U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-KSB

(Mark One)
     [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934
          For the fiscal year ended: December 31, 1999
     [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934 For the transition period from _________ to __________

                         Commission file number: 1-14076

                                  VIZACOM INC.
                 (Name of small business issuer in its charter)
              Delaware                                 22-3270045
      (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                Identification No.)

          Glenpointe Centre East,
  300 Frank W. Burr Boulevard - 7th Floor
            Teaneck, New Jersey                          07666
(Address of principal executive offices)               (Zip Code)

Issuer's telephone number:  (201) 928-1001

Securities registered under Section 12(b) of the Exchange Act:  Common stock,
par value $.001

Securities registered under Section 12(g) of the Exchange Act:  None

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange Act 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 __

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     State issuer's net revenues for its most recent fiscal year:  $19,891,357

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant was $61,616,465, at March 31, 2000, based on the last bid price
of the  Common  Stock on such date of $6 - 1/8 per  share,  as  reported  by The
Nasdaq Stock Market, Inc.

     As of March 31, 2000, there were a total of 11,882,539 shares of the Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

<PAGE>


     Throughout  this Annual Report on Form 10-KSB,  the terms "we," "us," "our"
and "our  company"  refers to Vizacom  Inc.  and,  unless the context  indicates
otherwise, our subsidiaries, Serif Inc., Serif (Europe) Limited, Software
Publishing  Corporation,   Renaissance  Multimedia,  Inc.,  PWR  Systems,  Inc.,
Junction  15  Limited,   VisualCities.com  Inc.  and  other  subsidiaries  on  a
consolidated basis.

INTRODUCTORY COMMENT - FORWARD-LOOKING STATEMENTS.

     Statements contained in this Annual Report on Form 10-KSB include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the  Exchange  Act.  Forward-looking  statements  involve
known and unknown risks, uncertainties and other factors which could cause our
actual results,  performance and  achievements,  whether expressed or implied by
such   forward-looking   statements,   not  to  occur  or  be   realized.   Such
forward-looking statements generally are based upon the Company's best estimates
of future results, performance or achievement, based upon current conditions and
the  most  recent  results  of  operations.  Forward-looking  statements  may be
identified  by the use of  forward-looking  terminology  such as "may,"  "will,"
"expect,"  "believe,"  "estimate,"  "anticipate,"  "continue" or similar  terms,
variations  of those terms or the negative of those terms.  Potential  risks and
uncertainties include, among other things, such factors as:
     -    the market acceptance and amount of sales of our products and
          services,
     -    the  success  of  our  expansion  into  Internet  and  other
          e-commerce solutions offerings,  such as web site design,  web-enabled
          customer service and systems integration,
     -    our  success  in  integrating  the  operations  of  acquired
          companies,  including  Renaissance  Multimedia,  Junction  15 and  PWR
          Systems, into a coordinated and complimentary operation,
     -    the extent that we are able to generate  e-commerce revenues from,
          build membership in and implement technological  enhancements to
          our VisualCities.com Internet commerce network,
     -    our ability to retain an active user base, attract new users
          and maintain customer  satisfaction for our software products, as well
          as our VisualCities.com and other web sites,
     -    the extent  that our  direct  marketing  operations  achieve
          satisfactory   response   rates,
     -    our   ability  to  obtain sufficient supplies of marketable products,
     -    the competitive environment within the industries in which we operate,
     -    our ability to raise additional capital,
     -    the extent to which we  are  successful  in   developing,   acquiring
          or  licensing products which are accepted by the market,
     -    consumer confidence in the security of transactions on our web sites,
     -    our ability to attract and retain qualified personnel,
     -    business and consumer trends,
     -    the cost-effectiveness of our product development activities, and
     -    the other  factors and  information  disclosed and discussed under
          "Risk Factors" below and in other sections of this Annual Report on
          Form 10-KSB.

     Investors should  carefully  consider such risks,  uncertainties  and other
information, disclosures and discussions which contain cautionary statements
identifying  important  factors  that  could  cause  actual  results  to  differ
materially from those provided in the forward-looking  statements.  We undertake
no  obligation  to  publicly  update or revise any  forward-looking  statements,
whether as a result of new information, future events or otherwise.


ITEM 1.  DESCRIPTION OF BUSINESS.

OVERVIEW

     We  provide   business-to-business  and   business-to-consumer   e-commerce
solutions to businesses seeking to improve their operations through the use of
Internet-based  technologies.  We also develop and market  visual  communication
software  products  and  resell  third-party  computer  software,  hardware  and
ancillary products.

     Our  e-commerce  solutions  are  intended to aid our  clients in  improving
business efficiencies, enhancing customer relationships and marketing, or
branding,   their   businesses,   products   and   services.   We  combine our

                                      -2-
<PAGE>

industry-specific knowledge and local implementation abilities in providing
e-commerce  solutions  to  United  States-  and  European-based  companies.  Our
e-commerce solutions clients primarily consist small and mid-sized companies and
divisions  and  local  offices  of  large,  multi-national   corporations.   Our
e-commerce solutions include the following services:

     -    web site development, including web site graphic design, e-business
          consulting, marketing and implementation,
     -    systems integration services,  including Internet,  intranet and
          extranet  development,  web site-to-  legacy systems  integration,
          computer  network  design  and   implementation, and acting as  an
          authorized   value-added-reseller of computer  and  other  digital
          communication equipment, and
     -    e-commerce call center services,  including  multi-national,
          multi-lingual  web-enabled  call-center sales,  customer and
          technical-support  services,  and   related  direct marketing,
          telemarketing and product fulfillment services.

     We gained our competencies in web site development and systems  integration
through our recent acquisitions of Renaissance  Multimedia,  Junction 15 and PWR
Systems. We provide additional information on these acquisitions in the "Recent
Acquisitions,  Financings  and Other  Events"  subsection  commencing  below and
elsewhere throughout this Annual Report on Form 10-KSB.

     We gained our competencies in customer service, telemarketing, direct
marketing and product fulfillment services through our historical business of
developing and marketing our own and third-party computer products. We currently
operate three telemarketing call centers in Nashua, New Hampshire, Nottingham,
England, and Aachen, Germany. We have web-enabled each of these three centers
using an Internet protocol-based multimedia contact center technology that we
licensed from a third-party. As such, our call centers are capable of providing
real-time chat, audio and video communication services between our call-center
representatives, acting on behalf of our clients, and our clients' customers
under current bandwidth capabilities. Our call centers are operated on a 24
hours per day, seven days per week, 365 days per year, commonly referred to as
on a 24/7/365, basis.

     We  continue  to develop  and market  visual  communications  products.  We
currently offer twenty-eight software products, which we developed, that operate
on Windows-based operating systems for personal and networked computers. Our
current flagship software products include Serif PagePlus 6, Harvard Graphics
98, HarvardGraphics Easy Presentations, Serif DrawPlus 4 and Serif PhotoPlus 6.
We also offer a number of hardware products, primarily digital cameras,
manufactured by third parties, and sell software products packaged together with
hardware products.

Through our Serif Inc. and Serif (Europe) Limited subsidiaries, two
companies we acquired in May 1996, we have over ten years of experience in
software development and international direct marketing and tele- marketing. We
believe the Serif brand is highly regarded and well-known throughout the United
Kingdom for its line of visual communication graphic software products. Through
our Software Publishing Corporation subsidiary, which we acquired in December
1996, we own the Harvard Graphics brand and product line. We believe the Harvard
Graphics brand is internationally recognized as a pioneer in computer software
applications, and is respected internationally for its presentation graphics
software products.

We also operate VisualCities.com, a destination web site that offers
information, content, membership benefits, products and services targeted at the
visual communication computer products community. We intend to utilize this web
site to sell visual communications products, including our own products and
products manufactured by third parties, to users in our targeted market.

RECENT ACQUISITIONS, FINANCINGS AND OTHER EVENTS

ACQUISITIONS

We have implemented a strategy to acquire e-commerce service providers in
order to expand our range and depth of services. The acquisitions completed
through March 31, 2000 consist of:

                                      -3-
<PAGE>


Renaissance Multimedia

     On February 15, 2000, we acquired Renaissance Computer Art Center, Inc,
d/b/a Renaissance Multimedia, a New York City-based digital communication
company focused on designing, implementing and supporting Internet web sites and
digital businesses through the use of new media. We acquired Renaissance
Multimedia through a merger of Renaissance Computer Art Center, Inc. with and
into RCAC Acquisition Corp., a wholly-owned subsidiary which we formed for this
specific transaction. RCAC changed its name to Renaissance Multimedia Inc.
following the merger.

     The Renaissance Multimedia merger was completed pursuant to the terms of an
Agreement and Plan of Merger, dated February 15, 2000. Pursuant to this merger
agreement, we issued an aggregate of 449,870 shares of our common stock and paid
an aggregate of $250,000 to the stockholders of Renaissance Multimedia at the
effective time of the merger. One-half of the shares issued are subject to an
escrow agreement to protect against any inaccuracy in any of the representations
and warranties of Renaissance Computer Art Center, Inc. and its stockholders
contained in this merger agreement.

     The 449,870 shares of our common stock were issued in reliance upon an
exemption from registration under the Securities Act of 1933 pursuant to Section
4(2) thereof. As a result, these shares are subject to restrictions on transfer
under the applicable provisions of the Securities Act. In accordance with the
Renaissance Multimedia merger agreement, we entered into a registration rights
agreement in which we granted the parties who received these shares customary
piggy back registration rights in connection with future registration statements
which we may file under the Securities Act.

     Under lock-up agreements entered into at the time of the Renaissance
Multimedia merger, each party who received any of the shares of our common stock
issued in the merger agreed to limit sales of these shares to 10% of the total
shares each received during the period from six to nine months following the
merger, and an additional 10% during the following three months.

     We also have entered into a three year employment agreement with Andrew
Edwards, the president of Renaissance Multimedia at the time of the merger.
Under this agreement, Mr. Edwards will serve as one of our vice presidents and
president of Renaissance Multimedia, Inc. This agreement also contains
restrictions on Mr. Edwards engaging in competition with us for the term of the
agreement and for one year thereafter and provisions protecting our proprietary
rights and information.

Junction 15

     On March 9, 2000, we acquired Junction 15 Limited, a London,  England-based
digital communication company focused on designing, implementing and supporting
Internet web sites and digital businesses through the use of new media. We
acquired Junction 15 through our purchase of all of the outstanding capital
stock of Junction 15 from Junction 15's shareholders.

     The Junction 15 acquisition was completed  pursuant to the terms of a Stock
Purchase Agreement, dated March 9, 2000, between us and the shareholders of
Junction 15. Pursuant to the acquisition agreement, we issued an aggregate of
681,818 shares of our common stock and paid an aggregate of $250,000 to the
Junction 15 shareholders.

     The 681,818  shares of our common stock that we issued in this  acquisition
transaction were issued in reliance upon an exemption from registration under
the Securities Act of 1933. As a result, these shares are subject to
restrictions on transfer under the applicable provisions of the Securities Act.
In accordance with the acquisition agreement, we entered into a registration
rights agreement in which we granted the parties who received these shares
customary piggy back registration rights in connection with future registration
statements which we may file under the Securities Act.

                                      -4-
<PAGE>


     We  also  entered  into  lock-up   agreements   with  each  of  the  former
shareholders of Junction 15 regarding their disposition of the shares of our
common stock that we issued in the acquisition transaction, the extent of the
lock-up being dependent upon the former shareholders' relationships with
Junction 15. For those former shareholders who were directors of Junction 15 at
the time of the acquisition transaction and an affiliate, who received an
aggregate 583,767 shares of our common stock in the transaction, the lock-up
agreements prohibit the disposition of such shares prior to March 9, 2002,
except for (a) 10% of the total shares each received during the period of
September 9, 2000 to March 8, 2001, (b) an additional 10% during the period of
March 9, 2001 to September 8, 2001, and (c) an additional 10% during the period
of September 9, 2001 to March 8, 2002. For those former shareholders who were
not directors of Junction 15 at the time of the acquisition transaction, who
received an aggregate 98,051 shares of our common stock in the transaction, the
lock-up agreements prohibit the disposition of such shares prior to March 9,
2001.

     We also have entered into a three-year  employment  agreement  with each of
Ian McCalla, the Managing Director of Junction 15, and Paul Simpson, a Director
of Junction 15 at the time of the transaction. Under his agreement, Mr. McCalla
will serve as Managing Director of Junction 15 and receive a base annual salary
of 90,000 (or $144,000, based on currency exchange rates in effect on March 31,
2000). This base salary will increase to 100,000 on March 9, 2001 (or $160,000,
based on currency exchange rates in effect on March 31, 2000). Mr. McCalla will
also be entitled to annual bonuses based upon Junction 15's performance during
the employment period. Under his agreement, Mr. Simpson will serve as a Director
of Junction 15 and receive a base salary of 50,000. Mr. Simpson will also be
entitled to annual bonuses based upon the gross profit to Junction 15 from
projects generated through Mr. Simpson's sales efforts. These employment
agreements also contain restrictions on Messrs. McCalla or Simpson engaging in
competition with us for the term of the agreement and for one year thereafter
and provisions protecting our proprietary rights and information.

PWR Systems

     Effective March 27, 2000, we acquired PC Workstation  Rentals,  Inc., d/b/a
PWR Systems, a Long Island, New York-based designer and integrator of Internet,
intranet and extranet systems and other computer networks and
value-added-reseller of computer and digital communication equipment. The
acquisition was in the form of a merger of PWR into PWR Acquisition Corp., a
wholly-owned subsidiary we formed for this transaction.

     The PWR Systems acquisition was completed pursuant to an Agreement and Plan
of Merger, dated as of February 28, 2000, among us, PWR Acquisition, PWR and
PWR's shareholders. Pursuant to the merger agreement, at the closing of the
transaction, we made a cash payment to the PWR shareholders of $1 million and
delivered to the PWR shareholders our promissory notes in the aggregate
principal amount of $500,000. These notes are payable in twelve equal monthly
installments, commencing on April 27, 2000. These notes are convertible into
shares of our common stock, at a conversion price of $3.00 per share, and bear
interest at 6.30%. Accrued interest on these notes is payable with the monthly
principal payments. These notes have been guaranteed by our PWR subsidiary. The
stock portion of the acquisition consideration payable at closing was in the
form of 1,500,000 shares of our common stock.

     The  PWR  Systems  merger  agreement  provides  for  additional  contingent
consideration of up to $350,000 per year for the three-year period following the
closing of the acquisition, based upon increases in PWR's earnings before
interest, taxes, depreciation and amortization. We are also obligated to issue
additional shares of our common stock if the market price of our common stock
falls below $1.00 per share for any consecutive 30-day period during the
one-year period following the closing of the acquisition.

     Of the shares of our  common  stock  issued at  closing of the PWR  Systems
acquisition, 1,470,000 shares are subject to lock-up agreements between each PWR
shareholder and us. Under these lock-up agreements, the PWR shareholders are
prohibited from selling or otherwise transferring any of the shares that they
receive at closing, except for (a) 10% of the shares received during a six month
period commencing six months after the closing, (b) an additional 10% during the
next six-month period, and (c) an additional 10% during the next six-month
period. All remaining shares held by the PWR shareholders two years after the
closing will be free of any sale restriction under

                                      -5-
<PAGE>

the lock-up agreements. Any shares issued upon conversion of our promissory
notes delivered at closing in the aggregate principal amount of $500,000 will
not be subject to these lock-up agreements.

     All of the shares of our common stock issued in the PWR Systems acquisition
transaction, including those that may be issued upon conversion of the notes
delivered at closing, will be issued in reliance upon an exemption from
registration under Section 4(2) of the Securities Act of 1933. As a result,
these shares will be subject to restrictions on transfer under the applicable
provisions of the Securities Act. In accordance with the merger agreement, at
the closing, we entered into a registration rights agreement in which we granted
the PWR shareholders one demand and customary piggy-back registration rights.

     In accordance with the acquisition agreement, we made a capital
contribution of $2 million to PWR immediately following the closing.

     We have entered into three year  employment  agreements  with each of PWR's
executive officers and sole stockholders, Vincent DiSpigno and David N. Salav.
The employment agreements with each of Messrs. DiSpigno and Salav provide for
their service as vice presidents of Vizacom and as executive officers of our PWR
subsidiary. We were also obligated to expand our board of directors and cause
the election of each of Messrs. DiSpigno and Salav to our expanded board. Each
of these employment agreements also provide for annual base salaries of
$200,000, provide for annual bonuses of up to $25,000, based upon PWR attaining
specified performance thresholds, and contain restrictions on their engaging in
competition with us for the term of the agreement and for one year thereafter
and provisions protecting our proprietary rights and information.

     Prior to the  closing,  PWR  delivered to the PWR  shareholders  promissory
notes in the aggregate principal amount of $888,638. This amount represents an
estimate of PWR's accumulated retained earnings as of March 27, 2000. These
notes bear interest at 6.30% per annum, and are payable in four quarterly
payments, commencing June 27, 2000. The principal amount of these PWR notes will
be adjusted to reflect PWR's actual accumulated retained earnings at March 31,
2000. Payment of any amount outstanding under these PWR notes will be
accelerated to the date of our receipt of aggregate gross proceeds of at least
$15 million from the sale of our securities since November 12, 1999. We have
guaranteed these PWR notes.

CREDIT FACILITY

     In the first  quarter of 2000,  we  obtained a two year $1 million  line of
credit facility with Churchill Consulting. The interest rate on the line of
credit is 8% per year, compounded monthly, on the outstanding principal amount.
In connection with our first borrowing under this line of credit facility, we
issued to Churchill warrants exercisable for seven years to purchase 250,000
shares of our common stock at $3.00 per share. Under this line of credit
facility, all future borrowings will be due and payable 180 days after funding.
In February 2000, we borrowed $1 million under this line of credit facility.
This amount has been repaid. As of March 31, 2000, no amount was outstanding
under this line of credit facility.

PRIVATE PLACEMENTS OF OUR COMMON STOCK

     In March 2000, we sold a total of 936,954  shares of our common stock to 45
accredited investors for gross proceeds of $4,216,293. The issuances of theses
shares were private transactions exempt from registration under Section 4(2) of
the Securities Act of 1933.

     Also in  March  2000,  we  accepted  subscriptions  for and sold a total of
762,471 shares of our common stock to eleven foreign investors for gross
proceeds of $3,392,996. The issuances of these shares were private transactions
exempt from registration pursuant to Section 4(2) of, and Regulation S
promulgated under, the Securities Act.

                                      -6-
<PAGE>

PRO FORMA FINANCIAL INFORMATION

     The following unaudited pro forma condensed consolidated financial
information gives effect to the Renaissance Multimedia merger, Junction 15
acquisition and PWR Systems merger, using the purchase method of accounting, and
the effect of the recent sales of our common stock necessary to complete these
acquisitions, after giving effect to the pro forma adjustments described in the
accompanying notes. We are providing this pro forma financial information to aid
you in your analysis of the financial condition of Vizacom following these
mergers, acquisition and financings. We derived this pro forma financial
information from the audited financial statements of Vizacom, Renaissance
Multimedia, Junction 15 and PWR Systems, each for the year ended December 31,
1999. The unaudited pro forma condensed consolidated financial information
should be read in conjunction with the audited historical financial statements
and related notes of Vizacom, Renaissance Multimedia, Junction 15 and PWR
Systems, which are each included in this Annual Report on Form 10-KSB. The
unaudited pro forma condensed consolidated balance sheet gives effect to these
mergers, acquisition and financings as if they had each occurred on December 31,
1999 and combines the unaudited condensed consolidated historical balance sheets
of Vizacom, Renaissance Multimedia, Junction 15 and PWR Systems as of December
31, 1999. The unaudited pro forma condensed consolidated statements of income
for the year ended December 31, 1999 assume these mergers, acquisition and
financings were each effected on January 1, 1999. The unaudited pro forma
condensed consolidated financial information is presented for illustrative
purposes only and does not purport to be indicative of the operating results or
financial position that would have actually occurred if these mergers,
acquisition and financings had each been effected on the dates indicated, nor is
it indicative of our future operating results or financial position. The pro
forma adjustments are based on the information and assumptions available as of
March 31, 2000.

                                      -7-
<PAGE>


            UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                December 31, 1999
<TABLE>
<CAPTION>

                                                   Historical
                             ----------------------------------------------------       Pro Forma        Pro Forma
                             Vizacom        Renaissance     Junction 15       PWR      Adjustments      Consolidated
                             -------        -----------     -----------       ---      -----------      ------------
<S>                        <C>             <C>            <C>              <C>          <C>              <C>
Cash and cash equivalents  $ 1,730,495     $   131,316    $           40   $   457,850  $ 2,885,175 (A)  $   5,204,876
Marketable securities        2,746,678                --              --            --   (1,992,519)(B)        754,159
Receivables, net               733,410           245,270         231,862     3,692,224           --          4,902,766
Inventories                  1,457,604                --           5,363       567,836           --          2,030,803
Prepaid expenses and
  other current assets         526,552            19,854              --         3,426           --            549,832
                           ------------      ------------   -------------   ----------- ------------     --------------
Total current assets         7,194,739           396,440         237,265     4,721,336      892,656         13,442,436

Property and equipment,
  net                          828,108            81,677          39,009         6,189           --            954,983
Goodwill and other
  intangibles, net             118,665                --              --            --   13,022,923 (F)     13,141,588
Restricted cash                259,838                --              --            --           --            259,838
Deferred consulting costs    1,269,859                --              --            --           --          1,269,859
Other assets, net              803,762            14,424              --        18,904           --            837,090
                           ------------      ------------   -------------   ----------- ------------     --------------
Total assets               $10,474,971       $   492,541    $    276,274    $4,746,429  $13,915,579      $  29,905,794
                           ============      ============   =============   =========== ============     ==============

Revolving lines of credit  $        --       $        --    $         --    $1,748,131  $        --      $   1,748,131
Notes payable                       --            13,663              --       850,000    1,281,015 (C)      2,144,678
Accounts payable             4,111,748            57,451          38,859     1,340,160           --          5,548,218
Accrued and other
  liabilities                1,816,744           158,352         100,137        46,288           --          2,121,521
Value-added taxes payable      393,927                --          62,290            --           --            456,217
Due to shareholder                  --            19,475              --            --      (19,475)(D)             --
Current portion of capital
  lease obligations             63,792             6,793              --            --           --             70,585
Current portion of long-
  term debt                    155,554                --          66,151            --      (66,151)(A)        155,554
                           ------------      ------------   -------------   ----------- ------------     --------------
Total current liabilities    6,541,765           255,734         267,437     3,984,579    1,195,389         12,244,904

Capital lease obligation,
  long term                     98,265             1,803              --            --           --            100,068
Long-term debt, less
  current maturities           100,410            39,381          19,194            --      (19,194) (A)       139,791
                           ------------      ------------   -------------   ----------- ------------     --------------
Total liabilities            6,740,440           296,918         286,631     3,984,579    1,176,195         12,484,763
                           ------------      ------------   -------------   ----------- ------------     --------------

Common stock, $.001
  par value                      7,236             1,000           6,935            13       (4,198)(E)         10,986
Additional paid-in capital  49,851,699           119,577          26,534        17,107   13,519,532 (E)     63,534,449
(Accumulated deficit)
  retained earnings        (47,864,635)           75,046         (43,826)      781,015     (812,235)(E)    (45,872,116)
                                                                                         1,992,519  (B)
Treasury stock                 (10,395)               --              --       (36,285)      36,285 (E)        (10,395)
Other comprehensive
  income (loss)              1,750,626                --              --            --   (1,992,519)(B)       (241,893)
                           ------------      ------------   -------------   ----------- ------------      -------------
Total stockholders'
  equity                     3,734,531           195,623         (10,357)      761,850   12,739,384         17,421,031
                           ------------      ------------   -------------   ----------- ------------      -------------
Total liabilities and
  stockholders' equity     $10,474,971       $   492,541    $    276,274    $4,746,429  $13,915,579       $ 29,905,794
                           ============      ============   =============   =========== ============      =============
</TABLE>


                                      -8-
<PAGE>

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
                      PRO FORMA ADJUSTMENTS
                        December 31, 1999

NOTE A  CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>

                                       Renaissance       Junction 15             PWR         Financing        Total
<S>                                   <C>                <C>                <C>             <C>             <C>
Cash portion of purchase price        $  (250,000)       $  (250,000)       $(1,000,000)    $       --      $(1,500,000)
Legal and accounting fees for
  acquisitions                           (175,000)           (85,000)          (200,000)            --         (460,000)
Finder's fees paid in cash                     --            (69,480)                --             --          (69,480)
Funds raised as a requirement
  of PWR acquisition                           --                 --                 --      5,000,000        5,000,000
                                      ------------      -------------       ------------    -----------     ------------
                                         (425,000)          (404,480)        (1,200,000)     5,000,000        2,970,520
Repayment of loans concurrent
  with purchase                                --            (85,345)                --             --          (85,345)
                                      ------------      -------------       ------------    -----------     ------------
Net impact of acquisitions
  and financing on cash               $  (425,000)      $   (489,825)       $(1,200,000)    $5,000,000      $ 2,885,175
                                      ============      =============       ============    ===========     ============
</TABLE>


NOTE B  MARKETABLE SECURITIES

In an August 10, 1999  agreement,  the Company agreed to pay a finder a 10% fee,
payable in shares of Xceed,  Inc. in connection with acquisitions at that date's
market value of $13.375. The fees were calculated as follows:
<TABLE>
<CAPTION>

                                                Renaissance              PWR               Total
<S>                                            <C>                  <C>                  <C>
Gross purchase price . . . . . .               $  2,000,000         $  6,000,000
10% fee. . . . . . . . . . . . .                    200,000              600,000
Conversion price per agreement .                     13.375               13.375
Shares due to finder under the
     agreement . . . . . . . . .                     14,953               44,860
Market value of Xceed shares
     at closing date . . . . . .                     39.875               31.125
                                               -------------        -------------
Finder's fee paid in Xceed
     shares. . . . . . . . . . .               $    596,251         $  1,396,268         $  1,992,519
                                               =============        =============        =============

Realized gain on disposition
     of Xceed shares . . . . . .               $  (127,061)         $   (381,279)        $   (508,340)
                                               =============        =============        =============
</TABLE>


NOTE C  NOTES PAYABLE
<TABLE>
<CAPTION>

                                                        PWR             Total
<S>                                                  <C>             <C>
Note payable for retained earnings at closing        $   781,015     $  781,015
Convertible note . . . . . . . . . . . . .               500,000        500,000
                                                     ------------    -----------
Note payable resulting from PWR acquisition .        $ 1,281,015     $1,281,015
                                                     ============    ===========
</TABLE>

NOTE D DUE TO SHAREHOLDER
<TABLE>
<CAPTION>

                                                     Renaissance          Total
<S>                                                  <C>             <C>
Debt forgiven by shareholder on acquisition
     closing. . . . . . . . . . . . . . . . .        $    19,475     $   19,475
                                                     ============    ===========
</TABLE>

                                      -9-
<PAGE>

NOTE E  STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                       Renaissance       Junction 15             PWR         Financing        Total
<S>                                    <C>                <C>                 <C>             <C>
Common shares issued in
  acquisitions and financing           $    449,870       $   681,818         $ 1,500,000     $  1,117,739      $ 3,749,427
                                       =============      ============        ============    =============     ============

Market price per share                $      3.89       $      3.30         $      3.00     $       4.47

Common stock, $.001 par value                 450               682               1,500           1,118            3,750
Elimination of acquired
  companies' common stock                  (1,000)           (6,935)                (13)             --           (7,948)
                                       -----------      ------------        ------------    ------------     ------------
Effect on common stock account        $      (550)      $    (6,253)        $     1,487     $     1,118      $    (4,198)
                                      ============      ============        ============    ============     ============

Paid-in capital                       $ 1,749,550       $ 2,249,318         $ 4,498,500     $ 4,998,882      $13,496,250
Elimination of acquired
  companies' paid-in capital             (119,577)          (26,534)            (17,107)             --         (163,218)
Value of 50,000 options issued
  to PWR consultants                           --                --             186,500              --          186,500
                                      ------------      ------------        ------------    ------------     ------------

Elimination of acquired companies:

Effect on additional paid-in
  capital                             $ 1,629,973       $ 2,222,784         $ 4,667,893     $ 4,998,882      $13,519,532
                                      ============      ============        ============    ============     ============
(Accumulated deficit) retained
  earnings                            $    75,046       $   (43,826)        $   781,015     $        --      $  (812,235)
                                      ============      ============        ============    ============     ============

Treasury stock                        $        --       $        --         $   (36,285)    $        --      $    36,285
                                      ============      ============        ============    ============     ============
</TABLE>


NOTE F GOODWILL AND OTHER INTANGIBLES

     Goodwill arose from the preliminary assignment of fair values to the assets
and liabilities acquired. The amount may increase or decrease as a result of the
contingent consideration on the PWR acquisition. Additionally, further
assessment of fair values and completion of any appraisals may result in changes
in either valuation or allocation of the excess purchase price over fair value.
For the above pro forma goodwill was determined as follows:
<TABLE>
<CAPTION>

                                                              Renaissance       Junction 15        PWR            Total

<S>                                                           <C>               <C>             <C>              <C>
Cash paid as indicated in Note A                              $   425,000       $   404,480     $ 1,200,000      $  2,029,480
Stock issued as indicated in Note E                             1,750,000         2,250,000       4,500,000         8,500,000
Notes issued as indicated in Note C                                    --                --         500,000          500,000
Marketable securities issued as indicated in Note B               596,251                --       1,396,268        1,992,519
Forgiveness of shareholder debt upon acquisition                  (19,475)               --              --          (19,475)

Consultant options indicated in Note E                                 --                --         186,500          186,500
                                                              ------------      ------------     -----------     ------------
Total consideration paid                                        2,751,776         2,654,480       7,782,768       13,189,024
Less: Fair value of acquired net assets (liabilities)
  based on preliminary assessment                                 195,623           (10,357)        (19,165)         166,101
                                                              ------------      ------------     -----------     ------------
Goodwill and other intangibles                                $ 2,556,153       $ 2,664,837     $ 7,801,933      $13,022,923
                                                              ============      ============    ============     ============
</TABLE>

                                       10
<PAGE>


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
               For the Year Ended December 31, 1999
<TABLE>
<CAPTION>

                                                   Historical
                             ----------------------------------------------------       Pro Forma        Pro Forma
                             Vizacom        Renaissance     Junction 15       PWR      Adjustments      Consolidated
                             -------        -----------     -----------       ---      -----------      ------------
<S>                        <C>              <C>             <C>           <C>          <C>              <C>
Net sales                  $19,891,357      $1,531,400      $  717,804    $15,928,205            --     $38,068,766
Cost of goods sold           6,371,106         546,490         303,840     13,094,364            --      20,315,800
                           ------------     -----------     -----------   ------------ -------------    ------------
Gross profit                13,520,251         984,910         413,964      2,833,841            --      17,752,966

Expenses:
Selling, general and
  administrative expenses   17,175,520        925,276          392,939      2,371,756  $    179,000 (G)  21,044,491
Product development          1,027,447             --               --             --            --       1,027,447
Amortization of goodwill
  and other intangibles      2,219,363             --               --             --     1,860,418 (I)   4,079,781
Unrealized holding gain       (322,652)            --               --             --            --        (322,652)
Realized gain                 (642,444)            --               --             --      (508,340)(B)  (1,150,784)
Other (income) expense,
  net                          (59,503)        (1,668)              --         83,031        47,871 (H)      69,731
                           ------------     -----------     -----------   ------------ -------------    ------------
                            19,397,731         923,608         392,939      2,454,787     1,578,949      24,748,014
                           ------------     -----------     -----------   ------------ -------------    ------------

(Loss) income before
  income taxes              (5,877,480)         61,302          21,025        379,054    (1,578,949)      (6,995,048)
Income tax (benefit)
  expense                     (250,978)         23,000              --         12,541            --         (215,437)
                           ------------     -----------     -----------   ------------ -------------    ------------

Net (loss) income           (5,626,502)         38,302          21,025        366,513    (1,578,949)      (6,779,611)
Dividends on Series A
 and Series C
 preferred stock               (56,641)             --              --             --            --          (56,641)
                           ------------     -----------     -----------   ------------ -------------    ------------

Net (loss) income
 attributable to
common stockholders        $(5,683,143)     $   38,302      $   21,025    $   366,513  $ (1,578,949)    $ (6,836,252)
                           ============     ===========     ===========   ============ =============    =============
Pro forma loss per share -
  Basic and diluted:
  Net loss per share       $     (0.95)                                                                 $      (0.70)
                           ============                                                                 =============
  Weighted average
  number of shares           5,996,507                                                                     9,745,934
                           ============                                                                 =============
</TABLE>

                                       11
<PAGE>


NOTES TO UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      PRO FORMA ADJUSTMENTS
               For the Year Ended December 31, 1999

NOTE G  EMPLOYMENT AGREEMENTS

Represents the additional cost to PWR of $61,000 and Junction 15 of $118,000 for
compensation expense as a result of the employment agreements.


NOTE H  INTEREST EXPENSE

Represents  interest at 6.3% for the PWR retained  earnings note and convertible
note, assuming no conversion (described in Note C).


NOTE I  AMORTIZATION OF GOODWILL AND OTHER INTANGIBLES

To record amortization based on a seven-year life.

                                      -12-
<PAGE>

INDUSTRY BACKGROUND

     Today's   business   environment  has  forced  companies  to  operate  more
efficiently in order to better serve their customers' needs. In order to do
this, businesses are relying more and more on their access to information.
Computers and digital communication technology now allow companies to better
create, store, process and distribute information, whether internally or to and
from their customers, suppliers and business partners. As the information
requirements of companies have become more complex, organizations have required
a broader range of information and digital communications technology services,
including strategy, web site architecture design, application development,
systems integration and technical support. Further, the Internet has evolved
into a business transaction platform from its original use as an informational
base and reference source. However, most companies lack the ability and
resources to design, build, maintain and support their web sites, information
systems, infrastructure backbones and user-interfaces. Many also do not have the
capacity to support and improve their on-line marketing and sales in today's
fast-paced and global marketplace. Accordingly, many companies are seeking to
outsource certain or all of these responsibilities to service providers. This
trend toward outsourcing and a focus by companies on their core businesses has
resulted in a dramatic increase in the number of e-commerce service providers.
However, few service providers can perform all of these services.

     The  information  technology  services  market  has grown  most  quickly in
countries, such as the United States and those in western and northern Europe,
where high personal computer usage and technology adoption rates among
businesses and consumers allow for potentially large client bases. We believe
that the information technology and digital communications services market in
western and northern Europe will experience a significant growth in the next few
years. We intend to leverage our experience and reputation in the United States
and Europe, and to make further strategic acquisitions, to benefit from this
anticipated growth in the United States and Europe.

     Today,   digital   communications    e-commerce   solutions   are   largely
Internet-based. Forrester Research, Inc. projects that the size of the worldwide
Internet professional services market will grow from $2.4 billion in 1997 to
$32.8 billion in 2002. Internet-based solutions include intranets, extranets and
web sites. Intranets, extranets and web sites provide companies with a new set
of tools for improving basic business processes such as communications, data
transmission, marketing, transaction processing and customer service. An
intranet enables a company's employees to receive corporate information and
training efficiently, communicate through e-mail, use the internal network's
business applications, and access proprietary information and legacy databases.
An extranet can extend part or all of the functionality of a secure intranet to
selected business partners outside of the company, such as customers, suppliers
or distributors. On the consumer side, web sites support the full cycle of
customer interaction with a brand. Web sites can present advertising and
marketing materials in new and compelling fashions, display products and
services in electronic catalogs, offer products and services for sale online,
process transactions, provide customers with rapid and accurate responses to
their questions, and gather customer feedback efficiently.

     Businesses   are   rapidly   adopting   e-commerce   solutions.   Companies
implementing e-commerce solutions often must rely on fundamentally new business
approaches because these solutions utilize new technologies, allow companies to
implement a broad scope of business process improvements and are often
international in scope. Businesses seeking to realize the benefits provided by
e-commerce solutions face a formidable series of challenges presented by the
need to link business strategy with new and rapidly changing technologies and
continuously updated content. Before creating an intranet, extranet or web site,
a company must first conduct a thorough needs assessment to review its strategic
business requirements and compare them to the capabilities of its existing
processes and systems. Next, a company must design the solution and develop an
implementation plan. The implementation, establishment and maintenance of the
solution typically will require significant technical expertise in a number of
areas, such as electronic commerce systems, security and privacy technologies,
application and database programming, mainframe and legacy integration
technologies and advanced user interface and multimedia production.

     Similarly,   recent  trends  are  changing  the  marketing   communications
requirements of businesses throughout the world. Businesses must be able to
develop and execute marketing strategies rapidly, because shortened product life
cycles reduce lead times for marketing campaigns. New media, including
Internet-related services, have emerged as an integral component of marketing
and communications strategy. These new media and the increasing

                                      -13-
<PAGE>

complexity of sophisticated digital delivery, storage and multimedia
enhancement tools and technologies enable companies to improve the effectiveness
of communications, but pose additional challenges to businesses striving to link
business strategy with rapidly changing technologies.

     To perform  the  multitude  of  Internet  professional  services  functions
in-house, including integrated marketing communications, a company would have to
make substantial commitments of time, money, management and technical personnel
to keep current with rapidly evolving technologies, content presentation
techniques and competitors' offerings. Professionals with the requisite
strategic, technical and creative skills are often in short supply and many
organizations are reluctant to expand their internal information systems or
marketing departments for particular engagements at a time when they are
attempting to minimize fixed costs in order to increase returns on investment.
At the same time, external economic factors encourage organizations to focus on
their core competencies and limit workforces in the information technology
management and marketing areas. Accordingly, many businesses have chosen to
outsource a significant portion of the design, development and maintenance of
their intranets, extranets and web sites to independent professionals. These
independent professionals can leverage accumulated strategic, technical and
creative talent and track developments in a field characterized by extremely
short technology, process and content life cycles.

     In addition to confronting  issues related to their information and digital
communication equipment and the design and content of their web sites,
e-commerce companies are finding that their customers often have questions about
products and return policies, they want to know the status of their orders and
they want to give their credit card information over the telephone rather than
by over the Internet. While having a brand name and sales information on their
web site may attract consumers to their web sites, the inability to give real
time answers to potential customers can hinder the closing of the sale. One
industry consultant reported that 39% of shoppers testing web sites failed in
their buying attempts because the customers found sites to be too difficult and
estimated that customers' frustrations and disappointments would result in a
loss of more than $6 billion of potential on-line revenue for the 1999 holiday
season. Another consultant's survey showed that less than 30% of companies
respond to e-mail within 24 hours, and when customers do make contact with
someone, they get wrong answers half the time. Additionally, without having
personal contact with a potential buyer, the opportunity up-sell higher quality,
higher priced goods, and to sell additional products, is lost.

OUR E-COMMERCE SOLUTIONS

     Our mission is to provide clients with the vision,  expertise and resources
required to help build their businesses using interactive e-commerce solutions.
To capitalize on the opportunity presented by the rapid growth in demand for
such services, we are building and continuing to expand a professional services
firm with offices in the United States and Europe, and we intend to expand into
other important markets worldwide. We are an integrated international firm, with
local offices that can develop close client relationships and gain an in-depth
understanding of client needs. Each office benefits from the resources of our
overall organization. For example, individual offices may draw as needed upon
the assistance of one or more additional offices with specialized creative or
technical expertise. In addition, all of our offices can utilize and market our
multi-national, multi-lingual 24/7/365 web-enabled customer service call
centers.

     We  believe  that our  operational  model  enables  us to scale  rapidly by
leveraging our core resources as our operations expand. First, we believe that
our aggregation and deployment of the accumulated experience and expertise of
our network of offices provides clients with enhanced business solutions.
Second, as we build centrally accessable technology and operational resources,
we expect to be able to scale efficiently, through the growth of existing
offices and the acquisition of new offices, which we also expect to provide us
with significant numbers of additional skilled personnel. Third, our brand
development campaign, which reinforces the message that our interactive
solutions are expected to provide a secure, reliable, high-quality choice for
the provision of e-commerce professional services, increases our ability to
access and influence key client decision makers. Finally, our ability to provide
multi-national, multi-lingual 24/7/365 web-enabled customer service through our
call centers enables us to address our clients' compelling customer service
needs.

                                      -14-
<PAGE>


BUSINESS STRATEGY

     Our  objective is to become and remain a leading  international  e-commerce
services and communications firm. Our strategy to achieve this objective
includes our intent to offer, primarily within the business-to-business, or B2B,
and business-to-consumer, or B2C, markets, a full portfolio of services, or
solutions, to satisfy our customers' e-commerce needs. We intend to accomplish
our strategic objectives through the following:

      -   Solve   Internet   Customer   Service   Problems.  We   intend to
          minimize customer service  frustrations by providing a human interface
          between Internet and other businesses and their customers.  We have
          licensed  CosmoCall  Universe software, in order to provide to our
          e-commerce clients live, text-based "chat," voice, video and e-mail
          customer and  technical  support  through   our   multi-national,
          multi-lingual 24/7/365 call centers. In connection with this strategy,
          we have established a multi-lingual call center in Aachen, Germany to
          supplement our  call  centers  and   telemarketing  operations in
          Nottingham, England and Nashua, New Hampshire.  We have web-enabled
          each of these call  centers to be capable of  providing value-added
          e-commerce customer care, sales and technical support services to
          Internet  and other  e-commerce businesses.  We intend to market our
          ability to provide multi-national, multi-lingual call center customer
          and technical support and services on a 24/7/365 basis to Internet and
          other  businesses which lack the assets and expertise to provide these
          services in a cost-effective  and efficient manner.  Global Sight Inc.
          has indicated that approximately 42% of the people using the Internet
          are non-English speakers. We believe that our call center capabilities
          will help us attract clients  desiring to provide  these  non-English
          speaking users with quality sales, customer and technical support.

     -    Provide an Integrated Full Range of E-Commerce Services.  We
          believe that, by making available to our targeted market a full range
          of e-commerce services, we can provide our clients with  customized,
          complete and efficient turn-key solutions to their  e-commerce  and
          digital  communication  needs.  We further believe that,  by making
          available to our targeted  market all of our services and products on
          an  integrated basis, we may be able to increase  our  revenues  by
          obtaining  additional  client  accounts and increasing the average
          revenues generated per client account.

     -    Provide Web Site  Architecture.  We offer to our clients the
          ability to support their business, management and dissemination  of
          information  and  marketing  and  sales  efforts.  We can build  the
          architecture to maintain  and support customized  networks for the
          storage and retrieval of  information,  for internal use on intranets,
          for use with vendors and suppliers in extranets,  and for use on the
          Internet in connection with marketing and sales and other uses. We can
          design and implement web  sites  for  use by  businesses  in  their
          marketing  and  sales of their  products  and  dissemination  of other
          information.  We can also supply the support services for the client's
          Internet  and  other marketing and sales efforts, by  offering
          outsourcing services tailored for e- commerce.

     -    Use   Integration   of  Services  as  a  Tool  for  Building
          Relationships.  Our client relationships have typically begun with a
          single assignment that might encompass an electronic  commerce system,
          a web site or  building  an Internet  backbone.  Such single project
          relationships allow clients to try our services with minimal long-term
          risk. We intend to expand our relationships  beyond the single-project
          assignments to include additional  projects in other  disciplines.  We
          intend to promote the benefits of our integrated services offering and
          leverage our integrated  approach as a tool for building and enhancing
          client relationships.

     -    Build Our Position as a Leading  Internet  Services Firm. We
          intend to continue investing significantly in identifying, reviewing
          and integrating the latest Internet  technologies and accumulating and
          deploying  the  best   demonstrated   practices  for   developing  and
          implementing  Internet solutions.  We intend to develop a library of
          partially pre-built Internet solutions that combine our methodologies,
          services and reusable  software and content  objects with  third-party

                                      -15-
<PAGE>

          software. We intend to continue leveraging our international presence,
          operational scale and professional marketing tools, which provide each
          of our offices  with  resources and credibility  to convince  client
          decision makers that we can provide successful e-commerce solutions to
          meet the most demanding business needs.  We also  intend  to remain
          focused on delivering  the e-commerce solution  best  suited  to a
          client's needs.

     -    Continue  to  Expand  Geographic  Presence.   We  intend  to
          continue to expand our geographic presence through  acquisitions and
          internal growth. Our acquisition  efforts are focused on strategic and
          international opportunities.  We believe that in the fragmented market
          for providing e- commerce solutions, rapidly building a critical mass
          of  strategic,  technical  and creative talent through both internal
          growth and acquisitions will provide us with a substantial competitive
          advantage.  As of March 31, 2000,  we had offices in major markets in
          the United States, the United Kingdom and Germany.

     -    Foster Creative  Excellence.  We strive to provide  creative
          solutions in all areas of  interactive  services to meet or exceed the
          highest standards of service within each  individual discipline.  In
          order to maintain  high levels of  creativity and quality, we place
          great importance on recruiting and retaining talented employees.  We
          have received numerous honors and awards, including:

          -    Renaissance  Multimedia  was  listed as one of the
               top 50  fastest growing companies in New York City for 1999 by
               Deloitte & Touche, LLP.

