  Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002

      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, 2003.


                                       21
<PAGE>

                                   SIGNATURES

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

                                SITI-SITES.COM, INC.



Dated: June 30, 2003            By /s/ Toni Ann Tantillo
                                   ---------------------------------------------
                                       Toni Ann Tantillo
                                       (Chief Financial Officer, Vice President,
                                               Secretary and Treasurer)

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



Dated: June 30, 2003            By /s/ Lawrence M. Powers
                                   ---------------------------------------------
                                                Lawrence M. Powers
                                           (Chief Executive Officer and
                                        Chairman of the Board of Directors)


Dated: June 30, 2003            By /s/ Robert Ingenito
                                   ---------------------------------------------
                                                 Robert Ingenito
                                                   (Director)


Dated: June 30, 2003            By /s/ Barclay V. Powers
                                   ---------------------------------------------
                                                Barclay V. Powers
                                                   (Director)


                                       22
<PAGE>


                                            CERTIFICATION


Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Lawrence M. Powers, certify that:

1)    I have reviewed this Annual Report on Form 10-K of SITI-Sites.com, Inc.
(the "Registrant")

2)    Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3)    Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4)    The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to us by others
within those entities, particularly during the period in which this annual
report is being prepared;

      b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

      c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5)    The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):

      a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

      b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6)    The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: June 30, 2003
                                         By  /s/ Lawrence M. Powers
                                             ----------------------
                                              Lawrence M. Powers
                                              Chief Executive Officer and
                                              Chairman of the Board of Directors


                                       23
<PAGE>

                                  CERTIFICATION


Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Toni Ann Tantillo, certify that:

1)    I have reviewed this Annual Report on Form 10-K of SITI-Sites.com, Inc.
(the "Registrant")

2)    Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3)    Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4)    The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

      a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

      b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

      c) presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5)    The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
function):

      a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

      b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6)    The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: June 30, 2003

                                         By  /s/ Toni Ann Tantillo
                                             ---------------------
                                         Toni Ann Tantillo
                                         Chief Financial Officer,
                                         Vice President, Secretary and Treasurer


                                       24
<PAGE>

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




Unaudited Financial Statements for the Fiscal Year Ended March 31, 2003:

Statement of Net Assets in Liquidation as of March 31, 2003
(Unaudited)                                                                  F-2

Statement of Changes in Net Assets in Liquidation for the Twelve
Months Ended March 31, 2003 (Unaudited)                                      F-3

Notes to Consolidated Financial Statements for the Twelve Months
Ended March 31, 2003 (Unaudited)                                       F-4 - F-9


Audited Financial Statements for the Fiscal Years Ended March 31, 2002 and
March 31, 2001:

Report of Independent Certified Public Accountants                          F-10

Statement of Assets in Liquidation as of March 31, 2002                     F-11

Statement of Changes in Net Assets in Liquidation for the Three
Months Ended March 31, 2002                                                 F-12

Consolidated Statements of Operations and Comprehensive Loss For
the Nine Months Ended December 31, 2001 and Year Ended March 31,
2001(Going Concern Basis)                                                   F-13

Consolidated Statements of Stockholders' Equity For the Nine
Months Ended December 31, 2001 and Year Ended March 31, 2001
(Going Concern Basis)                                                       F-14

Consolidated Statements of Cash Flows For the Nine Months Ended
December 31, 2001 and Year Ended March 31, 2001 (Going Concern
Basis)                                                                      F-15

Notes to Consolidated Financial Statements for the Fiscal Years
Ended March 31, 2002 and 2001                                        F-16 - F-29


                               F-1
<PAGE>

SITI-Sites.com, Inc.
Statement of Net Assets in Liquidation            March 31, 2003
(Amounts in thousands)                             (Unaudited)
----------------------------------------------------------------
Assets
Current assets:
  Cash and cash equivalents                           $     36
  Receivables and other assets                               5
                                                      --------
         Total current assets
                                                            41
                                                      --------

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

         Total assets                                 $     41
                                                      ========

Liabilities:
Current Liabilities
  Accounts payable and accrued liabilities            $     13
                                                      --------
         Total current liabilities                          13
                                                      --------

         Total liabilities                                  13
                                                      ========

Net Assets in Liquidation
                                                      $     28
                                                      ========

See accompanying notes to consolidated financial statements.


                                      F-2
<PAGE>

SITI-Sites.com, Inc.
Statement of Changes in Net Assets in Liquidation
Twelve Months Ended March 31, 2003
(Amounts in thousands)                                          (Unaudited)
                                                                -----------


Net assets in liquidation at beginning of period                  $     11
Reductions to net assets in liquidation:
     Operating expenses and accrual of estimated costs                (260)
Increases to net assets in liquidation:
     Refund of charges                                                  17
     Issuance of common stock                                           75
     Contribution of management's services and rent                    185
                                                                  --------
Net assets in liquidation at end of period                        $     28
                                                                  ========

See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE TWELVE MONTHS ENDED MARCH 31,
2003 (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (a) MANAGEMENT'S PLAN FOR LIQUIDATION

      Siti-Sites.com, Inc., a Delaware corporation (referred to as "SITI" or the
"Company") previously operated as an Internet media company with three websites
for the marketing of news and services. The Company's websites related entirely
to the music industry. SITI incurred losses continuously since its inception in
1999. Following conclusion of the second fiscal quarter ended September 30,
2001, management who were its primary investors (investing approximately $4.1
million 1998-2002), intended to continue operations by investing approximately
$600,000 in further equity capital in the Company. But on November 13, 2001 they
determined that such limited funding would not accomplish a meaningful result
for the investors or the Company and terminated discussions of such financing
plan. The Company commenced procedures to prepare to liquidate its assets
effective January 1, 2002.

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

      Certain former employees and directors purchased excess furniture and
equipment from the Company for a total of approximately $19,000. The balance of
the furniture was sold to an unrelated third party for approximately $5,000.

      Financing. The Company required a small financing to complete its employee
terminations, asset liquidation and provide for ongoing corporate expenses.
Major investors in the Company provided $110,000 in equity funds, purchasing
4,400,000 shares of common stock at $.025 per share, in a private offering as of
December 7, 2001 in varying amounts parallel to their respective option
holdings. Each purchasing investor was further required to surrender all of his
outstanding options to purchase common stock of the Company, acquired in making
each previous investment. These consisted of options for a total of 4,400,000
shares, previously exercisable at prices ranging from $.15 to $2.50 per share,
and expiring between 2003 and 2006. All of such options are now cancelled and
terminated, reducing all outstanding stock options by over 90%. This surrender
and cancellation was intended to make future merger, sale or other business
possibilities for the Company easier to achieve. The Company has options,
previously held by employees in 1998 (before current major investors purchased
control), which still remain outstanding, for the purchase of 415,577 shares,
exercisable at prices ranging from $.35 to $2.15 per share, expiring between
2004 and 2006. There were 20,118,178 shares of common stock outstanding as of
June 30, 2002 as a result of the financing described above.

      The Company's stock was trading at $.03 per share with nominal volume,
during the seven-day offer/closing period in December, 2001. The shares sold to
major investors were not registered under the Securities Act of 1933, were
purchased for investment and are not readily marketable, which factors generally
result in discounts in purchase value. There was also substantial business risk
to the purchasers because the Company has no continuing operations and was being
liquidated.

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

      Other Financing. The Company Chairman/CEO Lawrence M. Powers and another
investor, in order to finance ongoing corporate expenses, purchased an
additional 1,800,000 shares of common stock of the Company (1,200,000 and


                                      F-4
<PAGE>

600,000 shares, respectively) as of July 26, 2002, at $.025 per share. (This was
the same price paid by six shareholder investors in December, 2001, to finance
ongoing corporate expenses at that time.) The Company's stock was trading at
$.05 per share during the week ending July 26, 2002 with nominal volume. The
shares recently sold to these two existing investors were not registered under
the Securities Act of 1933, were purchased for investment requiring "legended"
certificates and are not readily marketable because of such legending and the
nominal trading volume in SITI stock, which factors generally result in
substantial discounts in purchase value. There are also several other business
risks to the purchasers, because the Company has no ongoing operations, is in
liquidation, and is seeking merger or sale possibilities with operating
businesses, to make use of the Company's publicly traded status with
approximately 5,400 shareholders. But current depressed stock market conditions
for "going public" increase the difficulties in arranging any such transactions.