          -    PWR Systems was the 385th fastest growing private company in the
               United States in 1998, according to Inc. Magazine's Inc. 500
               Special Edition (October, 1999).

          -    For 1999, Deloitte & Touche, LLP listed PWR Systems as the third
               fastest growing  technology  company on Long Island and the 367th
               fastest  growing  technology  company in the United States.

          -    PWR  received  an  Entrepreneurial   Spirit  Award sponsored
               by Hofstra  University  and KPMG LLP,  placing fifth on their
               list of Long Island's fastest growing private firms.

          -    Sm@rt  Reseller  magazine  listed  PWR  Systems as number 35 on
               its Sm@rt 50 report (November 15, 1999 issue).

          -    PWR Systems also received a 1999 Apple Reseller of the Year
               award for sales excellence and superior service.

     -    Capitalize  on Market  Opportunities  in New  Media.  We are
          striving to obtain a leadership position in the  development  and
          application  of  new  media  marketing  communication  services and
          products.  We believe that the proliferation of the Internet and other
          new media will continue to provide us with substantial  opportunities.
          These new media services and products enable companies to better focus
          their marketing messages and may  ultimately  facilitate  one-on-one
          marketing to specific  individuals.  To this end, we seek to provide
          clients with integrated new media design and development services as
          well as support in implementing  and maintaining key content delivery
          technologies.

     -    Expansion of Direct Marketing  Operations.  We have expanded our
          direct  marketing  operations  to  include  e-commerce  marketing
          services.  These services may be integrated with the direct  marketing
          and telemarketing services available  through our web-enabled  call
          centers, or may be provided on a stand-alone basis.

     -    Leverage Operational  Economies of Scale. We provide certain
          operational and administrative  services  centrally, allowing  our
          various offices to benefit from the economies of scale created by a

                                      -16-
<PAGE>

          larger operation while enabling  our offices to focus on their core
          competencies of providing superior client services.  These centrally
          provided   services  may  include  business  development  programs,
          operations  management  guides,  client support assistance, human
          resources programs, financial reporting and forecasting, performance
          appraisals and standardized methodologies.

     In implementing our business strategy we face numerous risks, including:

     -    Our   failure   to   successfully   compete   for   Internet
          professionals may affect our business operations.  We are dependent on
          key personnel, the loss of any of their services could have a material
          adverse effect on us.  Competition for qualified sales, technical and
          other personnel, including expert Windows-environment programmers, is
          intense, and we may not be able to attract or retain highly qualified
          employees in the future.  Our future success depends in  significant
          part upon the continued service of our current key technical, sales
          and senior management personnel.  The loss of the services of one or
          more of these key employees could have a material adverse effect on
          our business, operating results and financial condition.  Further,
          additions of new and departures of existing personnel, particularly in
          key  positions, can be disruptive, which also could have a material
          adverse effect upon us.

     -    Our  success is  dependent  on the  continued  growth of the Internet
          and e-commerce  services market.  The markets for the sale of goods
          over  the  Internet  and for  e-commerce  services  are new and
          emerging.  Our future revenues and growth  will  be  substantially
          dependent upon the widespread acceptance of the Internet as a medium
          for commerce by consumers and e-commerce services. Rapid growth in the
          use of and  interest in the Internet and e-commerce  services is a
          recent phenomenon. This growth may not continue. Concerns about fraud,
          privacy and other problems may mean that a sufficiently broad base of
          consumers will not adopt the Internet as a medium for commerce.  These
          concerns may increase as additional publicity over privacy issues over
          the Internet  increases.  Market acceptance for recently  introduced
          services and products over the Internet is highly uncertain, and there
          are few  proven services  and  products.  In order to expand our user
          base, we must appeal to and acquire consumers who historically  have
          used traditional means of commerce to purchase goods.

     -    Our e-commerce  business is dependent on the development and
          maintenance of the Internet and service center  infrastructures.  This
          includes maintenance of a reliable network,  with the necessary speed,
          data  capacity  and security,  as well as timely  development  of
          complementary  products  such  as  high speed  modems for providing
          reliable Internet access and services.  The Internet has experienced a
          variety of outages and other  delays as a result of damage to portions
          of its  infrastructure, and it could face  outages  and delays in the
          future.  These outages and delays could reduce the level of Internet
          usage,  as  well  as the  level  of traffic and the processing of
          transactions on our web sites and through our service  centers.  In
          addition,  the Internet could lose its viability due to delays in the
          development or adoption of new  standards  and  protocols  to handle
          increased levels of activity or due  to  increased   governmental
          regulation.  The infrastructure and complementary products or services
          necessary to make the Internet a viable commercial marketplace for the
          long term may not be developed successfully or in a timely  manner.
          Even if these products or services are developed, the Internet may not
          become a viable commercial marketplace for the goods and services such
          as those that we offer.

     -    The Internet has experienced, and is likely to continue to experience,
          significant growth in the numbers of users and amount of traffic.
          If the Internet continues to experience  increased numbers of users
          , increased frequency of use or increased bandwidth requirements,
          the Internet infrastructure may be unable to  support  the  demands
          placed on it. In  addition, the performance of the  Internet may be
          harmed by increased users' or bandwidth requirements.

                                      -17-
<PAGE>

     -    Online security  breaches could harm our business.   A significant
          barrier to online  commerce and  communications  over the Internet is
          the secure  transmission of confidential  information over public
          networks.  Our security measures may not be able to prevent all
          types of security breaches.  Our failure to prevent security breaches
          could harm our business.  We rely on  encryption  and  authentication
          technology licensed from third parties to provide the  security and
          authentication   technology   to effect secure transmission of
          confidential information,  including customer credit card numbers.
          Advances in computer capabilities,  new discoveries  in the field of
          cryptography  or other  developments may result in a compromise  or
          breach of the technology used by us to protect customer transaction
          data.  Any such compromise of our security  could harm our reputation
          and, therefore, our business.  In addition,  a party who is able to
          circumvent our security measures could misappropriate  proprietary
          information or cause interruptions in our operations.  We may need to
          expend significant resources to protect against security breaches or
          to address problems caused by breaches. Security breaches could damage
          our reputation and expose us to a risk of loss or  litigation  and
          possible liability.  Our insurance policies carry low coverage limits,
          which  may not be adequate to reimburse usfor losses caused  by
          security breaches.

     -    We are dependent on key personnel, the loss of any of their services
          could  have a  material  adverse  effect on us.  Our  future
          success depends in significant part upon the continued  service of our
          current key technical, sales and senior management personnel. The loss
          of the services of one or more of these key employees could have a
          material adverse effect on our business, operating  results  and
          financial  condition.  Further,  additions of new and departures of
          existing personnel, particularly in key positions, can be disruptive,
          which also could have a material adverse effect upon us.

     -    We may enter into fixed-price contracts which involve financial risks.
          We anticipate that certain of our e-commerce services contracts may be
          on a  fixed-price  basis,  rather than on a time and materials  basis.
          Further, as the average size of our e-commerce services contracts
          increases,  our exposure to the financial risks of fixed price
          contracts could increase.  We may assume greater financial risk on
          fixed-price contracts than on time and materials  engagements.  We
          have limited  experience in estimating  costs for our  engagements,
          particularly for larger projects.  We may have to commit unanticipated
          resources to complete some of our projects, resulting in lower gross
          margins on such contracts.  In addition, we may assume the fixed-price
          contracts  of  the  companies  we  acquire.  If we or our  acquired
          businesses fail to estimate accurately the resources and time required
          for an engagement, to manage client expectations effectively or to
          complete  fixed-price engagements  within budget, on time and to our
          clients'  satisfaction,  we could be exposed  to  cost  overruns,
          potentially leading to losses on these projects.

          In addition,  we expect to recognize revenues from fixed-fee contracts
          based on our  estimate of the  percentage  of each  project completed
          in a  reporting  period.  To the extent our  estimates are inaccurate,
          the revenues and operating profits, if any, we report for periods
          during  which we are working on a project may not  accurately reflect
          the final  results of the project and we would be required to make
          adjustments to such estimates in a subsequent period.

     -    We generally do not  expect to have  long-term  e-commerce solutions
          contracts and the need to establish  relationships with new clients
          creates an uncertain  revenue  stream.  We anticipate that our
          e-commerce solutions services clients generally will retain us on a
          project by project  basis,  rather than under long-term  contracts,
          although our e-commerce support services may  be  rendered  under
          one-year or other long-term service contracts.  As a result, a client
          may or may not  engage us for further services once a project is
          completed.   We  expect that  establishment and  development of
          relationships with additional  companies and other corporate users of
          information technology will be an important component of our business
          operations.  The absence of long-term contracts and the need for new
          clients create an uncertain revenue stream.  A client which accounts
          for a  significant  portion of our revenues in a given period may not
          generate a similar amount of revenues, if any, in subsequent periods.
          There is no assurance that we will be able to

                                      -18-
<PAGE>

          add new  clients or to secure new engagements with existing clients.
          In addition, some of our existing clients may unilaterally reduce the
          scope of, or terminate, existing projects.

     -    We may be subject to legal liability to our clients. Many of our
          e-commerce services engagements will involve the development and
          implementation of e-commerce  solutions  that are  important  to our
          clients' businesses.  Our failure or inability  to meet a client's
          expectations  in the performance of services could injure our business
          reputation  or result in a claim for substantial damages  against us
          regardless of our  responsibility for such failure.  In addition, the
          services we provide may include  confidential or proprietary client
          information.  Although we have  implemented policies to prevent such
          client information from being disclosed to  unauthorized  parties or
          used  inappropriately, any such unauthorized disclosure or use could
          result in a claim against us for substantial damages. Our contractual
          provisions attempting to limit such damages may not be enforceable in
          all instances or may otherwise fail to protect us from  liability for
          damages.

     -    The nature and extent of our international operations and currency
          fluctuations  could have an adverse  effect on our business,
          financial condition and  results of operations.  We  believe  that
          achieving profitability will require, among other matters, additional
          expansion  of  our  e-commerce  services  into foreign markets.  We
          anticipate  that our international operations will be denominated in
          either  U.S.  dollars, the Euro or local currency  and  we do not
          anticipate engaging in any hedging  activities.  Fluctuations to date
          have not been significant.  However, fluctuations in currency exchange
          rates in the future could have a material adverse impact on us.

          Our international  business  activities may be subject to:
          -    unexpected changes in regulatory requirements,
          -    tariffs  and  other  trade   barriers,
          -    costs  of localizing products for foreign countries,
          -    lack of acceptance   of  localized   products  in  foreign
               countries,
          -    longer accounts receivable payment cycles,
          -    difficulties in collecting payment,
          -    difficulties  in  managing   diverse  and  distant operations,
          -    potentially adverse tax consequences, including limitations on
               the repatriation of earnings,
          -    reduced protection for intellectual property,
          -    foreign currency exchange fluctuations,
          -    legal and regulatory requirements of different countries, such as
               differing tax and labor laws,
          -    potential political and economic instability,
          -    the burdens  of  complying  with  a  wide  variety  of
               foreign laws, and
          -    the effects of potentially high local wage scales, diverse
               employment regulations and other expenses.

          Any of these factors or others not presently contemplated by us
          could have a material  adverse  effect on our future  international
          operations.

     -    We have and may continue to have fluctuations  in our quarterly
          operating results. Our quarterly operating results have and, in
          the future, may fluctuate significantly,  depending on a variety of
          factors, many of which are outside of our control.  Factors that may
          affect our quarterly results include:
          -    the demand for our products and services,
          -    the size,  timing and timely  fulfilment of orders for our
               products and services,
          -    the level of product, price and service competition,
          -    changes in our sales incentive strategy,  as well as sales
               personnel changes,
          -    the mix of direct and indirect sales, product returns and
               rebates,
          -    the extent that our direct mail programs achieve satisfactory
               response rates,

                                      -19-
<PAGE>

          -    the efficiency of our telemarketing operations,
          -    our ability to keep our web sites operational and free of
               technical difficulties and service interruptions,
          -    federal, state or local government regulation,
          -    our ability to upgrade and develop our systems and infrastructure
               to accommodate growth,
          -    the success of our brand building and marketing campaigns, and
          -    general economic conditions and economic conditions specific to
               the Internet and e- commerce industries.

     -    Our operating expenses and capital expenditures are expected to be
          based in large part on our expectations of future revenues and the
          expected  costs  associated  with  growing  our  new e-  commerce
          business and acquired companies.  Therefore, if revenue levels are
          below  expectations,  operating  results are likely to be adversely
          affected.  Net income may be disproportionately affected  by  an
          unanticipated  decline in revenue for a particular quarter because a
          relatively  small amount of our expenses will vary with our revenue in
          the short term.  As a  result, we  believe  that  period-to-period
          comparisons of our  results of operations  are  not  and  will  not
          necessarily be meaningful and should not be relied upon  as any
          indication of future performance. Due to all of the foregoing factors,
          it is likely that in some future quarter our operating results will be
          below expectations.

     -    Our growth will depend on our ability to continue to develop our
          brands. We believe that strengthening our brands will be critical
          to achieving  widespread  acceptance  of our goods  and  services.
          Promoting  and  positioning our brands will depend largely on the
          success of our  marketing efforts and our ability to provide  high
          quality content, goods and services.  In order to promote our brands,
          we will need to increase our marketing budget and otherwise  increase
          our financial commitment to creating and  maintaining  brand loyalty
          among users.  Brand promotion activities may not  yield  increased
          revenues and, even if they do, any increased revenues may not offset
          the  expenses we incur in building our brands.  If we do attract new
          users to our web sites or services, they may not conduct transactions
          over our web sites or utilize our services on a regular  basis.  If we
          fail to promote and maintain our brands or incur substantial  expenses
          in an unsuccessful attempt to promote and maintain  our brands, our
          business would be harmed.

OUR SERVICES AND PRODUCTS

E-COMMERCE SOLUTIONS

     Our e-commerce interactive solutions services currently consist of:
     -    web site design, development and implementation,
     -    Internet, intranet and extranet  backbone and computer  network design
          and implementation,
     -    web site-to-legacy systems integration,
     -    Internet and e-commerce customized software design,
     -    direct marketing and telemarketing services,
     -    web-enabled sales, customer and technical support services,
     -    fulfillment, and
     -    e-business building and consulting services.

Web Site Development.

     We believe that,  with the  tremendous  demands on companies to become more
efficient, companies must re-evaluate their traditional business models and
incorporate digital communications into their organizations' information systems
and manner of conducting business, in order to remain competitive. We help
companies interact effectively, both internally with employees and externally
with vendors, suppliers and customers, in this

                                      -20-
<PAGE>

new business environment. We design and implement e-commerce solutions that
enhance our clients' core business, operations and communications.

     Our web site development services are intended to:
     -    provide our clients with an on-line vehicle to communicate efficiently
          with each client's target audience and the general public via an
          exciting web site that will  support,  promote and raise an end
          user/consumer's level of awareness of the client's products and
          services,
     -    establish an attractive and functional on-line environment that will
          provide a presence and awareness of the client's brand(s),
     -    attract new visitors to each client's web sites by expanding public
          awareness of the site, and
     -    speak effectively to end users/consumers who look to our client's web
          site as an informational resource.

     In developing and delivering a successful project, we:
     -    integrate a sophisticated, feature-rich design that is intended to be
          superior to the client's competition's web-site and transmit the
          client's message in a compelling fashion,
     -    establish a scalable platform that anticipates additional content
          areas and functionality which will enable our clients to strengthen
          the end-user relationship by offering e-commerce, community building
          vehicles and interactive opportunities,
     -    create custom graphics, backgrounds, typographical design and photo
          montages to create a unique look and feel for the web site,
          including the development of individually designed interfaces,
     -    establish  interfaces  that  allow  for the  positioning  of
          "rich" media  advertising,
     -    create customized viewer windows to support streaming video (real
          video),
     -    create animation in various commonly-used formats to deliver movement
          and visual excitement to the site,
     -    create web sites that are browser-aware and compatible with current
          Netscape and Explorer versions,
     -    stress  interactivity via use of pull-down menus, and contextualized
          navigation where appropriate,
     -    provide customer support and retention enhancement programs through
          our web-enabled multi-national, multi-lingual telemarketing programs,
     -    harness visitor's captured data for future marketing initiatives, and
     -    focus on managing the user experience at all times through careful and
          consistent navigation.

     We use a team-based  approach in creating our solutions.  A typical project
involves an account manager, a producer, one or more designers, and three or
more programmers. Our approach emphasizes client interaction with our web site
design staff. This process provides assurance that the web site design solution
meets the client's expectations. A typical project process consists of:

     -    IDENTIFYING AND CLARIFYING THE CLIENT'S NEEDS. We begin our web
          site design by understanding  the client's business and clarifying
          the client's immediate and long term goals. During this phase, we also
          assess the client's operating and technical environment. We review the
          client's competitor's  web sites.  We also work  with the  client to
          identify how the  solution can be tailored to meet the  interactive
          needs  of the client's brand.  Once  the  client's  objectives  are
          outlined, a strategic plan is  formulated,  including a definition of
          how the success of the project will be assessed. We also establish the
          project's scope and budget and create a detailed work plan and set of
          milestones during this phase.

     -    ARCHITECTURE. We create the architecture of the solution for the
          specific business problem to be addressed and the  definition of the
          functional, technical and creative requirements  necessary to put
          the solution into effect. We collaborate with the client to refine the
          architecture of the solution. We typically construct a web site with a
          template architecture in order to facilitate quick updates of content.
          This enables our and the client's personnel to rapidly add or update
          content as needed  without the need for additional creative/graphic
          development.  Our web  sites are  designed to establish intelligent
          linking throughout the projects such that an end user will rapidly
          become
                                      -21-
<PAGE>

          engaged in interactivity with the client and be encouraged to
          advance  towards its product line. We deliver all completed pages with
          HTML and source files to the server of the client's choice,  while
          allotting  protected  space on our  server  during development for
          24/7/365  access  and review.  We include middleware programming
          solutions, as needed,  such as CGI and scripts using Perl, Java and
          Active X, where necessary.  We utilize industry  standard  development
          tools such as Photoshop, Bbedit, Dreamweaver, Fireworks  and other
          digital construction tools as necessary.  We consult with the client's
          designated Internet service provider, or ISP, to manage traffic growth
          and service build-out as the site expands with  functionality  and
          commerce applications.  We work with our clients in developing system
          server requirements and can recommend our systems integration services
          to the client.  We often  develop a prototype of the solution to test
          the initial concept and its functionality.

     -    DESIGN.  Once the structural  foundation is established,  we focus
          on completing the  interaction and interface  design aspects of
          the  project.  We develop  the features of the project, refine the
          technology architecture for the solution and conduct usability testing
          to evaluate the performance of the solution. During this phase, we can
          offer our clients a variety of services beyond the design of the web
          site, including  illustration, digital video and copywriting.  By the
          end of this phase,  we deliver a functional prototype of the solution
          and a detailed plan for its implementation.

     -    IMPLEMENTATION. The final web site is built and launched. If
          necessary,  we integrate the solution  with the  client's  existing
          information  technology  infrastructure.   We employ the latest
          development tools, such as Perl/CGI,  Cold Fusion, Java, Shockwave and
          full-blown multimedia.  Our designs generally are compatible with both
          Windows and  Macintosh  environments.  As part of the final  delivery
          process, we perform quality assurance tests and ensure that the client
          understands  how to use and  maintain the web site through  client
          training and maintenance documentation.

     -    ENHANCEMENT.  After implementation of the solution, we monitor it for
          a specified period of time and analyze how the solution performs.

     -    MAINTENANCE AND AFTER-SALES SUPPORT.  We typically are requested by
          our clients to provide updates, regular maintenance and other support
          and consulting services to their web sites. In addition, we  encourage
          clients to continue to work with us to address their needs for the
          next generation of the solution as new  technologies are developed and
          end-user's requirements evolve. At the client's option, we design a
          marketing and  promotion  plan for the web site. We may be able to use
          such  opportunities  to promote  our call  centers and our other
          e-commerce services.

     -    CUSTOMER SERVICE.  We offer to our clients the ability to install on
          their web sites a direct link to real-time chat, audio and/or video
          help provided by our multi-national,  multi-lingual 24/7/365 call
          centers, to facilitate our client's customers' satisfaction and
          minimize aborted sales attempts.

     We also offer a wide range of  marketing  services to build the client's
     brand on-line, including:
     -    research and competitive analysis,
     -    strategic planning sessions,
     -    focus  groups,
     -    e-commerce concept development,
     -    web site usage tracking and analysis,
     -    web site banners and interactive product advertising,
     -    search engine listings and maintenance,
     -    on-line advertisement placement and management,
     -    on-line product launch and product support,
     -    web site programming,
     -    multimedia presentations and interactive sales tools.

                                      -22-
<PAGE>

     In order to draw traffic to a client's web site, we typically:

     -    register the client with all major search engines, such as Yahoo,
          Altavista, GoTo and Excite in the appropriate categories, including
          client-supplied keywords,
     -    hard code various metatags, a hidden keyword that is recognized by the
          programs that run search  engines, into individual pages of the
          client's site, and
     -    Create a policy of "link  trading" with relevant sites, especially
          with client's partners and affiliates.

Systems integration.

     Through PWR Systems,  we are an  authorized  dealer and VAR of computer and
digital communication equipment. In this connection, we also provide systems
integration services, including regional support in Internet, intranet and
extranet application and framework design, enterprise and work group
client/server design and optimization, relation or data base development, local
and wide area network and workgroup solutions.

     We provide consulting services to our clients, particularly in the areas of
hardware and software selection, logical and physical system design, programming
implementation, education and training. As a systems integrator, we assume
overall project management responsibility. We generally bill for project work on
a time and materials basis. Our ability to undertake and successfully implement
major systems integration and other projects requires a wide range of technical
skills, such as logistical and physical design, implementation and training
support and technical expertise in computer hardware and peripheral equipment,
data bases, programming, productivity tools, communications, and system design
and maintenance.

     We have substantial  experience  servicing the unique needs of advertising,
publishing and new media companies. The principal products used in our systems
integration projects include third-party computer hardware and software. We are
authorized dealers and/or resellers for a number of manufacturers of high
quality computer and network equipment, including Apple Computer, Cisco Systems,
Compaq Computer, IBM, Silicon Graphics, NEC, Hewlett Packard, Intergraph, 3Com,
Micronet and Microtech.

     As an  interactive  solutions  integrator,  we  concentrate  our  marketing
efforts on advanced systems, peripherals, and communications equipment. We
develop our accounts through a process that focuses on our commitment to use the
full range of our resources, products, services and expertise. We constantly
evaluate new products on the basis of price, performance, reliability, customer
support, and stability of the vendor. We establish an on-going relationship with
our clients so that we are continually involved in their changing business
needs. By maintaining a supportive presence, we can then assist in the
decision-making and planning processes, and make sure that our customer receives
not only current value, but long-term benefits as well. To achieve the most
effective systems configuration and satisfy our clients' highly demanding needs,
our staff is involved in every stage of the purchase and implementation of our
clients' integration, from analyzing and advising hardware and software
solutions through installation, training, on-line and telephone support and
systems maintenance.

     We also operate a web site, at  store.PWRSystems.com,  for the on-line sale
of computer and digital communication equipment which we are authorized to sell.
This web site is targeted to our regular systems integration customers and the
B2B market.

     With  connectivity  and  client/server  technology  to store,  retrieve and
present information becoming a critical part of any companies' strategy to
attain a competitive advantage, we believe that we can supply the necessary
expertise in building and supporting advanced systems which typically can
include hundreds, if not thousands, of pieces of equipment, including multiple
central processing units, or CPUs, operating systems and wiring topologies. Our
technical staff includes experts with experience with Novell, Windows NT, Apple
OS X, Linux and UNIX operating systems, as well as all major hardware
manufacturers. This enables us to provide our clients with an objective,
long-term technology plan based on their individual needs. We reduce the expense
and frustration of dealing with multiple vendors by consolidating purchasing
activity.

                                      -23-
<PAGE>

     Our hardware sales include the warranty  provided by the  manufacturers  of
the products sold. We can also provide options on extended warranties and
service contracts available from most manufacturers. Our field technicians have
authorizations and expertise in all major industry products we sell. We provide
to our systems integration customers access to our other interactive solutions
services and team with strategic technical support partners, where necessary, to
enable us to provide our clients complete e-commerce solutions.

     We typically  sell our  products on a net 30 days basis.  We can also refer
our clients to several third party leasing companies with whom we have on-going
relationships.

     We also can provide  customer  training and education to assist our clients
in reaching higher productivity and achieving greater returns on their
investments in computer products. We offer convenient, hands-on training with
major application packages running on IBM-compatible and Apple hardware. Our
classes are taught by working professionals retained by us on a consultation
basis who are specifically trained in desktop publishing and corporate
computing.

     We also  maintain  a  state-of-the-art  digital  studio at PWR's  office in
Bohemia, New York. We constantly test new products and technologies available
from our various vendors in the digital video, digital audio, 3D animation and
multimedia areas in order to make the most up-to-date and appropriate
recommendations of computer and digital communication equipment to our clients.

     As a systems  integrator,  we consult with our clients to  ascertain  their
short- and long-term computer network and digital communication demands. We
attempt to learn their business and information management needs, the
environments in which they operate and their internal maintenance and support
capabilities. We then propose a customized solution to their requirements. Among
our other services, we can provide asset management. This includes conducting an
inventory of all hardware and software and verifying that all licenses to such
hardware and software are current.

     We also offer  web-hosting  and  co-location  services to our  clients,  as
necessary. As a web-host, we provide and maintain dedicated web servers and
provide content and infrastructure. By providing co-location services, we permit
the client to use our own computer network for the gathering, storage and
retrieval of the client's data.

     We have not  experienced  any  material  difficulties  or delays in meeting
customer shipments. In cases where we are unable to obtain equipment directly
from the manufacturer, through our sourcing network we attempt to locate
equipment from other systems integrators and resellers. Where we are still
unable to obtain equipment, we suggest alternative equipment to our clients for
use in their integration projects.

     We are not dependent on a single purchasing or product source. Our sourcing
network is intended to provide our clients with constrained and allocated
product delivery and avoid customer complaints of erratic delivery. Typically,
we configure customer orders in-house prior to delivery to the customer.

     For  1999,  two of PWR  Systems'  vendors  accounted  for an  aggregate  of
approximately 48% of PWR Systems' purchases.

     While we believe our sourcing network permits us to fill client orders on a
timely basis, the loss of any license or reseller agreement with a significant
manufacturer or the termination of relationship with a significant source of
computer equipment could interrupt our integration services business and have a
material adverse impact on us.

Sales, customer and technical support and marketing.

     We believe that e-commerce companies cannot function solely by having a web
site and backbone. We further believe that, in order to effectively compete and
complete sales transactions on their web sites and create customer loyalty,
e-commerce companies need to have available a human bridge, or interface,
between the e-seller and its customer. This human interface is intended to
assist in completing the transaction, including taking the

                                      -24-
<PAGE>

customers'  credit card number for those  customers who are insecure  about
providing the number over the Internet, as well as giving immediate, or
real-time, answers to any questions the customer may have.

     We believe that we are capable of providing this human  interface  customer
service function through our web-enabled call centers in Nashua, New Hampshire,
Nottingham, United Kingdom and Aachen, Germany. Through these centers we can
provide multiple multi-lingual 24/7/365 chat, audio, video, customer service and
technical support over the Internet. We have licensed certain technology which
permits us to communicate with a customer, on a real-time basis, by computer
chat, audio and/or video functions, depending on the capabilities of the
customer's computer. We believe that this service is a key difference between us
and our e-services competitors.

Acquisitions.

For acquisitions, we have frequently used a standardized transaction
structure that includes a purchase price adjustment or bonus feature to provide
target company management with an incentive to improve and expand their
organizations. We also generally grant stock options to employees of a target
company who continue their employment with us to provide them with an incentive
to contribute to the success of our overall organization.

     We identify  those firms that meet our  acquisition  criteria,  engage in a
series of meetings and due diligence activities with each candidate to explore
whether the candidate meets our criteria for growth potential and operating
strategy, and complete the acquisition of attractive candidates. We stress to
each desired candidate the advantages of merging with us, including the depth
and breadth of services required by many potential clients; the client
recognition and acceptance of our interactive solutions brands; and additional
funding required to pursue large and profitable long-term client opportunities.

     We believe that there are numerous  potential  acquisition  candidates that
satisfy our acquisition criteria. We are currently discussing, on a non-binding
basis, the acquisitions of several companies. If, after due diligence review and
negotiation, such companies can be acquired on a basis considered fair to us and
our stockholders, we may proceed with such acquisitions. We expect most of our
future acquisition transactions will include the issuance of additional shares
of our common stock. To penetrate foreign markets, we may use joint ventures as
well as acquisitions, to capitalize on a foreign partner's local knowledge and
reputation as well as our interactive solutions brands and technical, marketing
and administrative resources. Our acquisition strategy involves a number of
risks and uncertainties, and we cannot be sure that we will be able to identify
suitable acquisition candidates, acquire such companies on acceptable terms or
integrate their operations successfully with ours. As we issue stock to complete
future acquisitions, our existing stockholders experience ownership dilution. In
addition, to the extent we choose to pay cash consideration for such
acquisitions, we may be required to obtain additional financing. We cannot be
sure that such financing will be available on favorable terms, if at all.

     We also  face a number of  challenges  that  pose  risks or could  hurt our
business as we build up our international operations, such as:
     -    unexpected  changes in  regulatory  requirements  that could raise the
          cost of doing business, prevent doing business, or restrict our
          ability to remove funds from a country,
     -    economic downturns more sudden and dramatic than those generally
          occurring in the U.S.,
     -    changes in currency exchange rates, which could dramatically increase
          the price of acquisitions or significantly decrease the profitability
          of operations where payment is in local currency,
     -    difficulties in staffing and managing foreign operations,
     -    difficulties in using equity incentives for employees, which we rely
          on heavily but which are often less understood outside the U.S.,
     -    differences in business customs,
     -    longer payment cycles, and
     -    political instability and the risk of military conflict.

                                      -25-
<PAGE>

SOFTWARE PRODUCTS

     Most of our  software  products  are  visual  communication  tools  for the
corporate, small office/home office and consumer markets. Our software products
are designed to allow the user to improve the visual and graphical appeal, as
well as the overall effectiveness, of documents and digital images. Our software
products include application programs primarily designed for:
     -    desktop publishing,
     -    web publishing,
     -    presentation graphics,
     -    digital imaging,
     -    drawing/graphics,
     -    charting, and
     -    other similar applications.

     We  currently  derive  substantially  all of  our  software  revenues  from
products sold directly to end-users by our direct mail and telemarketing centers
and, to a lesser extent, through retailers, distributors and corporate
purchasers, by our internal sales force and independent sales representatives.
Through VisualCities.com and our other web sites, we also market and sell our
products over the Internet. Approximately 91% of our net sales for the year
ended December 31, 1999 were generated through our direct sales and
telemarketing efforts. Our international sales for the year ended December 31,
1999 represented approximately 66% of our total sales.

     Our product  development staff produces the master  diskettes,  CD-ROMs and
user manuals for our proprietary software. We generally have third party
contractors print and assemble CD-ROM discs, diskettes, manuals, inserts and
boxes in which our products are shipped. We have multiple sources for major
components of our products and do not rely on any one principal supplier. We
have not experienced any material delays in production or assembly. To date, we
have not experienced any material difficulties or delays in production of our
software products and related documentation.

     We generally  purchase  computer  hardware  products such as mouse pens and
digital cameras from third parties. From time to time, supplies of these
products have not been sufficient to meet customer demand, primarily as a result
of manufacturing difficulties, our just-in-time inventory policy and our less
than optimal amounts of letter of credit facilities or other resources
sufficient to finance such purchases.

VISUALCITIES.COM

     Our  VisualCities.com  web site is an on-line  destination  targeted to the
visual communication community. This web site offers information, content,
membership benefits, products and services to users in this targeted market. We
intend to utilize this web site to sell visual communications products,
including both our software products and software and hardware products
manufactured by third parties. We also intend to create a gathering place and
e-community for individuals with interest in and needs for visual communication
tools. We believe that the market for our VisualCities.com web site includes the
existing customers of our software products.

     We intend to  attract  users to  VisualCities.com,  induce  such users into
becoming members of the web site community and promote commercial transactions
over the web site by leveraging our:
     -    large installed base of software customers,
     -    direct marketing capabilities, and
     -    international brand recognition of our Harvard Graphics and Serif
          brands.

     We intend to ultimately offer to the VisualCities.com  user focused content
within a studio-based format reflecting seven visual communications markets:
     -    digital imaging,
     -    animation,
     -    image marketplace/art gallery,
     -    drawing,

                                      -26-
<PAGE>

     -    presentation graphics,
     -    desktop publishing, and
     -    web publishing.

Four of these studios are currently  operational at VisualCities.com.  We expect
this web site to achieve full functionality in early 2001.

     We believe that increased membership will result in a high level of traffic
at the web site which may result in increasing our revenues. We envision that
our VisualCities.com web site will generate revenue from a number of sources,
including :
     -    the sale of our own and third party products,
     -    advertising,
     -    the  brokerage of images, including photos, digital art, clip-art and
          traditional media art, as well as other content,
     -    links to other web sites,
     -    other ancillary services related to the market for visual
          communication tools, and
     -    with the  anticipated  broadening  of the  band-width of the Internet,
          the capacity to transfer data over the Internet, as an application
          service provider, or ASP, of software programs.

     An  ASP  can  be  broadly  defined  as an  online  community  dedicated  to
outsourcing computer software, as a service, via the Internet. Under this model,
the software resides on a server owned and operated by an intermediary company.
We believe that the ASP model will become a leading method for the use of
software because the end-user can use the software with nothing more than a
personal computer and a browser. With an ASP application, installation,
training, support and system integration issues disappear along with the heavy
financial burden of buying and maintaining software.

     System failures could harm our business.  Substantially all of our computer
hardware for operating our web sites and service centers currently is located at
our Nashua, New Hampshire, Nottingham, England, and Aachen, Germany facilities
and at the offices of one of our vendors. Despite any precautions we may take,
our systems and operations may be vulnerable to damage or interruption from
floods, fires, power loss, telecommunication failures and similar events. They
are also subject to break-ins, sabotage, intentional acts of vandalism and
similar misconduct. Although we have fully redundant systems, we do not have, at
this time, a formal disaster recovery plan or alternative providers of hosting
services, and we do not carry business interruption insurance to compensate us
for losses that may occur. Any damage to or failure of our systems could result
in interruptions in our web sites or service centers. Interruptions in our web
sites would reduce our revenues, and our future revenues will be harmed if our
users believe that our systems are unreliable.

     Unauthorized  break-ins to our systems could harm our business. Our servers
are vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions, which could lead to interruptions, delays, loss of data or the
inability to complete user transactions. In addition, unauthorized persons may
improperly access our data. We may experience an unauthorized break-in by a
"hacker" who could cause damage to or change our system or take confidential
information. Any actions like these could harm us. Actions like these may be
very expensive to remedy and could damage our reputation and discourage new and
existing users from visiting our web sites.

     The  enactment  of new  laws  and  the  application  of  existing  laws  to
transactions over the Internet could affect the way our clients conduct their
businesses and rely on the Internet, which may have a material adverse effect on
our operating results and financial position. Today, there are relatively few
laws specifically directed towards web site providers. However, due to the
increasing popularity and use of the Internet, it is possible that laws and
regulations will be adopted with respect to the Internet and web site providers.
These laws and regulations could cover issues such as:
     -    user privacy,
     -    freedom of expression,
     -    pricing,
     -    fraud,

                                      -27-
<PAGE>

     -    content,
     -    quality of products and services,
     -    taxation,
     -    advertising,
     -    intellectual property rights,
     -    obscenity, and
     -    information security.

     The vast  majority of laws  relating to these issues were adopted  prior to
the advent of the Internet and related technologies and, as a result, do not
contemplate or address the unique issues of the Internet and related
technologies. Those laws that do reference the Internet generally have not yet
been interpreted by the courts and their applicability and reach are therefore
uncertain.

     Several  states  have  proposed  legislation  that would  limit the uses of
personal user information gathered online or require web site providers to
establish privacy policies. The Federal Trade Commission also has recently
settled a proceeding with one online service regarding the manner in which
personal information is collected from users and provided to third parties.
Changes to existing laws or the passage of new laws intended to address these
issues could directly affect the way we do business or could create uncertainty
in the marketplace. This could reduce demand for our services, increase the cost
of doing business as a result of litigation costs or increased service delivery
costs, or otherwise harm our business. In addition, because our web sites are
accessible worldwide, foreign jurisdictions may claim that we are required to
comply with their laws. As we continue to expand our international activities,
we will become obligated to comply with these laws. Compliance may be more
costly or may require us to change our business practices or restrict our
service offerings relative to those in the United States. Our failure to comply
with foreign laws could subject us to penalties ranging from fines to bans on
our ability to conduct business on our web sites.

SOFTWARE DEVELOPMENT

     The  personal   computer   software  industry  is  characterized  by  rapid
technological change, which requires a continuing high level of expenditures for
the enhancement of existing products as well as development, licensing or
acquisition of new products. Our current product development activities include
enhancing and updating our present software packages, including preparations for
making our Serif and Harvard Graphics products available as server-based
applications on the Internet through VisualCities.com, as well as the continued
development of our VisualCities.com web site.

     Our Serif technology  includes two advanced code bases,  desktop publishing
and drawing, which can continue to be expanded as user requirements evolve. We
have focused our research and development resources on expanding our Serif and
Harvard Graphics technology, as well as on our intended development of
VisualCities.com and other Internet technologies and products.

     We  intend to  acquire  additional  technology  through  a  combination  of
internal development, licensing, purchasing and strategic alliances. There can
be no assurance that our software product development efforts or software
product introductions will result in commercially successful products. Our
software revenues are based on a combination of products developed internally,
acquired products and licensed products. We intend to continue a flexible
approach to our development, acquisition and release of new software products
and technologies. We believe this flexible approach is necessary because the
rapid changes in the software industry require ever shorter development cycles
and ever higher levels of product quality and functionality.

     We developed VisualCities.com  internally and with outside consultants.  We
transitioned the further development and maintenance of VisualCities.com to our
Renaissance Multimedia subsidiary.

     We  spent  approximately  $1,027,000  in 1999  and  $1,266,000  in 1998 for
software product development and enhancement activities. These expenditures
represented approximately 5.2% of our total net revenues for 1999

                                      -28-
<PAGE>

and 6.9% of our total net revenues for 1998. In 1999, we released a total of
seventeen of our own software products.

     The  shortened  product life cycles of  competitive  software  products may
adversely affect our product life cycles and development costs, as well as our
revenues. From time to time we or our competitors may announce new products,
capabilities or technologies that have the potential to replace or shorten the
life cycles of our existing products. Such announcements of currently planned or
other new products may cause customers to defer purchasing our existing
products.

     Rapid  technological  changes could cause delays in our introduction of new
products and these delays may reduce our revenues. The software market is
characterized by:
     -    ongoing technological developments,
     -    evolving industry standards,
     -    frequent new product introductions, and
     -    rapid changes in customer requirements and preferences.

     The introduction of products with new technologies and the emergence of new
industry standards and practices can rapidly render existing products obsolete
and unmarketable. In the past, we have experienced delays in software
development. We may experience delays in connection with our current and future
product development activities. Further, our new products and product
enhancements may not adequately meet the requirements of the marketplace nor
achieve market acceptance. Delays in the commencement of commercial shipments of
new products or enhancements may result in customer dissatisfaction and delays
or losses in product revenues.

     Product defects could delay or prevent market acceptance of new or upgraded
products. Our software products may contain undetected flaws or failures when
first released. These flaws or failures may result in loss of or delay in market
acceptance.

     Our software  development  projects may not have the intended  results.  We
have a number of development projects ongoing or under consideration, such as
Serif PagePlus7, a possible new version of our Harvard Graphics product and the
continued development of our VisualCities.com web site. These development
projects:
     -    may not be completed successfully, on time or within budget,
     -    may not include features required to achieve market acceptance, and
     -    may not result in enhancements to our products that keep pace with
          broadening market requirements.

SALES AND MARKETING

E-COMMERCE SOLUTIONS

     Our e-commerce  solutions  services marketing efforts are expected to focus
on strengthening our brand names and enhancing our reputation as a creative
provider of e-commerce and digital communications solutions. We believe that the
breadth of our services and our brand names will provide us with a competitive
advantage over those professional information technology services firms whose
brands may not be as well known or may not convey the same focused message of
creative digital communications solutions.

     Our brand  development  programs are designed to reinforce the message that
we are an international company with a local presence that can provide
integrated, full-service digital communication and e-commerce service offerings.
We also intend to increase our advertising in an effort to expand the
recognition of our brand names.

     Currently,  our account managers are responsible for marketing and sales of
our web site design services. This approach provides us with a flexible sales
resource. We do not have a formal marketing or sales force for our web site
design business.  We intend to cross train the marketing and sales

                                      -29-
<PAGE>

staffs of our operating subsidiaries and to further develop an integrated sales
and marketing force. We intend the marketing and sales force primarily to
develop and prioritize new business leads and to filter incoming contacts from
prospective clients.

     We also sponsor the Silicon Alley Breakfast Club as a means to network with
professionals in the New York City-based web site design industry and to keep
abreast of new developments in the industry.

     Our systems  integration sales and marketing efforts are coordinated by our
account managers. Historically, we have conducted limited advertising of our
networking products and integration services. We believe that our growth as a
systems integrator has been dependent on referrals from former and current
customers and vendors. We expect to increase the marketing of our networking
products and integration services.

     Our integration  services' sales engineers typically meet with a new client
to discuss their business, legacy systems and goals. A legacy system consists of
the current computer equipment and any network the client is using at the time
it hires us. We will then do a site survey to understand the environment in
which we will build the client's integration solution. We also do a customer
assessment so as to understand the client's philosophy towards its integration
needs, the extent to which cost or quality are factors, whether expansion or
upgrading of the system is planned and whether the client will only accept a
"cutting edge" solution. We then design the appropriate integration solution,
including identifying all computer and digital communication equipment and
software and present the customer with a proposed purchase order. Upon
acceptance, equipment is ordered and scheduling of the installation is planned.

SOFTWARE PRODUCTS

     Our  software   products  are  sold  primarily  through  direct  marketing,
telemarketing, retail, corporate, original equipment manufacturer and Internet
sales channels. Direct sales, which accounted for approximately 91% of our total
net revenues for 1999 and 84% of our total net revenues for 1998, are generated
primarily by inbound and outbound telemarketing operations in the United States
and United Kingdom. Corporate sales are comprised of both individual product
sales as well as volume license sales. Most of our retail sales are made on a
two-step basis with the initial sales being made to distributors who then sell
the products to retail chains. Consistent with industry trends, our retail sales
of software products have been declining significantly. We also distribute our
products through OEMs on a bundled or value-added basis. In addition, we sell
our products through VisualCities.com and have established separate on-line
software stores at www.harvardgraphics.com and www.serif.com from which our
products may be purchased. We expect to continue to expand our software and
hardware distribution over the Internet.

     We utilize our telemarketing operations in conjunction with our direct mail
operations to maximize direct sales to existing and new end user customers.
These mailings and direct response advertisements originate from our offices in
Nashua, New Hampshire, Nottingham, England and Aachen, Germany and are handled
by our inbound and outbound telemarketers at such locations. These mailings and
advertisements are varied and tested to attempt to maximize response rates and
profitability. We maintain a list of our registered customers and send periodic
mailings to them in an effort to sell them upgrade versions and new products.

     Our  advertising  programs  for our product  lines are designed to increase
corporate and product brand awareness, as well as to increase sales. Our
advertising targets new customers, our registered users and, with competitive
upgrade promotions, our competitors' customers. We advertise primarily through
promotions to support distributors' and resellers' sales efforts, including:
     -    distributor/reseller advertising programs,
     -    rebates,
     -    training, and
     -    price promotions.

     We engage in joint promotional  activities with computer hardware and other
manufacturers. We also participate in trade shows.

                                      -30-
<PAGE>

     Our products continue to derive substantial revenues from foreign sales. We
translate a number of our products, including packaging, documentation,
software, and promotional materials, for international markets. These
translations are generally done by outside contractors, or by our local sales
and marketing agents. Advertising and promotional programs are customized for
local markets where necessary. International sales include localized versions of
selected products, as well as the English language versions of our products
throughout the United Kingdom, Europe, Latin America, South America and the
Asia/Pacific region. Localized versions include:
     -    German,
     -    French,
     -    Spanish,
     -    Italian,
     -    Portuguese, and
     -    Dutch.

     Approximately  66% of our total net  revenues for 1999 and 54% of our total
net revenues for 1998 came from sales made outside of the United States. We
expect to continue to sell internationally and invoice in foreign currencies.
Accordingly, we are subject to risks associated with exchange rate fluctuations.