      The Company Chairman/CEO Lawrence M. Powers, in order to finance ongoing
corporate expenses, purchased an additional 1,500,000 shares of common stock of
the Company as of October 23, 2002, at $.02 per share. The Company's stock was
trading at $.02 per share for most of the three weeks preceding October 23, 2002
with nominal volume. The shares recently sold to Mr. Powers were not registered
under the Securities Act of 1933, were purchased for investment requiring
"legended" certificates and are not readily marketable because of such legending
and the nominal trading volume in SITI stock, which factors generally result in
substantial discounts in purchase value. The several other business risks to the
purchaser described above are continuing. As a result of this stock purchase
transaction completed October 28, 2002, the Company's outstanding common stock
increased as of such date from 21,918,178 shares to 23,418,178 shares.

      As a result of the liquidation and reasons discussed below, the Company's
management has determined that it is an inactive entity (See "Item 1. Business -
Inactive Entity"). The Company meets all of the criteria as set forth below
except as noted:

            (a) Gross receipts from all sources for the fiscal year ended March
      31, 2003 are not in excess of $100,000;

            (b) The registrant has not purchased or sold any of its own stock,
      granted options therefore, or levied assessments upon outstanding stock;
      (1)

            (c) Expenditures for all purposes for the fiscal year ended March
      31, 2003 are not in excess of $100,000; (2)

            (d) No material change in the business has occurred during the
      fiscal year, including any bankruptcy, reorganization, readjustment or
      succession or any material acquisition or disposition of plants, mines,
      mining equipment, mine rights or leases; and

            (e) No exchange upon which the shares are listed, or governmental
      authority having jurisdiction, requires the furnishing to it or the
      publication of audited financial statements.

      (1) During the last fiscal year, the Company had no source of funding to
cover its expenses which were almost entirely audit and stock transfer expenses,
and Chairman/CEO Powers, who may be deemed to beneficially own approximately 48%
of the Company's outstanding stock, and another investor provided funding to the
Company. All of the shares issued are legended and neither investor, has any
intention of selling the stock publicly in the foreseeable future. (See "Item 1.
Business - Inactive Entity")

      (2) Operating expenses of approximately $260,000 include approximately
$185,000 of contributed services and rent. The Company recorded such $185,000 as
a contribution of capital because there was no cash outlay for such expenses.

      (b) CHANGE TO LIQUIDATION BASIS OF ACCOUNTING

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


                                      F-5
<PAGE>

be periodically reviewed and adjusted. Since the Company is in liquidation
without continuing operations, the need to present quarterly Statements of
Operations and Comprehensive Loss as well as a Statement of Cash Flows, is
eliminated. However, the prior year's financial statements for the comparable
quarter are presented, since the Company did not adopt this method of accounting
until January 1, 2002.

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

      (c) RECENT HISTORY

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

      (d) USE OF ESTIMATES

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

      (e) 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.

2. STOCKHOLDERS' EQUITY

      (a) STOCK AND OPTION ISSUANCES

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

            (i) 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.


                                      F-6
<PAGE>
            Additional information as follows:
<TABLE>
<CAPTION>
                                                                                   Weighted
                                                                     Shares        Average
                                                                     Subject to    Exercise
                                                                     Options       Price
                                                                     ----------------------
<S>                                                                     <C>         <C>
            Outstanding at March 31, 2002 at $1.69-$2.15 per share      41,500      $2.13
             Granted, exercised and extinguished                            --      $  --
                                                                     ----------------------
            Outstanding at March 31, 2003 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, 2003:

<TABLE>
<CAPTION>
                                   Outstanding and   Weighted Average         Weighted
            Range of               Exercisable at    Remaining Contractual    Average Exercise
            Exercise Prices        March 31, 2003    Life (Years)             Price
            ----------------------------------------------------------------------------------
<S>                                  <C>                 <C>                     <C>
            $1.69 to $2.15           41,500              4.39                    $2.13
</TABLE>

            (ii) 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 2003.

<TABLE>
<CAPTION>
                                                                                     Weighted
                                                                        Shares       Average
                                                                      Subject to     Exercise
                                                                       Options        Price
                                                                     ------------------------
<S>                                                                     <C>           <C>
            Outstanding at March 31, 2002 at $0.875-$2.15 per share     40,000        $1.19
            Granted, exercised and extinguished                             --        $  --
                                                                     ------------------------
            Outstanding at March 31, 2003 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,
            2003:

<TABLE>
<CAPTION>
                                   Outstanding and   Weighted Average         Weighted
            Range of               Exercisable at    Remaining Contractual    Average Exercise
            Exercise Prices        March 31, 2003    Life (Years)             Price
            ----------------------------------------------------------------------------------
<S>                                      <C>                    <C>                <C>
            $0.875 to $2.15              40,000                 5.15               $1.19
</TABLE>

            (iii) 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-7
<PAGE>

            Additional information as follows:

<TABLE>
<CAPTION>
                                                                       Weighted        Shares
                                                                       Average        Subject
                                                                       Exercise          to
                                                                        Price          Options
                                                                     --------------------------
<S>                                                                     <C>            <C>
            Outstanding at March 31, 2002 at $0.35 per share            $0.35          300,000
            Granted, exercised and extinguished                         $0.00             0
                                                                     --------------------------
            Outstanding at March 31, 2003 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, 2003:

<TABLE>
<CAPTION>
                                   Outstanding and   Weighted Average         Weighted
            Range of               Exercisable at    Remaining Contractual    Average Exercise
            Exercise Prices        March 31, 2003    Life (Years)             Price
            ----------------------------------------------------------------------------------
<S>                                <C>                 <C>                     <C>
             $0.35 per share          300,000             .70                     $0.35
</TABLE>

3. COMMITMENTS AND CONTINGENCIES

      Management uses its personal offices to conduct business for the Company.
As a result, no rent has been paid during the fiscal year ended March 31, 2003.
However, as a result of the contribution of rent, a charge was recorded to rent
and paid in capital of approximately $60,000.

4. 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. In December, 2002 the
Company was sued for $3,750 in Civil Court, New York City by MetTel, a former
supplier of Internet access service. The suit was brought one year after the
Company terminated the service in November, 2001, returned the "router"
connecting the system and paid all outstanding bills into December, 2001.
Although the outcome of any legal proceedings cannot be predicted with
certainty, based on current knowledge of the applicable law and facts taking
into consideration the opinion of the Company's general counsel that the
allegations lack merit and substance, and that the Company should prevail in
this litigation, management believes that this lawsuit should not have a
material adverse effect on the net assets in liquidation. As of March 31, 2003,
the claimant has not pursued its claim by docketing it in Court or replying to
the Company's counterclaim.

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

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


                                      F-8
<PAGE>

5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      As of March 31, 2003, accounts payable and accrued liabilities were
comprised of the following:

                                                        2003
                                                    -----------
                                                    (Amounts in
                                                     thousands)

                  Accrued professional fees          $      11
                  Accounts payable                           2
                                                     ---------
                                                     $      13
                                                     =========


                                      F-9
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

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

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

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

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


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


                                      F-10
<PAGE>

SITI-Sites.com, Inc.
Statement of Net Assets in Liquidation
(Amounts in thousands)
                                                                  March 31, 2002
--------------------------------------------------------------------------------
Assets
Current assets:
  Cash and cash equivalents                                         $     39
  Receivables and other assets                                             4
                                                                    --------
         Total current assets                                             43
                                                                    --------

                                                                    --------
Property and Equipment, net                                               --
                                                                    --------
         Total assets                                               $     43
                                                                    ========

Liabilities:
Current Liabilities
  Accounts payable and accrued liabilities                          $     32
                                                                    --------
         Total current liabilities                                        32
                                                                    --------

         Total liabilities                                                32
                                                                    --------


Net Assets in Liquidation                                           $     11
                                                                    ========

See accompanying notes to consolidated financial statements


                                      F-11
<PAGE>

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

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

See accompanying notes to consolidated financial statements.