     We have a general  return  policy  for our  North  American  resellers  and
distributors whereby they may return any products previously purchased from us,
provided that the aggregate purchase price for such returned products does not
exceed 10% of the reseller's or distributor's net purchases for the prior
quarter. In addition to this return allowance, our North American distributors
and resellers may generally exchange any discontinued products within ninety
days of notification of discontinuation for products of equal or greater value.
For our international distributors and resellers, the general return policy is
the same as for North American resellers and distributors, except that returns
with respect to sales in a quarter must be completed within the first month of
the subsequent quarter. For our international distributors and resellers, the
policy for the exchange of obsolete products generally allows returns within
thirty days after the announcement of a product's obsolescence, provided that
the product was shipped within thirty days prior to the announcement. However,
to maintain good customer relations, we may accept returns in excess of those
allowed under our general policy.

     We typically  ship software  products  within several days after receipt of
orders, which is customary in the personal computer applications software
business. We also attempt to ship our hardware products within several days
after receipt of orders; however, when supplies of such products are not in
stock, delays of up to several weeks may occur. We had a backlog of
approximately $500,000 as of December 31, 1999, primarily relating to digital
cameras. We had a backlog of $389,000 as of December 31, 1998.

     Our dependence on retailers,  distributors  and sales  representatives  may
adversely affect our software sales and cash flows. Our software customers are
not contractually required to make future purchases of our products and could
discontinue carrying or purchasing our products, at any time and for any reason.
Retailers and distributors generally are in a strong position to negotiate
favorable terms of sale, including price discounts and product return policies.
Retailers also often require software publishers to pay fees in exchange for
preferred shelf space. Further, resellers may give higher priority to products
other than ours, thus reducing their efforts to sell our products. We may not be
able to increase or sustain the current amount of our retail shelf space and, as
a result, our operating results could be adversely affected.

VISUAL CITIES.COM

     We expect to market our VisualCities.com web site initially to the existing
users of our software products through direct marketing efforts. We may also
utilize other interactive marketing and advertising efforts to expand the
traffic and membership of Visualcities.com.

                                      -31-
<PAGE>

CUSTOMER CONCENTRATION AND CREDIT RISK

     No customer accounted for more than 10% of out total net sales for 1999. We
had one customer which accounted for approximately 13% of our total net revenues
for 1998. This same customer accounted for approximately 36% of our net accounts
receivable at December 31, 1998. The loss of any significant customer, a
significant decrease in product shipments to one or more of them or an inability
to collect receivables from one or more of them could adversely affect our
business, operating results and financial condition.

     Product returns and  difficulties in the collection of accounts  receivable
could result in reductions in our cash flows. Our sales generally are made on
unsecured credit terms which may vary substantially. Therefore, a default in
payment on a significant scale could materially adversely affect our business,
results of operations and financial condition.

CUSTOMER SUPPORT AND SERVICE

E-COMMERCE SOLUTIONS

     We believe that customer support services, whether rendered before or after
the initial sale, are a key to attaining customer satisfaction. This
satisfaction may result in additional revenues from the customer in the future,
as well as referrals by the customers to potential new clients. Customer
satisfaction with our integration services also may result in our ability to
promote our web site design and Web-enabled support services to the client.
Consultation with the client's department managers and end-user groups in
conjunction with our ongoing technical briefings and newsletters are part of our
strategy to enable our clients to reach their productivity goals.

     In our systems  integration  business,  we maintain a limited  inventory of
hardware and software products and typically purchase products from our
third-party vendors only after receipt of a client order. However, we have
expanded our inventory of key spare parts to assure our clients of delivery of
timely and quality service. We also use our network of sources to obtain parts
on prompt, as needed basis. We use only factory authorized parts in our service
operations.

     As an authorized  dealer of many of the highest quality computer  equipment
manufacturers, we have the experience and training to sell and service the
hardware equipment constituting an integration project and any enhancements and
upgrades our customers may require. In addition, we have strategic alliances
with third parties to supplement our own internal resources in the areas of data
security application programming.

     We have  Web-enabled  our three call centers and  telemarketing  operations
utilizing CosmoCall Universe, an Internet protocol-based, multimedia contact
center technology, to provide multi-lingual, online customer sales and support
services to Internet businesses. Key features include live, text-based "chat,"
voice and video over the Internet, and e-mail communications between our
specially trained employees and our clients' customers. Additional capabilities
facilitated by CosmoCall Universe, which was cited "Product of the Year" for
1999 by Internet Telephony and Communications Solutions magazines, include
seamless integration with a client's customer relationship management software,
real-time reporting and online, collaborative browsing.

SOFTWARE

     We provide free  technical  support for our software and hardware  products
directly in the United States, United Kingdom and Germany for a period of thirty
days from either the first call to our technical support centers from the
customer or from receipt of the customer's product registration card. After this
initial period, technical support is available for purchase under a variety of
value-added support programs. However, to maintain good customer relations, we
may provide free technical support in excess of the initial period.

                                      -32-
<PAGE>

VISUAL CITIES.COM

     We utilize  our  Web-enabled  call  centers to provide  real-time  customer
service to VisualCities.com users, as we provide to our e-commerce interactive
solutions customers.

COMPETITION

E-COMMERCE SOLUTIONS

     The e-commerce  services market has grown dramatically in recent years as a
result of the increasing use of computers and digital communication technology
and the Internet by businesses for communication, marketing and information
dissemination to their employees, customers, vendors and suppliers. Different
e-commerce service providers focus on different types of services. For example,
Internet content providers, consulting and advertising agencies and
telecommunications companies offer very different services. This factor, along
with the rapid pace of technological change, makes the e-commerce services
market intensely competitive and rapidly evolving. We expect competition to
persist and intensify in the future.

     We anticipate  that our  competitors in our e-commerce  solutions  business
will include:
     -    Internet service firms, such as Scient, Viant, Agency.com, Icon
          Medialab, iXL, Modem Media, Poppe Tyson, Organic Online, Pixelpark,
          Proxicom, Razorfish, Rare Medium, Xceed Inc. and USWeb/CKS;
     -    technology consulting firms, such as Diamond Technology Partners and
          Metzler Group;
     -    technology integrators, such as Andersen Consulting, Cambridge
          Technology Partners, Cap Gemini, EDS, IBM, Sapient and WM-Data;
     -    strategic consulting firms, such as Bain & Company, Booz-Allen &
          Hamilton, Boston Consulting Group and McKinsey & Company; and
     -    in-house information technology, marketing and design service
          departments of our potential clients.

     We can also expect  competition  in our call center  service  business from
large call center service providers and any in-house service centers of our
potential clients.

     Compared to us, many of these competitors have:
     -    longer operating histories,
     -    larger installed client bases,
     -    longer relationships with clients,
     -    greater brand or namerecognition, and
     -    significantly greater financial, technical, marketing and public
          relations resources.

     Although  only a few  of  these  competitors  have  offered  a  package  of
solutions as extensive as our portfolio of services, several have announced
their intention to offer a broader range of solutions. Furthermore, greater
resources may enable a competitor to respond more quickly than we can to new or
emerging technologies and changes in customer requirements and to devote greater
resources to the development, promotion and sale of its products and services
than we can to our products and services. In addition, the lack of any
significant barriers to entry into this market permits new market entrants,
which may further intensify competition.

     We  believe  that  the  principal  competitive  factors  in our  e-commerce
solutions markets, in relative importance, are:
     -    the ability to attract and retain  professionals,
     -    technical knowledge and creative skills,
     -    brand recognition and reputation,
     -    reliability of the delivered solutions,
     -    client service, and
     -    price.

                                      -33-
<PAGE>

SOFTWARE

     The market for visual  communications and business productivity software is
highly competitive and subject to rapid technological change. Many of our
current and potential competitors possess significantly greater financial,
technical and marketing resources, greater name recognition and a larger
customer base than we have. In addition, any of these competitors may be able to
respond more quickly to new or emerging technologies and changes in customer
requirements, as well as to devote greater resources to the development,
promotion and sale of their products than we can. Furthermore, because there are
relatively low barriers to entry in the software industry, we expect additional
competition from other established and emerging companies, which may choose to
enter the market by developing products that compete with those offered by us or
by acquiring companies, businesses, products or product lines that compete with
us. It is also possible that competitors may enter into alliances and rapidly
acquire significant market share. We also believe that competition will increase
as a result of software industry consolidation. There can be no assurance our
current or potential competitors will not develop or acquire products comparable
or superior to those developed by us, combine or merge to form significant
competitors, or adapt more quickly than us to new technologies, evolving
industry trends and changing customer requirements. Increased competition could
result in further price reductions, reduced margins or loss of market share, any
of which could materially and adversely affect our business, operating results
and financial condition. There can be no assurance that we will be able to
compete successfully against current and future competitors or that competitive
pressures faced by us will not have a material adverse effect on our business,
operating results and financial condition. If we are unable to compete
successfully against current and future competitors, our business, operating
results and financial condition would be materially and adversely affected.

     Some of our  competitors  sell  "bundles"  or "suites"  of  products  which
include products that directly compete with our products and which are bundled
with other office software programs by the same or multiple competitors. These
suite products are sold at an all-inclusive price. Additionally, application
software is increasingly provided as part of the operating system, or bundled
and pre-loaded into new computers. The price for a stand-alone or pre-loaded
bundle or suite of software is typically significantly less than separately
purchased applications, and many end users are likely to prefer the bundle or
suite over a more expensive combination of other individually purchased
applications, even if the latter applications offer superior performance or
features. These factors have resulted in and are expected to continue to cause
significant downward pressures on average selling prices for our products. There
is no assurance that we will be able to adopt strategies to compete successfully
in this environment.

     The market for our software products is increasingly competitive as a
     result of:
     -    ongoing technological developments,
     -    licensing of technology between companies,
     -    cross and collateral marketing of products by two or more companies,
     -    alliances between companies,
     -    joint marketing campaigns,
     -    rapid changes in customer requirements and increasing customerdemands,
          and changes in operating systems.

     We believe that the principal  competitive  factors in the corporate,  SOHO
and consumer software markets include:
     -    pricing (which includes individual product pricing, standard and
          competitive upgrade pricing, licensing and volume discounting),
     -    product functionality,
     -    ease-of-use,
     -    bundling in suites of related products which could render competitive
          products to be considered "free,"
     -    distribution through existing and new channels, and
     -    brand name recognition.

                                      -34-
<PAGE>

     As a result, we believe that our success in this market depends upon our
ability to continue to:
     -    enhance our existing and future products,
     -    correctly identify and enter new markets,
     -    effectively market our current and future products,
     -    expand our existing distribution channels and develop new distribution
          channels, including distribution over the Internet,
     -    timely and efficiently acquire, license or develop and introduce new
          products that utilize new technologies, and
     -    respond to new demands of the market.

     To the extent one or more of our competitors introduce products that better
address market requirements, our business could be adversely affected. We may
not be successful in timely developing and marketing enhancements to our
existing products or future products. Also, our existing and new products may
not adequately address the changing needs of the market. If we are unable to
timely develop and introduce new products or enhance existing products, our
business and results of operations could be materially and adversely affected.

     Based on product lines and price points,  we regard Microsoft  Corporation,
Symantec Corporation, Corel Corporation, Lotus Development Corporation, Adobe
Systems, The Learning Company, Micrografix, Fractile, Visio, Metatools,
Deltapoint and Macromedia as competitors to our software business. The dominant
position of Microsoft in the personal computer operating system and application
program market place provides it with a range of competitive advantages,
including the ability to determine the direction of future operating systems and
to leverage its strength in one or more product areas to achieve a dominant
position in new markets. This position may enable Microsoft to increase its
market position even with respect to products having superior performance, price
and ease-of-use features. Microsoft's ability to offer corporate and SOHO
productivity software, to bundle software, to provide incentives to customers to
purchase certain products in order to obtain favorable sales terms or necessary
compatibility or information with respect to other products, and to pre-load
such bundled software on new computers, may significantly inhibit our ability to
maintain or expand our business. In addition, as Microsoft or other companies
create new operating systems and applications, there can be no assurance that we
will be able to ensure that our products will be compatible therewith. The
introduction of upgrades to operating systems or the introduction of new
operating systems and standardized software by Microsoft and others, over which
we have no control, may adversely affect our ability to upgrade our own
products, and may cause reduction in sales of our products.

     We believe that  competition  will  continue to intensify in the future and
that new product introductions, further price reductions, strategic alliances
and other actions by competitors could materially and adversely affect our
competitive position.

VISUALCITIES.COM

     We believe that our VisualCities.com web site competes with web sites such
as:
     -    dtp.com,
     -    arttoday.com, and
     -    other web sites that offer products and services for visual
          communications users.
However, we believe that few, if any, of our competitors offer as wide a variety
of visual communication content, products and services, as we offer or expect to
offer on our VisualCities.com web site.

     Many  current  and  potential   competitors  to  VisualCities.com   possess
significantly greater financial, technical and marketing resources, greater name
recognition and a larger member base than VisualCities.com. In addition, any of
these competitors may be able to respond more quickly to new or emerging
technologies and changes in customer requirements, as well as to devote greater
resources to the development and promotion of their web sites than we can.
Furthermore, because there are relatively low barriers for entry into the
Internet e-commerce industry, we expect additional competition from other
established and emerging web site and visual communication software companies,
which may choose to enter the market by launching web sites that compete with
VisualCities.com, by acquiring companies, businesses, and web sites that compete
with  VisualCities.com  or by


                                      -35-
<PAGE>


expanding  their  businesses  or web sites to offer  similar  products  and
services as are offered on VisualCities.com. We also believe that competition
will increase as a result of the anticipated expansion of the use of the
Internet, both domestically and internationally. Increased competition could
result in price reductions, reduced margins or loss of market share, any of
which could materially and adversely affect our business, operating results and
financial condition. There can be no assurance that we will be able to compete
successfully against current and future competitors or that competitive
pressures faced by us will not have a material adverse effect on our business,
operating results and financial condition. If we are unable to compete
successfully against current and future competitors, our business, operating
results and financial condition would be materially and adversely affected.

CUSTOMERS

E-COMMERCE SOLUTIONS

     Our e-commerce  solutions customers range from multi-national corporations
to small and medium size companies.

     We have  concentrated our web site design marketing efforts in the New York
and London metropolitan areas. Some of our web site design customers include:
     -    ADI Security Systems               -    Audiovox
     -    AT&T                               -    Capital Vectors International
     -    Canon USA                          -    Chase Manhattan Bank
     -    CIMA Laboratories                  -    Essence Magazine
     -    Digital Equipment Corporation      -    Global Ministries
     -    First Alert                        -    Loehmann's
     -    Golf Digest                        -    Manhattan Bagel
     -    Loral Space & Communication        -    Merck
     -    MasterCard                         -    New York Business Forums
     -    New England Journal of Medicine    -    Phillips Van-Heusen
     -    Price Waterhouse                   -    Sara Lee Bakery
     -    Reckson Associates                 -    Smithsonian Magazine
     -    Schering-Plough                    -    Sprint Communications
     -    South Beach Beverage               -    Youngs Brewery
     -    Tishman Construction               -    The Harbour Club
     -    Justin Bell Racing                 -    Cannons Health Club
     -    Hale Clinic                        -    Books@once.com
     -    Business Link                      -    British Market Research
                                                  Association

     We have historically  focused our systems integration  marketing efforts at
the entertainment, advertising, publishing and new media industries. Some of our
systems integration clients are:

     -    Sony Music                         -    Viacom
     -    American Lawyer Media              -    MTV Networks
     -    Acclaim Entertainment              -    HBO
     -    Polo Ralph Lauren                  -    DDB Worldwide
     -    Quick International                -    FCB Worldwide
     -    Simon and Schuster                 -    PBS
     -    Comedy Central                     -    RCA
     -    Martha Stewart Living

SOFTWARE

     We  believe  that our  Harvard,  Serif  and  other  software  products  are
currently used by over one million end-users, with approximately five million
historically installed users.

                                      -36-
<PAGE>

GOVERNMENTAL REGULATION

E-COMMERCE SOLUTIONS

     We believe that we do not need any government  approval in connection  with
our current e-commerce solutions operations. In addition, we know of no
governmental regulations, either federal, state or local, which currently
materially affect our e-commerce solutions operations or products, except for
those involving our telemarketing activities. Consequently, we have not incurred
any material costs nor have we experienced any material effects from compliance
with any governmental regulations with respect to our current e-commerce
solutions operations.

SOFTWARE

     We believe that we do not need any  government  approval for production and
sale of our software products. In addition, we know of no governmental
regulations, either federal, state or local, which currently materially affect
our software operations or products. Furthermore, we know of no environmental
law, either federal, state or local, which would materially affect us or our
software products. Consequently, we have not incurred any material costs nor
have we experienced any material effects from compliance with any governmental
regulations or environmental laws with respect to our software operations.

VISUALCITIES.COM

     Proposals   to  enact  laws  and   regulations   that  apply  to   Internet
communication, commerce and advertising are becoming more prevalent. The
adoption of such laws could create uncertainty in Internet usage and reduce the
demand for all products and services offered on the Internet. Recently, Congress
enacted legislation regarding children's privacy on the Internet. It is possible
that additional federal, state and local laws and regulations may be proposed or
adopted with respect to the Internet, covering issues such as user privacy,
taxation, advertising, intellectual property rights and information security.
Several states have proposed legislation to limit the use of personal user
information gathered online or to require online services to establish privacy
policies. We believe that we are in full compliance with all current federal and
state privacy laws.

     The  Federal  Trade  Commission  recently  reported  that it has no present
intention of proposing legislation to address online privacy in the near future,
and that it believes self-regulation to be the best course of action, except for
rules to implement the newly enacted laws governing the collection of personal
information from children and the confidentiality of such information. However,
the FTC has initiated action against at least one online service regarding the
manner in which personal information was collected from users and provided to
third parties. We believe that we are in full compliance with all FTC privacy
rules.

     Legislation  recently  has been enacted in several  states  relating to the
transmission of unsolicited e-mail, a practice commonly referred to as
"spamming." The federal government and several other states, including New York,
are considering, or have considered, similar legislation. Although the
provisions of these current and contemplated laws vary, the laws generally limit
or prohibit both the transmission of unsolicited e-mails and the use of familiar
spamming techniques, such as the use of forged or fraudulent routing and header
information. Some states, including California, require that unsolicited e-mails
include opt-out instructions and that senders of such e- mails honor any opt-out
requests. We believe that our operations will not be affected by legislation
directed at spamming because we currently do not send unsolicited messages and
because our practices are intended to comply with all applicable laws and rules.
However, if we are required to change our business practices as a result of new
legislation, our business could suffer.

     We do not know how our business may be affected by the  application  to the
Internet of existing laws governing issues such as property ownership,
copyrights, encryption and other intellectual property issues, taxation, libel,
obscenity and export or import matters. Most of these laws were adopted before
the advent of the Internet and do not contemplate or address the unique issues
of the Internet and related technologies. Changes in laws intended

                                      -37-
<PAGE>

to address such issues could create uncertainty in the Internet marketplace.
That uncertainty could reduce demand for our web sites and services and also
could increase the cost of our doing business.

     In addition, because our services are available on the Internet in multiple
states and foreign countries, these states and countries may claim that we are
required to qualify to do business in their jurisdictions. Our failure to
qualify in any jurisdictions where we are required to do so could subject us to
taxes and penalties. It could also restrict our ability to enforce contracts in
those jurisdictions. The application of laws or regulations from jurisdictions
whose laws we do not believe currently apply to our business could have a
material adverse effect on us. We are currently not aware of any violations by
us of any laws or regulations of any states or other countries or of any
material qualification problems.

     The European  Union  adopted a privacy  directive  that went into effect in
1998. Under this directive, business entities domiciled in member states of the
EU are limited with respect to the transactions in which they may engage with
business entities domiciled outside the EU, unless the non-EU entities are
domiciled in jurisdictions with privacy laws comparable to the EU privacy
directive. The United States presently does not have laws that satisfy the EU
privacy directive. Discussions between representatives of the EU and the United
States are ongoing and may lead to a number of safe harbor provisions which, if
adhered to, would allow business entities in the EU and the United States to
continue doing business without limitation. If these negotiations are not
successful and the EU begins enforcing the privacy directive, there could be a
material adverse effect on our Internet business.

     We may be held  liable  for the  unlawful  activities  of  users on our web
sites. We may be unable to prevent unlawful activities by users of our web
sites, and we may be subject to civil or criminal liability for unlawful
activities carried out by users on our web sites. In order to reduce our
exposure to this liability, we may prohibit certain activities. We may in the
future implement other protective measures that could require us to spend
substantial resources and/or to reduce revenues by discontinuing certain service
offerings. Any costs incurred as a result of liability or asserted liability
relating to unlawful activities could harm our business.

     We may be subject to liabilities  associated with information  disseminated
through our web sites. The law relating to the liability of web site operators
for information carried on or disseminated through their services is currently
unsettled. Claims could be made against web site providers under both United
States and foreign law for defamation, libel, invasion of privacy, negligence,
copyright or trademark infringement, or other theories based on the nature and
content of the materials disseminated through their web sites. Several private
lawsuits seeking to impose liability upon other web site providers currently are
pending. In addition, federal, state and foreign legislation has been proposed
that imposes liability for or prohibits the transmission over the Internet of
certain types of information. Our web sites feature chat rooms, which include
information from users regarding other users and other persons and entities.
Although all such discussions are generated by users and not by us, it is
possible that a claim of defamation or other injury could be made against us for
content posted on our web sites. Claims like these become more likely and have a
higher probability of success as we continue to expand internationally. If we
become liable for information provided by our users and carried on our web
sites, we could be harmed and we may be forced to implement new measures to
reduce our exposure to this liability. This may require us to expend substantial
resources and/or to discontinue certain service offerings. In addition, the
increased attention focused upon liability issues as a result of these lawsuits
and legislative proposals could harm our reputation or otherwise impact the
growth of our business. We carry liability insurance, but it may not be adequate
to fully compensate us if we become liable for information carried on or through
our web sites. Any costs incurred as a result of this liability or asserted
liability could harm our business.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

E-COMMERCE SOLUTIONS

     Typically,  all of our web site design services,  including any designs and
copywriting we produce, are "works for hire" and belong exclusively to the
client for whom we provided the services to the extent permissible under Federal
copyright laws.

                                      -38-
<PAGE>

     We have licensed certain  web-enabled call center  technology which enables
our call center operators to provide real time chat, audio and/or video
assistance to our customers and customers of third parties who retain us to
provide customer service to their Internet customers.

     Our dependence on third party licenses could have adverse affects.  We rely
on certain software, technology and content that we license or have licensed
from third parties to perform key functions. These third-party licenses may not
continue to be available to us on commercially reasonable terms. Also, the
licensed software, technology and content may not be appropriately supported,
maintained or enhanced by the licensors such that the license would not continue
to provide the necessary commercial benefits to us. In addition, we may not be
able to license additional software, technology and content on terms
advantageous to us. The loss of or inability to obtain or replace licenses to,
or inability to support, maintain and enhance, any of such licensed software,
could result in increased costs, including the expense of internally developing
the required software, technology and/or content, as well as delays or
reductions in product shipments.

SOFTWARE

     We believe that our success in the software market depends significantly
upon our proprietary technology. To protect our technology from
misappropriation, we currently rely on a combination of:
     -    copyright and trademark laws,
     -    trade secrets,
     -    confidentiality procedures and contractual provisions, and
     -    federal and state trade secrets, patent and copyright laws.

     We have registered and applied for  registration  for certain service marks
and trademarks, and we intend to continue to evaluate the registration of
additional service marks and trademarks. Additionally, we generally copyright
our software and related user documentation. However, the copyright laws afford
only limited practical protection against duplication of the media embodying the
programs and the related user manuals.

     Despite  our  efforts  to  protect  our   intellectual   property   rights,
unauthorized parties may attempt to copy aspects of our products or services or
to obtain and use information that we regard as proprietary. In addition, the
laws of some foreign countries do not protect proprietary rights to as great an
extent as do the laws of the United States. Monitoring and identifying
unauthorized use of such broadly disseminated products as personal computer
software is difficult. We expect software piracy to be a continuing problem for
the software industry. We rely upon software engineering and marketing skills to
protect our market position, in addition to the copyright and trademark or trade
secret protection discussed above. Because the software development industry is
characterized by rapid technological change, we believe that the following
factors are as important to establishing and maintaining a technology leadership
position as the various legal protections of our technology:
     -    the  technological  and  creative  skills  of our  personnel,
     -    new product developments,
     -    frequent product enhancements,
     -    brand name recognition, and
     -    reliable product maintenance.

       There can be no assurance that our means of protecting  our  intellectual
property rights will be adequate or that our competitors will not independently
develop similar technology or duplicate our products or services or design
around our patents or other intellectual property rights. There also can be no
assurance that any issued patent will provide us with any competitive
advantages. We believe that we retain ownership rights to all software which we
have developed and commercially distribute, except for those components of the
software that we license from third parties. Our software is licensed and
generally provided in object code pursuant to shrink-wrap or on-screen license
agreements or executed license agreements which contain restrictions on
disclosure and transferability. In addition, we have, from time to time,
licensed to third parties the right to use, modify, reproduce, sub-license,
distribute and market certain of our software products or portions of our
software products. Such licensed software is provided in object code and, in
certain limited circumstances, source code, pursuant to agreements which contain
restrictions on disclosure and transferability.

                                      -39-
<PAGE>

     Certain  technology used in our products is licensed on a perpetual,  fully
paid, non-royalty-bearing basis from third parties. If any event occurred that
rendered technology licensed from a third party and incorporated in our products
unavailable to us, or if the technology is not appropriately supported and
enhanced by the licensor, we could be forced to expend financial and development
resources to replace that technology. Such expenditures could materially
adversely affect our business, financial condition and results of operations.

     We are not aware that any of our  products  materially  infringes  upon the
proprietary rights of third parties. There can be no assurance, however, that
third parties will not claim such infringement by us or our licensors with
respect to current or future products. We expect that software product
developers will increasingly be subject to such claims as the number of products
and competitors in our industry segment grows and the functionality of products
in different industry segments overlaps. Any such claims, with or without merit,
could be time consuming, result in costly litigation, cause product shipment
delays or might require us to enter into royalty or licensing agreements. Such
royalty or licensing agreements, if required, may not be available on terms
acceptable to us.

     Litigation  may be necessary  to protect our  proprietary  technology.  Our
competitors and potential competitors may resort to litigation as a means of
competition. Such litigation may be time consuming, costly and expose us to new
claims that we may not have anticipated. Although patent and intellectual
property disputes in the software area have often been settled through
licensing, cross-licensing or similar arrangements, costs associated with such
arrangements may be substantial, if they may be obtained at all. Any litigation
involving us, whether as plaintiff or defendant, regardless of the outcome,
including any litigation relating to claims which have been or may in the future
be asserted against us, may result in substantial costs and expenses to us and
cause a significant diversion of effort by our technical and management
personnel. In addition, there can be no assurance that litigation, instituted
either by or against us, will not be necessary to resolve issues that may arise
from time to time in the future with other competitors. Any such litigation
could have a material adverse effect upon our business, operating results and
financial condition. In the event of an adverse result in any such litigation,
we could be required to expend significant resources to develop non-infringing
technology, obtain licenses to the technology which is the subject of the
litigation on terms not advantageous to us, pay damages, and/or cease the use of
any infringing technology. There can be no assurance that we would be successful
in such development, that any such licenses would be available and/or that we
would have available funds sufficient to satisfy any cash awards.

VISUALCITIES.COM

     We used a third party web site design firm to prepare our  VisualCities.com
web site for its initial launch. We believe that the VisualCities.com web site
does not infringe on the intellectual property of others. However, the law
relating to the liability of web site operators for information carried on or
disseminated through their services is currently unsettled. Claims could be made
against web site providers under both United States and foreign law for
defamation, libel, invasion of privacy, negligence, copyright or trademark
infringement, or other theories based on the nature and content of the materials
disseminated through their web sites. Several private lawsuits seeking to impose
liability upon other web site providers currently are pending. In addition, we
may be unable to prevent unlawful activities by users of our web sites, and we
may be subject to civil or criminal liability for unlawful activities carried
out by users through our web sites. In order to reduce our exposure to this
liability, we may prohibit certain activities. We may in the future implement
other protective measures that could require us to spend substantial resources
and/or to reduce revenues by discontinuing certain service offerings. Any costs
incurred as a result of liability or asserted liability relating to unlawful
activities could harm our business.

EMPLOYEES

     As of March 31,  2000,  we had a total of 215  employees.  Of this  amount,
seventeen were employed by Renaissance, thirteen were employed by Junction 15
and twenty-two were employed by PWR. Of our 215 employees:

     -    45 were primarily engaged in Internet and product development,
     -    91 were  primarily  engaged  in  e-commerce  marketing  and sales,
          including telemarketers,
     -    43 were primarily engaged in customer and technological  support,
          production and fulfillment, and

                                      -40-
<PAGE>


     -    36 were primarily engaged in general and administrative functions.

     Of our 215 total  employees,  104 are located in the United  States and 111
are located internationally. From time to time, we also utilize independent
contractors in connection with our product development, administration and
marketing activities.

     We have never experienced  a work stoppage and  believe that we have
satisfactory relations with our employees and contractors.

                                  RISK FACTORS

     You should carefully consider the following risk factors.

WE HAVE INCURRED LOSSES TO DATE AND THERE IS NO ASSURANCE THAT WE WILL BECOME
PROFITABLE.

     We have been unprofitable since our inception in July 1992 and may continue
to incur operating losses for the foreseeable future. For the year ended
December 31, 1999, we had a net loss attributable to common stockholders of
approximately $5,683,000. For the year ended December 31, 1998, we had a loss of
approximately $2,407,000. Our operating losses may increase as we:

     -    develop our e-commerce services business,
     -    develop, produce and distribute additional products and services,
     -    de-emphasize other products and services,
     -    implement our growth strategy, which is expected to include
          investments required to accelerate the growth of acquired companies,
     -    develop our Internet commerce network, and
     -    operate in a multi-currency marketplace.

     No assurance can be given that we will ever become profitable nor, if we
obtain profitability, that we would thereafter maintain profitability.

WE HAVE LIMITED EXPERIENCE AS AN E-COMMERCE MARKETER AND SERVICE PROVIDER.

     Our historical operations have been as a developer and marketer of software
products, primarily visual communication applications. We have only recently
focused our resources on competing in the e-commerce services market. This has
been primarily accomplished by offering our telemarketing, direct marketing,
call center and fulfilment services to third party e-commerce and other
businesses and our acquisitions of Renaissance Multimedia, Junction 15 and PWR
Systems. Accordingly, there is little historical information on which you can
base an evaluation of our new businesses and prospects. As an e-commerce
services company, we face risks and uncertainties that are different than the
risks and uncertainties we faced and continue to face with our software
operations. To address these new risks and uncertainties, we must do the
following:
     -    continue to raise working capital to be able to compete effectively
          in the e-commerce services market with well-funded competition,
     -    attract,  integrate,  retain  and  motivate  qualified  personnel,
     -    maintain and enhance our brands,
     -    successfully execute our business acquisition and marketing strategy,
     -    continue to develop and upgrade our technology and information
          processing systems,
     -    provide superior customer service, and
     -    respond to competitive developments.

     We may be unable to  accomplish  one or more of these  things,  which could
cause our business to suffer. In addition, accomplishing one or more of these
things may be very expensive, which could adversely affect our ability to
achieve profitability and thereafter operate profitably.

                                      -41-
<PAGE>

WE ANTICIPTE SIGNIFICANT EXPANSION WHICH, IF NOT MANAGED CORRECTLY, COULD HARM
OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     Our business strategy calls for us to aggressively  pursue  acquisitions of
e-commerce solutions companies. To address potential growth in our business
operations and market opportunities and in executing our business strategies, we
may experience a period of significant expansion in:
     -    the number of our employees,
     -    our facilities,
     -    our infrastructure, and
     -    the number of countries in which we maintain operations.

     We expect this anticipated expansion will place a significant strain on our
management, operational and financial resources.

WE MAY BE UNABLE TO IMPLEMENT OUR ACQUISITION GROWTH STRATEGY, WHICH COULD HARM
OUR BUSINESS AND COMPETITIVE POSITION.

     Our business  strategy  includes  making  strategic  acquisitions  of other
companies or businesses, including e- commerce solutions providers, web site
designers, systems integrators and other firms. Our continued growth will depend
on our ability to identify and acquire, on acceptable terms, companies that
complement or enhance our businesses. The competition for acquisition candidates
is intense and we expect this competition to increase. There is no assurance
that we will identify and successfully compete for appropriate acquisition
candidates or complete acquisitions at reasonable purchase prices, in a timely
manner or at all. Further, we may not be able to realize the anticipated results
of future acquisitions. In implementing our acquisition growth strategy, we may
encounter:
     -    costs associated with incomplete acquisitions,
     -    expenses, delays and difficultiesof integrating acquired companies
          into our existing organization,
     -    the impact of amortizing goodwill and other intangible assets of
          acquired companies on our statement of income,
     -    dilution of the interest of existing  stockholders if we issue our
          stock in making acquisitions or if we sell our stock to the public to
          raise cash for acquisitions,
     -    diversion of management's attention,
     -    increases in our expenses in order to advertise and promote acquired
          companies and their and our current products and services,
     -    unusual  impacts on our  financial  condition due to the timing of
          acquisitions, and
     -    expenses of any undisclosed or potential legal liabilities of an
          acquired company.

     Any of these matters could have a material adverse effect on our business,
results of operations and financial condition.

ACQUISITIONS COULD RESULT IN OPERATING DIFFICULTIES AND OTHER HARMFUL
CONSEQUENCES TO US.

     If  appropriate  opportunities  present  themselves,  we intend to  acquire
businesses, technologies, services or products. The process of integrating the
operations of any acquisition, including our recent acquisitions of Renaissance
Multimedia, Junction 15 and PWR Systems, may create unforeseen operating
difficulties and expenditures and is itself risky.

     To the extent we use cash  consideration for acquisitions in the future, we
may need to obtain additional financing which may not be available on favorable
terms or at all. To the extent our management must devote significant time and
attention to the integration of technology, operations, businesses and personnel
as a result of these acquisitions, our ability to service current customers and
attract new customers may suffer. In addition, our senior management faces the
difficult and potentially time consuming challenge of implementing uniform
standards, controls, procedures and policies throughout our operating units,
including future acquisitions. We could also experience financial or other
setbacks if any of the acquired businesses experience unanticipated problems.
Further, we may experience disputes with the sellers of acquired businesses and
may fail to retain key acquired personnel.


                                      -42-
<PAGE>

In addition, we may experience a decline in employee morale and retention issues
resulting from changes in compensation, reporting relationships, future
prospects, or the direction of the business.

     Moreover,  the anticipated benefits of any or all of these acquisitions may
not be realized. Future acquisitions could result in the incurrence of debt,
contingent liabilities and amortization expenses related to goodwill and other
intangible assets, each of which could have a material adverse effect on our
operating results and financial position.

FAILURE TO OBTAIN IRS CLOSING AGREEMENT COULD RESULT IN LARGE TAX PAYMENT.

     In September 1997, we applied for a closing agreement with the IRS pursuant
to which we would become jointly and severally liable for Software Publishing
Corporation's tax obligations upon occurrence of a "triggering event" requiring
recapture of dual consolidated losses previously utilized by SPC. Such closing
agreement would avoid SPC's being required to recognize a tax of approximately
$8.0 million on approximately $24.5 million of SPC's pre-acquisition dual
consolidated losses. We have received notification from the IRS that the IRS
determined not to act on our application until SPC submitted additional filings
pertaining to pre-acquisition filings made by SPC. We have submitted these
filings in an application for relief. We believe that, if the IRS accepts the
application for relief, and the re-application for a closing agreement is made,
the IRS should agree to a closing agreement. However, no assurance can be given
that the IRS will do so, and any failure to do so could result in the
recognition of this tax liability. Should such a closing agreement be obtained,
under certain circumstances, a future acquirer of SPC or us also may be required
to agree to a similar closing agreement in order to avoid the same tax
liability. This could have a material adverse effect on our future ability to
sell SPC. The report of our auditors covering our December 31, 1999 consolidated
financial statements contains a paragraph emphasizing these dual consolidated
losses.

WE MUST CONTINUE TO DEVELOP OUR VISUALCITIES.COM WEB SITE IN ORDER TO MAKE IT
COMPETITIVE.

     Only a limited  number of expected  functions are currently  operational on
our VisualCities.com web site. In order to attract and maintain visitors to the
web site, we must complete our development, including, adding additional
functions.

OUR SOFTWARE REVENUES MAY CONTINUE TO DECLINE.

     We have  experienced  a decline in software  revenues,  primarily  from our
North American software operations, including in our 1999 fiscal year. We
believe that we must continue to enhance our software products, develop
additional products, license successful products, create strategic alliances,
implement successful marketing programs and reduce operating costs of our
software business, in order to remain competitive in the software industry. No
assurance can be given that we will be able to do so in a commercially
successful manner.


ITES 2.  DESCRIPTION OF PROPERTY

     Our principal  executive offices are located at Glenpointe Centre East, 300
Frank W. Burr Boulevard - 7th Floor, Teaneck, New Jersey 07666. The lease for
this facility terminates in January 2003 and provides for average annual rental
costs of approximately $120,000, for approximately 4,750 square feet of space.
Serif Inc. leases approximately 25,400 square feet of office and warehouse space
in Nashua, New Hampshire pursuant to a lease ending in March 2002. This facility
serves as our primary North American telemarketing, customer support, product
development, warehouse and fulfillment center. Rental costs for the Nashua
facility currently average approximately $90,000 per year. Serif (Europe)
Limited leases approximately 20,000 square feet of office and warehouse space in
Nottingham, England under a lease which terminates in May 2002. This facility
serves as our United Kingdom telemarketing center and European warehouse and
fulfillment center. The rental cost for the Nottingham facility currently
averages approximately $128,000 per year (based on current exchange rates). We
also lease approximately 4,000 square feet of office space in Aachen, Germany
pursuant to a lease which expires in September 2001, with an expected rental
cost of approximately $52,000 per year (based on current exchange rates).


                                      -43-
<PAGE>

This facility serves as our continental European sales and customer support
office and houses our multi-lingual call center.

     We conduct our website  design  services  primarily from the offices of our
Renaissance Multimedia and Junction 15 subsidiaries. Renaissance Multimedia
currently occupies approximately 2,700 square feet of office space in New York
City under a lease expiring in April 2002. Our current rental costs for this
space are approximately $54,000 per year. Junction 15 currently occupies
approximately 1,000 square feet of office space in London, England under a lease
expiring in January 2002. Our current rental costs for this space are
approximately $16,000 per year.

     We conduct our systems  integration  business primarily from the offices of
PWR Systems, which currently occupies approximately 5,000 square feet of office
and warehouse space in Bohemia, New York, a suburb of New York City, under a
lease expiring in February 2004. Our current rental costs for this space are
approximately $60,000 per year. PWR Systems also has offices located in New York
City and Boston, for the use by our employees in their sales and support
functions. The current rental costs for these offices currently aggregate to
approximately $13,000 per year.

     We  coordinate   our   executive,   administrative,   accounting,   product
development, sales, marketing, purchasing and scheduling functions primarily
from our executive offices in Teaneck, New Jersey. Our telemarketing, sales and
fulfillment operations are located in our Nashua, New Hampshire, Nottingham,
England and Aachen, Germany facilities. Our inventory control, order processing,
warehousing and shipping activities related to such operations are located
primarily at our offices in Nashua and Nottingham. Our computer systems handle
order entry, order processing, picking, billing, accounts receivable, accounts
payable, general ledger, inventory control, catalog management and analysis, and
mailing list management.

     We believe that our existing  space provides us with adequate space for our
present operations for the near future. We expect to assume and lease additional
space in connection with future acquisitions of other businesses. We currently
are reviewing opportunities to lease additional office space in New York City.

     We do not  own  nor do we  contemplate  owning  any  real  property  in the
foreseeable future. We do not currently have any policy imposing limitations,
whether by quantity or type, with respect to investments in real estate or
interests in real estate, investments in real estate mortgages or the securities
of or interests in persons primarily engaged in real estate activities.
Additionally, there is no policy currently in effect regarding investments in
real estate for possible capital gain or income. It is not anticipated that the
creation of any policy regarding real estate investments, and changes to any
such policy if created, will require a vote of holders of our securities.


ITEM 3.  LEGAL PROCEEDINGS.

     On April 7, 2000, we filed a  stipulation  of  settlement  dismissing  with
prejudice the action commenced against us, Mark E. Leininger and Barry A.
Cinnamon in the United States District Court, Southern District of New York, on
January 30, 1998, under the caption Howard Milstein and Ronald Altman v. SPC
Holdings, Inc., Mark E. Leininger and Barry A. Cinnamon. The settlement was
without cost to us, other than our counsel fees and expenses that were not
covered by insurance.

     In the fourth  quarter of 1998, an action was  commenced  against us in the
Superior Court of the State of California in and for the County of Santa Clara,
under the caption Community Towers, LLC vs. Software Publishing Corporation
Holdings, Inc. In this action, Community Towers, LLC is seeking $300,000 in
damages for an alleged violation of a lease for office space located in San
Jose, California. This is the location where SPC had its principal place of
business and where we had our principal executive offices during the period of
January 1997 through January 1998. We no longer have any offices at this
location. We believe that the plaintiff's claims in this action are without
merit and intend to vigorously defend ourselves in this action. We have filed an
answer in this action denying the plaintiffs' allegations. We plan to file a
summary judgement motion for a court determination in our favor on the
plaintiff's claims.

                                      -44-
<PAGE>

     In February  2000,  we received a demand for  arbitration  with  respect to
certain fees payable in connection with an investment banking agreement which we
terminated. The claim calls for payment of $45,000 and reinstatement of warrants
to purchase 150,000 shares of our common stock which we canceled upon
termination of the investment banking agreement, and legal and other expenses in
connection with the arbitration. We believe that the claims in this arbitration
matter are without merit. We intend to vigorously defend ourself in this action.


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

     Not applicable.


                                      -45-

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)  MARKET INFORMATION

     Our common stock has traded on the Nasdaq SmallCap Market under the symbol
"VIZY" since August 2, 1999. Our common stock traded on the Nasdaq SmallCap
Market under the symbol "SPCOD" from May 28, 1998 through June 24, 1998, under
the symbol "SPCOC" from October 23, 1998 through January 14, 1999, and otherwise
from January 28, 1997 through August 1, 1999 under the symbol "SPCO." Our common
stock also has traded on the Boston Stock Exchange under the symbol "VZM" since
August 2, 1999 and under the symbol "SPO" from January 20, 1997 through August
1, 1999. The following table sets forth the range of high and low bid prices for
our common stock for the periods indicated as derived from reports furnished by
The Nasdaq Stock Market, adjusted to reflect our one-for-three reverse stock
split effective on May 27, 1998. Such adjustment has been made by multiplying
the closing prices by three and does not necessarily reflect the prices for our
common stock had such reverse stock split occurred prior to the periods
indicated. The information reflects inter-dealer prices, without retail
mark-ups, mark-downs or commissions and may not necessarily represent actual
transactions.
<TABLE>
<CAPTION>

                                                High Bid     Low Bid
                                                --------     -------
Fiscal 1998
-----------
<S>                                                <C>         <C>
First Quarter . . . . . . . . . . . . .            2-13/16     1-1/2
Second Quarter  . . . . . . . . . . . .            3           1-3/8
Third Quarter . . . . . . . . . . . . .            1-5/8         5/8
Fourth Quarter. . . . . . . . . . . . .            1-1/8         9/16

Fiscal 1999
-----------
First Quarter . . . . . . . . . . . . .            1-31/32       15/16
Second Quarter. . . . . . . . . . . . .            4-7/16      1-21/32
Third Quarter . . . . . . . . . . . . .            4-1/4       2-1/4
Fourth Quarter. . . . . . . . . . . . .            4           2-1/8

Fiscal 2000
-----------
First Quarter . . . . . . . . . . . . .            9-3/4       3
</TABLE>

     As of March 31, 2000, the closing price for our Common Stock as reported on
Nasdaq was $6-1/8. As of the close of business on March 31, 2000, we had 711
stockholders of record. We estimate, based upon surveys conducted by our
transfer agent in connection with our 1999 Annual Meeting of Stockholders, that
we have approximately 5,000 beneficial holders of our common stock.

     We have never paid cash dividends on our capital stock and do not
anticipate paying cash dividends in the foreseeable future. We currently intend
to retain any future earnings for reinvestment in our business. Any future
determination to pay cash dividends will be at the discretion of our board of
directors and will be dependent upon our financial condition, results of
operations, capital requirements and other relevant factors.