                                      F-12
<PAGE>

SITI-Sites.com, Inc.
Statements of Operations and Comprehensive Loss (Going Concern Basis)
For the Nine Months Ended December 31, 2001 and the Year Ended March 31, 2001
(Amounts in thousands, except per share amounts)

                                                         Nine
                                                        Months          Year
                                                         Ended         Ended
                                                      December 31,    March 31,
                                                          2001          2001
-------------------------------------------------------------------------------
Revenues                                                $     --     $     --
                                                        --------     --------
Operating costs and expenses:
  Impairment of goodwill                                      --          134
  Selling, general and administrative expenses               343          668
                                                        --------     --------
           Total operating costs and expenses                343          802
                                                        --------     --------
Operating loss                                              (343)        (802)
                                                        --------     --------
Other income (expense):
   Interest income                                            --           32
   Gain on litigation settlement                              --           19
   Gain on sale of marketable securities                      --           28
   Impairment provision on assets                           (157)          --
   Loss on disposal of equipment                             (74)          --
   Other income                                               19            2
                                                        --------     --------
   Total other income (expense), net                        (212)          81
                                                        --------     --------
Loss from continuing operations                             (555)        (721)
                                                        --------     --------
Discontinued operations:
   Loss from discontinued operations - all divisions        (604)      (1,281)
                                                        --------     --------
 Loss from discontinued operations                          (604)      (1,281)
                                                        --------     --------
Net loss                                                $ (1,159)    $ (2,002)
   Other Comprehensive Loss, net                              (3)          (1)
                                                        --------     --------
Comprehensive loss                                      $ (1,162)    $ (2,003)
                                                        ========     ========
Basic and diluted loss per common share:
   Loss  from continuing operations                     $   (.03)    $   (.05)
   Loss from discontinued operations                        (.04)        (.09)
                                                        --------     --------
Net loss per common share                               $   (.07)    $   (.14)
                                                        ========     ========
Weighted Average Number of Common Shares used in
basic and diluted calculation (see note 1 (i) to
financial statements)                                     15,697       14,024
                                                        ========     ========

See accompanying notes to consolidated financial statements.


                                      F-13
<PAGE>

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

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

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

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

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

See accompanying notes to consolidated financial statements.


                                      F-14
<PAGE>

SITI-Sites.com, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Going Concern Basis)
Nine Months Ended December 31, 2001 and the Year Ended March 31, 2001
(Amounts in thousands)
<TABLE>
<CAPTION>
                                                                          Nine Months
                                                                             Ended            Year Ended
                                                                          December 31,          March 31,
                                                                              2001                2001
---------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                 <C>
Cash flow from operating activities:
Net loss                                                                    $(1,159)            $(2,002)
Adjustments to reconcile net loss to net cash used by continuing
activities:
Impairment provision on assets                                                  157                 134
Gain on litigation settlement                                                    --                 (19)
Gain on sale of marketable securities                                            (5)                (29)
Depreciation and amortization                                                     8                  92
Loss on sale of assets                                                           74                  --
Compensation to employees and consultants  via stock and options                  8                   6
Contribution of services by management                                           65                  53
(Increase)decrease  in:
 Receivables and other assets                                                    18                   5
Increase(decrease)  in:
  Accounts payable                                                               (5)                  3
  Accrued liabilities                                                           (90)                (81)
 Income on discontinued operations                                              604               1,281
                                                                            -------             -------
Net cash used by continuing operations                                         (325)               (557)
Net cash used by discontinued operations                                       (510)               (813)
---------------------------------------------------------------------------------------------------------
Net cash used by operating activities                                          (835)             (1,370)
---------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capitalization of Artist Promotion Services                                    (157)                 --
Proceeds from sale of marketable securities                                     626               2,233
Proceeds from sale of property and equipment                                     24                  --
Purchase of marketable securities                                                --              (2,339)
Purchase of property and equipment                                               (2)                (47)
---------------------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities                                491                (153)
---------------------------------------------------------------------------------------------------------
Cash flow from financing activities:
Proceeds from the issuance of common stock                                      110               1,150
---------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                       110               1,150
---------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                                      (234)               (373)
Cash and cash equivalents, beginning of period                                  320                 693
---------------------------------------------------------------------------------------------------------
Total cash and cash equivalents, end of period (excluding cash
amounts in net assets of discontinued operations)                           $    86             $   320
                                                                            =======             =======
</TABLE>
See accompanying notes to consolidated financial statements.