     The market for our common stock is highly volatile. The trading price of
our common stock could widely fluctuate in response to, among other things:
     -    quarterly variations in our operating and financial results,
     -    announcements of  technological  innovations or new products by us or
          our competitors,
     -    changes in prices of our products or our competitors' products and
          services,
     -    changes in the product mix of our sales,
     -    changes in our revenue and revenue growth rates as a whole or for
          individual geographic areas,
     -    business units, products or product categories,
     -    responses to our strategies concerning e-commerce and the Internet,
     -    unscheduled system interruptions,


                                      -46-
<PAGE>

     -    our ability to timely develop, introduce and market new products, as
          well as enhanced versions of our current products,
     -    additions or departures of key personnel,
     -    announcements of  technological  innovations or new services
          by us or our competitors,
     -    changes in financial estimates by securities  analysts,
     -    conditions  or trends in the Internet and  online commerce industries,
     -    changes  in  the  market valuations  of  other Internet or e-commerce
          service companies,
     -    developments in Internet regulations,
     -    announcements by us or our competitors of significant acquisitions,
          strategic partnerships, joint ventures or capital commitments,
     -    sales of our common  stock or other  securities  in the open market,
          and
     -    other events or factors that may be beyond our control.

     Statements or changes in opinions, ratings, or earnings estimates made by
brokerage firms or industry analysts relating to the market in which we do
business or relating to us could result in an immediate and adverse effect on
the market price of our common stock. In addition, the stock market has from
time to time experienced extreme price and volume fluctuations which have
particularly affected the market price for the securities of many software and
Internet companies which often have been unrelated to the operating performance
of these companies. These broad market fluctuations may adversely affect the
market price of our common stock.

(b) RECENT SALES OF UNREGISTERED SECURITIES

     The information set forth below is a list of all our sales and issuances of
our equity securities occurring during 1999 and the first quarter of 2000 which
we have not otherwise disclosed in any of our Quarterly Reports on Form 10-QSB.

     On November 22, 1999, we sold and issued 17,052 shares of our common stock
to one individual for gross proceeds of $25,578 upon the exercise of warrants
held by this individual. The issuance of such shares was a private transaction
exempt from registration under Section 4(2) of the Securities Act.

     Between November 11, 1999 and December 30, 1999, we sold and issued an
aggregate of 80,024 shares of our common stock to a total of four of our vendors
in exchange for their reduction of a total of $216,249 in amounts due them. The
issuances of such shares were private transactions exempt from registration
under Section 4(2) of the Securities Act.

     Between July 26, 1999 and August 24, 1999, we sold and issued an aggregate
of 1,750 shares of our Common Stock to a total of three individuals for gross
proceeds of $1,805 upon the exercises of options held by such individuals. The
issuances of such shares were private transactions exempt from registration
under Section 4(2) of the Securities Act.

     In the first quarter of 2000, we sold and issued an aggregate of 226,695
shares of our common stock to a total of fifteen individuals and entities for
gross proceeds of $469,226 upon exercise of warrants held by these individuals
and entities. The issuances of such shares were private transactions exempt from
registration under Section 4(2) of the Securities Act.

     In connection with our acquisition of Renaissance Multimedia in February
2000, we sold and issued an aggregate of 449,870 shares of our common stock to
the former shareholders of Renaissance Multimedia. The issuances of such shares
was a private transaction exempt from registration under Section 4(2) of the
Securities Act.

     In connection with our acquisition of Junction 15 in March 2000, we sold
and issued an aggregate of 681,818 shares of our common stock to the former
shareholders of Renaissance Multimedia. The issuances of such shares was a
private transaction exempt from registration under Section 4(2) of the
Securities Act.

                                      -47-

<PAGE>

     In connection with our acquisition of PWR Systems in March 2000, we sold
and issued an aggregate of 1,500,000 shares of our common stock to the former
shareholders of Renaissance Multimedia. The issuances of such shares was a
private transaction exempt from registration under Section 4(2) of the
Securities Act.

     In March 2000, we sold a total of 936,954 shares of our common stock to 45
accredited investors for gross proceeds of $4,216,293. The issuances of theses
shares were private transactions exempt from registration under Section 4(2) of
the Securities Act of 1933.

     In March 2000, we accepted subscriptions for and sold a total of 762,471
shares of our common stock to eleven foreign investors for gross proceeds of
$3,392,996. The issuances of these shares were private transactions exempt from
registration pursuant to Section 4(2) of, and Regulation S promulgated under,
the Securities Act.

     Our acquisition strategy may result in dilution to our stockholders. Our
business strategy calls for strategic acquisitions of businesses, technologies,
services and products. In connection with our recent acquisitions of Renaissance
Multimedia, Junction 15 and PWR Systems, among other consideration, we issued an
aggregate 2,631,688 shares of our common stock and paid $2,000,000 in cash and
promissory notes. We anticipate that future acquisitions will require cash and
issuances of our capital stock, including our common stock. To the extent we are
required to pay cash for any acquisition, we anticipate that we would be
required to obtain additional equity and/or debt financing. Such stock issuances
and financing, if obtained, may not be on terms favorable to us and could result
in substantial dilution to our stockholders at the time(s) of these stock
issuances and financings.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.

RESULTS OF OPERATIONS

1999 COMPARED TO 1998

     NET SALES. Net sales increased by $1,619,624 or 8.9% to $19,891,357 in 1999
from $18,271,733 in 1998 primarily as a result of the introduction of sales of
the Company's Go Digital Camera Pak (introduced in the fourth quarter of 1998),
the introduction of Page Plus 6.0 in July 1999, and expanded operations in
Germany. Camera revenues were $5,259,000 in 1999, compared to $1,371,000 in
1998. The increase in camera revenues more than offset a decline in software
sales of approximately $2,300,000. We provided for returns in 1999 at 14% of
gross sales compared to 10% in 1998 because digital cameras have a higher return
rate than software and a higher proportion of our 1999 sales were of digital
cameras.

     North  America  and  International  net  sales  for 1999  and 1998  were as
follows:
<TABLE>
<CAPTION>

                                          1999          %          1998         %
                                          ----         ---         ----        ---
     <S>                             <C>              <C>      <C>            <C>
     North America. . . . . . . .    $  6,730,271      33.8    $ 8,431,271     46.1
     International. . . . . . . .      13,161,086      66.2      9,840,462     53.9
                                     ------------      ----      ---------     ----
     Total. . . . . . . . . . . .    $ 19,891,357     100.0    $18,271,733    100.0
                                     ============     =====    ===========    =====
</TABLE>

     We have experienced a continuing negative trend in our North American
direct marketing software programs. We have addressed this trend by refocusing
our business strategy to include further overseas expansion and to utilize our
direct marketing and other core competencies to enhance our Internet services
business.

     GROSS PROFIT. Our gross profit for 1999 was $13,520,251, or 68% of our net
sales, compared to $14,562,488, or 80% in 1998. The decline in gross margins for
1999 reflects a change in product mix resulting primarily from a higher
proportion of hardware sales as compared to software sales in the comparable
1998 period due to our Go Digital Camera Pak promotion and delays in the
introduction of additional software products. Digital cameras produced by third
parties carry lower margins than our proprietary software products. Our cost of
goods sold consisted primarily of product costs, royalties and inventory
allowances for damaged and obsolete products. Product costs have historically
consisted of the costs to purchase the underlying materials and print both

                                      -48-

<PAGE>

boxes and manuals, media costs (CD-ROMs and other media), assembly costs,
and hardware costs. Cost of goods sold was $6,371,106 for 1999 compared to
$3,709,245 for 1998, an increase of 72%, reflecting increased sales in 1999 as
well as the change in product mix.

     Our gross margins and operating income may be affected in particular
periods by the mix of distribution channels used, the mix of international and
domestic revenues, the mix of products sold and the timing of product
introductions, promotional pricing and rebate offers, return privileges and
marketing promotions in connection with new product introductions and upgrades.
These promotions may have a negative influence on average selling prices and
gross margins. In addition, gross margins are expected to fluctuate on a
quarterly basis as we utilize alternative direct response promotions. Gross
margins have also been, and may continue to be, adversely affected by
competitive pricing strategies in the software industry as a whole, including
competitive upgrade pricing, the OEM business and alternative licensing
arrangements. The Company expects additional gross margin fluctuations in 2000
as it expands its e-commerce services business.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased by $3,694,564, or 27.4%, to
$17,175,520 for 1999 from $13,480,956 in 1998, primarily as a result of
increased catalog and direct mail costs, including the cost of developing an
expanded direct-response list in the United States and the introduction of a
direct mail program in Germany. Increases in direct marketing selling expenses
amounted to approximately $1,815,000. We establish several of our marketing
expenditure levels based on expected net revenues. We periodically review and
adjust our variable expenditure levels based on actual sales volumes.
Additionally we experienced increases in technical recruiting costs of
approximately $100,000 related to the competitive technical environment in which
we operate, increases in legal fees of approximately $200,000 primarily related
to litigation, an increase in consulting fees primarily associated with
financial and investment banking agreements of $370,000, and an $80,000 increase
in investor relations costs. Salary and wages increased by approximately
$700,000 as additional staffing and increased compensation expenses were
required in connection with VisualCities.com Inc., our European expansion, and
the development of our forward looking growth and acquisition strategy.

     PRODUCT DEVELOPMENT. Product development expenses decreased $238,716 or
18.9% to $1,027,447 in 1999 from $1,266,163 in 1998, primarily as a result of
the reduction in development operations of our SPC subsidiary. Our product
development costs represented 5.2% of net sales in 1999 compared to 6.9% in
1998. We capitalized approximately $478,000 of product enhancement costs
associated with product designs where technological feasibility has been
established. All other development costs have been expensed in the period
incurred. We intend to continue to acquire externally developed technology,
explore strategic alliances and other methods of acquiring or licensing
technology, and invest in certain internal development projects, including the
updating of existing products. We believe that product development expenses may
increase in dollar amount in the future, although our long-term goal is to
continue to reduce product development costs as a percentage of sales.

     AMORTIZATION OF GOODWILL AND PURCHASED TECHNOLOGY. In 1999 and 1998, we
incurred expenses of $2,219,363 and $2,377,282, respectively, in respect of the
amortization of goodwill and purchased technology associated with acquisitions
of the Serif companies and SPC. While this amortization has now been completed,
we expect increased amortization expenses associated with our recent and
anticipated future acquisitions.

     UNREALIZED HOLDING GAIN ON MARKETABLE SECURITIES. The unrealized holding
gains of $322,652 and $90,000 in 1999 and 1998, respectively, represent the
increase in value of our investment in marketable securities characterized as
trading securities.

     REALIZED GAIN. In a July 1, 1999 agreement, we agreed with the holder of
all our outstanding shares of Class C Preferred Stock that in the event we
called for redemption any of our shares of Class C Preferred Stock within 45
days, we would sell to the Holder 53,815 Xceed Shares which we owned, at a price
of $18.44 per Xceed Share, or $992,349 in the aggregate. On July 14, 1999, the
Board of Directors called for redemption all outstanding shares of Class C
Preferred Stock with a record date for such redemption of July 19, 1999. Such
transaction was consummated on July 19, 1999, leaving us with 66,185 shares of
Xceed common stock. We realized a gain of $642,444 on the exchange of our
marketable securities in this transaction.

                                      -49-

<PAGE>

     OTHER EXPENSE (INCOME). Other expense (income) for the 1999 decreased
$35,236,  or 37.2%,  to $(59,503) from $(94,739) in 1998 primarily  related to a
decline in interest income.

     INCOME TAXES (BENEFIT). The income tax benefit for 1999 consists of
$(216,044) received under a state sponsored technology program which allowed for
the assignment of value to previously established net operating loss benefits.,
and $(34,934), relating principally to foreign tax benefits. The tax provision
for 1998 consisted of foreign and state income taxes.

LIQUIDITY AND CAPITAL RESOURCES

     Our cash and cash equivalents decreased by $647,153 to $1,730,495 at
December 31, 1999 from $2,377,648 at December 31,1998, primarily as a result of
using $3,103,610 of cash for operations and $811,109 for investing activities.
Our operating and investing activities for 1999 were primarily related to
increased direct marketing expenditures, the development of our VisualCities.com
website, our European expansion, and the costs associated with the development
of future software products. We intend to continue to utilize our working
capital in 2000 for Internet web site development, European expansion, securing
additional digital camera supplies, product development, marketing and
advertising, to finance the higher level of inventory and accounts receivable
necessary to support any increase in sales, for capital expenditures, including
the purchase of computer and internet services equipment, and for internal and
external software development, as well as to finance the costs of our e-commerce
services business, including the costs of acquisitions, and the respective
working capital needs of acquired companies. Our cash requirements, however, may
change depending upon numerous factors, including, without limitation, the cost
of integrating our businesses and the need to finance the licensing or
acquisition of third party software, as well as increased inventory and accounts
receivable arising from the sale and shipment of new products. Our 1999
financing activities consisted of receipt of net proceeds of $3,497,695 from the
sale of our common stock, option and warrant exercises , and the issuance of
long term debt net of repayments. We had working capital of $652,974 at December
31, 1999, an increase of $217,902 from our working capital at December 31, 1998
of $435,072, which increase was attributable primarily to the significant
unrealized appreciation in the value of our marketable securities.

     We believe that our existing cash and cash equivalents and cash generated
from operations, if any, should be sufficient to meet our currently anticipated
liquidity and capital expenditure requirements for the next twelve months.. In
March and April 2000 we completed private placements of our common stock for an
aggregate of 1,699,425 shares raising aggregate gross proceeds of $7,609,289,
before associated placement costs. We utilized approximately $5,000,000 of these
proceeds to fund our acquisitions and associated legal and other costs thereof,
as well as working capital needs, for Renaissance Multimedia, Junction 15, and
PWR Systems in February and March 2000 as well as repay a $1,000,000 line of
credit loan. We plan to utilize the remaining proceeds to pursue additional
acquisition targets, expand our VisualCities.com website, including promotional
activities, develop our e- commerce services business, expand our European
operations, develop additional software products, and fund our other working
capital requirements. In the first quarter of 2000 we entered into a two-year
unsecured line of credit agreement for maximum borrowings of $1,000,000, at an
8% interest rate, with a foreign company. We borrowed $1,000,000 under this note
in February 2000. This note was repaid in full with accrued interest on March
20, 2000, and we now have $1 million available under this line of credit. We
have letter of credit facilities of approximately $260,000 relating to certain
lease obligations. Serif (Europe) Limited has a letter of credit facility of
approximately $200,000, which was fully drawn upon as of December 31, 1999, with
its primary bank in the United Kingdom, and which is secured by Serif (Europe)
Limited cash reserves of a similar amount. Serif (Europe) Limited has bank loans
of approximately $118,000 at December 31, 1999 which are secured by
substantially all of its assets. Our PWR Systems subsidiary, acquired on March
27, 2000, has a $1,000,000 bank credit facility, which we have guaranteed, and
an additional $1,000,000 credit facility, both of which are secured by PWR's
assets. There can be no assurance that we will be successful in attaining our
sales or strategic goals, or that attaining such goals will have the desired
effect on our cash resources.

     Our exposure to foreign currency gains and losses is partially mitigated as
we incur operating expenses in the principal foreign currency in which we
invoice foreign customers. As of December 31, 1999, we had no foreign

                                      -50-

<PAGE>


exchange contracts outstanding. Our foreign exchange gains and losses may
be expected to fluctuate from period to period depending upon the movement in
exchange rates.

     We have entered into a five-year consulting agreement pursuant to which we
are required to pay .30% of our net revenue (subject to an annual minimum fee of
$125,000, and an annual maximum fee of $250,000) to the consultant. The term of
the agreement may be extended automatically by an additional eighteen months if
we report annual net revenues of $40,000,000, and an additional eighteen months
should net revenues exceed $60,000,000. At December 31, 1999, we have accrued
$125,000 in connection with this agreement.

     On July 27, 1999 we entered into a minimum annual purchase commitment of
approximately $230,000 with a distributor of certain software the Company
intends to sell in its direct mail operation. We anticipate that we will fulfill
such commitment from our operational resources.

     We had a backlog of approximately $500,000 as of December 31, 1999,
primarily relating to digital cameras.

NET OPERATING LOSS CARRYFORWARDS

     We estimate our consolidated tax net operating loss carryforwards to be
approximately $35 million at December 31, 1999, after consideration for
limitations on the use thereof, which expire in years 2002 through 2019. Under
Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"),
changes in the ownership or the business of a corporation that has net operating
loss carryforwards can result in the inability to use or the imposition of
significant restrictions on the use of such net operating loss carryforwards to
offset future income and tax liability of such corporation. An "ownership
change" may be deemed to have occurred under Section 382 of the Code and the
regulations thereunder with respect to both the Company and SPC, and the use by
the Company of these net operating loss carryforwards will be limited.
Utilization of the net operating loss carryforwards of SPC may be further
limited by reason of the consolidated return/separate return limitation year
rules. We estimate the maximum utilization of such net operating loss
carryforwards to be approximately $1,200,000 per year for losses through
December 31, 1996. There can be no assurance that we will be able to utilize all
of our net operating loss carry forwards. In addition, the foreign losses
incurred by SPC may decrease or otherwise restrict our ability to claim U.S. tax
credits for foreign income taxes.

POSSIBLE TAX OBLIGATION

     We have applied for a closing agreement with the IRS pursuant to which we
would become jointly and severally liable for SPC's tax obligations upon
occurrence of a "triggering event" requiring recapture of dual consolidated
losses previously utilized by SPC. Such closing agreement would avoid SPC's
being required to recognize a tax of approximately $8 million on approximately
$24.5 million of SPC's previous dual consolidated losses. The IRS notified us
that it determined not to act on our application until SPC submitted certain
filings pertaining to pre-acquisition consolidated tax year return filings made
by SPC. We have submitted these filings in an application for relief. We believe
that should the IRS accept the application for relief, and once a re-application
for a closing agreement is made, the IRS should agree to such a closing
agreement. However, no assurance can be given that the IRS will do so, and any
failure to do so could result in the recognition of this tax liability. Should
such a closing agreement be obtained, in certain circumstances, a future
acquirer of the Company may also be required to agree to a similar closing
agreement in order to avoid the same tax liability, to the extent it is able to
do so. This could have a material adverse effect on our future ability to sell
SPC. The report of our auditors covering the December 31, 1999 consolidated
financial statements contains a paragraph emphasizing these dual consolidated
losses.

YEAR 2000 UPDATE

     We completed our Year 2000 preparations as planned. Through the first
quarter of the Year 2000 our operations have not experienced any material
problems associated with the Year 2000. Further, no problems have been
identified with respect to any of our key suppliers, nor have we had any reports
with respect to the products we

                                      -51-

<PAGE>

sell. We expended a total of approximately $90,000 in our Year 2000
compliance review and implementation efforts through December 31, 1999. No
further costs in the Year 2000 are expected.

SEASONALITY

     The computer software market is characterized by significant seasonal
swings in demand, which typically peak in the fourth quarter of each calendar
year. The seasonal pattern is due primarily to the increased demand for software
during the year-end holiday buying season and reduced retail and corporate
demand for business software during the European Easter and summer vacation
period. We expect our net sales and operating results to continue to reflect
this seasonality. Our revenues may also experience substantial variations as a
result of a number of factors, such as consumer and business preferences and
introduction of competing products and services by competitors. There can be no
assurance that we will achieve consistent growth or profitability on a quarterly
or annual basis.

INFLATION

     We believe that  inflation has  generally not had a material  impact on our
operations.


ITEM 7.  FINANCIAL STATEMENTS.

     We set forth  below a list of the  financial  statements  of  Vizacom  Inc.
included in this Annual Report on Form 10-KSB.

Item                                                                      Page*
----                                                                      -----
Independent Auditors' Reports. . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Balance Sheet at December 31, 1999. . . . . . . . . . . . . . F-4
Consolidated Statements of Operations for the years ended
 December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Stockholders' Equity for the
 years ended December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . F-6
Consolidated Statements of Cash Flows for the years ended
 December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . . . . . F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . F-8

     We set  forth  below  a list of the  financial  statements  of
Renaissance Computer Art Center, Inc., d/b/a Renaissance Multimedia,
included in this Annual Report on Form 10-KSB.

Item                                                                      Page*
----                                                                      -----
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . F-28
Balance Sheet at December 31, 1999 . . . . . . . . . . . . . . . . . . . . F-29
Statement of Operations and Retained Earnings for the
 year ended December 31, 1999. . . . . . . . . . . . . . . . . . . . . . . F-30
Statement of Cash Flows for the year ended December 31, 1999 . . . . . . . F-31
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . F-32

     We set  forth  below a list of the  financial  statements  of
Junction  15 Limited included in this Annual Report on Form 10-KSB.

Item                                                                      Page*
----                                                                      -----
Directors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-37
Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-39
Profit and Loss Account for the year ended 31 December 1999. . . . . . . . F-40
Balance Sheet as at December 31, 1999. . . . . . . . . . . . . . . . . . . F-41
Cash Flow Statement for the year ended 31 December 1999. . . . . . . . . . F-42
Notes to the Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . F-43
Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . . . F-44

                                      -52-

<PAGE>

     We set forth below a list of the financial statements of P. C.
Workstation Rentals, Inc., d/b/a PWR Systems, and Storageland, Inc.
included in this Annual Report on Form 10-KSB.

Item                                                                      Page*
----                                                                      -----
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . F-51
Combined Balance Sheets at December 31, 1999 and 1998. . . . . . . . . . . F-52
Combined Statement of Operations and Retained Earnings for
 the years ended December 31, 1999 and 1998. . . . . . . . . . . . . . . . F-53
Statements of Combined Cash Flows for the years ended
 December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . . . . . F-54
Notes to Combined Financial Statements . . . . . . . . . . . . . . . . . . F-55
----------
*   Page F-1 follows page 68 to this Annual Report on Form 10-KSB.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

          Not applicable.

                                      -53-

<PAGE>


                             PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

OUR EXECUTIVE OFFICERS AND DIRECTORS

     Our current executive officers and directors, and their ages, positions and
offices with us are as follows:
<TABLE>
<CAPTION>

NAME                     AGE  POSITIONS AND OFFICES
<S>                      <C>  <C>
Mark E. Leininger        49   President, Chief Executive Officer and Director
Marc E. Jaffe, Esq.      47   Chairman of the Board of Directors and Secretary
Norman W. Alexander      69   Director
Vincent DiSpigno         43   Vice President and Director; Chief Executive Officer of PWR Systems
Werner G. Haase          61   Director
Neil M. Kaufman, Esq.    39   Director
David N. Salav           33   Vice President and Director; President of PWR Systems
Rand Schulman            47   Executive Vice President
Alan W. Schoenbart       41   Vice President - Finance and Chief Financial Officer
</TABLE>

     Set forth below is a brief  description  of the background of our executive
officers and directors, based on information provided by them to us.

     MARK E. LEININGER has served as a director since July 1996, our president
since January 1998 and our chief executive officer since July 1999. He served as
our chief financial officer from July 1995 through December 1997 and our chief
operating officer from September 1996 to July 1999. From February 1994 through
April 1995, Mr. Leininger was the president of Phoenix Leasing Corporation, a
passenger and cargo air carrier and aircraft leasing company, which filed for
bankruptcy protection in 1996. From February 1986 through February 1994, Mr.
Leininger held various positions, including chief financial officer and chief
operating officer, with Mid Pacific Air Corporation, a transportation and
service company whose stock was traded on Nasdaq. Mr. Leininger received an MBA
degree from National University, San Diego, California in 1979 and a BA from
Miami University, Oxford, Ohio in 1972.

     MARC E. JAFFE, ESQ., has served as a director since August 1995, our
chairman of the board of directors since January 1998 and our secretary since
December 1997. In his capacity as chairman, he does not serve as our chief
executive officer. Mr. Jaffe is managing director - New York of Double Impact,
Inc., a global venture catalyst for Internet-based companies. Since 1992, Mr.
Jaffe has been president of Electronic Licensing Organization, Inc., which, from
time to time, has acted as our agent in the acquisition of certain electronic
publishing rights. From 1988 to 1991, Mr. Jaffe was executive vice president of
database management for Franklin Electronic Publishers, a New York Stock
Exchange-listed company engaged in the business of publishing electronic books
on hand held media. From 1985 through 1987, Mr. Jaffe was President of the
software and video division of Simon & Schuster, a publishing company. Mr. Jaffe
received a JD degree from Columbia University School of Law in 1976 and a BA
from Columbia College in 1973.

     NORMAN W. ALEXANDER has served as a director since December 1996. Mr.
Alexander is a retired former director of Imperial Foods Ltd., a food products
company, and formerly was the chairman of several subsidiaries of Imperial Foods
Ltd.

     VINCENT DISPIGNO has been a director and vice president since April 2000
and has been the chief executive officer of PWR Systems since June 1994. For
three years prior to that, Mr. DiSpigno was a corporate marketing manager for
Arrow Electronics Inc., a major electronics distributor. For five years prior to
that, Mr. DiSpigno was a district manager for BusinessLand Inc., a national
value added reseller.

                                      -54-

<PAGE>

     WERNER G. HAASE has served as a director since May 1999. Mr. Haase has
been, since July 1996, the co- chairman and chief executive officer of Xceed
Inc., formerly X-Ceed, Inc., a Nasdaq-listed company providing performance
improvement services, Internet-based performance improvement programs and
communication services and corporate travel management services. Mr. Haase also
served as a director of Xceed Inc. from September 1987 to July 1996, as a
director and chief executive officer of Journeycraft, Inc. prior to its
acquisition by Xceed Inc. in July 1996 and was the owner, with Nurit Kahane
Haase, of TheraCom Integrated Medical Communications, Inc. prior to its
acquisition by Xceed in July 1996.

     NEIL M. KAUFMAN, ESQ., has been a director since December 1996. Mr. Kaufman
served as our secretary from December 1996 to December 1997. Mr. Kaufman is
currently a member of Kaufman & Moomjian, LLC, our corporate counsel. From
January 1997 to December 1997, Mr. Kaufman was a partner in Moritt, Hock &
Hamroff, LLP. From 1993 to January 1997, he was a member of Blau, Kramer,
Wactlar & Lieberman, P.C. From 1984 to 1993, Mr. Kaufman was associated with
Lord Day & Lord, Barrett Smith. Each of these three law firms served as our
counsel during the periods in which Mr. Kaufman was affiliated or associated
with such firms. Mr. Kaufman received a JD degree from New York University
School of Law in 1984 and a BA degree from SUNY Binghamton in 1981.

     DAVID N. SALAV has been a director and vice president since April 2000 and
has been the president of PWR since its inception in 1991. For one year prior to
that, Mr. Salav was a business development manager for Arrow Electronics, a
major electronics distributor. Mr. Salav received a B.A. degree from the State
University of New York at Buffalo in 1989.

     RAND SCHULMAN has served as our executive vice president since March 2000.
From November 1997 to March 2000, Mr. Schulman was chief executive officer of
Keylime Software, Inc, a B2B e-business analysis service company. From July 1994
to March 1997, he was executive vice president and vice president of marketing
of TriTeal Corp. a Unix software company. From January 1992 to June 1994, Mr.
Schulman served as vice president of sales and marketing at Pages Software, a
computer software company. Mr. Schulman was employed in various capacities from
December 1983 to January 1992 by Island Graphics/Dainippon Screen Mfg. Co., a
computer software company, serving most recently as general manager and senior
vice president.

     ALAN W. SCHOENBART has been our vice president - finance and chief
financial officer since April 1999. Mr. Schoenbart served as chief financial
officer of Windswept Environmental Group Inc., an environmental remediation
company, from September 1997 to April 1999. He was chief financial officer of
Advanced Media Inc., a multimedia company, from August 1995 to August 1997. Mr.
Schoenbart was controller of GoodTimes Entertainment, a producer and distributor
of video and software products, from September 1993 to July 1995. Mr. Schoenbart
is a certified public accountant and received a BS degree from Fairleigh
Dickinson University in 1981.

     The loss of the services of our principal executive officers could have a
material adverse effect on us. We are significantly dependent upon the continued
availability of Mark E. Leininger, our president and chief executive officer,
Rand Schulman, our executive vice president, and Alan W. Schoenbart, our vice
president - finance and chief financial officer. Mr. Leininger has entered into
an employment agreement with us, but neither of Messrs. Schoenbart nor Schulman
currently are subject to either an employment or non-competition agreement with
us. The loss or unavailability to us of either of Messrs. Leininger, Schulman or
Schoenbart for an extended period of time could have a material adverse effect
on our business operations and prospects. To the extent that their services
would be unavailable to us for any reason, we would be required to procure other
personnel to manage and operate the Company. There can be no assurance that we
will be able to locate or employ such qualified personnel on acceptable terms.
At the present time, we have "key man" life insurance covering only the life of
Mr. Leininger.  The amount of this insurance is $2,000,000.

THE THREE CLASSES OF OUR BOARD

     Our board of directors is divided into three classes. The directors in each
class serve for three-year terms. Set forth below are the members of each class
and the year in which the term of each director class expires.

                                      -55-

<PAGE>
<TABLE>
<CAPTION>

             Class I                              Class II                              Class III
  (To Serve Until the Annual            (To Serve Until the Annual             (To Serve Until the Annual
Meeting of Stockholders in 2000)      Meeting of Stockholders in 2001)      Meeting of Stockholders in 2002)
--------------------------------      --------------------------------      --------------------------------

       <S>                                   <C>                                     <C>
        Marc E. Jaffe                        Norman W. Alexander                     Mark E. Leininger
       Werner G. Haase                         Neil M. Kaufman                        David N. Salav
                                              Vincent DiSpigno
</TABLE>

DIRECTOR COMPENSATION

     Directors receive no cash compensation for their services as directors, but
are reimbursed for expenses actually incurred in connection with attending
meetings of our board of directors. Members of our board who are not also
employees, of which there currently are three, are eligible to participate in
our Outside Director and Advisor Stock Option Plan. Our board met eleven times
and acted by unanimous written consent on one occasion during 1999. All of our
current directors attended not less than 75% of such meetings of the board and
committees thereof on which they serve, except that Werner G. Haase attended two
of six meetings of the Board during the period in which he has served as one of
our directors.

BOARD COMMITTEES

     The audit committee of our board of directors currently consists of Norman
W. Alexander, Werner G. Haase and Neil M. Kaufman. Our audit committee met four
times during 1999. Our audit committee recommends the engagement of our
independent certified public accountants. The audit committee is primarily
responsible for reviewing and approving the scope of the audit and other
services performed by our independent certified public accountants. The audit
committee also reviews and evaluates our accounting principles and practices,
systems of internal controls, quality of financial reporting and accounting and
financial staff, as well as any reports or recommendations issued by the
independent accountants.

     The compensation committee of our board of directors currently consists of
Norman W. Alexander and Werner G. Haase. Our compensation committee held four
meetings during 1999. The compensation committee generally reviews and approves
of our executive compensation and administers all of our stock plans.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Based solely upon a review of Forms 3, 4 and 5 and amendments to these
forms furnished to us, together with written representations received by us from
applicable parties that no Form 5 was required to be filed by such parties, all
parties subject to the reporting requirements of Section 16(a) of the Exchange
Act filed all such required reports during and with respect to our 1999 fiscal
year, except that (a) Norman W. Alexander failed to timely file his Form 5 with
respect to an option granted him by our Board of Directors in January 1999 and
(b) Werner G. Haase failed to timely file his form 5 with respect to his
automatic option grant in August 1999 under our Outside Director and Advisor
Stock Plan.


ITEM 10.  EXECUTIVE COMPENSATION.

     The following summary compensation table sets forth, for the three years
ended December 31, 1999, the cash and other compensation paid to Mark E.
Leininger, our president and chief executive officer, and Alan W. Schoenbart,
our vice president - finance and chief financial officer. No other individual
served as an executive officer of our company during 1999 whose total
compensation, for services rendered during 1999, was $100,000 or more.

                                      -56-

<PAGE>

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                   Long-Term
                                                                                 Compensation
                                                                                     Awards
                                                  Annual Compensation                ------
                                                                                   Securities
Name and Principal Positions             Year     Salary        Bonus          Underlying Options
----------------------------             ----     -----         -----          ------------------

<S>                                      <C>    <C>          <C>                    <C>
Mark E. Leininger, President and         1999   $ 162,500           --               80,000
 Chief Executive Officer                 1998     145,000           --              312,188
                                         1997     145,000    $  39,737              281,666

Alan W. Schoenbart, Vice President -     1999      92,361       15,000              110,000
  Finance and Chief Financial Officer    1998          --           --                   --
                                         1997          --           --                   --
</TABLE>

     For purposes of the summary compensation table,
     -    the value of all  perquisites  provided  to these  executive
          officers did not exceed the lesser of $50,000 or 10% of the  executive
          officer's salary and bonus,
     -    options granted to Mr.  Leininger in 1998 include options to
          purchase  102,188  shares of our common stock  repriced under our 1998
          repricing program, as discussed in "Repricing of Options" and "Certain
          Transactions" below,
     -    options granted to Mr.  Leininger in 1997 include options to
          purchase  181,666  shares of our common stock  repriced and reduced to
          options to purchase  136,250 shares of our common stock under our 1997
          repricing program.

STOCK OPTION GRANTS IN 1999

     The following table sets forth:
     -    the number of shares underlying options granted during 1999 to
          Mark E. Leininger and Alan W. Schoenbart, the only executive officers
          listed in the summary compensation table above,
     -    the percentage that the option grant represents of the total number of
          options granted to all of our employees during 1999,
     -    the per share  exercise  price of each such option, and
     -    the expiration date of each such option.

<TABLE>
<CAPTION>

                              Number of Shares      Percentage of Total
                             Underlying Options     Options Granted to      Exercise    Expiration
Name                         Granted During 1999     Employees in 1999        Price        Date
----                         -------------------    -------------------     --------    ----------
<S>                                <C>                     <C>               <C>          <C>
Mark E. Leininger. . . . .          80,000                 10.8              $1.375       1/26/09
Alan W. Schoenbart . . . .         110,000                 14.9              $1.03125     4/05/09
</TABLE>

AGGREGATE OPTION EXERCISES IN 1999 AND YEAR-END OPTION VALUES

     Set  forth in the  table  below is  information,  with  respect  to Mark E.
Leininger and Alan W.  Schoenbart,  our only  executive  officers  listed in the
summary compensation table above, as to:
     -    the total number of unexercised options held on December 31,
          1999,  separately  identified  between those exercisable and those not
          exercisable as of such date, and
     -    the aggregate  value of  in-the-money,  unexercised  options
          held  on  December  31,  1999,  separately  identified  between  those
          exercisable and those not exercisable.

                                      -57-

<PAGE>

<TABLE>
<CAPTION>

                                                NUMBER OF                   VALUE OF UNEXERCISED
                                           UNEXERCISED OPTIONS              IN-THE-MONEY OPTIONS
                                           AT DECEMBER 31, 1999             AT DECEMBER 31, 1999
                                           --------------------             --------------------

NAME                                    EXERCISABLE    UNEXERCISABLE       EXERCISABLE   UNEXERCISABLE
----                                    -----------    -------------       -----------   -------------
<S>                                       <C>             <C>                <C>            <C>
Mark E. Leininger . . . . . . . .         310,673         115,577            $658,642       $225,910
Alan W. Schoenbart. . . . . . . .          50,000          60,000             114,063        136,875
</TABLE>

     None of our executive officers listed in the summary compensation table
above exercised any of their options during 1999. The value of unexercised
in-the-money options is calculated by subtracting the aggregate exercise price
of the options from the aggregate market price of the shares underlying the
options as of December 31, 1999.

EMPLOYMENT AGREEMENTS

     We have entered into a three year employment agreement with Mark E.
Leininger. This employment agreement provides for a base salary of $162,500 in
1999, at least $172,500 in 2000 and at least $182,500 in 2001 and annual
incentive compensation equal to 3% of our pre-tax income for the year in which
the incentive compensation relates. This agreement with Mr. Leininger also
provides for the continued payment, for a three year period, of his then current
salary and compensation if his employment is terminated without cause. Further,
this employment agreement provides for the payment to Mr. Leininger of an amount
equal to three times his average total compensation for the five prior fiscal
years, minus $1.00, if there is a change of control of our company and Mr.
Leininger elects to terminate his employment within six months of his first
becoming aware of such change in control. This employment agreement also
contains restrictions on his engaging in competition with us for the employment
term and for up to one year thereafter and provisions protecting our proprietary
rights and information. In October 1996, our board of directors decided to pay
to Mr. Leininger a bonus of $25,000 following our first profitable fiscal
quarter after the fourth quarter of 1996. This bonus has not been paid.

     On January 28, 1998, the compensation committee of our board of directors
determined to compensate Marc E. Jaffe for his services as chairman of our board
of directors at the rate of $5,000 per month, payable $2,500 in the month of
service and $2,500 twelve months after such initial payment. During 1998, we
paid Mr. Jaffe $30,000 under this arrangement and, pursuant to a letter
agreement, dated December 17, 1998, between us and Mr. Jaffe, we issued to Mr.
Jaffe 30,000 shares of our common stock in satisfaction of $22,500 of our
obligations under this letter agreement. On January 13, 1999, the compensation
committee determined to compensate Marc E. Jaffe for his services as chairman of
the board for the 1999 calendar year at the rate of $5,000 per month. In
November 1999, we agreed to pay Mr. Jaffe an additional $3,000 per month for
November and December 1999 for additional services we requested that he perform.

     We have entered into three year employment agreements with each of Vincent
DiSpigno, one of our vice presidents and the chief executive officer of our PWR
Systems subsidiary, and David Salav, another of our vice presidents and the
president of our PWR Systems subsidiary. Each of these agreements provides for
an annual base salary of $200,000 and $25,000 annual bonuses if PWR attains a
30% increase in revenues over the prior year and PWR Systems has either at least
a 20% gross margin or $1,000,000 in net income for the subject year. Pursuant to
these two employment agreements, we expanded our board of directors and elected
Messrs. DiSpigno and Salav to our expanded board. During the term of these two
employment agreements, we have agreed to use our best efforts to cause their
reelections to our board when their initial terms expire. These two employment
agreements also contain restrictions on the employee engaging in competition
with us for the employment term and for one year thereafter and provisions
protecting our proprietary rights and information.

     We intend to enter into an employment agreement with Rand Schulman, our
executive vice president, to expire on March 14, 2001. We anticipate that this
agreement will provide for one-year renewals at the election of both Mr.
Schulman and us. We anticipate that this agreement will provide for a base
salary of $225,000, an annual bonus of $42,500, relocation payments and a
housing allowance. We anticipate that this employment agreement

                                      -58-

<PAGE>

will also contain restrictions on Mr. Schulman engaging in competition with
us for the term of the agreement and for one year thereafter and provisions
protecting our proprietary rights and information.

OUR STOCK PLANS

     We adopted our various stock plans in order to assist us in attracting and
retaining qualified employees, directors, officers and outside consultants and
to align the interests of such persons with those of our stockholders.
The following is a brief description of our stock plans.

1994 LONG TERM INCENTIVE PLAN

     Our 1994 Long Term Incentive Plan provides for the grant of incentive stock
options, non-qualified stock options, stock appreciation rights, restricted
stock, performance grants and other types of awards. The 1994 Incentive Plan,
which is administered by the compensation committee of our board of directors,
currently authorizes the issuance of a maximum of 5,000,000 shares of our common
stock. Incentive stock options generally may be granted at an exercise price of
not less than the fair market value of shares of our common stock on the date of
grant, and non-qualified stock options may be granted at an exercise price of
not less than 85% of such fair market value. If any award under the 1994
Incentive Plan terminates, expires unexercised or is canceled, the shares of our
common stock that would otherwise have been issuable pursuant thereto will be
available for issuance pursuant to the grant of new awards. As of March 31,
2000, we have issued an aggregate 136,514 shares of our common stock upon
exercise of options granted under the 1994 Incentive Plan and issued 50,000
shares of our common stock as awards under the 1994 Incentive Plan. Options to
purchase an aggregate 4,223,912 shares were outstanding and 639,574 shares
remain available for issuance under the 1994 Incentive Plan, as of March 31,
2000. The 1994 Incentive Plan expires in December 2003.

OUTSIDE DIRECTOR AND ADVISOR STOCK OPTION PLAN

     Our non-employee directors, of which there are presently three, are
eligible to participate in our Director and Advisor Stock Option Plan.
Currently, up to 750,000 shares of our common stock may be issued under the
Director and Advisor Plan. Under the Director and Advisor Plan, each
non-employee director, upon first becoming a director of our company, receives
an option to purchase 25,000 shares of our common stock at a price equal to the
fair market value of our common stock on the date of grant. On August 1st of
each subsequent year, each non-employee director receives an option to purchase
an additional 25,000 shares of our common stock at a price equal to the per
share fair market value of the common stock. In March 1997, the advisory
committee was eliminated. Options awarded to each non-employee director become
exercisable over a period of two years, and are subject to forfeiture under
certain conditions. We have issued an aggregate 21,033 shares of our common
stock upon exercise of options granted under the Director and Advisor Plan. As
of March 31, 2000, options to purchase an aggregate 162,191 shares were
outstanding and options to purchase 566,776 shares remain available for grant
under the Director and Advisor Plan. The Director and Advisor Plan expires in
December 2005.

SPC 1989 STOCK PLAN

     Our SPC 1989 Stock Plan, which we assumed in connection with our
acquisition of Software Publishing Corporation in December 1996, provides for
the grant of incentive stock options, non-qualified stock options, stock
appreciation rights, stock purchase rights, incentive stock rights, performance
grants and other types of awards. We may grant awards under the SPC 1989 Plan to
both SPC's and our officers, key employees, consultants and independent
contractors. The SPC 1989 Plan, which is administered by the compensation
committee of our board of directors, currently authorizes the issuance of a
maximum of 89,350 shares of our common stock. Incentive stock options generally
may be granted at an exercise price of not less than the fair market value of
shares of our common stock on the date of grant. Non-qualified stock options may
be granted at an exercise price of not less than 50% of fair market value.
Incentive stock rights permit the rightsholder to receive cash or shares of our
common stock based upon our or the grantee obtaining results specified at the
time of the granting of such rights. Stock appreciation rights, which may be
granted in connection with an option grant or as a separate grant, entitles the
grantee to receive a cash payment based upon the yield of our common stock
between grant and exercise. Stock

                                      -59-

<PAGE>

purchase rights entitle the grantee to purchase shares of our common stock
at a price of not less than 50% of the fair market price of such shares with us
retaining a diminishing right to repurchase the shares over a specified period
should the rightsholder's relationship with us terminate. Long term performance
awards allow us to customize incentive award programs to permit the awarding of
cash or our common stock upon us or grantee obtaining specified levels of
performance. A total of 6,948 shares of our common stock have been issued upon
exercise of options granted under the SPC 1989 Plan. As of March 31, 2000,
options to purchase an aggregate 78,103 shares were outstanding under the SPC
1989 Plan. The SPC 1989 Plan terminated in October 1999, although options
granted under the SPC 1989 Plan may still be exercised in accordance with their
respective terms.

SPC 1991 STOCK OPTION PLAN

     Our SPC 1991 Stock Option Plan, which we assumed in connection with our
acquisition of Software Publishing Corporation in December 1996, provides for
the grant of incentive stock options, non-qualified stock options and stock
purchase rights to SPC's and our officers, key employees, consultants and
independent contractors. The SPC 1991 Plan, which is administered by our
compensation committee, currently authorizes the issuance of a maximum of
142,960 shares of our common stock. Incentive stock options generally may be
granted at an exercise price of not less than the fair market value of our
common stock on the date of grant. Non-qualified stock options may be granted at
an exercise price of not less than 85% of fair market value. Stock purchase
rights entitle the rightsholder to purchase shares of our common stock at a
price of not less than 85% of the fair market price of such shares with us
retaining a diminishing right to repurchase such shares over a specified period
should the rightsholder's relationship with us terminate. If any award under the
SPC 1991 Plan terminates, expires unexercised, or is canceled, the shares of our
common stock that would otherwise have been issuable pursuant thereto will be
available for issuance pursuant to the grant of new awards. The equivalent of
2,688 shares of our common stock have been issued upon exercise of options
granted under the SPC 1991 Plan. As of March 31, 2000, we have options to
purchase an aggregate 135,384 shares of our common stock outstanding and 1,389
shares remain available for issuance under the SPC 1991 Plan. The SPC 1991 Plan
will terminate in October 2001.

LIMITATION ON LIABILITY ON DIRECTORS AND OFFICERS

     Section 145 of the Delaware General Corporation Law provides that
indemnification of directors, officers, employees and other agents of a
corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, may be provided by such
corporation.

     Our certificate of incorporation includes provisions eliminating the
personal liability of our directors for monetary damages resulting from breaches
of their fiduciary duty except, in accordance with the Delaware General
Corporation Law,
     -    for any breach of the director's duty of loyalty to us or
          our stockholders,
     -    for acts or omissions not in good faith or which involve intentional
          misconduct or a knowing violation of law,
     -    where the  liability  arises from an  unlawful  payment of a
          dividend or an unlawful  stock  purchase or redemption by us which was
          approved by the directors for whom liability is sought, or
     -    with  respect to any  transaction  from  which the  director derived
          an improper personal benefit.

     Our by-laws provide indemnification to directors, officers, employees and
agents, including against claims brought under state or Federal securities laws,
to the full extent allowable under Delaware law. We also have entered into
indemnification agreements with our directors and executive officers providing,
among other things, that we will provide defense costs against any such claim,
subject to reimbursement in certain events. We also maintain a directors and
officers liability insurance policy in a coverage amount of $3,000,000, subject
to a $200,000 deductible.

                                      -60-

<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Our common stock is the only class of our voting securities presently
outstanding. The following table sets forth information with respect to the
beneficial ownership of shares of our common stock, as of March 31, 2000, by:
     -    each person known by us to beneficially own 5% or more of
          the outstanding  shares of our common stock, based on filings with the
          SEC and certain other information,
     -    each of our executive officers and directors, and
     -    all of our executive officers and directors as a group.

     Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting and investment power. In addition, under SEC rules, a person
is deemed to be the beneficial owner of securities which may be acquired by such
person upon the exercise of options, warrants or convertible securities within
60 days from the date on which beneficial ownership is to be determined.

     Except as otherwise indicated in the notes to the following table,
     -    we believe that all shares are beneficially owned, and investment and
          voting power is held by, the persons named as owners, and
     -    the address for each beneficial owner listed in the table is
          Vizacom Inc.,  Glenpointe  Centre East,  300 Frank W. Burr Boulevard -
          7th Floor, Teaneck, New Jersey 07666.

<TABLE>
<CAPTION>

                                                            Amount and Nature
                                                            of Common Stock         Percentage of Shares
Name of Beneficial Owner                                    Beneficially Owned        Beneficial Owned
------------------------                                    ------------------      --------------------
<S>                                                             <C>       <C>          <C>
Vincent DiSpigno. . . . . . . . . . . . . . . . . . . .           849,583 (1)           7.1
David N. Salav. . . . . . . . . . . . . . . . . . . . .           849,583 (2)           7.1
Mark E. Leininger . . . . . . . . . . . . . . . . . . .           607,339 (3)           4.9
Marc E. Jaffe . . . . . . . . . . . . . . . . . . . . .           239,892 (4)           2.0
Neil M. Kaufman . . . . . . . . . . . . . . . . . . . .           196,316 (5)           1.6
Norman W. Alexander . . . . . . . . . . . . . . . . . .           131,488 (6)           1.1
Alan W. Schoenbart. . . . . . . . . . . . . . . . . . .            91,666 (7)           *
Rand Schulman . . . . . . . . . . . . . . . . . . . . .            50,000 (8)           *
Werner G. Haase . . . . . . . . . . . . . . . . . . . .             8,333 (9)           *
All officers and directors as a group (6 persons) . . .         3,024,200 (10)         23.1
----------
<FN>
*    Less than 1.0%.
</FN>
</TABLE>

(1)  Includes (a) 83,333 shares of our common stock issuable upon conversion
     of the principal amount of our convertible promissory note held by Mr.
     DiSpigno in the principal amount of $250,000 and (b) 31,250 shares of our
     common stock issuable upon exercise of an option granted to Mr. DiSpigno
     under our 1994 Incentive Plan which are exercisable within the next 60
     days. Does not include (a)additional shares of our common stock that may
     become issuable under the convertible promissory note held by Mr. DiSpigno
     with respect to accrued and unpaid interest, (b) 93,750 shares of our
     common stock issuable upon exercise of an option granted to Mr. DiSpigno
     under our 1994 Incentive Plan which are not exercisable within the next 60
     days or (c) any additional shares of our common stock that may be issued to
     Mr. DiSpigno under the PWR merger agreement if our price falls below $1.00
     per share for any 30 day period prior to March 27, 2001.

(2)  Includes (a) 83,333 shares of our common stock issuable upon conversion
     of the principal amount of our convertible promissory note held by Mr.
     Salav in the principal amount of $250,000, (b) 31,250 shares of our common
     stock issuable upon exercise of an option granted to Mr. Salav under our
     1994 Incentive Plan which are exercisable within the next 60 days. Does not
     include (a) additional shares of our common stock that may become issuable
     under the convertible promissory note held by Mr. Salav with respect to
     accrued and unpaid interest and (b) 93,750 shares of our common stock
     issuable upon exercise of an option granted to Mr. Salav under our 1994
     Incentive Plan which are not exercisable within the next 60 days or (c) any

                                      -61-

<PAGE>

     additional shares of our common stock that may be issued to Mr. Salav under
     the PWR merger agreement if our price falls below $1.00 per share for any
     30 day period prior to March 27, 2001.

(3)  Represents (a) 3,333 shares of our common stock held by Mr. Leininger
     and his spouse as joint tenants and (b) 404,006 shares of common stock
     issuable upon exercise of options granted to Mr. Leininger under our
     various stock plans which are exercisable within the next 60 days. Does not
     include 222,244 shares of common stock issuable upon exercise of options
     granted to Mr. Leininger under our various stock plans which are not
     exercisable within the next 60 days.

(4)  Includes 186,559 shares of our common stock issuable upon exercise of
     options granted to Mr. Jaffe under our various stock plans which are
     exercisable within the next 60 days. Does not include 75,941 shares of
     common stock issuable upon exercise of options granted to Mr. Jaffe under
     our various stock plans which are not exercisable within the next 60 days.
     The address for Mr. Jaffe is c/o Double Impact, 386 Park Avenue South -
     Suite 1900, New York, New York 10016.

(5)  Includes 139,578 shares of our common stock issuable upon exercise of
     options granted to Mr. Kaufman under our various stock plans which are
     exercisable within the next 60 days. Does not include options to purchase
     165,422 shares of common stock granted to Mr. Kaufman under our various
     stock plans which are not exercisable within the next 60 days. The address
     for Mr. Kaufman is c/o Kaufman & Moomjian, LLC, 50 Charles Lindbergh
     Boulevard, Suite 206, Mitchel Field, New York 11553.

(6)  Includes (a) 8,333 shares of our common stock owned of record by Mr.
     Alexander's spouse and (b) 92,184 shares of common stock issuable upon
     exercise of options granted Mr. Alexander under our various stock plans
     which are exercisable within the next 60 days. Does not include 64,899
     shares of common stock issuable upon exercise of options granted to Mr.
     Alexander under our various stock plans which are not exercisable within
     the next 60 days. The address for Mr. Alexander is Burnside, Church Walk,
     Marholm, Peterborough, PE 67H2 England.

(7)  Represents 91,666 shares of our common stock issuable upon exercise of
     options granted to Mr. Schoenbart which are exercisable within the next 60
     days. Does not include options to purchase 98,334 shares of common stock
     granted to Mr. Schoenbart which are not exercisable within the next 60
     days.

(8)  Represents 50,000 shares of our common stock issuable upon exercise of
     an option granted to Mr. Schulman under our 1994 Incentive Plan which are
     exercisable within the next 60 days. Does not include 150,000 shares of our
     common stock issuable upon exercise of an option granted to Mr. Schulman
     under our 1994 Incentive Plan which are not exercisable within the next 60
     days.

(9)  Represents 8,333 shares of our common stock issuable upon exercise of
     options granted to Mr. Haase under our Outside Director and Advisor Stock
     Option Plan which are exercisable within the next 60 days. Does not include
     options to purchase 16,667 shares of common stock granted to Mr. Haase
     under our Outside Director and Advisor Stock Option Plan which are not
     exercisable within the next 60 days. The address for Mr. Haase is c/o
     Xceed      Inc., 488 Madison Avenue, New York, New York 10022.

(10) Includes (a) the aggregate 11,666 shares of our common stock held
     jointly with, or individually, by spouses of our officers and directors,
     and (b) an aggregate 1,201,492 shares of our common stock issuable upon
     conversion of promissory notes and the exercise of the options discussed in
     notes (1) through (9) above which are convertible or exercisable within the
     next 60 days.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     On January 28, 1998, the compensation committee of our board of directors
determined to compensate Marc E. Jaffe for his services as our chairman of the
board of directors at the rate of $5,000 per month, payable $2,500 in the month
of service and $2,500 twelve months after such initial payment. During 1998, we
paid Mr.

                                      -62-
<PAGE>

Jaffe $30,000 under this arrangement and, pursuant to a letter agreement,
dated December 17, 1998, we issued to Mr. Jaffe 30,000 shares of our common
stock in satisfaction of $22,500 of our obligations under such January 28, 1998
compensation arrangement. On January 13, 1999, the Compensation Committee of our
Board of Directors determined to compensate Marc E. Jaffe for his services as
Chairman of the Board of Directors for the 1999 calendar year at the rate of
$5,000 per month. In November 1999, we agreed to pay Mr. Jaffe an additional
$3,000 per month for November and December 1999 for additional services we have
requested that he perform.

     The following directors and executive officers purchased the number of
shares of our common stock set forth below in our May 1998 private placement,
each at $1.20 per share.
<TABLE>
<CAPTION>

          NAME                               NUMBER OF SHARES
          ----                               ----------------
          <S>                                    <C>
          Norman W. Alexander. . . . . . .        8,333
          Marc E. Jaffe. . . . . . . . . .       23,333
          Mark E. Leininger. . . . . . . .        3,333
</TABLE>

     Mr. Leininger purchased such 3,333 shares of our common stock with spouse
as joint tenants. In addition, Mr. Alexander's spouse also purchased 8,333
shares of our common stock in the May 1998 private placement.

     During 1999, we incurred approximately $400,000 in legal fees to Kaufman &
Moomjian, LLC. During 1998, we incurred approximately $390,000 in legal fees to
Kaufman & Moomjian, LLC and its predecessor. Neil M. Kaufman, one of our
directors, is a member of Kaufman & Moomjian, LLC, and was a member of the
predecessor firm. In May 1998, this predecessor firm was issued 11,904 shares of
our common stock in partial satisfaction of outstanding legal fees equal in
amount to the market value of such shares, and these shares have been assigned
to Mr. Kaufman. In August 1999, we issued 50,000 shares of our common stock to
members of Kaufman & Moomjian, LLC in satisfaction of $100,000 of outstanding
legal fees due Kaufman & Moomjian, LLC.

     Effective July 17, 1998, we adopted a repricing program under which we
offered to each optionee granted one or more options under any of our various
stock plans who, as of July 17, 1998, was either an employee or a director of
our company, the right to exchange each outstanding option granted to the
eligible optionee under our various stock plans, for the issuance of two
options, the first such option, or new option, entitling the eligible optionee
to purchase up to 75% of the number of shares of our common stock that were
issuable under each eligible option so exchanged, at an exercise price per share
equal to $1.375, the closing per share price on July 17, 1998, as reported by
The Nasdaq Stock Market, Inc., and the second such option, or non-repriced
option, entitling the eligible optionee to purchase up to 25% of the number of
shares of our common stock that were issuable under the eligible option so
exchanged, at an exercise price per share equal to the exercise price per share
or eligible option so exchanged. To the extent the eligible option so exchanged
was exercisable as of July 17, 1998, the non-repriced option shall be
exercisable and, where the number of shares exercisable under the eligible
option so exchanged as of July 17, 1998 exceeded the number of shares issuable
under the non-repriced option, any such options shall be immediately exercisable
under the new option. Further, to the extent the eligible option so exchanged
was not exercisable as of July 17, 1998, the non-repriced option shall first
become exercisable in accordance with the earliest dates set forth in the
eligible option so exchanged for the exercisability of shares issuable under the
eligible option so exchanged, and the shares of our common stock issuable under
the new option became exercisable on July 17, 1999, with respect to 25% of the
total number of shares of our common stock issuable under the new option, and
will become exercisable on each of July 17, 2000, 2001, 2002, with respect to an
additional 25% of the total number of shares of our common stock issuable under
the new option.

     In addition, each new option has a term expiring at the close of business
on July 16, 2008 and shall be deemed granted under such of our various stock
plans under which the eligible option was originally granted and the non-
repriced option shall be deemed granted under such of the plans under which the
eligible option was originally granted. Except as otherwise noted, each of the
new option and non-repriced option shall otherwise be identical to the eligible
option so exchanged.

     The creation of the 1998 repricing program was approved primarily because
of the importance to us of having meaningful equity incentives in the hands of
key officers, directors and employees. Our board of directors

                                      -63-

<PAGE>

and compensation committee believed that stock options which are "out of
the money" provide less compensatory incentive to an officer, director and
employee who may be considering alternative opportunities. Our board and
compensation committee decided to include directors and officers in the 1998
repricing program because of the importance of their leadership, administrative
and technical skills to the success of our business.

     In connection with our 1998 repricing program, the following options held
by directors and executive officers granted under our various stock plans were
repriced each to an exercise price of $1.375 per share with a termination date
of July 16, 2008:
<TABLE>
<CAPTION>

                                           Shares Underlying       Original            Original
Optionee                                    Original Option     Exercise Price      Termination Date
--------                                    ---------------     --------------      ----------------
<S>                                             <C>                <C>                  <C>   <C>
Norman W. Alexander . . . . . . . . . .          4,688             $ 3.75               12/19/06
Norman W. Alexander . . . . . . . . . .          1,875               3.75                7/31/07
Norman W. Alexander . . . . . . . . . .         25,000               3.1875             12/15/07
Marc E. Jaffe . . . . . . . . . . . . .            938               3.75               10/31/04
Marc E. Jaffe . . . . . . . . . . . . .          4,688               3.75                8/2/05
Marc E. Jaffe . . . . . . . . . . . . .          1,875               3.75                7/31/06
Marc E. Jaffe . . . . . . . . . . . . .          1,875               3.75                7/31/07
Mark E. Jaffe . . . . . . . . . . . . .         25,000               3.1875             12/15/07
Marc E. Jaffe . . . . . . . . . . . . .         16,250               2.8125              1/27/08
Neil M. Kaufman . . . . . . . . . . . .          4,688               3.75                4/24/06
Neil M. Kaufman . . . . . . . . . . . .          4,688               3.75               12/19/06
Neil M. Kaufman . . . . . . . . . . . .          1,875               3.75                7/31/07
Mark E. Leininger . . . . . . . . . . .          3,750               3.75                7/20/05
Mark E. Leininger . . . . . . . . . . .          1,875               3.75                2/19/06
Mark E. Leininger . . . . . . . . . . .         13,125               3.75                4/24/06
Mark E. Leininger . . . . . . . . . . .         27,188               3.75                9/28/06
Mark E. Leininger . . . . . . . . . . .         56,250               3.75                2/4/07
Martin F. Schacker. . . . . . . . . . .          6,249               2.859375           12/28/07
Martin F. Schacker. . . . . . . . . . .         18,750               2.8125              1/27/08
</TABLE>

     With respect to  compensation  paid to Mark E. Leininger in his capacity as
our employee, see "Management - Executive Compensation."

     We have entered into a three year employment agreement with Mark E.
Leininger. This employment agreement provides for a base salary of $162,500 in
1999, at least $172,500 in 2000 and at least $182,500 in 2001 and annual
incentive compensation equal to 3% of our pre-tax income for the year to which
the incentive compensation relates. This agreement with Mr. Leininger also
provides for the continued payment, for a three year period, of his then current
compensation if his employment is terminated without cause. Further, this
employment agreement provides for the payment to Mr. Leininger of an amount
equal to three times his average total compensation for the five prior fiscal
years, minus $1.00, if there is a change of control of our company and Mr.
Leininger elects to terminate his employment within six months of his first
becoming aware of such change in control. This employment agreement also
contains restrictions on his engaging in competition with us for the term
thereof and for up to one year thereafter and provisions protecting our
proprietary rights and information. In October 1996, our Board of Directors
determined to pay to Mr. Leininger a bonus of $25,000 following our first
profitable fiscal quarter after the fourth quarter of 1996. This bonus has not
been paid.

     In connection with our acquisition of PWR Systems, we have entered into
three year employment agreements with each of Vincent DiSpigno, one of our vice
presidents and the chief executive officer of our PWR Systems subsidiary, and
David Salav, another of our vice presidents and the president of our PWR Systems
subsidiary. Each of these agreements provides for an annual base salary of
$200,000 and $25,000 annual bonuses if PWR attains a 30% increase in revenues
over the prior year and PWR System has either at least a 20% gross margin or
$1,000,000 in net income for the subject year. Pursuant to these two employment
agreements, we expanded our board of directors and elected Messrs. DiSpigno and
Salav to the expanded board. During the term of these two

                                      -64-

<PAGE>

employment agreements, we have agreed to use our best efforts to cause
their reelections to our board when their initial terms expire. These two
employment agreements also contain restriction on the employee engaging in
competition with us for the employment term and for one year thereafter and
provisions protecting our proprietary rights and information.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(A)  EXHIBITS.

     Set forth below are all exhibits to this Annual Report on Form 10-KSB:

Exhibit
Number    Description of Exhibit
-------   ----------------------
3.1       Composite of Certificate of Incorporation  of the Company,  as amended
          to date.  (Incorporated  by  reference  to  Exhibit  3.1 to the
          Company's Current Report on Form 8-K (Date of Report: July 1, 1999)
          (Commission File Number: 1-14076), filed with the Commission on July
          15, 1999.)
3.2       By-laws of the Company,  as amended.  (Incorporated by reference to
          Exhibit 3.3 to the  Company's  Annual  Report on Form  10-KSB
          (Commission  File  Number: 1-14076),  for the year ended December
          31, 1997, filed with the Commission on April 16, 1998.)
4.1       Specimen Common Stock  Certificate.  (Incorporated by reference to
          Exhibit 4.1 to the Company's  Annual Report on Form 10-KSB (Commission
          File Number:  1-14076),  for the year ended December 31, 1997,
          filed with the  Commission on April 16, 1998.)
10.1      Company 1994 Long Term Incentive Plan, as amended to date.
          (Incorporated by reference to Exhibit 10.3 to the Company's Current
          Report on Form 8-K (Date of Report:  July 1, 1999) (Commission File
          Number: 1-14076), filed with the Commission on July 15, 1999.)
10.2      Company Outside Director and Advisor Stock Option Plan, as amended  to
          date.  (Incorporated  by  reference  to  Exhibit  10.4 to the
          Company's  Current  Report  on Form 8-K  (Date of  Report:  July 1,
          1999) (Commission File Number:  1-14076),  filed with the Commission
          on July 15, 1999.)
10.3      SPC 1989 Stock Plan. (Incorporated by reference to Exhibit 4.2
          to the Company's  Registration Statement on Form S-8 (Registration
          Number: 333-19509),  filed with the Commission on January 10, 1997.)
10.4      SPC 1991 Stock  Option  Plan.  (Incorporated  by  reference to Exhibit
          4.3 to the Company's   Registration  Statement  on  Form  S-8
          (Registration  Number: 333-19509),  filed with the  Commission on
          January 10, 1997.)
10.5      Form of Indemnification   Agreement  between  the  Registrant  and its
          executive officers and directors.  (Incorporated by reference to
          Exhibit 10.8 to the Company's  Registration  Statement  on  Form  SB-2
          (Registration  Number: 33-97184),  filed with the Commission on
          September 21, 1995.)
10.6      Form of Underwriters'  Purchase Option  (Specimen).  (Incorporated by
          reference to Exhibit 10.18 to the Company's Annual Report on Form
          10-KSB,  for the year ended  December 31, 1997,  filed with the
          Commission  on April 16, 1998.)
10.7      Registration  Rights  Agreement,  dated July 31,  1996,  between the
          Company and the former stockholders  of Serif Inc. and Serif (Europe)
          Limited.  (Incorporated by reference to Exhibit 10.31 to the Company's
          Current  Report on Form 8-K (Date of Report:  July 31,  1996)
          (Commission File Number: 1-14076), filed with the Commission on August
          13, 1996.)
10.8      Lease Agreement, dated September 7, 1995, between Community Towers LLC
          and the Company,  for facilities located at 111 North Market Street,
          San Jose, California.  (Incorporated  by  reference  to  Exhibit 10.22
          to  Software Publishing  Corporation's  Annual  Report  on Form 10-K
          (Commission  File Number: 0-14025), for the fiscal year ended
          September 30, 1995, filed with the Commission on December 29, 1995.)
10.9      Option, dated October 23, 1997, issued to Ronald L. Altman.
          (Incorporated by reference to Exhibit 10.53 to the Company's Quarterly
          Report on Form 10-QSB  (Commission  File Number: 1-14076),  for the
          quarter  ended  September  30,  1997,  filed  with the Commission  on
          November 14,  1997.)

                                      -65-

<PAGE>

10.10     Rights  Agreement,  dated as of March 31, 1998,  between the Company
          and American  Stock  Transfer & Trust Company.  (Incorporated  by
          reference to Exhibit  10.51 to the Company's Annual Report on Form
          10-KSB  (Commission File Number: 1-14076),  for the year ended
          December  31,  1997,  filed with the Commission  on April 16, 1998.)
10.11     Warrant,  dated April 7, 1998, registered in the name of Boru
          Enterprises,  Inc.,  with respect to 50,000 shares of Common Stock
          (before giving  effect to the  Company's  one-for-three  reverse stock
          split made effective  May 27, 1998).  (Incorporated  by reference to
          Exhibit 10.54 to the Company's  Quarterly  Report on Form 10-QSB
          (Commission  File Number: 1-14076),  for the quarter ended March 31,
          1998, filed with the Commission on May 13, 1998.)
10.12     Stock Exchange Agreement, dated December 15, 1998, between the Company
          and Seafish  Partners.  (Incorporated  by reference to Exhibit 10.2 to
          the Company's Current Report on Form 8-K (Date of Report: December 15,
          1998)  (Commission  File  Number:  1-14076),  filed with the
          Commission on December 16, 1998.)
10.13     Letter Agreement, dated January 4, 1999, between the Company and
          Seafish Partners. (Incorporated by reference to  Exhibit  10.3 to the
          Company's Current  Report  on Form 8-K (Date of Report:  January 11,
          1999) (Commission File Number:  1-14076),  filed with the Commission
          on January 20, 1999.)
10.14     Consulting  Agreement  between the Company and Target Capital Corp.
          (Incorporated by reference to Exhibit 10.1 to the Company's Current
          Report on Form 8-K (Date of Report:  January 11, 1999) (Commission
          File Number:  1-14076), filed with the Commission on January 20,
          1999.)
10.15     Consulting  Agreement  between the Company and Michel  Ladovitch.
          (Incorporated  by  reference  to  Exhibit  10.2 to the Company's
          Current  Report on Form 8-K (Date of Report:  January 11, 1999)
          (Commission  File Number:  1-14076),  filed with the Commission on
          January 20, 1999.)
10.16     Warrant  Certificate,  with respect to 520,000  shares of Common
          Stock, registered in the name of Target Capital Corp. (Incorporated
          by reference to Exhibit 10.5 to the Company's  Current  Report on Form
          8-K (Date of Report:  January 11, 1999)  (Commission  File  Number:
          1-14076), filed with the Commission on January 20, 1999.)
10.17     Warrant Certificate,  with respect to 120,000 shares of Common Stock,
          registered in the name of United Krasna Organizations. (Incorporated
          by reference to Exhibit 10.6 to the  Company's  Current  Report on
          Form 8-K (Date of Report:  January  11, 1999)  (Commission  File
          Number:  1-14076),  filed with the  Commission on January 20,  1999.)
10.18     Warrant  Certificate,  with respect to 260,000 shares of Common Stock,
          registered  in the name of  Seafish  Partners. (Incorporated by
          reference to Exhibit 10.8 to the Company's Current Report on Form 8-K
          (Date of Report:  January 11, 1999)  (Commission  File Number:
          1-14076),  filed with the  Commission  on January 20, 1999.)
10.19     Warrant  Certificate, with respect to 600,000 shares of Common Stock,
          registered in the name of Regency  Investment  Partners. (Incorporated
          by reference to Exhibit 10.7 to the Company's  Current Report on Form
          8-K (Date of Report: January  11,  1999)  (Commission  File  Number:
          1-14076),  filed with the Commission on January 20, 1999.)
10.20     Letter  Agreement,  dated  December 17, 1998, between the Company Marc
          E. Jaffe. (Incorporated by reference to Exhibit 10.4 to the Company's
          Current Report on Form 8-K (Date of Report: January  11,  1999)
          (Commission  File  Number:  1-14076),  filed with the Commission  on
          January 20, 1999.)
10.21     Advice of Borrowing  Terms,  dated December 29, 1998, between Serif
          (Europe) Limited and National Westminster Bank PLC, and Mortgage
          Debenture,  dated  October 9, 1989,  between Serif (Europe)  Limited
          and  National  Westminster  Bank PLC.  (Incorporated  by reference to
          Exhibit 10.45 to the  Company's  Annual Report on Form 10-KSB
          for the year ended  December 31, 1998  (Commission  File Number
          1-14076), filed with the  Commission  on April 15,  1999.)
10.22     Letter  Agreement, dated  April  20,  1999,   between  the  Company
          and  Seafish   Partners. (Incorporated  by  reference to Exhibit
          10.1 to the  Company's  Quarterly Report on Form 10-QSB for the period
          ended March 31, 1999 (Commission File Number  1-14076),  filed  with
          the  Commission  on May 20,  1999.)
10.23     Agreement,  dated July 1, 1999,  between the Company and Seafish
          Partners. (Incorporated by reference to Exhibit 10.1 to the Company's
          Current Report on Form 8-K  (Date of  Report:  July 1,  1999)
          (Commission  File  Number: 1-14076),  filed with the  Commission on
          July 15, 1999.)
10.24     Employment Agreement,  dated  July  14,  1999, between  Vizacom  Inc.
          and  Mark  E. Leininger.  (Incorporated  by reference  to Exhibit 10.2
          to the  Company's Current Report on Form 8-K (Date of

                                      -66-


<PAGE>



          Report: July 1, 1999) (Commission File Number:  1-14076),  filed with
          the  Commission on July 15,  1999.)
10.25     Agreement and Plan of Merger, dated as of February 15, 2000, among
          Vizacom Inc., RCAC Acquisition Corp.,  Renaissance  Computer Art
          Center,  Inc. and the  former   stockholders  of  Renaissance
          Computer  Art  Center,  Inc. (Incorporated by reference to Exhibit
          10.1 to the Company's Current Report on Form 8-K (Date of Report:
          February 15, 2000)  (Commission File Number: 1-14076),  filed with the
          Commission  on February 22, 2000.)
10.26     Escrow Agreement,  dated as of February 15, 2000, among Vizacom Inc.,
          Renaissance Computer Art Center Inc., the former stockholders of
          Renaissance  Computer Art Center,  Inc.,  Andrew Edwards and Kaufman
          & Moomjian,  LLC, as escrow agent. (Incorporated by reference to
          Exhibit 10.2 to the Company's Current  Report on Form 8-K (Date of
          Report:  February 15, 2000)  (Commission  File Number:  1-14076),
          filed with the Commission on February 22, 2000.)
10.27     Form of Lock-Up  Agreement.  (Incorporated by reference to Exhibit
          10.3 to the  Company's  Current  Report on Form 8-K (Date of Report:
          February 15, 2000)  (Commission  File Number:  1-14076),  filed with
          the  Commission on February  22,  2000.)
10.28     Registration  Rights  Agreement,  dated as of February 15, 2000, among
          Vizacom Inc., and each of the former stockholders of Renaissance
          Computer Art Center,  Inc.  (Incorporated  by reference to Exhibit
          10.4 to the Company's  Current Report on Form 8-K (Date of Report:
          February  15, 2000)  (Commission  File  Number:  1-14076),  filed with
          the Commission on February 22, 2000.)
10.29     Employment Agreement,  dated as of February  15,  2000, by and between
          Vizacom  Inc.  and Andrew  Edwards. (Incorporated by reference to
          Exhibit 10.5 to the Company's Current Report on Form 8-K (Date of
          Report:  February 15, 2000)  (Commission File Number: 1-14076),  filed
          with the  Commission on February 22, 2000.)
10.30     Line of Credit Facility Agreement, dated January 8, 2000, between
          Vizacom Inc. and Churchill  Consulting.  (Incorporated  by reference
          to Exhibit 10.6 to the Company's  Current Report on Form 8-K (Date of
          Report:  February 15, 2000) (Commission File Number:  1-14076),  filed
          with the Commission on February 22,  2000.)
10.31     Letter  Agreement,  dated March 15, 2000, by and between Vizacom  Inc.
          and  Churchill  Consulting.  (Incorporated  by reference to Exhibit
          10.7 to the Company's  Current Report on Form 8-K (Date of Report:
          March  9,  2000)  (Commission  File  Number:  1-14076),  filed  with
          the Commission on March 21, 2000.)
10.32     Line of Credit Note, dated January 8, 2000,  in the  principal  amount
          of  $1,000,000 and payable to  Churchill Consulting.  (Incorporated
          by reference to Exhibit 10.7 to the  Company's Current Report on Form
          8-K (Date of Report: February  15, 2000) (Commission File Number:
          1-14076),  filed with the  Commission on February 22, 2000.)
10.33     Warrant Certificate, dated February 17, 2000, registered in the name
          of Churchill Consulting. (Incorporated by reference to Exhibit 10.8 to
          the Company's  Current Report on Form 8-K (Date of Report:  February
          15, 2000) (Commission File Number:  1-14076),  filed with the
          Commission on February  22, 2000.)
10.34     Stock Acquisition  Agreement,  dated March 9, 2000, among Vizacom Inc.
          and  the  former   stockholders  of  Junction  15  Limited.
          (Incorporated by reference to Exhibit 10.1 to the Company's Current
          Report on Form 8-K (Date of  Report:  March 9,  2000)  (Commission
          File  Number: 1-14076),  filed with the  Commission  on March 21,
          2000.)
10.35     Form of Lock-Up  Agreement for use by directors of Junction 15 Limited
          at the time of the  acquisition.  (Incorporated  by  reference  to
          Exhibit 10.2 to the Company's  Current  Report on Form 8-K  (Date of
          Report:  March 9,  2000) (Commission File Number:  1-14076), filed
          with the Commission on March 21, 2000.)
10.36     Form  of  Lock-Up  Agreement  for use by  non-directors  of Junction
          15  Limited  at the time of the  acquisition.  (Incorporated  by
          reference  to Exhibit  10.3 to the  Company's  Current  Report on Form
          8-K (Date of Report: March 9, 2000) (Commission File Number: 1-14076),
          filed with  the  Commission  on  March  21,  2000.)
10.37     Registration  Rights Agreement,  dated as of March 9, 2000, among
          Vizacom Inc., and each of the former shareholders of Junction 15
          Limited.  (Incorporated by reference to  Exhibit 10.4 to the Company's

                                      -67-

<PAGE>

          Current Report on Form 8-K (Date of Report: March  9,  2000)
          (Commission  File  Number:   1-14076),  filed  with  the Commission
          on March 21, 2000.)
10.38     Agreement and Plan of Merger,  dated as of February 28, 2000,  among
          Vizacom Inc., PWR  Acquisition  Corp.,  PC Workstation  Rentals, Inc.,
          d/b/a PWR Systems and the stockholders of PC Workstation Rentals, Inc.
          (Incorporated by reference to Exhibit 10.1 to the Company's Current
          Report on Form 8-K (Date of Report:  March 27, 2000) (Commission File
          Number:  1-14076),  filed with the Commission on April 2, 2000.)
10.39     Amendment No. 1 to Merger  Agreement,  dated March 27, 2000,
          among Vizacom Inc., PWR Acquisition Corp., PC Workstation  Rentals,
          Inc., d/b/a PWR Systems and the shareholders of PC Workstation
          Rentals,  Inc. (Incorporated by reference to Exhibit 10.2 to the
          Company's Current Report on Form 8-K (Date of Report:  March 27, 2000)
          (Commission  File  Number: 1-14076),  filed  with the  Commission  on
          April 2,  2000.)
10.40     Letter Agreement, dated March 27, 2000 among Vizacom Inc., PWR
          Acquisition Corp., PC Workstation Rentals, Inc., d/b/a PWR Systems and
          the stockholders of PC Workstation  Rentals,  Inc.  (Incorporated by
          reference to Exhibit 10.1 to  the Company's Current Report on Form 8-K
          (Date of Report:  March 27, 2000) (Commission File Number:  1-14076),
          filed with the Commission on April 2, 2000.)
10.41     Convertible  Note,  dated March 27, 2000, of Vizacom Inc. in the
          principal  amount  of  $250,000  and  payable  to  Vincent  DiSpigno.
          (Incorporated by reference to Exhibit 10.3 to the Company's Current
          Report on Form 8-K (Date of Report:  March 27,  2000)  (Commission
          File  Number: 1-14076),  filed with the Commission on April 2, 2000.)
10.42     Convertible Note,  dated March 27, 2000,  of Vizacom Inc. in the
          principal  amount of $250,000 and payable to David Salav.
          (Incorporated by reference to Exhibit 10.4 to the Company's  Current
          Report on Form 8-K (Date of Report:  March 27, 2000) (Commission File
          Number:  1-14076), filed with the Commission on April 2, 2000.)
10.43     Lock-Up  Agreement,  dated March 27, 2000,  between Vizacom Inc. and
          Vincent  DiSpigno.  (Incorporated by reference to Exhibit
          10.5 to the Company's  Current  Report on Form 8-K (Date of Report:
          March 27, 2000) (Commission File Number:  1-14076), filed with the
          Commission on  April 2, 2000.)
10.44     Lock-Up  Agreement,  dated March 27, 2000,  between  Vizacom Inc. and
          David Salav.  (Incorporated  by reference to Exhibit 10.6 to the
          Company's  Current  Report on Form 8-K (Date of Report:  March 27,
          2000) (Commission  File Number: 1-14076),  filed with the  Commission
          on April 2, 2000.)
10.45     Registration Rights Agreement, dated March 27, 2000, among Vizacom
          Inc.,  Vincent  DiSpigno and David Salav.  (Incorporated  by
          reference  to Exhibit  10.7 to the  Company's  Current  Report on Form
          8-K (Date of Report: March 27, 2000) (Commission File Number:
          1-14076), filed with the Commission on April 2, 2000.)
10.46     Employment  Agreement,  dated March 27, 2000,  between Vizacom Inc.
          and Vincent DiSpigno.  (Incorporated by reference to Exhibit 10.8 to
          the Company's  Current  Report on Form 8-K (Date of Report: March 27,
          2000) (Commission File Number:  1-14076), filed  with the Commission
          on April 2, 2000.)
10.47     Employment  Agreement,  dated March 27, 2000, between  Vizacom Inc.
          and David Salav.  (Incorporated  by reference to Exhibit  10.9 to the
          Company's  Current  Report on Form 8-K (Date of Report: March 27,
          2000) (Commission File Number:  1-14076), filed with the  Commission
          on April 2, 2000.)
10.48     Form of  Promissory  Note, dated March 27, 2000,  of PC  Workstation
          Rentals,  Inc. in the aggregate principal amount of $888,638  and
          payable to Vincent  DiSpigno  and David Salav.  (Incorporated  by
          reference  to  Exhibit  10.10 to the Company's Current  Report on
          Form 8-K (Date of Report:  March 27, 2000)  (Commission File Number:
          1-14076), filed with the Commission on April 2, 2000.)
10.49     Consulting Agreement,  dated as of January 28, 2000, between Vizacom
          Inc., Arel AMG,  Inc.,  and Charles S. Lazar.
10.50     Warrant  Certificate,  with respect to 100,000  shares of our common
          stock,  registered in the name of Arel AMG, Inc.
10.51     Warrant Certificate, with respect to 40,000 shares of our common
          stock,  registered in the name of Arel AMG, Inc.
10.52     Warrant Certificate, with respect to 70,000 shares of our common
          stock, registered in the name of Arel AMG, Inc.

                                      -68-

<PAGE>

10.53     Warrant  Certificate,  with respect to 90,000  shares of our common
          stock,  registered  in the name of Arel AMG, Inc.
10.54     Warrant  Certificate,  with  respect to 50,000  shares of our
          common  stock,  registered  in the name of Arel AMG,  Inc.
10.55     Warrant Certificate,   with  respect  to  150,000  shares  of  our
          common  stock, registered in the name of Arel AMG, Inc.
10.56     Warrant  Certificate,  with respect to 150,000  shares of our common
          stock,  registered in the name of Arel AMG, Inc.
10.57     Distribution and Marketing Agreement,  dated July 27, 1999,  between
          Nova Development  Corporation and all Serif subsidiaries of
          Vizacom Inc.
21        Subsidiaries of the Company.
23.1      Consent of Richard A. Eisner & Company,  LLP.
23.2      Consent of Ernst & Young.
23.3      Consent of Silver & Levene.
24        Powers of Attorney (set forth on the signature  page of this Annual
          Report on Form 10-KSB).
27        Financial Data Schedule.

(b) REPORTS ON FORM 8-K.

     On December 29, 1999, we filed a Current Report on Form 8-K (Date of
Report: December 23, 1999) with the Commission, as an Item 5 disclosure, setting
forth a revised description of our business and revised risk factors that
investors should take into consideration when making a determination to make an
investment in our securities.

     On February 22, 2000, we filed a Current Report on Form 8-K (Date of
Report: February 15, 2000) with the Commission reporting, as an Item 2
disclosure, our acquisition of Renaissance Multimedia. In this Form 8-K we noted
that financial statements of Renaissance Multimedia and other pro forma
information would be provided in an amendment to this Form 8-K. Such financial
statements are included in this Annual Report on Form 10-KSB on pages F-28
through F-36 and we will file an amendment to the Form 8-K to incorporate by
reference such Renaissance Multimedia financial statements into the Form 8-K. In
addition, pro forma information concerning us, Renaissance Multimedia, Junction
15 and PWR Systems is included in the "Recent Events" section of Item 1 of this
Form 10-KSB and the amendment to the Form 8-K will incorporate by reference such
pro forma information by reference to this Form 10-KSB.

     On March 3, 2000, we filed a Current Report on Form 8-K (Date of Report:
February 28, 2000) with the Commission reporting, as an Item 5 disclosure, our
entering into an agreement to acquire PWR Systems.

     On March 21, 2000, we filed a Current Report on Form 8-K (Date of Report:
March 9, 2000) with the Commission reporting, as an Item 2 disclosure, our
acquisition of Junction 15. In this Form 8-K we noted that financial statements
of Junction 15 and other pro forma information would be provided in an amendment
to this Form 8-K. Such financial statements are included in this Annual Report
on Form 10-KSB on pages F-37 through F- 50 and we will file an amendment to the
Form 8-K to incorporate by reference such Junction 15 financial statements into
the Form 8-K. In addition, pro forma information concerning us, Renaissance
Multimedia, Junction 15 and PWR Systems is included in the "Recent Events"
section of Item 1 of this Form 10-KSB and the amendment to the Form 8-K will
incorporate by reference such pro forma information by reference to this Form
10-KSB.

     On April 2, 2000, we filed a Current Report on Form 8-K (Date of Report:
March 27, 2000) with the Commission reporting, as an Item 2 disclosure, our
acquisition of PWR Systems. In this Form 8-K we noted that financial statements
of PWR Systems and other pro forma information would be provided in an amendment
to this Form 8-K. Such financial statements are included in this Annual Report
on Form 10-KSB on pages F-51 through F- 64 and we will file an amendment to the
Form 8-K to incorporate by reference such PWR Systems financial statements into
the Form 8-K. In addition, pro forma information concerning us, Renaissance
Multimedia, Junction 15 and PWR Systems is included in the "Recent Events"
section of Item 1 of this Form 10-KSB and the amendment to the Form 8-K will
incorporate by reference such pro forma information by reference to this Form
10-KSB.

                                      -69-
<PAGE>


                          Index to Financial Statements

VIZACOM INC.:
Independent Auditors' Reports. . . . . . . . . . . . . . . . . . . . . . .  F-2
Consolidated Balance Sheet at December 31, 1999. . . . . . . . . . . . . .  F-4
Consolidated Statements of Operations for the years
 ended December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . .  F-5
Consolidated Statements of Stockholders' Equity for
 the years ended December 31, 1999 and 1998. . . . . . . . . . . . . . . .  F-6
Consolidated Statements of Cash Flows for the years
 ended December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . .  F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . .  F-8

RENAISSANCE COMPUTER ART CENTER, INC., d/b/a RENAISSANCE MULTIMEDIA:
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . F-28
Balance Sheet at December 31, 1999 . . . . . . . . . . . . . . . . . . . . F-29
Statement of Operations and Retained Earningsfor the year
 ended December 31, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . F-30
Statement of Cash Flows for the year ended December 31, 1999 . . . . . . . F-31
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . F-32

JUNCTION 15 LIMITED:
Directors' Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-37
Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-39
Profit and Loss Account for the year ended 31 December 1999. . . . . . . . F-40
Balance Sheet as at December 31, 1999. . . . . . . . . . . . . . . . . . . F-41
Cash Flow Statement for the year ended 31 December  1999 . . . . . . . . . F-42
Notes to the Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . F-43
Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . . . F-44

P. C. WORKSTATION RENTALS, INC., d/b/a PWR SYSTEMS, AND STORAGELAND, INC.:
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . F-51
Combined Balance Sheets at December 31, 1999 and 1998. . . . . . . . . . . F-52
Combined Statement of Operations and Retained Earnings
 for the years ended December 31, 1999 and 1998. . . . . . . . . . . . . . F-53
Statements of Combined Cash Flows for the years ended
 December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . . . . . F-54
Notes to Combined Financial Statements . . . . . . . . . . . . . . . . . . F-55



                                      F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Vizacom Inc.
Teaneck, New Jersey

We have audited the  consolidated  balance  sheet of Vizacom Inc. as of December
31, 1999, and the related consolidated  statements of operations,  stockholders'
equity  and cash  flows  for  each of the  years in the  two-year  period  ended
December 31, 1999.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial  statements  based  on our  audit.  We did  not  audit  the  financial
statements  of  Serif  (Europe)  Limited,  a  wholly  owned  subsidiary,   which
statements  reflect total assets and net sales  constituting  34.5% and 61.9% of
the related  consolidated  totals for 1999 and net sales  constituting 50.9% for
1998.  Those  financial  statements were audited by other auditors whose reports
have been furnished to us, and our opinion, insofar as it relates to the amounts
included for Serif (Europe) Limited, is based solely on the reports of the other
auditors.

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

In our opinion,  based on our audits and the reports of the other auditors,  the
financial statements  enumerated above present fairly, in all material respects,
the consolidated financial position of Vizacom Inc. as of December 31, 1999, and
the consolidated  results of their operations and their  consolidated cash flows
for  each of the  years  in the  two-year  period  ended  December  31,  1999 in
conformity with generally accepted accounting principles.

As  described  in Note 8,  the  Company  has  applied  to enter  into a  closing
agreement with the Internal  Revenue  Service with respect to dual  consolidated
losses previously utilized by a wholly owned subsidiary of the Company, Software
Publishing Corporation ("SPC"). Such closing agreement, if not consummated, will
require  the  Company  to  recognize  a  tax  of  approximately  $8  million  on
approximately $24.5 million of SPC's previous dual consolidated losses.


                                         /s/ Richard A. Eisner & Company, LLP
                                         Richard A. Eisner & Company, LLP
New York, New York
March 27, 2000

                                      F-2

<PAGE>


REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Serif (Europe) Limited

We have audited the balance sheet of Serif  (Europe)  Limited as of December 31,
1999 and  1998,  and the  related  statements  of  operations,  cash  flows  and
shareholders'  equity for each of the two years in the period ended December 31,
1999.  These  financial  statements  are  the  responsibility  of the  company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance  with United  Kingdom  auditing  standards
which do not differ in any  significant  respect  from United  States  generally
accepted  auditing  standards.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the  financial  position of Serif  (Europe)  Limited at
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the two years in the period ended  December 31, 1999,  in conformity
with United Kingdom generally accepted accounting principles.

United Kingdom  accounting  principles  vary in certain  material  respects from
accounting  principles  generally accepted in the United States. The application
of  the  latter  would  not  have  materially   affected  the  determination  of
shareholders' equity and financial position as of December 31, 1999 and 1998 and
the determination of net profit for the two years ended December 31, 1999.