                                      F-15
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEARS ENDED MARCH 31,
2002 AND 2001


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (a) MANAGEMENT'S PLAN FOR LIQUIDATION

            For a complete description of management's plan for liquidation, see
      "Notes to the Consolidated Financial Statements for the Twelve Months
      Ended March 31, 2003 - Note 1. (a)".

      (b) CHANGE TO LIQUIDATION BASIS OF ACCOUNTING

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

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

      (c) RECENT HISTORY

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

      (d) DISCONTINUED OPERATIONS

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

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


                                      F-16
<PAGE>

      New York Expo

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

      Hungry Bands

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

      New Media Music

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

      Operating results from discontinued operations are as follows:

      New York Expo:

                                                            Nine        Twelve
                                                           months       months
                                                           ended        ended
                                                          December     March 31,
                                                          31, 2001       2001
                                                          ----------------------
         Revenues                                         $      -     $     78
                                                          ----------------------

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


                                      F-17
<PAGE>

      Hungry Bands

                                                            Nine        Twelve
                                                           months       months
                                                           ended         ended
                                                          December     March 31,
                                                          31, 2001       2001
                                                          ----------------------
         Revenues                                         $     --     $      1
                                                          ----------------------

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


         New Media Music

                                                            Nine        Twelve
                                                           months       months
                                                           ended        ended
                                                          December     March 31,
                                                          31, 2001       2001
                                                          ----------------------
         Revenues                                         $      -     $      1
                                                          ----------------------

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


      (e) USE OF ESTIMATES

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

      (f) CASH AND CASH EQUIVALENTS

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


                                      F-18
<PAGE>

      (g) MARKETABLE SECURITIES

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

      (h) REVENUE RECOGNITION

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

      (i) LOSS PER COMMON SHARE

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

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

      (j) PROPERTY AND EQUIPMENT

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

      (k) INTANGIBLES

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

      (l) COMPREHENSIVE LOSS

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

      (m) WEBSITE EXPENSES

            In March 2000, the Emerging Issues Task Force of the Financial
      Accounting Standards Board issued consensuses on an emerging accounting
      issue entitled "Accounting for Web Site Development Costs" (Issue 00-2).
      These consensuses addressed costs incurred in the planning stage, the
      application and infrastructure development stage, graphics development
      stage, the content development stage, and the


                                      F-19
<PAGE>

      operating stage. The consensuses call for capitalization or expense
      treatment of various costs depending on certain criteria. The consensuses
      are applicable for costs incurred for fiscal quarters beginning after June
      30, 2000 and allows a company to adopt the consensuses as a cumulative
      effect of a change in accounting principles.

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

      (n) TERRORIST ATTACK OF SEPTEMBER 11, 2001

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

      (o) SIGNIFICANT ESTIMATES

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


2. INVESTMENT IN MARKETABLE SECURITIES

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

      As of March 31, 2002, there were no marketable securities. As of March 31,
2001 marketable securities were comprised of investments in government
securities which consisted primarily of Federal Home Loan Bank Discount Notes.
The aggregate cost, fair value and unrealized holding gains for those Notes held
at March 31, 2001 are as follows:

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

3. STOCKHOLDERS' EQUITY

      (a) CLASS A CONVERTIBLE PREFERRED STOCK

      Shares of Class A Convertible Preferred Stock were convertible to common
stock on a one-to-one basis upon the request of the holder and were
automatically converted on March 31, 1999. Until March 31, 1999, holders of such
shares had a liquidation preference in bankruptcy and had the same voting rights
as


                                      F-20
<PAGE>

the common stockholders. During the fiscal year ended March 31, 1999 all
shares previously not converted (approximately 813,000), were converted from
preferred stock to common stock.

      (b) STOCK AND OPTION ISSUANCES

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

            (i) 1996 INCENTIVE DEFERRAL PLAN

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

            (ii) 1996 STOCK INCENTIVE PLAN

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

      Additional information as follows:

                                                               Shares   Weighted
                                                              Subject    Average
                                                                 to     Exercise
                                                              Options     Price
                                                              ------------------
      Outstanding at March 31, 2001 at $1.69-$2.15 per share   41,500     $2.13
       Granted, exercised and extinguished                         --     $  --
                                                              ------------------
      Outstanding at March 31, 2002 at $1.69-$2.15 per share   41,500     $2.13
                                                              ==================