                                                       /s/ Ernst & Young
                                                       Ernst & Young


Nottingham, England
March 27, 2000

                                      F-3

<PAGE>


                                  VIZACOM INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1999
<TABLE>
<CAPTION>

ASSETS
Current assets:
<S>                                                              <C>
     Cash and cash equivalents . . . . . . . . . . . . . . .     $   1,730,495
     Marketable securities . . . . . . . . . . . . . . . . .         2,746,678
     Receivables
        Trade accounts, less allowances of $434,290. . . . .           558,550
        Other. . . . . . . . . . . . . . . . . . . . . . . .            88,842
        Notes. . . . . . . . . . . . . . . . . . . . . . . .            86,018
    Inventories. . . . . . . . . . . . . . . . . . . . . . .         1,457,604
    Prepaid expenses and other current assets. . . . . . . .           526,552
                                                                 --------------
            Total current assets . . . . . . . . . . . . . .         7,194,739

Property and equipment, net. . . . . . . . . . . . . . . . .           828,108
Goodwill, net of accumulated amortization of $256,066. . . .           118,665
Restricted cash. . . . . . . . . . . . . . . . . . . . . . .           259,838
Deferred consulting costs. . . . . . . . . . . . . . . . . .         1,269,859
Other assets . . . . . . . . . . . . . . . . . . . . . . . .           803,762
                                                                 --------------
            Total assets . . . . . . . . . . . . . . . . . .     $  10,474,971
                                                                 ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable . . . . . . . . . . . . . . . . . . . .     $  4,111,748
    Accrued liabilities. . . . . . . . . . . . . . . . . . .        1,816,744
    Value-added taxes payable. . . . . . . . . . . . . . . .          393,927
    Current portion of capital lease obligations . . . . . .           63,792
    Current portion of long-term debt. . . . . . . . . . . .          155,554
                                                                 -------------
            Total current liabilities. . . . . . . . . . . .        6,541,765

Capital lease obligations, less current portion. . . . . . .           98,265
Long-term debt, less current maturities. . . . . . . . . . .          100,410
                                                                 -------------
            Total liabilities. . . . . . . . . . . . . . . .        6,740,440
                                                                 -------------

Commitments and contingencies

Stockholders' equity:
    Serial Preferred Stock, authorized 1,939,480 shares,
      par value $.001 per share
        Junior  Participating  Preferred Stock, Series A,
           100,000 shares authorized, none issued and
           outstanding . . . . . . . . . . . . . . . . . . .               --
    Class B Voting Preferred Stock, Series A, 60,520
      shares authorized, none issued and outstanding . . . .               --
    Common stock, par value $.001 per share, 60,000,000
      shares authorized; 7,235,578 shares issued . . . . . .            7,236
    Additional paid-in capital . . . . . . . . . . . . . . .       49,851,699
    Accumulated deficit. . . . . . . . . . . . . . . . . . .      (47,864,635)
    Accumulated other comprehensive income . . . . . . . . .        1,750,626
    Treasury stock, 3,095 shares, at cost. . . . . . . . . .          (10,395)
                                                                 --------------
            Total stockholders' equity . . . . . . . . . . .         3,734,531
                                                                 --------------
            Total liabilities and stockholders' equity . . .     $  10,474,971
                                                                 ==============
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>


                                  VIZACOM INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                         Year Ended December 31,
                                                                     -------------------------------
                                                                         1999              1998
                                                                         ----              ----
<S>                                                                <C>               <C>
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . .   $ 19,891,357      $ 18,271,733
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . .      6,371,106         3,709,245
                                                                   -------------     -------------
     Gross profit. . . . . . . . . . . . . . . . . . . . . . . .     13,520,251        14,562,488


Selling, general and administrative expenses . . . . . . . . . .     17,175,520        13,480,956
Product development. . . . . . . . . . . . . . . . . . . . . . .      1,027,447         1,266,163
Amortization of goodwill and purchased technology. . . . . . . .      2,219,363         2,377,282
Unrealized holding gain on marketable securities . . . . . . . .       (322,652)          (90,000)
Realized gain on marketable securities . . . . . . . . . . . . .       (642,444)               --
Interest and other income, net of interest
   expense of $41,622 and $49,085. . . . . . . . . . . . . . . .        (59,503)          (94,739)
                                                                   -------------     -------------
                                                                     19,397,731        16,939,662
                                                                   -------------     -------------

Loss before income taxes . . . . . . . . . . . . . . . . . . . .     (5,877,480)       (2,377,174)

Income taxes (benefit) . . . . . . . . . . . . . . . . . . . . .       (250,978)           29,541
                                                                   -------------     -------------

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .   $ (5,626,502)     $ (2,406,715)

Dividends on Series A and Series C Preferred Stock . . . . . . .        (56,641)               --
                                                                   -------------     -------------

Net loss attributable to common stockholders . . . . . . . . . .   $ (5,683,143)     $ (2,406,715)
                                                                   =============     =============

Loss per common share:
     Net loss per common share - basic and diluted . . . . . . .   $       (.95)     $       (.65)
     Weighted average number of common shares outstanding - basic
        and diluted. . . . . . . . . . . . . . . . . . . . . . .      5,996,507         3,676,820
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>

                                  VIZACOM INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                       Preferred Stock
                                                          ----------------------------------------
                                                                Class A               Class C             Common Stock
                                                          -------------------   ------------------    ------------------
                                                          Shares      Amount    Shares      Amount    Shares      Amount
                                                          ------      ------    ------      ------    ------      ------
<S>                                                        <C>      <C>         <C>       <C>        <C>         <C>
BALANCE AT DECEMBER 31, 1997 . . . . . . . . . . . . .       --     $     --      --      $     --   3,003,804   $ 3,004
Issuance of common stock in payment of
  previously established liabilities . . . . . . . . .       --           --      --            --      58,585        59
Issuance of common stock and warrants in
  payment of liabilities for services rendered . . . .       --           --      --            --     143,333       143
Issuance of warrants for services rendered . . . . . .       --           --      --            --          --        --
Acquisition of treasury shares . . . . . . . . . . . .       --           --      --            --          --        --
Adjustment of common stock to reflect
  payment of fractional shares in cash in
  connection with reverse stock split. . . . . . . . .       --           --      --            --         (37)        0
Sale of common stock-net . . . . . . . . . . . . . . .       --           --      --            --   1,877,968     1,878
Issuance of Class A preferred stock. . . . . . . . . .      930      930,000      --            --          --        --
Net loss . . . . . . . . . . . . . . . . . . . . . . .       --           --      --            --          --        --
                                                           ----     --------    ----      --------   ---------   -------
BALANCE AT DECEMBER 31, 1998 . . . . . . . . . . . . .      930     $930,000      --      $     --   5,083,653   $ 5,084
COMPREHENSIVE INCOME (LOSS):
Net loss . . . . . . . . . . . . . . . . . . . . . . .       --           --      --            --          --        --
Unrealized holding gain. . . . . . . . . . . . . . . .       --           --      --            --          --        --
Currency translation adjustment. . . . . . . . . . . .       --           --      --            --          --        --
Total comprehensive loss . . . . . . . . . . . . . . .       --           --      --            --          --        --
Exchange of Class A preferred  stock for Class
  C preferred  stock and  warrants, less related
  costs. . . . . . . . . . . . . . . . . . . . . . . .     (930)    (930,000)    930       930,000          --        --
Redemption of preferred stock. . . . . . . . . . . . .       --           --    (930)     (930,000)         --        --
Dividends paid on preferred stock. . . . . . . . . . .       --           --      --            --          --        --
Common stock issued on exercise of warrants
  and options. . . . . . . . . . . . . . . . . . . . .       --           --      --            --     217,835       218
Issuance of options and warrants for services. . . . .       --           --      --            --          --        --
Sale of common stock in private placements,
  net. . . . . . . . . . . . . . . . . . . . . . . . .       --           --      --            --   1,804,066     1,804
Common stock issued for payment of legal
  services . . . . . . . . . . . . . . . . . . . . . .       --           --      --            --      50,000        50
Common stock issued in settlement of
  vendor and licensing liabilities . . . . . . . . . .       --           --      --            --      80,024        80
                                                           ----     --------    ----      --------   ---------   -------
BALANCE AT DECEMBER 31, 1999 . . . . . . . . . . . . .       --     $     --      --      $     --   7,235,578   $ 7,236
                                                           ====     ========    ====      ========   =========   =======
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                         Accumulated
                                                         Additional                         Other                       Total
                                                          Paid-in       Accumulated     Comprehensive    Treasury   Stockholders'
                                                          Capital         Deficit       Income (Loss)      Stock       Equity
                                                       --------------  -------------    -------------    --------   -------------
<S>                                                    <C>             <C>              <C>             <C>         <C>
BALANCE AT DECEMBER 31, 1997 . . . . . . . . . . . . . $ 42,971,820    $(39,831,418)    $         --    $     --    $   3,143,406
Issuance of common stock in payment of
  previously established liabilities . . . . . . . . .      117,107              --               --          --          117,166
Issuance of common stock and warrants in
  payment of liabilities for services rendered . . . .      186,607              --               --          --          186,750
Issuance of warrants for services rendered . . . . . .      701,206              --               --          --          701,206
Acquisition of treasury shares . . . . . . . . . . . .           --              --               --     (10,395)         (10,395)
Adjustment of common stock to reflect
  payment of fractional shares in cash in
  connection with reverse stock split. . . . . . . . .           --              --               --          --                0
Sale of common stock-net . . . . . . . . . . . . . . .    1,408,747              --               --          --        1,410,625
Issuance of Class A preferred stock. . . . . . . . . .           --              --               --          --          930,000
Net loss . . . . . . . . . . . . . . . . . . . . . . .           --      (2,406,715)              --          --       (2,406,715)
                                                       ------------    -------------    ------------    ---------   --------------
BALANCE AT DECEMBER 31, 1998 . . . . . . . . . . . . . $ 45,385,487    $(42,238,133)    $         --    $(10,395)   $   4,072,043

COMPREHENSIVE INCOME (LOSS):
Net loss . . . . . . . . . . . . . . . . . . . . . . .           --      (5,626,502)              --          --               --
Unrealized holding gain. . . . . . . . . . . . . . . .           --              --        1,753,929          --               --
Currency translation adjustment. . . . . . . . . . . .           --              --           (3,303)         --               --
                                                                       -------------    -------------
Total comprehensive loss . . . . . . . . . . . . . . .           --      (5,626,502)       1,750,626          --       (3,875,876)
                                                                       -------------    -------------
Exchange of Class A preferred  stock for Class
  C preferred  stock and  warrants, less related
  costs. . . . . . . . . . . . . . . . . . . . . . . .      (33,905)             --               --          --          (33,905)
Redemption of preferred stock. . . . . . . . . . . . .           --              --               --          --         (930,000)
Dividends paid on preferred stock. . . . . . . . . . .      (56,641)             --               --          --          (56,641)
Common stock issued on exercise of warrants
  and options. . . . . . . . . . . . . . . . . . . . .       52,155              --               --          --           52,373
Issuance of options and warrants for services. . . . .      996,954              --               --          --          996,954
Sale of common stock in private placements,
  net. . . . . . . . . . . . . . . . . . . . . . . . .    3,111,080              --               --          --        3,112,884
Common stock issued for payment of legal
  services . . . . . . . . . . . . . . . . . . . . . .      181,200              --               --          --          181,250
Common stock issued in settlement of
  vendor and licensing liabilities . . . . . . . . . .      215,369              --               --          --          215,449
                                                       ------------    -------------    ------------    ---------   -------------
BALANCE AT DECEMBER 31, 1999 . . . . . . . . . . . . . $ 49,851,699    $(47,864,635)    $  1,750,626    $(10,395)   $   3,734,531
                                                       ============    =============    ============    =========   =============
</TABLE>
See accompanying notes to consolidated financial statements.

                                      F-6

<PAGE>


                                  VIZACOM INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                                    -----------------------------
                                                                          1999         1998
                                                                          ----         ----
OPERATING ACTIVITIES:
<S>                                                                 <C>            <C>
Net loss . . . . . . . . . . . . . . . . . . . . . . . .            $ (5,626,502)  $ (2,406,715)
Adjustments to reconcile net loss to net cash used
  in operating activities:
  Depreciation and amortization. . . . . . . . . . . . .               2,907,758      2,570,924
  Provision for doubtful accounts. . . . . . . . . . . .                  85,006        665,000
  Unrealized holding gain on trading securities. . . . .                (322,652)       (90,000)
  Gains on sale of fixed assets. . . . . . . . . . . . .                      --         (9,409)
  Gain  realized on available-for-sale securities. . . .                (642,444)       173,600
  Common stock and stock options issued for legal and
    licensing matters. . . . . . . . . . . . . . . . . .                 126,712             --
  Changes in assets and liabilities:
     Receivables . . . . . . . . . . . . . . . . . . . .                 331,641     (1,128,449)
     Inventories . . . . . . . . . . . . . . . . . . . .                (775,780)      (139,368)
     Prepaid expenses and other current assets . . . . .                 260,748       (354,677)
     Other assets. . . . . . . . . . . . . . . . . . . .                (466,270)        (3,778)
     Accounts payable. . . . . . . . . . . . . . . . . .                 918,721        586,243
     Accrued liabilities . . . . . . . . . . . . . . . .                 514,785     (1,359,937)
     Value-added taxes payable . . . . . . . . . . . . .                (415,333)            --
                                                                    -------------  -------------
          Net cash used in operating activities. . . . .              (3,103,610)    (1,496,566)
                                                                    -------------  -------------

INVESTING ACTIVITIES:
Purchase of property and equipment. . . . . . . . . . .                 (638,636)      (103,415)
Investment in website . . . . . . . . . . . . . . . . .                 (268,248)            --
Increase in restricted cash . . . . . . . . . . . . . .                  (59,838)       100,000
Collection of notes receivable. . . . . . . . . . . . .                  155,613             --
Proceeds from sales of property and equipment . . . . .                       --         58,480
                                                                    -------------  -------------
          Net cash (used in) provided by investing
           activities . . . . . . . . . . . . . . . . .                 (811,109)        55,065
                                                                    -------------  -------------

FINANCING ACTIVITIES:
Proceeds from sale of common stock - net. . . . . . . .                3,125,675      1,410,625
Proceeds from long-term debt. . . . . . . . . . . . . .                  353,552             --
Proceeds from option and warrant exercises. . . . . . .                   52,373             --
Payment of long-term debt and capital lease
  obligations . . . . . . . . . . . . . . . . . . . . .                 (230,129)      (167,834)
Payment of costs of preferred stock issuance. . . . . .                  (33,905)            --
Purchase of treasury stock. . . . . . . . . . . . . . .                       --        (10,395)
                                                                    -------------  -------------
          Net cash provided by financing activities . .                3,267,566      1,232,396
                                                                    -------------  -------------

(Decrease) in cash and cash equivalents . . . . . . . .                 (647,153)      (209,105)
Cash and cash equivalents at beginning of year. . . . .                2,377,648      2,586,753
                                                                    -------------  -------------
Cash and cash equivalents at end of year. . . . . . . .             $  1,730,495   $  2,377,648
                                                                    =============  =============

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND
  INVESTING ACTIVITIES:
Issuance of Class A Preferred Stock for
  marketable securities. . . . . . . . . . . . . . . .              $         --   $    930,000
Redemption of Class C Preferred Stock
  with marketable securities . . . . . . . . . . . . .              $    930,000   $         --
Payment of preferred stock dividends with
  marketable securities. . . . . . . . . . . . . . . .              $     56,641   $         --
Issuance of common stock for previously
  established liabilities. . . . . . . . . . . . . . .              $    291,249   $    117,166
Issuance of stock options for previously
  established liabilities. . . . . . . . . . . . . . .              $     62,000   $         --
Issuance of common stock in payment of
  liabilities for services rendered. . . . . . . . . .              $         --   $    186,750
Issuance of warrants to purchase common
  stock for services rendered. . . . . . . . . . . . .              $    923,730   $    701,206
Listing fees accrued for capital stock transactions. .              $    (22,828)  $         --
Unrealized holding gain on available-for-sale
  securities . . . . . . . . . . . . . . . . . . . . .              $  1,753,929   $         --
SUPPLEMENTAL  DISCLOSURES  OF CASH FLOW  INFORMATION:
Cash paid during the year for:
    Interest paid. . . . . . . . . . . . . . . . . . .              $     47,329   $    107,704
    Income taxes . . . . . . . . . . . . . . . . . . .              $     15,233   $     55,564
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-7

<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF BUSINESS

     Vizacom Inc., formerly known as Software Publishing Corporation
     Holdings, Inc., and subsidiaries, (collectively, the "Company,") is an
     international developer and supplier of desktop publishing, presentation
     graphics and other visual communications business and productivity computer
     software products. The Company sells its products to corporate customers,
     consumers, retail and wholesale customers, and original equipment
     manufacturers primarily in the United States and Europe. The Company's
     business has recently evolved through acquisitions in 2000, into a
     multi-national provider of business to business and business to consumer
     e-commerce services providing website design, systems integration, customer
     service, marketing, warehousing, and fulfillment services, utilizing its
     web-enabled multi-lingual call centers located in the United States and
     Europe.

     PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of Vizacom
     Inc. and its wholly-owned subsidiaries. All significant intercompany
     accounts and transactions have been eliminated. The translation of foreign
     currencies into United States dollars for subsidiaries where the local
     currency is the functional currency is performed for balance sheet accounts
     using the exchange rate in effect at year end and for revenue and expense
     accounts using an average rate for the period. The unrealized gains and
     losses resulting from such translation are included as a separate component
     of stockholders'equity in accumulated other comprehensive loss.

     BUSINESS COMBINATIONS

     The Company has accounted for all business combinations under the
     purchase method of accounting. Under this method the purchase price is
     allocated to the assets and liabilities of the acquired enterprise as of
     the acquisition date based on their estimated respective fair values which
     are subject to revision for a period not to exceed one year from the date
     of acquisition. The results of operations of the acquired enterprises are
     included in the Company's consolidated financial statements for the period
     subsequent to their acquisition.

     CONCENTRATION OF CREDIT RISK

          The Company performs periodic credit  evaluations of its customers but
     generally does not require collateral from them.

     REVENUE RECOGNITION

     Revenue is generally recognized upon shipment of products to customers
     and is recorded net of allowances for anticipated returns for potential
     excess quantities in the distribution channel. Certain customers have been
     provided goods on a consignment basis. Revenues on these transactions are
     recognized upon the sale of products to the ultimate customer. Revenue for
     "locked versions" of software is recognized when customers purchase an
     unlocking code.

     CASH EQUIVALENTS

          Cash equivalents  consist of highly liquid investments with a maturity
     of three months or less when purchased.

                                      F-8

<PAGE>

                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     MARKETABLE SECURITIES

     The Company accounts for investments in marketable securities pursuant
     to Statement of Financial Accounting Standards No. 115, "Accounting for
     Certain Investments in Debt and Equity Securities" ("SFAS No. 115"). SFAS
     No. 115 requires, among other things, the classification of investments in
     one of three categories based upon the Company's intent: (a) trading, (b)
     available-for-sale and (c) held-to- maturity, with trading and
     available-for-sale securities carried at market value and held-to-maturity
     securities carried at amortized cost. Realized and unrealized gains and
     losses are recorded in the statement of operations for trading securities,
     whereas only realized gains and losses are recorded in the statement of
     operations for available-for-sale securities and unrealized gains and
     losses are recorded as a component of other comprehensive income. The
     Company originally classified its marketable securities as trading
     securities, and transferred them to available-for-sale securities as a
     result of certain agreements described in Note 3. For a security
     transferred from the trading category, the unrealized holding gain or loss
     at the date of transfer has already been recognized in earnings, and
     accordingly, is not reversed.

     INVENTORIES

     Inventories, which are principally finished goods, are stated at the  lower
     of cost (first-in, first-out) or market.

     DIRECT-RESPONSE ADVERTISING

     Advertising costs associated with direct-response advertising, whose
     primary purpose is to elicit sales to customers who could be shown to have
     responded specifically to that advertising, are capitalized and recognized
     ratably in the future as a percentage of actual period revenues to total
     revenues anticipated from such advertising. Costs associated with
     direct-response advertising include mailing list rental, postage,
     production, and other associated promotional activities. The Company
     incurred advertising and promotion costs of approximately $7,582,000 in
     1999 and $5,736,000 in 1998.

     ROYALTY ADVANCES

     Non-refundable royalty payments in connection with licensing contracts
     for the Company's products are generally amortized based on product sales.
     Management evaluates the future realization of royalty advances
     periodically and charges to cost of goods sold any amounts they believe
     will not be recovered through future sales.

     PRODUCT DEVELOPMENT COSTS

     Costs incurred in the development of new software products are
     expensed as incurred until technological feasibility has been established.
     Product enhancement costs for products which have established technological
     feasibility are capitalized, and capitalization is discontinued when the
     product is available for sale. Approximately $478,000 was capitalized at
     December 31, 1999. Amortization, which will commence when the products are
     available for general release to customers, will be computed at the greater
     of the straight-line rate over the estimated life of each product, or an
     amount based on the ratio of current revenues to the total of current and
     anticipated revenues.

                                       F-9
<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost. Depreciation is provided on
     a straight-line basis over the estimated useful lives of the related
     assets, generally 3 to 7 years. Leasehold improvements are amortized on a
     straight-line basis over the shorter of the life of the improvement or the
     remainder of the lease term.

     WEB SITE DEVELOPMENT COSTS

     Certain direct internal and external costs of web site development
     incurred during the application development stage in 1999 are being
     capitalized and amortized over a three-year period. At December 31, 1999,
     $240,000 of these remaining development costs, net of $28,248 accumulated
     amortization, are included in other assets.

     USE OF ESTIMATES

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts in the financial statements
     and accompanying notes. These estimates principally include provisions for
     sales returns and allowances and purchase price allocations. Actual results
     could differ from these estimates.

     SELF INSURANCE

     The Company is primarily self-insured for its employee health plan,
     which covers medical, hospital, and dental claims. The Company accrues for
     claims filed and estimates of claims incurred but not reported. The Company
     has purchased additional stop-loss coverage above $120,000, in order to
     limit its exposure to any significant levels of health claims beyond this
     amount.

     STOCK OPTIONS

     As permitted under the provisions of Statement of Financial Accounting
     Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," the
     Company continues to apply Accounting Principles Board ("APB") Opinion No.
     25, "Accounting for Stock Issued to Employees," and its related
     interpretations in accounting for its stock-based compensation plans.

     INCOME TAXES

     The liability method is used in accounting for income taxes. Under
     this method, deferred tax assets and liabilities are determined based on
     differences between financial reporting and tax bases of assets and
     liabilities and are measured using the enacted tax rates and laws that will
     be in effect when the differences are expected to reverse. The resulting
     asset at December 31, 1999 was fully reserved since management does not
     believe it is more likely than not that the tax benefit will ultimately be
     realized.

     LOSS PER SHARE

     Basic loss per share is computed based upon the weighted average
     number of common shares outstanding during each year. Stock options and
     warrants did not have an effect on the computation of diluted
     loss per share in 1999 and 1998 since they were anti-dilutive.

                                      F-10
<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     REVERSE STOCK SPLIT

     The Company effected a one-for-three (1:3) reverse stock split,
     effective as of the close of business on May 27, 1998. All share and per
     share amounts for all years presented have been adjusted to reflect such
     reverse stock split.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of the Company's financial instruments, including cash
     and cash equivalents, marketable securities, accounts receivable, accounts
     payable, accrued liabilities and short- and long-term debt approximate
     their carrying values because of short-term maturities or because their
     interest rates approximate current market rates.

     The Company utilizes letters of credit to collateralize certain
     short-term purchases. In the Company's past experience, no claims have been
     made against these financial instruments. Management does not expect any
     material losses to result from these off-balance sheet instruments because
     performance is not expected to be required, and, therefore, is of the
     opinion that the fair value of these instruments is zero.

     RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued
     Statement of Financial Accounting Standards No. 133, "Accounting for
     Derivative Instruments and Hedging Activities" ("SFAS 133"), which
     establishes accounting for derivative instruments and hedging activities.
     SFAS 133 will require the Company to record all derivatives as assets or
     liabilities at fair value. The statement requires that changes in the
     derivatives fair value be recognized currently in earnings unless specific
     hedge accounting criteria are met. The statement was been delayed by SFAS
     No. 137, "Accounting for Derivative Instruments and Hedging
     Activities-Deferral of the Effective Date of FASB Statement No. 133-an
     amendment of FASB Statement 133," which delay would require adoption by the
     Company as of January 1, 2001. The Company believes that the adoption will
     not have a material impact on its financial statements; however, its
     effect, if any, will depend on the Company 's exposure to derivative
     instruments at the time of adoption and thereafter.

     RECLASSIFICATIONS

     Certain  reclassifications  have been made to the 1998  amounts  to conform
     with the 1999 presentation.

2.   BUSINESS COMBINATIONS AND ACQUISITIONS

     In July 1996, the Company acquired Serif Inc. and Serif (Europe)
     Limited (collectively, the "Serif companies"). The aggregate purchase
     price, including all direct costs, was approximately $4,200,000 and was
     principally financed through the issuance of 333,333 shares of the
     Company's common stock. The cost of the acquisition exceeded the fair value
     of Serif's net assets by approximately $400,000, which was recorded as
     goodwill.

     In December 1996, the Company acquired Software Publishing Corporation
     ("SPC"). The aggregate purchase price, including all direct costs, was
     approximately $30,000,000 and was principally financed through the issuance
     of 1,125,305 shares of the Company's common stock. The cost of the
     acquisition exceeded the fair value of SPC's net assets by approximately
     $3,795,000, which was recorded as goodwill as of the acquisition date and
     was subsequently eliminated in 1997 as a result of settlement and
     adjustment of pre-acquisition liabilities and accruals.

                                      F-11
<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.   BUSINESS COMBINATIONS AND ACQUISITIONS (CONTINUED)

     On February 15, 2000, the Company acquired Renaissance Multimedia
     ("RM"). The aggregate purchase price, including all direct costs, was
     approximately $2,752,000 and was principally financed through the issuance
     of 449,870 shares of the Company's common stock and a $250,000 cash
     payment. The Company entered into a three-year employment contract with the
     President of RM at an annual salary of $175,000, with certain predetermined
     performance bonus targets. Additionally, the Company granted options to
     purchase an aggregate of 600,000 shares of its common stock under its 1994
     Long Term Incentive Plan to certain employees of RM. The acquisition was
     accounted for under the purchase method of accounting. Accordingly, the
     consolidated financial statements of the Company will include the results
     of this business subsequent to the acquisition date. The purchase price
     will be allocated to the assets acquired and liabilities assumed based on
     their fair values on the date of purchase. The approximatly $2,556,000 of
     goodwill and other intangibles acquired will be amortized principally over
     7 years.

     On March 9, 2000, the Company acquired all of the outstanding shares
     of Junction 15 Limited, an English company ("J15"). The aggregate purchase
     price, including all direct costs, was approximately $2,655,000 and was
     principally financed through the issuance of 681,818 shares of the
     Company's common stock and a $250,000 cash payment. The Company entered
     into three-year employment agreements with two principals of J15 starting
     at approximately $150,000 and $80,000, respectively, with various
     provisions for pensions, commissions, and bonuses. Additionally, the
     Company granted options to purchase an aggregate of 250,000 shares of its
     common stock under its 1994 Long Term Incentive Plan to certain employees
     of J15.  The purchase price will be allocated to the assets acquired and
     liabilities assumed based on their fair values on the date of purchase.
     The approximately $2,665,000 of goodwill and other intangibles acquired
     will be amortized principally over 7 years.

     On March 27, 2000, the Company acquired PWR Systems, a Long Island, New
     York based interactive internet integrator and value-added reseller of
     computer and digital information equipment, for $7,783,000 inclusive of all
     direct costs. The purchase price includes a $1,000,000 cash payment, a
     $500,000 one-year promissory note convertible into the Company's common
     stock at $3.00 per share, and payable in equal quarterly installments with
     interest of 6.3% per annum, and 1,500,000 shares of the Company's common
     stock, valued at $3 per share, to the two principals of PWR. The
     acquisition agreement also calls for additional contingent consideration
     of up to $350,000 per annum for the three-year period following the
     acquisition based upon increases in PWR's earnings before interest, taxes,
     depreciation, and amortization. The Company is further obligated to issue
     additional common stock if the market price of the Company's common stock
     falls below $1 per share for any consecutive thirty-day period following
     the closing. The Company entered into three-year employment agreements with
     PWR's two principals providing for annual salaries of $200,000 to each of
     them, and provisions for bonuses upon attaining certain specified
     performance thresholds. Additionally, the Company granted options to
     purchase an aggregate of 750,000 shares of its common stock under its 1994
     Long Term Incentive Plan to certain employees and consultants of PWR.
     Furthermore, the Company agreed to prepay, upon receipt of gross proceeds
     of $15,000,000 from equity offerings, a 6.3% note payable to the PWR
     principals, equivalent to the estimated retained earnings of PWR at
     closing, of approximately $890,000, subject to adjustment to the actual
     retained earnings at the date of acquisition. Otherwise, the note will be
     paid in quarterly installments through March 2001.  The purchase price will
     be allocated to the assets acquired and liabilities assumed based on their
     fair values on the date of purchase.  The approximately $7,802,000 of
     goodwill and other intangible acquired will be amortized principally over
     7 years.

                                      F-12
<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.   MARKETABLE SECURITIES

     On July 1, 1999, the Company agreed with the holder (the "Holder") of
     its shares of Class C 11% Cumulative Non-Convertible Redeemable Preferred
     Stock ("Class C Preferred") that in the event the Company called for
     redemption any of its shares of Class C Preferred within 45 days, the
     Company would sell to the Holder 53,815 Xceed Inc. common stock (the
     "Xceed Shares") owned by the Company at a price of $18.44 per Xceed Share,
     or $992,349 in the aggregate. On July 14, 1999, the Board of Directors of
     the Company called for redemption of all outstanding shares of the Class C
     Preferred of the Company with a record date for such redemption of July 19,
     1999. Such transaction was consummated on July 19, 1999 resulting in a
     realized gain of $642,444 on the exchange of the Xceed Shares.

3.   MARKETABLE SECURITIES (CONTINUED)

     On August 10, 1999 the Company entered into an agreement with a finder
     pursuant to which should the finder provide assistance to the Company in
     finding or advising with respect to an acquisition or acquisitions, the
     Company shall pay a fee payable in shares of common stock of Xceed Inc.
     valued at $13.375 per share (the closing price thereof on the date of the
     agreement), equivalent to 10% of the purchase price of the acquisition(s),
     up to a maximum of $800,000. The agreement resulted in the Company
     transferring the balance of its Xceed shares, or 66,185 Xceed shares, from
     trading securities to available-for-sale securities. This resulted in the
     recognition of an unrealized holding gain at the date of transfer of
     $322,652. In connection with the RM transaction described in Note 2, the
     aforementioned party received a fee of 14,953 Xceed Shares. In connection
     with the PWR transaction described in Note 2, the aforementioned party
     received a fee of 44,860 Xceed Shares. The market value of the Xceed shares
     at the time of the RM and PWR acquisitions during the first quarter of 2000
     has been recorded as an additional cost of these acquisitions.

4.   PROPERTY AND EQUIPMENT

     Property and equipment consists of the following as of December 31, 1999:
<TABLE>
<CAPTION>

          <S>                                           <C>
          Computer equipment . . . . . . . . . .        $  643,532
          Computer software. . . . . . . . . . .           172,413
          Office furniture and equipment . . . .           586,527
          Leasehold improvements . . . . . . . .           343,928
                                                        -----------
                                                         1,746,400
          Less accumulated depreciation. . . . .           918,292
                                                        -----------
          Total. . . . . . . . . . . . . . . . .        $  828,108
                                                        ===========
</TABLE>

     Depreciation  expense for the years ended  December  31, 1999 and 1998
     was $255,974 and $177,783, respectively.


                                      F-13
<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.   LEASES

     On July 14, 1999 the Company entered into a sublease agreement for its
     corporate headquarters. Under the sublease agreement the Company leases
     4,787 square feet of commercial office space commencing September 1, 1999
     for a fixed annual rental of $119,675. The lease runs through January 31,
     2003.

     The Company leases various office space under non-cancelable operating
     leases. In addition to the fixed rentals, certain of the leases require the
     Company to pay additional amounts based on specified costs related to the
     property. Certain of the leases have renewal options for periods of up to 2
     years. The Company receives certain sublease income at one of its
     locations. Restricted cash of $259,837 at

     December 31, 1999 represents collateral of $200,000 for a letter of credit
     of like amount which serves as a lease security deposit for premises in
     California previously occupied by the Company and now sub-leased to third
     parties. The balance represents collateral of $59,837 for a letter of
     credit of like amount which serves as a lease security deposit for the
     Company's corporate headquarters in Teaneck, New Jersey.

     The Company is obligated under various capital leases for computer and
     office equipment that expire at various dates during the next five years.
     The book value of capital leases included in fixed assets was as follows at
     December 31, 1999:
<TABLE>
<CAPTION>

          <S>                                           <C>
          Computer equipment . . . . . . . . . . .      $    53,827
          Office equipment . . . . . . . . . . . .          217,243
                                                        ------------
                                                            271,070
          Less accumulated amortization. . . . . .           57,579
                                                        ------------
                                                        $   213,491
                                                        ===========
</TABLE>

     Future minimum lease payments under noncancellable operating leases
     primarily for office and warehouse space and the present value of future
     minimum lease payments under capital leases as of December 31, 1999 are as
     follows:
<TABLE>
<CAPTION>

                                                                                                         Net
                                                           Capital     Operating      Sublease       Operating
                                                            Leases       Leases        Income          Leases
                                                           --------    ----------     --------       ---------
     Year ending December 31:
     ------------------------
     <S>                                                   <C>         <C>            <C>            <C>
     2000. . . . . . . . . . . . . . . . . . . . .         $  77,459   $  784,523     $(405,360)     $  379,163
     2001. . . . . . . . . . . . . . . . . . . . .            72,600      396,141             --        396,141
     2002. . . . . . . . . . . . . . . . . . . . .            34,057      176,395             --        176,395
     2003. . . . . . . . . . . . . . . . . . . . .             2,245        9,973             --          9,973
     2004. . . . . . . . . . . . . . . . . . . . .             2,245           --             --             --
                                                           ----------  -----------    ----------     -----------
     Total minimum lease payments. . .                       188,606   $1,367,032     $(405,360)     $  961,672
                                                                       ===========    ==========     ===========
     Less amount representing interest (at rates
     ranging from 9.0% to 20.6%) . . . . . . . . .            26,549
                                                           ----------
     Present value of net minimum capital lease
     payments. . . . . . . . . . . . . . . . . . .            162,057
     Less current installments . . . . . . . . . .             63,792
                                                           -----------
     Capital lease obligations . . . . . . . . . .         $   98,265
                                                           ===========
</TABLE>

     Total rental  expense for operating  leases  charged to operations for
     the years ended December 31, 1999 and 1998 was  approximately  $198,000 and
     $158,000, respectively.

                                      F-14
<PAGE>

                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.   DEBT
<TABLE>
<CAPTION>

     Debt consists of the following at December 31, 1999:

          <S>                                                                     <C>
          Bank loan, 9.5 %, in monthly installments of $2,305 through
               September 2003. . . . . . . . . . . . . . . . . . . . . . . . . .  $  108,977
          Bank loan, 9.5 %, in monthly installments of $1,295
               through July 2000 . . . . . . . . . . . . . . . . . . . . . . . .       8,891
          Note payable - landlord, 10%, in monthly installments of
               $1,402 through March 2002 . . . . . . . . . . . . . . . . . . . .      33,780
          Directors and officers insurance premium financing, 8.3 %, in
               monthly installments of $11,980 through September 2000. . . . . .     104,316
                                                                                  -----------
                                                                                     255,964
          Less current maturities . . . . . . . . . . . . . . . . . . . . . . .      155,554
                                                                                  -----------
                                                                                  $  100,410
                                                                                  ===========
</TABLE>

6.   DEBT (CONTINUED)

     The bank loans are secured by the assets of the Company's U.K. subsidiary,
     Serif (Europe) Ltd.

     Maturities of long-term debt as of December 31, 1999 are as follows:
<TABLE>
<CAPTION>

          Year Ending
          December 31,
          ------------
             <S>                                              <C>
             2000 . . . . . . . . . . . . . . . . . . . . .   $  155,554
             2001 . . . . . . . . . . . . . . . . . . . . .       43,790
             2002 . . . . . . . . . . . . . . . . . . . . .       32,370
             2003 . . . . . . . . . . . . . . . . . . . . .       24,250
                                                              -----------
             Total. . . . . . . . . . . . . . . . . . . . .   $  255,964
                                                              ===========
</TABLE>

     At December 31, 1999, a letter of credit amounting to $200,000 was
     outstanding related to short term purchase commitments issued to foreign
     suppliers for approximately the same amount. The collateral for the letter
     of credit consisted of interest bearing bank deposits for the amount of the
     letter of credit.

     On January 8, 2000 the Company entered into an agreement for a maximum
     $1,000,000 unsecured line of credit note arrangement with a foreign
     company. The Company borrowed the maximum advance of $1,000,000 on February
     17, 2000. Advances under the arrangement bear interest at 8%. This
     borrowing was paid in full with accrued interest on March 20, 2000. With
     the exception of the first advance, all future advances are payable within
     180 days of the receipt of the advance. In connection with this note, the
     Company issued warrants to purchase an aggregate of 250,000 shares of its
     common stock exercisable at $3.00 per share. The warrants were valued at
     $382,500 and will be charged to interest expense over the two-year
     agreement period. The Company has agreed to include the shares of common
     stock underlying these warrants in its next resale registration statement
     to be filed no later than April 17, 2000. The Company further agreed to
     issue warrants on similar terms to purchase 25,000 shares of common stock,
     and to reduce the exercise price of all of these warrants by 10% for each
     full week the filing of this registration statement is delayed.

                                      F-15

<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     7.   STOCKHOLDERS' EQUITY

          a)  COMMON STOCK

     In 1998, the Company issued an aggregate of 58,585 shares of common
     stock in payment of previously established liabilities incurred in 1996 and
     1997 for the acquisition of certain software, goods and legal and
     consulting services.

     In 1998, the Company issued an aggregate of 143,333 shares of common
     stock and warrants to purchase 33,332 shares of common stock, exercisable
     at various prices ranging from $1.50 to $3.83 (subject to adjustment) per
     share, in payment for services rendered in 1998 by consultants and the
     Chairman of the Board.

     In 1998, the Company retained an investment banking firm and
     consultants and, in connection therewith, issued warrants, valued at
     $701,206, to purchase 1,390,000 shares of common stock. The related
     deferred charges are being amortized over periods of one to five years.

     In 1998, the Company acquired an aggregate 3,095 shares of common
     stock, of which 1,237 shares were held by a former employee of one of the
     Company's subsidiaries and 1,858 shares were held by a trust for the
     benefit of certain of the employees of such subsidiary. The Company is
     holding such 3,095 shares in its treasury.

     On May 26, 1998, the stockholders of the Company granted the Board of
     Directors of the Company authority to amend the Company's Certificate of
     Incorporation to authorize a reverse stock split of the common stock.
     Following such stockholder action, the Company's Board of Directors
     authorized a one- for-three (1:3) reverse stock split of the common stock.
     The reverse stock split became effective as of the close of business on May
     27, 1998.

     In 1998, the Company sold an aggregate of 1,877,968 shares of common
     stock to certain investors, including directors, officers and employees of
     the Company and their affiliates, for net proceeds of $1,410,625.

     In 1999, the Company issued 217,835 shares of its common stock
     pursuant to the exercise of warrants and stock options, for aggregate
     consideration of $52,373.

                                      F-16
<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     On April 6, 1999, the Company entered into certain financial advisory
     and investment banking agreements whereby the Company issued warrants to
     purchase 100,000 and 45,000 shares, respectively, of common stock of the
     Company at an exercise price of $1.125. The warrants are exercisable for
     the period from April 6, 2000 through April 6, 2004. The warrants were
     valued at $69,742 and $31,523, respectively, and the related deferred
     charges are included in deferred consulting costs. The Company also issued
     options to purchase 25,000 shares of its common stock to employees of its
     legal counsel, at an exercise price of $1.03125 per share. On July 8, 1999
     options to purchase 25,000 shares of its common stock were issued to a
     member of its legal counsel. On July 20, 1999 the Company issued warrants
     to purchase an aggregate of 225,000 shares of its common stock at an
     exercise price of $2.00 per share, through July 20, 2004, in connection
     with a five-year consulting agreement. Such warrants were valued at
     $605,250, are being amortized over the term of the related consulting
     agreement, and the related deferred charges are included in deferred
     consulting. On October 20, 1999 the Company issued warrants to purchase an
     aggregate of 100,000 shares of its common stock at an exercise price of
     $2.00 per share, through October 20, 2004, in connection with a five-year
     marketing and sales advisory agreement. Such warrants were valued at
     $196,000, are being amortized over the term of the related marketing and
     sales advisory agreement, and the related deferred charges are included in
     deferred consulting. On November 11, 1999 the Company issued warrants to
     purchase an aggregate of 25,000 shares of its common stock at an exercise
     price of $2.00 per share, through November 10, 2002, in connection with a
     consulting agreement. Such warrants were valued at $52,500 and have been
     expensed. On December 6, 1999, the Company cancelled the warrants issued in
     connection with a certain investment banking agreement based on the
     assertion that the investment banking firm failed to perform the related
     services under its agreement. This resulted in a charge to additional
     paid-in capital of $31,286 in cancellation of the warrant. The dispute is
     subject to an arbitration. See further discussion in Note 11. Transactions
     costs of $9,237 associated with the warrants have been accrued and charged
     to additional paid-in capital. The Company recorded credits to additional
     paid in capital of $996,954 as a result of the issuance of the foregoing
     warrants and options.

     The Company received proceeds in 1999 from private placements of its
     common stock of $3,112,884 in connection with the following transactions.
     On June 9, 1999, the Company sold an aggregate of 525,000 shares of Common
     Stock for aggregate gross proceeds of $1,050,000, before associated
     transaction costs of $175,702. On July 1, 1999, the Company sold an
     aggregate of 762,653 shares of common stock for aggregate gross proceeds of
     $1,510,000, before associated transaction costs of $210,867, in a private
     placement. During the period September through October 1999, the Company
     sold units in a private placement, each unit consisting of one share of
     common stock plus one-quarter of a warrant. Each warrant will allow its
     holder to purchase one share of common stock at $2.75 per share for a
     three-year period from date of sale. The Company sold 516,413 units for
     aggregate gross proceeds of $1,097,375. The associated transaction costs
     for the September and October offering were $157,922.

     On July 8, 1999, the Company issued 50,000 shares of common stock to
     the members of its corporate counsel, in payment of $100,000 of accrued
     legal fees due to such law firm. See Note 9.

     In December 1999, the Company entered into a settlement agreement,
     mutual release, and license related to certain clip-art, and other images
     contained within the Company's desktop publishing software. In connection
     with this agreement, the Company paid $15,000 and issued 9,756 shares of
     common stock valued at $25,000. Also in December 1999, the Company issued
     70,268 shares of common stock, valued at $191,249, to three vendors in
     settlement of past trade and licensing liabilities. Transaction costs
     associated with the issuance of these shares totaled $800.

     As of December 31, 1999 the Company had reserved 3,096,656 shares of
     common stock for issued and outstanding warrants.

                                      F-17

<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     In March 2000, the Company completed two private placements under
     which it sold 1,699,425 shares of its common stock for gross proceeds of
     $7,609,289 before associated placement costs. Under the first of these
     private placements, the Company sold 936,954 shares of its common stock and
     raised aggregate gross proceeds of $4,216,293. In the second private
     placement in Europe, the Company sold 762,471 shares of its common stock
     for aggregate gross proceeds of $3,392,996.

     b) PREFERRED STOCK

     There are 1,939,480 authorized shares of Serial Preferred Stock, par
     value $.001 per share. Any shares of Serial Preferred Stock that have been
     redeemed are deemed retired and extinguished and may be reissued. The Board
     of Directors establishes and designates the series and fixes the number of
     shares and the relative rights, preferences and limitations of the
     respective series of the Serial Preferred Stock. During 1998, the Company
     designated a new Class A of the aforementioned shares, and authorized 1,500
     shares of Class A Preferred Stock. Under the Company's Certificate of
     Designations, holders of shares of Class A Preferred Stock were entitled to
     cumulative dividends of $140 per share per annum, payable semi-annually.
     The Company retained the right to redeem the Class A Preferred Stock, in
     part or whole, at any time, upon payment of $1,300 per share of Class A
     Preferred Stock plus any accrued and unpaid dividends on the Class A
     Preferred Stock so redeemed. In December 1998 the Company issued 930 shares
     of Class A Cumulative Non-Convertible Redeemable Preferred Stock, Series A
     (the "Class A Preferred Stock") in exchange for marketable securities
     valued at $930,000. In January 1999, the holder of all 930 shares of the
     Class A 14% Cumulative Non-Convertible Redeemable Preferred Stock ("Class A
     Preferred") of the Company exchanged such Class A Preferred shares for the
     issuance of 930 shares of the Class C Preferred of the Company, and the
     issuance of warrants to purchase 260,000 shares of Common Stock, at an
     exercise price of $1.0625 per share, exercisable immediately and expiring
     in January 2006. Holders of shares of Class C Preferred were entitled to
     cumulative dividends of $110 per share per annum, payable semi-annually.
     The Company retained the right to redeem the Class C Preferred, in part or
     whole, at any time, upon payment of $1,000 per share of Class C Preferred.
     The Company incurred legal costs in connection with the exchange of Class A
     for Class C, as well as registration of other securities of $33,905. On
     July 14, 1999, the Board of Directors of the Company called for redemption
     all outstanding shares of Class C Preferred of the Company with a record
     date for such redemption of July 19, 1999. See Note 3.