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

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

            (iii) 1998 CONSULTANT STOCK INCENTIVE PLAN

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

                                                               Shares   Weighted
                                                              Subject    Average
                                                                 to     Exercise
                                                              Options     Price
                                                              ------------------
      Outstanding at March 31, 2001 at $0.875-$2.15 per share  40,000     $1.19
      Granted, exercised and extinguished                          --     $  --
                                                              ------------------
      Outstanding at March 31, 2002 at $0.875-$2.15 per share  40,000     $1.19
                                                              ==================


                                      F-21
<PAGE>

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

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

      $0.875 to $2.15            40,000              6.15           $1.19

            (iv) 1999 STOCK OPTION PLAN

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

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

            (v) SEVERANCE OPTIONS

            In connection with the change of control transaction described in
      Note 1(a), the Company's prior management granted options to acquire an
      aggregate of 300,000 shares of Reorganized SITI Common Stock as part of a
      severance package for employees, officers and/or directors of the Company
      who were resigning and executing settlement agreements in connection with
      the change of control transaction. This plan was implemented concurrently
      with the December 11, 1998 stock purchase agreement between the Company
      and Powers & Co. (a sole proprietorship owned by Lawrence M. Powers) and
      the option agreements were executed on December 11, 1998.

      Additional information as follows:

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


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

                                                 Weighted
                                                 Average          Weighted
                            Outstanding and      Remaining        Average
      Range of Exercise     Exercisable at       Contractual      Exercise
      Prices                March 31, 2002       Life (Years)     Price
      --------------------------------------------------------------------
      $0.35 per share          300,000              1.70           $0.35


                                      F-22
<PAGE>

      (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 year ended March 31, 2001. However,
      there were 1,005,000 shares issued as compensation during the fiscal year
      ended March 31, 2001. There were 500,000 stock options granted during the
      fiscal year ended March 31, 2002.

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

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

                                       Nine months ended    Year ended March 31,
                                       December 31, 2001            2001

                                         (In thousands, except per share data)
                                       -----------------------------------------
          Net Loss:
             As reported                   $(1,159)               $(2,002)
             Pro forma                     $(1,165)               $(2,004)

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

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

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

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

5. COMMITMENTS AND CONTINGENCIES

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


                                      F-23
<PAGE>

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

6. INCOME TAXES

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


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

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

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

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

                                                   Nine months
                                                      ended         Year ended
                                                   December 31,      March 31,
                                                       2001            2001
                                                   ---------------------------
                                                      (Amounts in thousands)

Net loss                                            $ (1,159)       $ (2,002)
                                                   ===========================

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

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

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.


                                      F-24
<PAGE>

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

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

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

8. STATEMENTS OF CASH FLOWS

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

Non-cash transactions:
    Compensation to consultants and employees via
    stock and options                                   $   8            $   6
    Contribution by management (rent and compensation)  $  65            $  53
    Gain on litigation                                  $  --            $ (19)
    HungryBands.com, NewMediaMusic.com and
    NewYorkExpo.com acquisitions                        $  --            $  53
Discontinued Operations Non-cash transactions:
      Depreciation                                      $  16            $  30
      Compensation to employees via stock               $  10            $  77
      Contribution of services and rent                 $ 131            $ 215

9. SEGMENT INFORMATION

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

10. GOODWILL

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


                                      F-25
<PAGE>

Technical Director, and Ari Blank, Tropia's former Design Director. Such
individuals have since waived any rights to the escrowed 158,333 shares, and
have returned 50,000 of the shares delivered to them at the 1999 closing.

      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-26
<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

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

12. OTHER AGREEMENTS

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

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

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

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

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

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

      Messrs. Powers, Ingenito and Iannitto 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.


                                      F-27
<PAGE>

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

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

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

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

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

      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. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

      As of March 31, 2002, accounts payable and accrued liabilities were
comprised of the following:

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

                  Accrued audit and tax fees         $     25
                  Accrued expenses                          7
                                                     ---------
                                                     $     32


                                      F-28
<PAGE>

14. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

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

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

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


                                                   Quarter Ended
2001                                Mar. 31     Dec. 31    Sept. 30      June 30
--------------------------------------------------------------------------------

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


                                      F-29