                                       F-18

<PAGE>

                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     7.   STOCKHOLDERS' EQUITY (CONTINUED)

     In March 1998, the Company authorized 100,000 shares of Junior
     Participating Preferred Stock, Series A, par value $.001 per share. The
     Junior Preferred Stock has preferential voting, dividend and liquidation
     rights over the Common Stock. On March 31, 1998, the Company declared a
     dividend distribution, payable April 30, 1998, of one Preferred Share
     Purchase Right ("Right") on each share of Common Stock. Each Right, when
     exercisable, entitles the registered holder thereof to purchase from the
     Company one one-thousandth of a share of Junior Preferred Stock at a price
     of $1.00 per one one-thousandth of a share (subject to adjustment). The one
     one-thousandth of a share is intended to be the functional equivalent of
     one share of the Common Stock. The Rights will not be exercisable or
     transferable apart from the Common Stock until an Acquiring Person, as
     defined in the Rights Agreement, dated as of March 31, 1998, between the
     Company and American Stock Transfer & Trust Company, without the prior
     consent of the Company's Board of Directors, acquires 20% or more of the
     voting power of the Common Stock or announces a tender offer that would
     result in 20% ownership. The Company is entitled to redeem the Rights, at
     $.001 per Right, any time before a 20% position has been acquired or in
     connection with certain transactions thereafter announced. Under certain
     circumstances, including the acquisition of 20% of the Common Stock, each
     Right not owned by a potential Acquiring Person will entitle its holder to
     purchase, at the Right's then-current exercise price, shares of Junior
     Preferred Stock having a market value of twice the Right's exercise price.
     Holders of a Right will be entitled to buy stock of an Acquiring Person at
     a similar discount if, after the acquisition of 20% or more of the
     Company's voting power, the Company is involved in a merger or other
     business combination transaction with another person in which its common
     shares are changed or converted, or the Company sells 50% or more of its
     assets or earning power to another person.
     The Rights expire on April 20, 2008.

     The Class B Voting Preferred Stock, Series A ("Class B Voting
     Preferred") has maximum liquidation rights of $.001 per share, and does not
     receive dividends.

8.   INCOME TAXES

     At December 31, 1999, the Company has available net operating loss
     carryforwards of approximately $35,000,000, after consideration of certain
     limitations described below, that expire in years 2002 through 2019.
     The significant components of the Company's deferred tax assets, as of
     December 31, 1999, are as follows:
<TABLE>
<CAPTION>

          <S>                                                                           <C>
          Current:
               Reserve for accounts receivable, inventory and other. . . . . . . . .    $    361,000
          Non-current:
               Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . .       1,686,000
               Net operating loss carryforwards. . . . . . . . . . . . . . . . . . .      13,938,000
                                                                                        -------------
          Total deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . .      15,985,000
               Valuation allowance for deferred tax assets . . . . . . . . . . . . .     (15,985,000)
                                                                                        -------------
          Net deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . .    $          0
                                                                                        =============
</TABLE>

          The  Company's  profit  (loss) before income taxes is comprised of the
          following:
<TABLE>
<CAPTION>

                                                                                    Year Ended December 31,
                                                                                -------------------------------
                                                                                     1999             1998
                                                                                     ----             ----
          <S>                                                                   <C>              <C>
          United States . . . . . . . . . . . . . . . . . . . . . . . .         $  (4,085,861)   $ (3,071,051)
          Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . .            (1,791,619)        693,877
                                                                                --------------   -------------
                                                                                $  (5,877,480)   $ (2,377,174)
                                                                                ==============   =============
</TABLE>

                                       F-19


<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.   INCOME TAXES (CONTINUED)

     The income tax benefit of $(250,978) for 1999 consists principally of
     the sale of certain net operating losses in connection with a state
     technology transfer program. The income tax provision of $29,541 for 1998
     consists principally of foreign taxes which are currently payable.

     The reconciliation of income tax computed at the United States federal
     statutory tax rates to the recorded income tax expense is as follows:
<TABLE>
<CAPTION>

                                                                                 Year Ended December 31,
                                                                             -------------------------------
                                                                                 1999               1998
                                                                                 ----               ----
          <S>                                                                <C>               <C>
          Tax (benefit) at United States federal statutory rates. . . . .    $ (1,998,000)     $  (808,000)
          Non-usable net operating loss carryforwards and other
            permanent differences . . . . . . . . . . . . . . . . . . . .      23,598,000          999,000
          Change in valuation allowance . . . . . . . . . . . . . . . . .     (21,600,000)        (191,000)
          Foreign and state income taxes (benefit). . . . . . . . . . . .        (250,978)          29,541
                                                                             -------------     ------------
                                                                             $   (250,978)     $    29,541
                                                                             =============     ============
</TABLE>

     The Tax Reform Act of 1986 enacted a complex set of rules limiting the
     potential utilization of net operating loss and tax credit carryforwards in
     periods following a corporate "ownership change." In general, for federal
     income tax purposes, an ownership change is deemed to occur if the
     percentage of stock of a loss corporation owned (actually, constructively
     and, in some cases, deemed) by one or more "5% shareholders" has increased
     by more than 50 percentage points over the lowest percentage ownership of
     such stock owned during a three-year testing period. With regard to the
     purchase of SPC, such a change in ownership occurred. Utilization of the
     net operating loss carry- forwards of SPC may be further limited by reason
     of the consolidated return/separate return limitation year rules. As a
     result of the change, the Company's ability to utilize its net operating
     loss carryforwards will be limited to approximately $1.2 million of taxable
     income per year for losses through December 31, 1996. The Company has
     concluded that certain of its net operating loss carryforwards will not be
     usable as a result of these various limitation rules, and accordingly has
     eliminated them as deferred tax assets in 1999 against the related
     valuation allowance. The decrease of $21,600,000 in the valuation allowance
     during the year ended December 31, 1999 was due principally to this
     application.

     In connection with the purchase of SPC in December 1996, the Company
     applied for a closing agreement with the Internal Revenue Service (the
     "IRS") in September 1997 pursuant to which the Company will become jointly
     and severally liable for SPC's tax obligations upon occurrence of a
     "triggering event" requiring recapture of dual consolidated losses
     previously utilized by SPC. Such closing agreement would avoid SPC's being
     required to recognize a tax of approximately $8 million on approximately
     $24.5 million of SPC's pre-acquisition dual consolidated losses. The IRS
     has, to date, refused to grant the Company's application for such a closing
     agreement because of alleged deficiencies in SPC's pre-acquisition dual
     loss certifications. The Company received notification from the IRS that it
     determined not to act on its application until SPC submitted certain
     filings pertaining to pre-acquisition consolidated tax year return filings
     made by SPC. The Company has submitted these filings in an application for
     relief. The Company believes that should the IRS accept the application for
     relief, and once the re-application for a closing agreement is made, the
     IRS should agree to such a closing agreement. However, no assurance can be
     given that the IRS will do so, and any failure to do so could result in the
     recognition of this tax liability. Should such a closing agreement be
     obtained, in certain circumstances, a future acquirer of the Company may
     also be required to agree to a similar closing agreement in order to avoid
     the same tax liability, to the extent it is able to do so. This could have
     a material adverse effect on the Company's future ability to sell SPC.

                                       F-20


<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.   STOCK OPTION PLANS

     The Company has four stock options plans: the 1994 Long-Term Incentive
     Plan (the "1994 Incentive Plan"), the Outside Directors and Advisors Stock
     Option Plan (the "Company Directors Plan"), and the Software Publishing
     Corporation 1989 Stock Option Plan and Software Publishing Corporation 1991
     Stock Option Plan (collectively, the "SPC Stock Plans"). All plans are
     administered by the Board of Directors or a committee thereof.

     Elements of the Company's various stock option plans include the following:

     THE 1994 INCENTIVE PLAN - In December 1993, the Company's Board of
     Directors and stockholders adopted the 1994 Incentive Plan. Under the terms
     of the 1994 Incentive Plan, the Company's Board of Directors or a committee
     thereof may grant options, stock appreciation rights, restricted stock
     performance grants of the Company's common stock, cash or other assets to
     employees, consultants and others who perform services for the Company at
     such prices as may be determined by the Board of Directors (which price may
     be no less than 85% of the fair market value of the common stock on the
     date of grant in the case of nonqualified stock options). In July 1999, the
     Company's stockholders approved the increase of the maximum number of
     shares of common stock subject to the 1994 Incentive Plan from 1,333,333 to
     5,000,000. The options currently outstanding vest over a period of up to
     five years and expire after 10 years.

     THE COMPANY DIRECTORS PLAN - In August 1995, the Company's Board of
     Directors and stockholders approved the Company Directors Plan. Under the
     terms of this plan, each new non-employee director receives options to
     purchase 25,000 shares exercisable at fair market value on the date of
     grant upon becoming such a director. In addition, on each August 1
     thereafter each such person will receive options to purchase 25,000 shares
     of the Company's common stock at an exercise price equal to the fair market
     value at the respective dates of grant. In July 1999, the Company's
     stockholders approved the increase of the maximum number of shares of
     common stock under the Company Directors Plan from 166,666 to 750,000. The
     options vest over a period of two years and expire after 10 years.

     THE SPC PLANS - Options under the SPC Stock Plans may be granted for
     periods of up to ten years, for the 1989 plan, at prices no less than 50%
     of fair value and, for the 1991 plan, an exercise price no lower than 85%
     of fair value, in each case for non qualified options, and at not less than
     fair market value for incentive stock options. To date all options have
     been issued at fair value. Options become exercisable at such times and
     under such conditions as determined by the Board of Directors. As a result
     of the acquisition of SPC by the Company all options outstanding under the
     SPC Plans were converted (based on the exchange ratio used to complete the
     acquisition) to options to acquire the Company's common stock. The maximum
     number of shares of common stock subject to the SPC Stock Plans is 223,040.

     In addition to the plans described above, the Company's Board of
     Directors from time-to-time has granted outside consultants, employees, and
     vendors non-plan options. Specific terms of each such grant are at the sole
     discretion of the Board of Directors and are generally at prices not less
     than the fair market value at the date of grant.

                                       F-21
<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.   STOCK OPTION PLANS (CONTINUED)

     Option activities under the plans and for the non-plan options are detailed
     in the following table:
<TABLE>
<CAPTION>

                                                                                                          Weighted
                                                                                                          Average
                                                          1994      Company's                             Exercise
                                                       Incentive    Directors      SPC         Non-      Price Per
                                                          Plan        Plan        Plans        Plan        Share
                                                       ----------   ----------   ---------    --------    ---------
     <S>                                               <C>          <C>          <C>          <C>         <C>
     Outstanding at January 1, 1998 . . . . . . .       1,158,231     118,445      71,916       50,000    $   6.87
       Granted. . . . . . . . . . . . . . . . . . .       495,001      49,998          --           --         .95
       Forfeited. . . . . . . . . . . . . . . . . .      (511,535)    (12,781)    (63,876)     (33,334)      (7.26)
       Repriced - granted . . . . . . . . . . . . .       430,723      34,477          --           --        1.38
       Repriced - forfeited . . . . . . . . . . . .      (430,723)    (34,477)         --           --       (4.01)
                                                       -----------  ---------    ---------    ---------   ---------
     Outstanding at December 31, 1998 . . . . . . .     1,141,697     155,662       8,040       16,666    $   2.43
       Granted. . . . . . . . . . . . . . . . . . .       400,000      75,000     215,000      442,033        1.58
       Forfeited. . . . . . . . . . . . . . . . . .      (177,212)    (55,555)     (5,055)      (3,000)      (2.27)
       Exercises. . . . . . . . . . . . . . . . . .       (13,478)     (2,222)         --       (1,750)       1.35
                                                       -----------  ----------   ---------    ---------   ---------
     Outstanding at December 31, 1999 . . . . . . .     1,351,007     172,885     217,985      453,949    $   2.13
                                                       ===========  ==========   =========    =========   =========

     Exercisable at December 31, 1999 . . . . . . .       795,880     116,283      78,147      174,032    $   2.59
                                                       ===========  ==========   =========    =========   =========

     Exercisable at December 31, 1998 . . . . . . .       459,929     130,592       8,040       16,666    $   3.72
                                                       ===========  ==========   =========    =========   =========
</TABLE>

     As of December 31, 1999, 5,899,119 shares of common stock are reserved
     for issuance under the plans described above.

     On May 27, 1998, the Company  effected a  one-for-three  reverse stock
     split.  All option  balances and  activities  have been adjusted to reflect
     this reverse stock split.


                                       F-22
<PAGE>

                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     9.   STOCK OPTION PLANS (CONTINUED)

     Effective July 1998, the Company adopted a repricing program pursuant
     to which (a) the Company offered to each optionee (each, an "Eligible
     Optionee") granted one or more options under any of the Company's various
     stock plans who, as of July 17, 1998, was either an employee or a director
     of the Company, the right to exchange each outstanding option (each, an
     "Eligible Option") granted to such Eligible Optionee under the Company's
     various stock option plans for the issuance of two options, the first such
     option (the "New Option") entitling the Eligible Optionee to purchase up to
     75% of the number of shares of common stock that were issuable under the
     Eligible Option so exchanged, at an exercise price per share equal to
     $1.375, the closing per share price on the effective date of the repricing
     program, and the second such option (the "Non-Repriced Option") entitling
     such Eligible Optionee to purchase up to 25% of the number of shares of
     common stock that were issuable under the Eligible Option so exchanged, at
     an exercise price per share equal to the exercise price per share under the
     Eligible Option so exchanged. To the extent the Eligible Option so
     exchanged was exercisable, the Non-Repriced Option shall be exercisable
     and, where the number of shares exercisable under the Eligible Option so
     exchanged exceeded the number of shares issuable under the Non-Repriced
     Option, any such options shall be immediately exercisable under the New
     Option. Further, to the extent the Eligible Option so exchanged was not
     exercisable, the Non-Repriced Option shall first become exercisable in
     accordance with the earliest dates set forth in the Eligible Option so
     exchanged for the exercisability of shares issuable under the Eligible
     Option so exchanged, and the shares of common stock issuable under the New
     Option shall become exercisable over the next four years. In addition, each
     New Option shall have a term expiring ten years from the effective date of
     the repricing program and shall be deemed granted under such of the Plans
     under which the Eligible Option was originally granted and the Non-Repriced
     Option shall be deemed granted under such of the Plans under which the
     Eligible Option was originally granted. Except as otherwise noted, each of
     the Repriced Options shall otherwise be identical to the Eligible Option so
     exchanged.

     The weighted average fair value of options granted was $.93 and $.60 for
     1999 and 1998, respectively.

                                       F-23

<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     9.   STOCK OPTION PLANS (CONTINUED)

     At December 31, 1999, for each of the following classes of options as
     determined by range of exercise price, the following information regarding
     weighted-average exercise prices and weighted average remaining contractual
     lives of each class is as follows:
<TABLE>
<CAPTION>

                                                                                                     Weighted
                                                                   Weighted                          Average
                                                   Weighted        Average                           Exercise
                                                   Average        Remaining         Number of        Price of
                                       Number      Exercise     Contract Life        Options         Options
                                         of        Price of     of Outstanding      Currently       Currently
          Option Class                Options       Options        Options         Exercisable     Exercisable
          ------------                -------       -------        -------         -----------     -----------

     Prices ranging from:
       <S>                          <C>           <C>               <C>             <C>              <C>
       $  0.59 - $  1.38 . . . .    1,700,005     $   1.16          8.94            797,609          $ 1.07
       $  2.00 - $  3.83 . . . .      358,235         3.35          8.38            241,066            3.48
       $  4.50 - $  7.50 . . . .       54,776         6.64          5.22             54,109            6.63
       $ 10.99 - $ 13.99 . . . .       57,729        11.85          6.08             52,033           11.92
       $ 17.63 - $ 23.25 . . . .       25,081        17.64          6.58             19,525           17.65
</TABLE>

     Pro forma information regarding net income (loss) and earnings (loss)
     per share is required by SFAS No. 123, and has been determined as if the
     Company had been accounting for its employee stock options under the fair
     value method of that statement. The fair value of these options was
     estimated at the date of grant using a Black-Scholes option pricing model
     with the following assumptions for 1999 and 1998, respectively:
     weighted-average risk-free interest rates of 5.3% for 1999 and 5.21% for
     1998; no dividends; volatility factors of the expected market price of the
     Company's common stock of 100% for 1999 and 70% for 1998; and a
     weighted-average expected life of the options of 2 years for 1999 and 5
     years for 1998.

     The Company applies APB Opinion No. 25 and its related interpretations
     in accounting for its plans. Accordingly, no compensation cost has been
     recognized for its fixed stock option plan grants. Had compensation cost
     been determined using the fair value at the grant dates for awards under
     those plans consistent with the method of SFAS No. 123, the Company's net
     loss and loss per share would have been changed as indicated below:
<TABLE>
<CAPTION>

                                                                           1999           1998
                                                                           ----           ----
          <S>                                                         <C>             <C>
          Pro forma net loss . . . . . . . . . . . . . . . . . .      $ (7,036,731)   $ (3,083,875)
          Pro forma net loss per share - basic and diluted . . .      $      (1.18)   $       (.84)
</TABLE>

     The pro forma disclosures presented above for 1999 and 1998,
     respectively, reflect compensation expense only for options granted in 1996
     and thereafter. These amounts may not necessarily be indicative of the pro
     forma effect of SFAS No. 123 for future periods in which options may be
     granted, due to possible future grants and the effect of the exclusion of
     pre-1996 grants.

10.  RETIREMENT PLANS

     The Company maintains a defined contribution 401(k) savings plan
     ("401(k) plan") for the benefit of eligible employees. Under the 401(k)
     plan, a participant may elect to defer a portion of annual compensation.
     Contributions to the 401(k) plan are immediately vested in plan
     participants' accounts. Plan expenses were $3,310 and $3,444 for 1999 and
     1998, respectively. The Company provides similar plans for the benefit of
     eligible employees at its European subsidiaries.

                                       F-24


<PAGE>

                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  COMMITMENTS AND CONTINGENCIES

     LITIGATION

     On January 30, 1998, an action was commenced against the Company, its
     current chief executive officer and its former chief executive officer. The
     action alleged that the plaintiffs' investment in 296,333 shares of common
     stock for $919,495 was made based upon certain information that was
     intended to deceive the plaintiffs. The plaintiffs sought to recind the
     investment and certain other relief. The case has been dismissed with
     prejudice with no further cost to the Company.

     In May 1998, an action commenced by the Company's former Chairman of
     the Board, President and Chief Executive Officer and his wife, also a
     former officer and director of the Company, was settled at a cost to the
     Company of approximately $200,000, which amount had been accrued at
     December 31, 1997.

     In the fourth quarter of 1998, an action was commenced against the
     Company in California in which plaintiff is seeking $300,000 in damages for
     the Company's alleged violation of a lease for office space located in San
     Jose, California. This is the location at which SPC had its principal place
     of business and at which the Company had its principal executive offices
     during the period of January 1997 through January 1998. The Company no
     longer has any offices at this location. The Company has filed an answer in
     this action denying the plaintiffs' claims and plans to file a summary
     judgement motion seeking a determination in its favor on the claims. The
     Company believes that the plaintiffs claims are without merit and intends
     to vigorously defend itself in this action.

     In February 2000 the Company received a demand for arbitration with
     respect to certain fees payable in connection with an investment banking
     agreement which it terminated. The claim calls for payment of $45,000 and
     reinstatement of warrants to purchase 150,000 shares of common stock,
     cancelled upon termination, and legal and other expenses in connection with
     the arbitration. The Company believes that the claims in this action are
     without merit and intends to vigorously defend itself in this action.

     The Company has other litigation matters in progress in the ordinary
     course of business. In the opinion of management, all pending litigation of
     the Company will be resolved without a material adverse effect on the
     Company's financial position, results of operations or cash flows.

     EMPLOYMENT AGREEMENT

     On July 14, 1999, the Company entered into a three-year employment
     agreement with the Company's President and Chief Executive Officer, Mark E.
     Leininger. Under the terms of the agreement, Mr. Leininger will receive
     $162,500 base pay with minimum $10,000 annual increases during the term of
     the agreement. Such annual increases may be revised upward at the
     discretion of the Compensation Committee of the Board of Directors. Mr.
     Leininger will receive a $25,000 bonus upon the Company's attainment of its
     first profitable fiscal quarter. Mr. Leininger will also receive a
     quarterly bonus of 3% of the Company's income before extraordinary items.
     In the event of a change of control, the agreement provides that Mr.
     Leininger shall have the right to terminate the employment agreement within
     six months thereafter, and receive payment of three times the average
     annual cash compensation paid by the Company to Mr. Leininger over the
     previous five years, less $1.00. The agreement further contains
     restrictions on the officer engaging in competition with the Company for
     the term thereof and for up to one year thereafter, and provisions
     protecting the Company's proprietary rights and information.

                                       F-25


<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

     LONG TERM CONSULTING AGREEMENT

     The Company has entered into a five-year financial consulting
     agreement pursuant to which the Company is required to pay .30% of its net
     revenue (subject to an annual minimum fee of $125,000, and an annual
     maximum fee of $250,000) to the consultant. The term of the agreement may
     be automatically extended by an additional eighteen months if the Company
     reports annual net revenues of $40,000,000, and an additional eighteen
     months should net revenues exceed $60,000,000. At December 31, 1999 the
     Company has accrued $125,000 in connection with this agreement.

     PURCHASE COMMITMENT

     On July 27, 1999 the Company entered into a minimum annual purchase
     commitment of approximately $230,000 with a distributor of certain software
     the Company intends to sell in its direct mail operation.

12.  FOREIGN AND DOMESTIC OPERATIONS

     The Company conducts its business within the computer software industry.

     Foreign and  domestic  operations  as of December 31, 1999 and for the year
     then ended are as follows:

<TABLE>
<CAPTION>

                                                           United
                                                           States            Europe           Consolidated
                                                        ------------      ------------        ------------
     <S>                                                <C>               <C>                 <C>
     Net sales. . . . . . . . . . . . . . . . . . . .   $  6,730,271      $ 13,161,086        $ 19,891,357
     Income (loss) before income taxes. . . . . . . .     (4,085,861)       (1,791,619)         (5,877,480)
     Depreciation and amortization. . . . . . . . . .      2,758,104           149,654           2,907,758
     Income tax expense (benefit) . . . . . . . . . .       (216,044)          (34,934)           (250,978)
     Interest expense . . . . . . . . . . . . . . . .         29,494            12,128              41,622
     Interest income. . . . . . . . . . . . . . . . .        (55,181)          (24,088)            (79,269)

     Identifiable assets as of December 31, 1999. . .   $  6,214,873      $  4,260,098        $ 10,474,971
                                                        =============     =============       =============
</TABLE>

     Foreign and  domestic  operations  as of December 31, 1998 and for the year
     then ended are as follows:
<TABLE>
<CAPTION>

                                                           United
                                                           States            Europe           Consolidated
                                                        -------------     -------------       ------------
     <S>                                                <C>               <C>                 <C>
     Net sales . . . . . . . . . . . . . . . . . . . .  $  8,431,271      $  9,840,462        $  18,271,733
     Income (loss) before income taxes . . . . . . . .    (3,071,051)          693,877           (2,377,174)
     Depreciation and amortization . . . . . . . . . .     2,462,708           108,216            2,570,924
     Income tax expense. . . . . . . . . . . . . . . .            --            29,541               29,541
     Interest expense. . . . . . . . . . . . . . . . .        24,085            25,000               49,085
     Interest income . . . . . . . . . . . . . . . . .       (60,148)          (87,566)            (147,714)

     Identifiable assets as of December 31, 1998 . . .  $  5,523,240      $  4,789,456        $  10,312,696
                                                        =============     =============       ==============
</TABLE>

                                       F-26


<PAGE>
                                  VIZACOM INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.  RELATED PARTY TRANSACTIONS

     The Company compensates its Chairman of the Board for his services as such
     at the rate of $60,000 per annum.  During 1998, the Company paid $30,000
     under this arrangement and issued 30,000 shares of Common Stock in
     satisfaction of $22,500 of its obligations under such compensation
     arrangement.  In November 1999, the Company agreed to pay its Chairman
     an additional $3,000 per month for November and December 1999 for
     additional services the Company requested that he perform.

     The Company incurred legal expenses of approximately $447,000 in 1999
     (approximately $123,000 related to equity transactions and was charged to
     additional paid in capital) and $448,000 in 1998 to a law firm in which a
     director of the Company was a member, of which approximately $124,000 is
     included in accounts payable at December 31, 1999.

     In April 1999, the Company issued options to purchase 25,000 shares of
     its common stock to employees of its legal counsel, at an exercise price of
     $1.03. In July 1999, 50,000 shares of common stock were issued to the
     members of the Company's corporate law firm, of which a director of the
     Company is a member, in payment of legal fees. In addition, in June and
     July 1999, options to purchase an aggregate of 100,000 shares of common
     stock were granted to the members of this law firm at exercise prices of
     $2.75 and $3.08 per share. Options to purchase 75,000 of these shares were
     granted under the Company's 1994 Long Term Incentive Plan.

     On January 28, 2000 the Company issued options to purchase 24,000
     shares of its common stock to certain members of this law firm.

14.  CUSTOMER CONCENTRATION AND CREDIT RISK

     For the year ended December 31, 1999, one customer accounted for 19%
     of the Company's consolidated net accounts receivable. For the year ended
     December 31, 1998, the same customer accounted for approximately 12.7% and
     36% of consolidated net revenues and accounts receivable, respectively. The
     Company is not aware of any significant concentration of business
     transacted with a particular customer that could, if suddenly eliminated,
     have a material adverse impact on its operations. The Company does not have
     a concentration of available sources of labor, services, licenses or other
     rights that could, if suddenly eliminated, have a material adverse impact
     on its operations.

15.  SUBSEQUENT EVENTS

     On January 8, 2000 the Company entered into a $1,000,000 unsecured
     line of credit note agreement with a foreign company under which it
     borrowed the maximum amount and repaid it in full with accrued interest in
     March 2000. See Note 6.

     On January 8, 2000 the Company entered into a consulting agreement
     under which the Company issued an aggregate of 650,000 warrants exercisable
     at $3.00 per share.

     The Company entered into multiple acquisitions subsequent to December
     31, 1999. On February 15, 2000 the Company acquired Renaissance Multimedia.
     On March 9, 2000 the Company acquired Junction 15. On March 27, 2000 the
     Company acquired PWR Systems. These acquisitions are described in Notes 2
     and 3.

     In March 2000 the Company completed two private placements in which it sold
     an aggregate of 1,699,425 shares of its common stock for gross proceeds of
     $7,609,289, before associated transaction costs. See Note 7.

                                       F-27
<PAGE>
  INDEPENDENT AUDITORS' REPORT

  To the Board of Directors
  Renaissance Computer Art Center, Inc.
  New York, New York


  We have audited the  accompanying  balance sheet of  Renaissance  Computer Art
  Center, Inc. as of December 31, 1999, and the related statements of operations
  and retained earnings and cash flows for the year then ended.  These financial
  statements  are  the   responsibility   of  the  Company's   management.   Our
  responsibility is to express an opinion on these financial statements based on
  our audit.

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

  In our opinion, the financial  statements  enumerated above present fairly, in
  all material  respects,  the financial  position of  Renaissance  Computer Art
  Center,  Inc. as of December 31, 1999,  and the results of its  operations and
  its cash flows for the year then ended in conformity  with generally  accepted
  accounting principles.




  /s/ Richard A. Eisner & Company, LLP
  Richard A. Eisner & Company, LLP

  New York, New York
  March 20, 2000

                                      F-28

<PAGE>


RENAISSANCE COMPUTER ART CENTER, INC.

BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<CAPTION>

ASSETS
Current assets:
<S>                                                              <C>
  Cash and cash equivalents . . . . . . . . . . . . . . . . . .  $  131,316
  Accounts receivable . . . . . . . . . . . . . . . . . . . . .     245,270
  Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . .      19,854
                                                                 -----------
    Total current assets                                            396,440

Property and equipment, at cost, less accumulated
  depreciation of $195,507 . . . . . . . . . . . . . . . . . .       81,677
Security deposits and other assets . . . . . . . . . . . . . .       14,424
                                                                 -----------
                                                                 $  492,541
                                                                 ===========

LIABILITIES
Current liabilities:
  Notes payable. . . . . . . . . . . . . . . . . . . . . . . .   $   13,663
  Accounts payable . . . . . . . . . . . . . . . . . . . . . .       57,451
  Accrued expenses and other current liabilities . . . . . . .      144,352
  Deferred income taxes. . . . . . . . . . . . . . . . . . . .       14,000
  Capital lease obligation . . . . . . . . . . . . . . . . . .        6,793
  Due to shareholder . . . . . . . . . . . . . . . .                 19,475
                                                                 -----------
    Total current liabilities                                       255,734

Note payable - long-term . . . . . . . . . . . . . . . . . . .       39,381
Capital lease obligation - long-term . . . . . . . . . . . . .        1,803
                                                                 -----------
                                                                    296,918
                                                                 -----------

Commitments and contingencies

SHAREHOLDERS' EQUITY
Common stock, no par value; 1,000 shares
   authorized; 500 shares issued and outstanding . . . . . . .        1,000
Additional paid-in capital . . . . . . . . . . . . . . . . . .      119,577
Retained earnings. . . . . . . . . . . . . . . . . . . . . . .       75,046
                                                                 -----------
                                                                    195,623
                                                                 -----------
                                                                 $  492,541
                                                                 ===========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

                                      F-29

<PAGE>

RENAISSANCE COMPUTER ART CENTER, INC.
<TABLE>
<CAPTION>

STATEMENT OF OPERATIONS AND RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1999

<S>                                                              <C>
Net revenues. . . . . . . . . . . . . . . . . . . . . . . . .    $1,531,400
Cost of goods sold. . . . . . . . . . . . . . . . . . . . . .       546,490
                                                                 -----------

Gross profit. . . . . . . . . . . . . . . . . . . . . . . . .      984,910
Selling, general and administrative expenses. . . . . . . . .      925,276
                                                                 ----------

Income from operations. . . . . . . . . . . . . . . . . . . .       59,634

Other income (expenses):
  Other income. . . . . . . . . . . . . . . . . . . . . . . .         2,456
  Interest expense. . . . . . . . . . . . . . . . . . . . . .          (788)
                                                                 -----------

Income before provision for income taxes. . . . . . . . . . .        61,302
Provision for income taxes. . . . . . . . . . . . . . . . . .        23,000
                                                                 -----------

Net Income. . . . . . . . . . . . . . . . . . . . . . . . . .        38,302
Retained earnings, beginning of year  . . . . . . . . . . . .        36,744
                                                                 -----------

Retained earnings, end of year. . . . . . . . . . . . . . . .    $   75,046
                                                                 ===========
</TABLE>


SEE NOTES TO FINANCIAL STATEMENTS

                                      F-30

<PAGE>

RENAISSANCE COMPUTER ART CENTER, INC.
<TABLE>
<CAPTION>

STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999

Cash flows from operating activities:
<S>                                                              <C>
  Net income. . . . . . . . . . . . . . . . . . . . . . . . .    $   38,302
  Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization . . . . . . . . . . . . . .        24,639
    Deferred income taxes . . . . . . . . . . . . . . . . . .        14,000
    Changes in:
      Accounts receivable . . . . . . . . . . . . . . . . . .      (121,575)
      Prepaid expenses. . . . . . . . . . . . . . . . . . . .       (19,854)
      Other assets. . . . . . . . . . . . . . . . . . . . . .        (4,203)
      Accounts payable. . . . . . . . . . . . . . . . . . . .        47,513
      Accrued expenses and other current liabilities. . . . .        65,001
                                                                 -----------

        Net cash provided by operating activities                    43,823
                                                                 -----------

Cash flows from investing activities:
  Purchases of property and equipment. . . . . . . . . . . .       (42,096)
                                                                 ----------

Cash flows from financing activities:
  Proceeds from issuance of notes payable. . . . . . . . . .         55,000
  Payment of notes . . . . . . . . . . . . . . . . . . . . .         (1,956)
  Payments of capital lease obligation . . . . . . . . . . .        (17,292)
                                                                 -----------
      Net cash provided by financing activities. . . . . . .         35,752
                                                                 -----------

Increase in cash and cash equivalents                                37,479
Cash and cash equivalents, beginning of year . . . . . . . .         93,837
                                                                 -----------

Cash and cash equivalents, end of year . . . . . . . . . . .     $  131,316
                                                                 ===========

Supplemental disclosures of cash flow information:
  Cash paid for interest. . . . . . . . . . . . . . . . . .      $      788
  Cash paid for income taxes. . . . . . . . . . . . . . . .      $   41,243

Noncash investing and financing transaction:
  Purchase of equipment through capital leases. . . . . . .      $    2,902
</TABLE>


SEE NOTES TO FINANCIAL STATEMENTS

                                      F-31


<PAGE>

RENAISSANCE COMPUTER ART CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999

NOTE A - ORGANIZATION AND BUSINESS

Renaissance  Computer Art Center,  Inc. (the  "Company") is a  full-service  new
media design and production  firm,  focused on interactive  multimedia  Internet
websites and events.  The Company also develops  business-to  business marketing
tools using  multimedia and digital  video.  The Company's  production  services
include project development,  scripting,  design,  illustration,  authoring, and
software programming.


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 [1]   CASH EQUIVALENTS:

 The Company  considers  all highly  liquid debt  instruments  purchased  with a
 maturity of three months or less to be cash equivalents.

 [2] PROPERTY AND EQUIPMENT:

 Property and equipment are reported at cost.  Major  expenditures  for property
 and  those  which   substantially   increase  useful  lives  are   capitalized.
 Maintenance,  repairs, and minor renewals are expensed as incurred. When assets
 are retired or  otherwise  disposed  of,  their  costs and related  accumulated
 depreciation  are removed from the accounts,  and resulting gains or losses are
 included  in  operations.  Depreciation  is  provided  through  the  use of the
 straight-line method over the estimated useful lives of the related assets.

 [3] USE OF ESTIMATES:

 The preparation of financial  statements in conformity with generally  accepted
 accounting  principles  requires  management to make estimates and  assumptions
 that  affect  reported  amounts  of assets and  liabilities  at the date of the
 financial  statements and the reported  amounts of revenues and expenses during
 the reporting period. Actual results could differ from those estimates.

 [4] CONCENTRATION OF CREDIT RISK:

 Financial  instruments  which  potentially  subject  the Company to credit risk
 consist  principally of trade  receivables.  To reduce credit risk, the Company
 performs  credit  evaluations  of  its  customers'  financial  condition.   The
 Company's customers,  with which it does the majority of its business, are well
 known and financially stable. The Company maintains reserves when necessary for
 potential  credit  losses  for trade  accounts  receivable.  Historically,  the
 Company has not experienced any significant  losses in any particular  industry
 or geographic area.

                                      F-32
<PAGE>
RENAISSANCE COMPUTER ART CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 [5] ADVERTISING COSTS:

 Advertising costs are expensed as incurred.


 [6] FAIR VALUE OF FINANCIAL INSTRUMENTS:

 Carrying amounts of the Company's financial instruments including cash and cash
 equivalents,   accounts   receivable,   accounts  payable,  and  other  current
 liabilities  approximate fair value due to their  relatively short  maturities.
 The carrying amount of notes payable  approximated  fair value because interest
 is charged at market rates.

 [7] REVENUE RECOGNITION:

 Revenue for production  services is based on individual  customer contracts and
 is  recognized  using  the   percentage-of-completion   method,  based  on  the
 proportion of actual costs incurred to date to total  estimated  costs for each
 contract.

 [8] INCOME TAXES:

 The liability method is used in accounting for income taxes. Under this method,
 deferred tax assets and  liabilities  are determined  based on the  differences
 between financial reporting and the tax bases of assets and liabilities and are
 measured  using  enacted  laws and tax rates  that  will be in effect  when the
 differences are expected to reverse.


NOTE C - PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31, 1999:
<TABLE>
<CAPTION>

                                   ESTIMATED USEFUL
                                         LIVES              COST
                                   ----------------      ----------

     <S>                            <C>                   <C>
     Computer software                 3 years            $ 20,000
     Computer equipment                5 years             231,883
     Furniture and equipment           7 years              20,751
     Leasehold improvements         Life of lease            4,550
                                                          --------

                                                           277,184
     Less accumulated depreciation                         195,507
                                                          --------

     Net property and equipment                           $ 81,677
                                                          ========
</TABLE>

                                      F-33

<PAGE>
RENAISSANCE COMPUTER ART CENTER, INC.

NOTES TO FINANCIAL STATMENTS
DECEMBER 31, 1999

NOTE C - PROPERTY AND EQUIPMENT (CONTINUED)

The Company has acquired  computer  equipment under lease  arrangements that are
classified as capital leases. These acquisitions are accordingly included in the
property and equipment balances (see Note D below).

Depreciation  and  amortization  expense was $24,639 for the year ended December
31, 1999.


NOTE D - CAPITAL LEASES

As discussed in Note C above,  the Company  acquired  computer  equipment  under
lease arrangements  classified as capital leases. The lease obligations  require
aggregate  installments  ranging  from $157 to $968 per month  through  December
2001. The interest rates on these leases range from approximately 12% to 18%.

The following is a schedule of future minimum lease payments under capital lease
obligations at December 31,1999:
<TABLE>
<CAPTION>


     YEAR ENDING
     DECEMBER 31,                                 AMOUNT
     ------------                               ----------

        <S>                                     <C>
        2000                                    $ 7,433
        2001                                      1,883
                                                -------

                                                  9,316
     Less amount representing interest              720
                                                -------

     Present value of minimum lease payments      8,596
     Less current portion                         6,793
                                                -------

     Long-term portion                          $ 1,803
                                                =======
</TABLE>

The net book value of equipment  held under capital  leases at December 31, 1999
was $17,545.


NOTE E - NOTE PAYABLE
<TABLE>
<CAPTION>

     <S>                                                           <C>
     Due in monthly installments of $1,956, which includes
       interest at 13.671%, commencing on January 1, 2000
       and continuing through November 1, 2002                     $ 53,044
     Less current portion                                            13,663
                                                                   --------

                                                                   $ 39,381
                                                                   ========
</TABLE>

                                      F-34

<PAGE>
RENAISSANCE COMPUTER ART CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999

NOTE E - NOTE PAYABLE (CONTINUED)

The  following  is a schedule of future  payments  due under the note payable at
December 31, 1999:
<TABLE>
<CAPTION>


     YEAR ENDING
     DECEMBER 31,                                 AMOUNT
     ------------                               ----------

<S>                                             <C>
        2000                                    $  13,663
        2001                                       19,266
        2002                                       20,115
                                                ---------

                                                $  53,044
                                                =========

</TABLE>


NOTE F - OPERATING LEASE

The  Company  rents  office  space  in New York  City  under a  five-year  lease
arrangement  ending April 2002 that is  classified as an operating  lease.  Rent
expense was approximately $44,000 for the year ended December 31, 1999.

The following is a schedule of the future  minimum lease  obligations  under the
operating lease at December 31, 1999:

<TABLE>
<CAPTION>

     YEAR ENDING
     DECEMBER 31,                                 AMOUNT
     ------------                               ----------

        <S>                                      <C>
        2000                                     $ 54,000
        2001                                       55,000
        2002                                       19,000
                                                 --------

                                                 $128,000
                                                 ========
</TABLE>


NOTE G - INCOME TAXES

The provision for income taxes for the year ended  December 31, 1999 is composed
of the following:

<TABLE>
<CAPTION>

     <S>                                          <C>
     Current:
       Federal                                    $  6,000
       State and local                              12,000
                                                  --------

                                                    18,000
                                                  --------

     Deferred:
       Federal                                      2,800
       State and Local                              2,200
                                                  -------
                                                    5,000
                                                  -------
                                                  $23,000
                                                  =======
</TABLE>

                                      F-35

<PAGE>

RENAISSANCE COMPUTER ART CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999

NOTE G - INCOME TAXES (CONTINUED)

The  Company  files its  income tax  returns  on the cash  basis of  accounting.
Deferred  income taxes  represent the expected  future tax  consequences  of the
differences  between  (i) the  carrying  amounts of the  assets and  liabilities
(principally accounts receivable and accounts payable and accrued expenses which
are stated,  for financial  reporting  purposes,  on the accrual basis) and (ii)
their income tax basis, and differences in depreciation for financial  reporting
and income tax purposes.

Deferred tax assets and liabilities at December 31, 1999 consist of:
<TABLE>
<CAPTION>

     <S>                                          <C>
     Deferred tax asset:
       Depreciation                               $  2,000
     Deferred tax liability:
       Accrual to cash basis                       (16,000)
                                                  ---------
     Net deferred tax liability                   $(14,000)
                                                  =========
</TABLE>

The difference between the provision for taxes computed at the statutory rate of
15% and the reported amount of tax expense  attributable to income before income
tax is principally due to state and local income taxes.


NOTE H - ADVERTISING COSTS

The Company recorded  advertising expense of approximately  $42,000 for the year
ended December 31, 1999.


NOTE I - DUE TO SHAREHOLDER

The loan payable to a shareholder  is expected to be forgiven upon  consummation
of the business combination referred to in Note J.


NOTE J - SUBSEQUENT EVENT

On   February  15,  2000,  the  Company  was  acquired  by  Vizacom  Inc.    The
aggregate purchase price was approximately  $2,000,000,  of which $1,750,000 was
paid to the Companys' shareholders by issuance of 449,870 shares of Vizacom Inc.
common  stock,  and  the  balance  of  $250,000  consisted  of a  cash  payment.
Additionally,  Vizacom Inc.  granted options to purchase an aggregate of 600,000
shares of its common stock under its 1994  Long-term  Incentive  Plan to certain
employees of the Company.

                                      F-36


<PAGE>
JUNCTION 15 LIMITED

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 1999

The directors  present their report and financial  statements for the year ended
31 December 1999.

PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS
The principal  activity of the company  continued to be that of the provision of
computer consultancy services.

The directors expect substantial sales growth and a profitable current year.

RESULTS AND DIVIDENDS
The results for the year are set out on page 4.

The  company  paid  a  dividend  in excess of its distributable reserves. At the
time the dividend was paid there were sufficient  distributable reserves,  based
on interim accounts to cover the amount of the dividend.

The directors do not propose a final dividend.

POST BALANCE SHEET EVENTS
Vizacom Inc. acquired all of the company's issued share capital on 9 March 2000.

YEAR 2000
The  company  did  not  experience  any year 2000 compliance  issues on the year
change.  The  directors  are  satisfied  that all  major  computer  systems  are
compliant,  although given the complexity of the problem, it is not possible for
any  organisation  to guarantee  that no further year 2000  problems will arise.
However,  the directors consider that it has sufficient  resources  available to
deal promptly with any such issues,  and do not expect to have to expend amounts
in excess of normal computer costs on these.

DIRECTORS
The following directors have held office since 1 January 1999:

Ian C.N. McCalla
Paul J. Simpson

                                      F-37

<PAGE>

DIRECTORS' INTERESTS
THE  DIRECTORS' BENEFICIAL  INTEREST IN THE SHARES OF THE COMPANY WERE AS STATED
BELOW:

<TABLE>
<CAPTION>

                                 Ordinary shares of BP0.10p each              Ordinary bearer shares of BP0.10p each
                              --------------------------------------       ------------------------------------------
                               31 December 1999      1 January 1999         31 December 1999         1 January 1999
                               ----------------      --------------         ----------------         --------------
<S>                                   <C>                  <C>                     <C>                     <C>
Ian C.N. McCalla . . . . .            --                   --                      --                      --
Paul J. Simpson. . . . . .            --                   --                      --                      --
</TABLE>

<TABLE>
<CAPTION>

                               'A' Ordinary shares of BP0.10p each          'B' Ordinary bearer shares of BP0.10p each
                              --------------------------------------       ------------------------------------------
                               31 December 1999      1 January 1999         31 December 1999         1 January 1999
                               ----------------      --------------         ----------------         --------------

<S>                                  <C>                 <C>                       <C>                     <C>
Ian C.N. McCalla . . . . .           620                 26,300                    --                      --
Paul J. Simpson. . . . . .            --                     --                 9,140                   8,790
</TABLE>

<TABLE>
<CAPTION>
                                                        'C' Ordinary shares of BP0.10p each
                                                     ---------------------------------------
                                                      31 December 1999       1 January 1999
                                                      ----------------       --------------
<S>                                                          <C>                   <C>
Ian C.N. McCalla. . . . . . . . . . . . . . . .              --                    --
Paul J. Simpson . . . . . . . . . . . . . . . .              --                    --
</TABLE>

AUDITORS
In accordance with section 385 of the Companies Act 1985, a resolution proposing
that Silver Levene be reappointed as auditors of the company will be put to the
Annual General Meeting.

DIRECTORS' RESPONSIBILITIES
Company law requires  the  directors to prepare  financial  statements  for each
financial  year  which  give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that  period.  In preparing
those financial statements, the directors are required to:
     -    select suitable accounting policies and then apply them consistently;
     -    make judgements and estimates that are reasonable and prudent;
     -    prepare the financial statements on the going concern basis unless it
          is inappropriate to presume that the company will continue in
          business.

The  directors  are  responsible  for  keeping proper  accounting  records which
disclose  with  reasonable  accuracy at any time the  financial  position of the
company and to enable them to ensure that the financial  statements  comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the  company  and hence for  taking  reasonable  steps  for the  prevention  and
detection of fraud and other irregularities.

By order of the board

Ian C.N. McCaIla
Director
4 April 2000

                                      F-38
<PAGE>


JUNCTION 15 LIMITED

AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF JUNCTION 15 LIMITED

We  have   audited   the   financial   statements  on pages 4 to 15 for the year
ended  December  31, 1999 which have been  prepared  under the  historical  cost
convention and on the basis of the accounting  policies set out in page 8 to the
financial  statements.  These financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

We  conducted  our  audit  in  accordance with United Kingdom auditing standards
which do not differ in any  significant  respect  from United  States  generally
accepted  auditing  standards.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes,  an assessment of the significant  estimates and judgements
made by the directors in the  preparation  of the financial  statements,  and of
whether the accounting policies are appropriate to the company's  circumstances,
consistently  applied  and  adequately  disclosed.  We  believe  that our audits
provide a reasonable basis for our opinion.

In  forming  our  opinion,  we  have  considered the adequacy of the disclosures
made in note 1 of the attached  financial  statements  concerning the ability to
generate profits and the continued  support of the Company's bankers and owners.
In view of the significance of this matter,  we consider that it should be drawn
to your attention but our opinion is not qualified in this respect.

In  our  opinion  the  financial   statements  referred to above present fairly,
in all material  respect,  the  financial  position of Junction 15 Limited at 31
December 1999 and the results of its  operations and its cash flows for the year
then ended, in conformity with accounting  principles  generally accepted in the
United Kingdom.


/s/ Silver Levene
SILVER LEVENE                                April 4, 2000

Chartered Certified Accountants              37 Warren Street
REGISTERED AUDITORS                          London, United Kingdom WIP 5PD

                                      F-39
<PAGE>


JUNCTION 15 LIMITED

PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1999

<TABLE>
<CAPTION>
                                                                          1999
                                                         Notes              $

<S>                                                        <C>          <C>
TURNOVER. . . . . . . . . . . . . . . . . . . . .          2              717,804
Cost of sales . . . . . . . . . . . . . . . . . .                        (357,088)
                                                                        ----------
GROSS PROFIT. . . . . . . . . . . . . . . . . . .                         360,716

Distribution costs. . . . . . . . . . . . . . . .                         (78,840)
Administrative expenses . . . . . . . . . . . . .                        (314,100)
Other operating income. . . . . . . . . . . . . .                             647
                                                                        ----------
OPERATING LOSS. . . . . . . . . . . . . . . . . .          3              (31,577)
Interest payable and similar charges. . . . . . .          4               (6,912)
                                                                        ----------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION . . .                         (38,489)
Tax on loss on ordinary activities. . . . . . . .          5                1,819
                                                                        ----------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION. . . .                         (36,670)
Dividends . . . . . . . . . . . . . . . . . . . .          6               (3,701)
RETAINED LOSS FOR THE YEAR. . . . . . . . . . . .         14              (40,371)
                                                                        ==========
</TABLE>


The profit and loss account has been  prepared on the basis that all  operations
are continuing operations.

There are no recognised  gains and losses other than those  passing  through the
profit and loss account.

                                      F-40
<PAGE>


JUNCTION 15 LIMITED

BALANCE SHEET
AS AT 31 DECEMBER 1999

<TABLE>
<CAPTION>
                                                                               1999
                                                         Notes           $            $
<S>                                                       <C>                      <C>
FIXED ASSETS
Tangible assets . . . . . . . . . . . . . . . . .          7                        39,009

CURRENT ASSETS
Stocks. . . . . . . . . . . . . . . . . . . . . .          8           5,363
Debtors . . . . . . . . . . . . . . . . . . . . .          9         231,862
Cash at bank and in hand. . . . . . . . . . . . .                         40
                                                                   ----------
                                                                     237,265

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR. .         10        (267,437)
                                                                   ----------

NET CURRENT LIABILITIES . . . . . . . . . . . . .                                   (30,172)
                                                                                   ---------
TOTAL ASSETS LESS CURRENT LIABILITIES . . . . . .                                     8,837
CREDITORS: AMOUNTS FALLING DUE AFTER MORE
    THAN ONE YEAR . . . . . . . . . . . . . . . .         11                        (19,194)
                                                                                   ---------
                                                                                    (10,357)
                                                                                   =========

CAPITAL AND RESERVES
Called up share capital . . . . . . . . . . . . .         13                         6,935
Share premium account . . . . . . . . . . . . . .         14                        26,534
Profit and loss account . . . . . . . . . . . . .         14                       (43,826)
                                                                                   --------
SHAREHOLDERS' FUNDS . . . . . . . . . . . . . . .         15                       (10,357)
                                                                                   ========
</TABLE>

The financial statements were approved by the Board on 4 April 2000

Ian C.N. McCalla                                  Paul J. Simpson
Director                                          Director


                                      F-41
<PAGE>


JUNCTION 15 LIMITED

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 1999
<TABLE>
<CAPTION>

                                                                                    1999
                                                                                      $

<S>                                                                  <C>         <C>
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES. . . . . .                     6,979

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid. . . . . . . . . . . . . . . . . . . . . . . . .        (6,912)
                                                                     --------
NET CASH OUTFLOW FOR RETURNS ON INVESTMENTS AND SERVICING
     OF FINANCE. . . . . . . . . . . . . . . . . . . . . . . .                    (6,912)

CAPITAL EXPENDITURE
Payments to acquire tangible assets. . . . . . . . . . . . . .       (32,359)
                                                                     --------
NET CASH OUTFLOW FOR CAPITAL EXPENDITURE . . . . . . . . . . .                   (32,359)

EQUITY DIVIDENDS PAID. . . . . . . . . . . . . . . . . . . . .                    (3,701)
                                                                                 --------
NET CASH OUTFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES
     AND FINANCING . . . . . . . . . . . . . . . . . . . . . .                   (35,993)

FINANCING
Issue of ordinary share capital. . . . . . . . . . . . . . . .        16,413
New long term bank loan. . . . . . . . . . . . . . . . . . . .        12,124
Other new long term loans. . . . . . . . . . . . . . . . . . .         7,070
Other new short term loans . . . . . . . . . . . . . . . . . .         6,859
Capital element of hire purchase contracts . . . . . . . . . .          (871)
                                                                     --------
NET CASH INFLOW/(OUTFLOW) FROM FINANCING . . . . . . . . . . .                    41,595
                                                                                 --------

INCREASE/(DECREASE) IN CASH IN THE YEAR. . . . . . . . . . . .                     5,602
                                                                                 ========
</TABLE>

                                      F-42

<PAGE>


JUNCTION 15 LIMITED

NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 1999
<TABLE>
<CAPTION>

1.   RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
                                                                                           1999
                                                                                             $
     <S>                                                                                <C>
     Operating loss. . . . . . . . . . . . . . . . . . . . . . . . . . . .               (31,577)
     Depreciation of tangible assets . . . . . . . . . . . . . . . . . . .                17,530
     Decrease/(increase) in stocks . . . . . . . . . . . . . . . . . . . .                49,989
     Increase in debtors . . . . . . . . . . . . . . . . . . . . . . . . .              (137,752)
     Increase in creditors within one year . . . . . . . . . . . . . . . .               108,789
                                                                                        ---------
     NET CASH OUTFLOW FROM OPERATING ACTIVITIES. . . . . . . . . . . . . .                 6,979
                                                                                        =========
</TABLE>

<TABLE>
<CAPTION>
2.   ANALYSIS OF NET DEBT
                                                                          Other
                                            1 January,         Cash      non-cash       December
                                               1999            flow      changes        31, 1999
                                                 $               $          $               $
     <S>                                     <C>            <C>           <C>           <C>
     Net cash:
     Cash at bank and in hand. . . . . . .       524           (484)                          40
     Bank overdrafts . . . . . . . . . . .   (56,073)         6,086                      (49,987)
                                             --------       --------                    ---------
                                             (55,549)         5,602                      (49,947)
                                             --------       --------                    ---------

     Debt:
     Finance leases. . . . . . . . . . . .    (1,794)           871         (35)            (958)
     Debts falling due within one year . .   (14,867)        (6,859)          -          (21,726)
     Debts falling due after one year. . .         -        (19,194)          -          (19,194)
                                             --------       --------      ------        ---------
                                             (16,661)       (25,182)        (35)         (41,878)
                                             --------       --------      ------        ---------
     Net debt. . . . . . . . . . . . . . .   (72,210)       (19,580)        (35)         (91,825)
                                             ========       ========      ======        =========
</TABLE>

<TABLE>
<CAPTION>

3    RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
                                                                                          1999
                                                                                           $
     <S>                                                                                <C>
     (Decrease)/increase in cash in the year . . . . . . . . . . . . . . .                 5,602
     Cash inflow from increase in debt and lease financing . . . . . . . .               (25,182)
                                                                                        ---------
     Change in net debt resulting from cash flows. . . . . . . . . . . . .               (19,580)
     New finance lease . . . . . . . . . . . . . . . . . . . . . . . . . .                   (35)
                                                                                        ---------
     MOVEMENT IN NET DEBT IN THE YEAR. . . . . . . . . . . . . . . . . . .               (19,615)
     Opening net debt. . . . . . . . . . . . . . . . . . . . . . . . . . .               (72,210)
                                                                                        ---------
     CLOSING NET DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . .               (91,825)
                                                                                        =========
</TABLE>

                                      F-43
<PAGE>


JUNCTION 15 LIMITED

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1999

1.   ACCOUNTING POLICIES

     1.1 ACCOUNTING  CONVENTION
     The financial statements are prepared under the historical cost convention.

     The  financial  statements  have been  prepared  on  a  going concern basis
     which assumes that the company will continue in  operational  existence for
     the foreseeable future.

     The validity of  this  assumption  depends on  the company  being  able  to
     trade  profitably in the future and the continued  support of the company's
     bankers and owners. The financial statements do not include any adjustments
     that would  result if  the  company  continued  to  make  losses  and  such
     support were withdrawn.  If  the  company  was unable to continue to trade,
     adjustments  would  have  to  be  made  to  reduce  the  value of assets to
     their  recoverable  amounts,  provide  for  further  liabilities  that  may
     arise and to reclassify fixed assets and long term  liabilities as  current
     assets and  liabilities. The directors  consider it appropriate to  prepare
     the financial  statements on a  going  concern  basis  on  the  basis  that
     the  company  will  trade profitably and that the owners  will  support the
     company for the foreseeable future.

1.2  TURNOVER
     Turnover  represents  amounts receivable for goods and services net of  VAT
     and trade discounts.

1.3  TANGIBLE FIXED ASSETS AND DEPRECIATION
     Tangible  fixed  assets are stated at cost less depreciation.  Depreciation
     is  provided  at  rates  calculated  to  write  off the cost less estimated
     residual  value of each asset over its expected  useful life, as follows:

     Computer equipment                 3 - 5 years
     Fixtures, fittings & equipment     5 - 7 years

1.4  LEASING AND HIRE PURCHASE COMMITMENTS
     Assets  obtained under  hire purchase  contracts  and  finance  leases  are
     capitalised  as  tangible  assets and  depreciated  over the shorter of the
     lease  term  and  their  useful lives.  Obligations  under such  agreements
     are  included   in   creditors  net  of  the   finance   charge   allocated
     to  future periods. The finance element of the rental payment is charged to
     the  profit  and  loss account so as to produce a constant periodic rate of
     charge on the net obligation outstanding in each period.

     Rentals  payable  under  operating  leases  are charged against income on a
     straight line basis over the lease term.

                                      F-44
<PAGE>


1.5  STOCK AND WORK IN PROGRESS
     Work in progress is valued at the lower of cost and net realisable value.

1.6  PENSIONS
     The  pension  costs  charged  in  the  financial  statements  represent the
     contributions  payable by the company  during the year in  accordance  with
     SSAP 24.

1.7  DEFERRED TAXATION
     Deferred   taxation   is   provided   at   appropriate  rates on all timing
     differences  using the  liability  method only to the extent  that,  in the
     opinion  of  the  directors,  there  is a  reasonable  probability  that  a
     liability or asset will crystallise in the foreseeable future.

1.8  FOREIGN CURRENCY TRANSLATION
     Monetary  assets  and  liabilities  denominated  in  foreign currencies are
     translated  into US $ at the rates of exchange  ruling at the balance sheet
     date.  Transactions  in  UK  Sterling  currencies  are  translated  at   an
     average rate of US $ 1.61704. All differences are taken to profit and  loss
     account.

1.9  GOVERNMENT GRANTS
     Grants  are  credited  to  deferred   revenue.   Grants   towards   capital
     expenditure  are  released to the profit and loss account over the expected
     useful  life  of  the  assets.  Grants  towards  revenue  expenditure   are
     released  to  the  profit  and  loss  account as the related expenditure is
     incurred.

1.10 COMPARATIVES
     The  financial  statements  have been prepared for the period which is  not
     a statutory accounting period.

     The  directors  do  not  require  comparatives,  and  hence  none have been
     prepared.  Comparatives  are available in the statutory  accounts for the 6
     months period ended 31 December 1999.

2    TURNOVER
     The  total  turnover  of  the  company  for the year has been  derived from
     its principal activity wholly undertaken in the United Kingdom.

<TABLE>
<CAPTION>
3    OPERATING LOSS
                                                                     1999
                                                                       $
     <S>                                                           <C>
     Operating loss is stated after charging:
     Depreciation of tangible assets . . . . . . . . . . .          17,530
     Operating lease rentals . . . . . . . . . . . . . . .           3,409
     Auditors' remuneration. . . . . . . . . . . . . . . .           5,660
                                                                   ========
</TABLE>

                                      F-45
<PAGE>

<TABLE>
<CAPTION>
4    INTEREST PAYABLE
                                                                     1999
                                                                       $
     <S>                                                            <C>
     On bank loans and overdrafts. . . . . . . . . . . . .           3,607
     On other loans wholly repayable within 5 years. . . .           2,794
     Hire purchase interest. . . . . . . . . . . . . . . .             390
     On overdue tax. . . . . . . . . . . . . . . . . . . .             121
                                                                    -------
                                                                     6,912
                                                                    =======
</TABLE>

<TABLE>
<CAPTION>
5    TAXATION
                                                                     1999
                                                                         $
     <S>                                                           <C>
     U.K. CURRENT YEAR TAXATION
     U.K. corporation tax at 20% . . . . . . . . . . . . .          (1,819)
                                                                   ========
</TABLE>


<TABLE>
<CAPTION>
6    DIVIDENDS
                                                                     1999
                                                                       $
     <S>                                                            <C>
     Ordinary interim paid . . . . . . . . . . . . . . . .           3,701
                                                                    =======
</TABLE>

<TABLE>
<CAPTION>
7    TANGIBLE FIXED ASSETS

     FIXTURES, FITTINGS & EQUIPMENT

                                                                       $
     <S>                                                           <C>
     COST
     At 1 January 1999 . . . . . . . . . . . . . . . . . .          31,237
     Additions . . . . . . . . . . . . . . . . . . . . . .          32,389
                                                                   --------
     At 31 December 1999 . . . . . . . . . . . . . . . . .          63,626
                                                                   --------

     DEPRECIATION
     At 1 January 1999 . . . . . . . . . . . . . . . . . .           7,092
     Charge for the year . . . . . . . . . . . . . . . . .          17,525
                                                                   --------
     At 31 December 1999 . . . . . . . . . . . . . . . . .          24,617
                                                                   --------

     NET BOOK VALUE
     At 31 December 1999 . . . . . . . . . . . . . . . . .          39,009
                                                                   ========
     At 31 December 1998 . . . . . . . . . . . . . . . . .          24,145
                                                                   ========
</TABLE>

                                      F-46


<PAGE>


          Included  above are assets held under finance  leases or hire purchase
contracts as follows:
<TABLE>
<CAPTION>

     PLANT AND MACHINERY
                                                                     1999
                                                                       $
     <S>                                                           <C>
     NET BOOK VALUES
     At 31 December 1999 . . . . . . . . . . . . . . . . .           1,161
                                                                   ========

     DEPRECIATION CHARGE FOR THE YEAR
     At 31 December 1999 . . . . . . . . . . . . . . . . .           1,089
                                                                   ========
</TABLE>

<TABLE>
<CAPTION>
8    STOCKS AND WORK IN PROGRESS
                                                                     1999
                                                                       $
     <S>                                                            <C>
     Work in progress. . . . . . . . . . . . . . . . . . .           5,363
                                                                    -------
                                                                     5,363
                                                                    =======
</TABLE>

<TABLE>
<CAPTION>
9    DEBTORS
                                                                     1999
                                                                       $
     <S>                                                          <C>
     Trade debtors . . . . . . . . . . . . . . . . . . . .        191,311
     Called up share capital not paid. . . . . . . . . . .             37
     Other debtors . . . . . . . . . . . . . . . . . . . .          3,904
     Prepayments and accrued income. . . . . . . . . . . .         36,610
                                                                  --------
                                                                  231,862
                                                                  ========
</TABLE>

<TABLE>
<CAPTION>

10   CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
                                                                     1999
                                                                       $
     <S>                                                          <C>
     Bank loans and overdrafts . . . . . . . . . . . . . .          66,152
     Net obligations under finance lease and hire
        purchase contracts . . . . . . . . . . . . . . . .            958
     Trade creditors . . . . . . . . . . . . . . . . . . .         38,859
     Other taxes and social security costs . . . . . . . .         62,290
     Other creditors . . . . . . . . . . . . . . . . . . .          6,207
     Accruals and deferred income. . . . . . . . . . . . .         92,971
                                                                  --------
                                                                  267,437
                                                                  ========
</TABLE>

<TABLE>
<CAPTION>
11   CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
                                                                     1999
                                                                       $
     <S>                                                           <C>
     Bank loans. . . . . . . . . . . . . . . . . . . . . .          12,124
     Other loans . . . . . . . . . . . . . . . . . . . . .           7,070
                                                                   --------
                                                                    19,194
                                                                   ========

                                      F-47
<PAGE>

     ANALYSIS OF LOANS
     Wholly repayable within five years. . . . . . . . . .          40,920
                                                                   --------
                                                                    40,920
     Included in current liabilities . . . . . . . . . . .         (21,726)
                                                                   --------
                                                                    19,194
                                                                   ========
</TABLE>
     The  aggregate  amount  of  creditors  for  which security has been granted
     amounted to $86,305.

     The  bank  loan  is  secured   by  a  debenture  and a fixed  and  floating
     charge over all assets of the company.

12   PENSION COSTS
     The  company  operates  a  defined  contribution pension scheme. The assets
     of the  scheme  are  held  separately  from  those  of  the  company  in an
     independently  administered  fund.  The  pension  cost  charge   represents
     contributions payable by the company to the fund and amounted to $13,311.

<TABLE>
<CAPTION>
13   SHARE CAPITAL
                                                                       1999
                                                                        BP
     AUTHORISED
     <S>                                                             <C>
     700,000 Ordinary shares of BP0.10 each . . . . . . . .           70,000
     26,200 Ordinary bearer shares of BP0.10 each . . . . .            2,620
     73,800 'A' Ordinary shares of BP0.10 each. . . . . . .            7,380
     100,000 'B' Ordinary shares of BP0.10 each . . . . . .           10,000
     100,000 'C' Ordinary shares of BP0.10 each . . . . . .           10,000
                                                                     --------
                                                                     100,000
                                                                     ========

     ALLOTTED, CALLED UP AND FULLY PAID
                                                                        $
     26,200 Ordinary bearer shares of BP0.10 each . . . . .            4,306
     620 'A' Ordinary shares of BP0.10 each . . . . . . . .              103
     9,140 'B' Ordinary shares of BP0.10 each . . . . . . .            1,521
     6,040 'C' Ordinary shares of BP0.10 each . . . . . . .            1,005
                                                                     --------
                                                                       6,935
                                                                     ========
</TABLE>

     All shares rank pari-passu in all respects save that the directors shall be
empowered to declare dividends to any one class of share only.

                                      F-48
<PAGE>

<TABLE>
<CAPTION>
14   STATEMENT OF MOVEMENTS ON RESERVES

                                                              Share      Profit
                                                             premium    and loss
                                                             account    account
                                                                $          $
     <S>                                                     <C>        <C>
     Balance at 1 January 1999 . . . . . . . . . . . . .      11,981     (3,455)
     Retained loss for the year. . . . . . . . . . . . .          --    (40,371)
     Premium on shares issued during the year. . . . . .      14,553         --
                                                             --------   --------
     Balance at 31 December 1999 . . . . . . . . . . . .      26,534    (43,826)
                                                             ========   ========
</TABLE>


<TABLE>
<CAPTION>

15   RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS

                                                                       1999
                                                                         $
     <S>                                                             <C>
     Loss for the financial year . . . . . . . . . . . .             (36,670)
     Dividends . . . . . . . . . . . . . . . . . . . . .              (3,701)
                                                                     --------
                                                                     (40,371)

     Proceeds from issue of shares . . . . . . . . . . .              16,413
                                                                     --------

     Net depletion in shareholders' funds. . . . . . . .             (23,958)
     Opening shareholders' funds . . . . . . . . . . . .              13,601
                                                                     --------
     Closing shareholders' funds . . . . . . . . . . . .             (10,357)
                                                                     ========
</TABLE>

16   FINANCIAL COMMITMENTS

     At  31  December  1999  the  company  had  annual   commitments  under
     non-cancellable operating leases as follows:
<TABLE>
<CAPTION>
                                                                       1999
                                                                         $
     <S>                                                             <C>
     LAND AND BUILDINGS
     Expiry date:
     Between two and five years. . . . . . . . . . . . .              41,800
                                                                     ========
</TABLE>

<TABLE>
<CAPTION>

17   DIRECTORS' EMOLUMENTS
                                                                      1999
                                                                        $
     <S>                                                            <C>
     Emoluments for qualifying services. . . . . . . . .             64,682
     Company pension contributions to money
      purchase schemes . . . . . . . . . . . . . . . . .              2,911
                                                                    --------
                                                                     67,593
                                                                    ========
</TABLE>

                                      F-49
<PAGE>


18   EMPLOYEES
<TABLE>
<CAPTION>

     NUMBER OF EMPLOYEES
     The average monthly number of employees (including directors) during
     the year was:
                                                                      1999
                                                                    Number
     <S>                                                          <C>
     Sales and management. . . . . . . . . . . . . . . .                 6
                                                                  =========

     EMPLOYMENT COSTS
                                                                     1999
                                                                       $
     Wages and salaries. . . . . . . . . . . . . . . . .           277,749
     Social security costs . . . . . . . . . . . . . . .            26,979
     Other pension costs . . . . . . . . . . . . . . . .            13,311
                                                                  ---------
                                                                   318,039
                                                                  =========
</TABLE>
19   CONTROL

          On 9 March 2000, the company became 100% subsidiary of Vizacom Inc., a
     company registered the United States of America.

20   RELATED PARTY TRANSACTIONS

     During  the  year,  the  company  paid  $57,133  for  subcontract  services
     from  Junction  15 (London)  Limited,  a company in  which I.C.  McCalla, a
     director of the company has a  beneficial  interest.  On  the balance sheet
     date, the balance owed between the two companies was $nil.


                                      F-50

<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Shareholders' of P.C. Workstation Rentals, Inc., and
Storageland, Inc.

We  have  audited  the  combined  balance  sheets of P.C.  Workstation  Rentals,
Inc., and Storageland, Inc. (collectively,  the "Companies"),  both of which are
under common ownership and common management,  as of December 31, 1999 and 1998,
and the related combined  statements of operations and retained  earnings and of
combined  cash  flows  for  the  years  then  ended.  These  combined  financial
statements   are  the   responsibility   of  the  Companies'   management.   Our
responsibility is to express an opinion on these combined  financial  statements
based on our audits.

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

In  our  opinion,  such  combined  financial  statements  present fairly, in all
material respects,  the combined financial position of the Companies at December
31,  1999 and 1998  and the  results  of their  combined  operations  and  their
combined  cash  flows for the years  then  ended in  conformity  with  generally
accepted accounting principles.

As  discussed  in  Footnote  12  to  the   combined  financial  statements,  the
Companies were acquired by Vizacom, Inc. on March 27, 2000.

Our  audits  were  conducted  for  the  purpose  of  forming  an  opinion on the
basic combined financial statements taken as a whole. The supplemental schedules
listed in the  table of  contents  are  presented  for  purposes  of  additional
analysis of the basic combined  financial  statements rather than to present the
combined financial position and combined results of operations of the individual
companies  and  are  not  a  required  part  of  the  basic  combined  financial
statements.   These  supplemental   schedules  are  the  responsibility  of  the
Companies'  management.  Such supplemental  schedules have been subjected to the
auditing  procedures  applied  in our  audits  of the basic  combined  financial
statements and, in our opinion,  are fairly stated in all material respects when
considered in relation to the basic  combined  financial  statements  taken as a
whole.


/s/ Deloitte & Touche LLP
March 23, 2000 (March 27, 2000 as to Note 12)

                                      F-51
<PAGE>


P.C. WORKSTATION RENTALS, INC., AND STORAGELAND, INC.

COMBINED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>

                                                               1999         1998
ASSETS
CURRENT ASSETS:
<S>                                                       <C>           <C>
  Cash. . . . . . . . . . . . . . . . . . . . . . . .     $   457,850   $   229,226
  Accounts receivable (net of allowance for doubtful
    accounts of $168,511 and $121,976, respectively)
    (Notes 2, 5, and 11). . . . . . . . . . . . . . .       3,692,224     2,617,251
  Inventories (Notes 2 and 5) . . . . . . . . . . . .         567,836       187,140
  Prepaid expenses. . . . . . . . . . . . . . . . . .           3,426             -
                                                          ------------  ------------
    Total current assets. . . . . . . . . . . . . . .       4,721,336     3,033,617
PROPERTY AND EQUIPMENT - Net (Notes 2 and 3). . . . .           6,189        13,108
DEFERRED TAX ASSET (Notes 2 and 7). . . . . . . . . .           1,949         9,280
OTHER ASSETS. . . . . . . . . . . . . . . . . . . . .          16,955        16,955
                                                          ------------  ------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . .     $ 4,746,429   $ 3,072,870
                                                          ============  ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Revolving lines of credit (Note 5). . . . . . . . .     $ 1,748,131   $   779,732
  Notes payable (Note 6). . . . . . . . . . . . . . .         850,000            --
  Accounts payable and accrued expenses . . . . . . .       1,340,160     1,509,234
  Accrued pension (Note 9). . . . . . . . . . . . . .          37,900        39,078
  Deferred revenue (Note 2) . . . . . . . . . . . . .           8,388       173,858
                                                          ------------  ------------
    Total current liabilities . . . . . . . . . . . .       3,984,579     2,501,902
                                                          ------------  ------------
COMMITMENTS (Note 10)
SHAREHOLDERS' EQUITY:
  Common stock (Note 8) . . . . . . . . . . . . . . .              12            12
  Contributed capital . . . . . . . . . . . . . . . .          17,108        17,108
  Retained earnings . . . . . . . . . . . . . . . . .         781,015       590,133
  Treasury stock (Note 8) . . . . . . . . . . . . . .         (36,285)      (36,285)
                                                          ------------  ------------
    Total shareholders' equity. . . . . . . . . . . .         761,850       570,968
                                                          ------------  ------------
  TOTAL . . . . . . . . . . . . . . . . . . . . . . .     $ 4,746,429   $ 3,072,870
                                                          ============  ============
</TABLE>

See notes to combined financial statements.

                                      F-52
<PAGE>


P.C. WORKSTATION RENTALS, INC., AND STORAGELAND, INC.

COMBINED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>

                                                               1999         1998
<S>                                                       <C>           <C>
NET SALES (Notes 2 and 11). . . . . . . . . . . . . .     $15,928,205   $11,431,882
COST OF SALES . . . . . . . . . . . . . . . . . . . .      13,094,364     9,614,625
                                                          ------------  ------------
GROSS PROFIT. . . . . . . . . . . . . . . . . . . . .       2,833,841     1,817,257
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES. . . . . . . . . . . . . . . . . . . . . .       2,371,756     1,600,229
                                                          ------------  ------------
INCOME FROM OPERATIONS. . . . . . . . . . . . . . . .         462,085       217,028
INTEREST EXPENSE (Notes 5 and 6). . . . . . . . . . .          83,031        34,361
                                                          ------------  ------------
INCOME BEFORE PROVISION FOR INCOME
  TAXES . . . . . . . . . . . . . . . . . . . . . . .         379,054       182,667
PROVISION FOR INCOME TAXES (Notes 2 and 7). . . . . .          12,541        36,371
                                                          ------------  ------------
NET INCOME. . . . . . . . . . . . . . . . . . . . . .         366,513       146,296

RETAINED EARNINGS, BEGINNING OF YEAR. . . . . . . . .         590,133       531,487
LESS:  NET DISTRIBUTIONS TO PRINCIPAL
  SHAREHOLDERS (Note 4) . . . . . . . . . . . . . . .        (175,631)      (87,650)
                                                          ------------  ------------
RETAINED EARNINGS, END OF YEAR. . . . . . . . . . . .     $   781,015   $   590,133
                                                          ============  ============
</TABLE>

See notes to combined financial statements.

                                      F-53
<PAGE>


P.C. WORKSTATION RENTALS, INC., AND STORAGELAND, INC.

STATEMENTS OF COMBINED CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>

                                                               1999         1998

OPERATING ACTIVITIES:
<S>                                                       <C>           <C>
  Net income. . . . . . . . . . . . . . . . . . . . .     $   366,513   $   146,296
  Adjustments to reconcile net income to net cash
    used in operating activities:
    Depreciation and amortization . . . . . . . . . .           6,829         7,331
    Provision for deferred taxes. . . . . . . . . . .           7,331       (10,459)
    Provision for doubtful accounts . . . . . . . . .          46,535       107,460
    Changes in assets and liabilities:
      Increase in accounts receivable . . . . . . . .      (1,121,508)   (1,355,480)
      Decrease (increase) in inventories. . . . . . .        (380,696)       46,299
      Increase in prepaid expenses. . . . . . . . . .          (3,426)           --
      Increase in other assets. . . . . . . . . . . .              --       (15,000)
      Increase (decrease) in accounts payable and
        accrued expenses. . . . . . . . . . . . . . .        (169,074)      623,850
      Increase (decrease) in accrued pension. . . . .          (1,178)       24,078
      Increase (decrease) in deferred revenue . . . .        (165,470)        2,904
                                                          ------------  ------------
        Net cash used in operating activities . . . .      (1,414,144)     (422,721)
                                                          ------------  ------------

FINANCING ACTIVITIES:
  Net borrowings from revolving lines-of-credit . . .         968,399       535,346
  Proceeds from issuance of notes payable . . . . . .         850,000            --
  Repayment of loans from shareholders. . . . . . . .              --       (75,000)
  Acquisition of treasury stock . . . . . . . . . . .              --       (36,285)
  Net distributions to shareholders . . . . . . . . .        (175,631)      (87,650)
                                                          ------------  ------------
        Net cash provided by financing activities . .       1,642,768       336,411
                                                          ------------  ------------

NET INCREASE (DECREASE) IN CASH . . . . . . . . . . .         228,624       (86,310)
CASH BALANCE, BEGINNING OF YEAR . . . . . . . . . . .         229,226       315,536
                                                          ------------  ------------
CASH BALANCE, END OF YEAR . . . . . . . . . . . . . .     $   457,850   $   229,226
                                                          ============  ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest paid . . . . . . . . . . . . . . . . . . .     $    87,518   $    34,361
                                                          ============  ============
  Income taxes paid . . . . . . . . . . . . . . . . .     $     7,550   $    13,583
                                                          ============  ============
</TABLE>

See notes to combined financial statements.

                                      F-54

<PAGE>


P.C. WORKSTATION RENTALS, INC., AND STORAGELAND, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998

1.   BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

     The accompanying combined financial statements for the years ended December
     31, 1999 and 1998 contain the assets, liabilities and results of operations
     of   P.C.  Workstation  Rentals,  Inc.  ("PWR")  and   Storageland,   Inc.
     ("Storageland").  PWR  and  Storageland  are  under  common  ownership  and
     common  management.  PWR  and  Storageland  are  hereinafter   collectively
     referred to as the "Companies."

          PWR  is  an  independent   value  added  reseller  and  integrator  of
     information  technology  products  specializing  in  serving  the  high-end
     graphics communication industry. Storageland is a personal computer product
     reseller and integrator  servicing a variety of industries.  The Companies'
     principal  geographic  market  area is the  greater  New York  metropolitan
     region.  PWR provides  assistance  to its  customers  with respect to every
     stage of the purchase and  implementation  of network and internet backbone
     systems.  Such  assistance  includes  analyzing and advising with regard to
     hardware  and  software  solutions,  installation,  training,  on-line  and
     telephone support, and systems integration and maintenance.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     PRINCIPLES OF COMBINATION    -  The   financial  statements   of   PWR  and
     Storageland  are  presented  on a combined  basis since these  entities are
     under common ownership and common management.  All significant intercompany
     accounts and transactions have been eliminated in combination. See Note 13.

     REVENUE  RECOGNITION  - Revenues  are recognized when products are  shipped
     and services are provided.

     USE  OF  ESTIMATES  -   The   preparation   of   financial   statements  in
     conformity  with  generally   accepted   accounting   principles   requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities  and disclosure of contingent  assets and
     liabilities  at the  date of the  financial  statements  and  the  reported
     amounts of  revenues  and  expenses  during the  reporting  period.  Actual
     results could differ from those estimates.

     UNVENTORIES  -  Inventories  are  stated  at  the  lower  of cost or market
     and  consist of  electronic  components  and  computer  systems,  which are
     purchased directly from the Companies' suppliers.  Cost is determined using
     the first-in, first-out method.

     PROPERTY  AND  EQUIPMENT - Property  and  equipment  are  stated  at  cost.
     Depreciation  is  calculated  on a  straight-line  basis over the estimated
     useful lives of the assets, which range from three to seven years.

                                      F-55
<PAGE>

     INCOME  TAXES  -  During the  fiscal  year ended  December  31,  1999,  the
     Companies have each elected to be considered as an S Corporation  under the
     provisions of the Internal Revenue Code, and accordingly,  no Federal taxes
     have been provided in the accompanying combined financial  statements.  New
     York State  requires  S  Corporations  to pay a state tax at the  corporate
     level equal to the  difference  between the  corporate  and personal  state
     income tax rates.

     During  the  fiscal  year  ended  December  31, 1998,  Storageland  was a C
     Corporation  under the  provisions of the Internal  Revenue  Code,  and the
     Company provided for all federal and state income taxes on its earnings.

     The  Companies  account  for  state  income  taxes pursuant to Statement of
     Financial  Accounting  Standards  No. 109,  "Accounting  for Income  Taxes"
     ("SFAS No. 109"). SFAS No. 109 requires  recognition of deferred tax assets
     and  liabilities  for the expected  future tax  consequences of events that
     have been included in the  Companies'  financial  statements and income tax
     returns.  Under  this  method,  deferred  tax assets  and  liabilities  are
     determined  based on the differences  between the financial  accounting and
     tax bases of assets and  liabilities  using enacted tax rates in effect for
     the year in which the differences are expected to reverse.

     DEFERRED  REVENUE - Consists  of  an  advance  payment from  a customer for
     the purchase of inventory. The revenue will be recognized upon delivery and
     acceptance by the customer.

     IMPAIRMENT OF  LONG-LIVED  ASSETS -  In   accordance   with   Statement  of
     Financial  Accounting  Standards No. 121, "Accounting for the Impairment of
     Long-Lived  Assets  and for  Long  Lived  Assets  to be  Disposed  of," the
     Companies review their long-lived assets for impairment  whenever events or
     changes in  circumstances  indicate that the carrying  amount of the assets
     may not be fully recoverable. To determine recoverability of its long-lived
     assets, the Companies evaluate the probability that future undiscounted net
     cash flows will be less than the carrying amount of the assets.  Impairment
     costs, if any, are measured by comparing the carrying amount of the related
     assets to their fair value.

     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS - It  is  management's  belief that
     the carrying  amounts of the  Companies'  financial  instruments  (accounts
     receivable,  accounts payable, revolving lines of credit and notes payable)
     approximate their fair value at December 31, 1999 and 1998 due to the short
     maturity of these instruments.

     The  Companies  estimate  an  allowance for doubtful accounts  based on the
     creditworthiness  of  their  customers,  as  well  as on  general  economic
     conditions.

     Consequently,  an  adverse  change  in  those  factors  could  affect   the
     Companies'  estimate of its bad debts. The Companies,  as a policy, do  not
     require collateral from their customers.

                                      F-56
<PAGE>

3.   PROPERTY AND EQUIPMENT - NET

     Property and  equipment - net at December 31, 1999 and 1998 consists of the
following:
<TABLE>
<CAPTION>

                                                1999         1998
<S>                                          <C>           <C>
Computer equipment . . . . . . .             $   6,281     $  6,281
Furniture and fixtures . . . . .                34,222       34,222
                                             ----------    ---------
  Total                                         40,503       40,503
Less accumulated depreciation
     and amortization. . . . . .               (34,314)     (27,485)
                                             ----------    ---------
  Property and equipment - net. .            $   6,189     $ 13,018
                                             ==========    =========
</TABLE>

4.   RELATED PARTY TRANSACTIONS

          a.   Net distributions to shareholders includes capital  contributions
          made  to  Storageland by Storageland's principal  shareholders  during
          1999 to fund the operations  of the business and provide cash flow for
          the entity.

          b.  Distributions  to  shareholders  were  paid  by PWR  to its  two
          principal shareholders.

5.   REVOLVING LINES OF CREDIT

     PWR  maintains  two  revolving  lines of credit with two separate financial
     institutions.  The  first  line has a $250,000 borrowing limit.  Borrowings
     under  this  revolving  line  of  credit  are to be repaid in equal monthly
     installments equivalent to 1/36 of the outstanding  amount  as of  the last
     borrowing  and  is  subject  to  interest  at the  prime rate plus one-half
     percent  at  December 31, 1999  and two percent at December 31, 1998 (9.00%
     and 9.75%, respectively).  Commitment fees  are  equal to $2,500 per annum.
     For the years ended  December 31, 1999  and 1998, the principal outstanding
     under  this  line  of credit  agreement amounted  to $944,172 and $244,910,
     respectively.  Such line of  credit  is  collateralized  by a lien on PWR's
     assets.  Subsequent to December 31, 1999, PWR  extended this line of credit
     through June 30, 2000, and increased the line of credit  from  $250,000  to
     $1,000,000, which accommodated the increase in borrowings at  December  31,
     1999.  Concurrent with this extension, certain terms of this line of credit
     were modified as follows: the previously existing repayment period of three
     years has been  rescinded  and replaced by an indefinite repayment term and
     the borrowing is subject to interest at prime plus one half percent.

     The  second  revolving  line  of  credit  has a $400,000  borrowing  limit.
     Borrowings under this revolving line of credit may be repaid within 40 days
     without  interest.  On the 41st day,  interest begins accruing at a rate of
     1.25% per month.  For the years ended December 31, 1999 and 1998, (the line
     of credit was executed in August 1998) the principal outstanding under this
     line  of credit agreement  amounted to $803,959 and $534,822, respectively.
     Such line is collateralized by PWR's inventory. Subsequent to  December 31,
     1999,  PWR   increased  this  revolving  line of  credit  from $400,000  to
     $1,000,000, with no stated expiration date, which accommodated the increase
     in borrowings at December 31, 1999.

                                      F-57
<PAGE>


6.   NOTES PAYABLE

     PWR  entered  into  two  notes  payable with a financial institution during
     1999.  Both notes bear  interest at prime plus one-half  percent  (9.00% at
     December 31,  1999).  Amounts  outstanding  under these  arrangements  were
     $280,000 and $570,000,  respectively. The notes expired on January 24, 2000
     and  February  7,  2000,  respectively.  The  $280,000  note was  repaid in
     February 2000,  while the term of the $570,000 note was extended to May 18,
     2000.

7.   INCOME TAXES

     At  December  31,  1999  and  1998,  the  Companies  recognized  a combined
     deferred tax provision (benefit) of $5,731 and ($10,459), respectively. The
     deferred tax asset is primarily  the result of  temporary  tax  differences
     relating to depreciation and the allowance for doubtful accounts.

     For  financial  reporting   purposes,   no  valuation  allowance  has  been
     recognized as of December 31, 1999 or 1998.

     The  combined  provision  for  income  taxes  for the years ended  December
     31, 1999 and 1998 for both companies are comprised of:

<TABLE>
<CAPTION>

                                     FEDERAL      STATE AND LOCAL           TOTAL
1999
<S>                                <C>                <C>                 <C>
Current . . . . . . . .            $      --          $  5,210            $  5,210
Deferred. . . . . . . .                5,852             1,479               7,331
                                   ---------          ---------           ---------
                                   $   5,852          $  6,689            $ 12,541
                                   =========          =========           =========

1998
Current . . . . . . . .            $  31,326          $ 15,504            $ 46,830
Deferred. . . . . . . .               (6,564)           (3,895)            (10,459)
                                   ---------          ---------           ---------
                                   $  24,762          $ 11,609            $ 36,371
                                   =========          =========           =========
</TABLE>


                                      F-58

<PAGE>
8.   COMMON AND TREASURY STOCK

     Common stock at December 31, 1999 and 1998 consisted of the following:

<TABLE>
<CAPTION>

                                                   1999            1998

     <S>                                        <C>              <C>
     PWR - No par value per share,
       200 shares authorized, 10 shares
       outstanding at both December 31,
       1999 and 1998 . . . . . . . . . . . .    $  10.00         $  10.00
                                                =========        =========

     Storageland - No par value per share,
       3 shares authorized, 2 shares
       outstanding at December 31, 1999. . .    $   2.00         $   2.00
                                                =========        =========
     Treasury stock of Storageland at
       December 31, 1999 and 1998,
       1 share purchased at cost . . . . . .    $(36,285)       $(36,285)
                                                =========        =========
</TABLE>


9.   ACCRUED PENSION

     PWR  maintains  a  qualified  employee  retirement  plan (the "Plan") which
     is a defined  contribution  plan designed to provide benefits for full-time
     employees.  Benefits are payable in the event of termination of employment,
     disability,  death or retirement as defined in the Plan. Employees who have
     completed  one year of continuous  service and have  attained  his/her 21st
     birthday are eligible to become a  participant  of the Plan.  Employees are
     not  permitted  to  contribute  to  the  Plan.  PWR  has no  obligation  to
     contribute  to the  Plan,  but may  contribute  on a  discretionary  basis.
     Employees  vest in the Plan over a  six-year  period,  zero  percent in the
     first  year  of  employment  and 20  percent  per  year  thereafter.  PWR's
     contributions  under the Plan  approximated  $38,000  during  both 1999 and
     1998.

10.  COMMITMENTS

     The  Companies  are  obligated  under  a   noncancelable   operating  lease
     agreement  for the rental of office and  warehouse  space.  The  Companies'
     lease expires in February of fiscal 2004.  Minimum annual  commitments  for
     rentals through fiscal 2004 are as follows:

<TABLE>
<CAPTION>
                FISCAL YEAR ENDING
                   DECEMBER 31,
                      <S>                            <C>
                      2000. . . . . . . .            $  60,000
                      2001. . . . . . . .               60,000
                      2002. . . . . . . .               60,000
                      2003. . . . . . . .               60,000
                      2004. . . . . . . .               10,000
                   Thereafter . . . . . .                   --
                                                     ----------
                      Total . . . . . . .            $ 250,000
                                                     ==========
</TABLE>

     Rent  expense  for  the  years  ended December 31, 1999 and 1998 aggregated
     approximately $61,000 and $59,000, respectively.

                                      F-59
<PAGE>
11.  SIGNIFICANT CUSTOMERS AND VENDORS

     During  the  year  ended  December  31, 1999,  one customer  represented at
     least 10% of the Companies' combined net sales. Such customer accounted for
     15.90% of the companies' combined net sales as of December 31, 1999.

     During  the  year  ended  December  31, 1998,  one customer  represented at
     least 10% of the Companies' combined net sales. Such customer accounted for
     23.40% of the Companies' combined net sales as of December 31, 1998.

     During  the  year  ended  December  31, 1999,  three customers  represented
     17.77%,  13.30%,  and  10.81%  of  the  Companies'  combined  net  accounts
     receivable balance.

     During  the  year  ended  December  31,  1998,   one  customer  represented
     13.50% of the Companies' combined net accounts receivable balance.

     During  the  year  ended  December  31, 1999, the Companies' purchases from
     two vendors  represented at least 10% of the Companies' combined purchases.
     Purchases from such vendors represented 37.41% and 10.67% of the Companies'
     combined purchases for the year ended December 31, 1999.

     During  the  year  ended  December  31, 1998, the Companies' purchases from
     two vendors  represented at least 10% of the Companies' combined purchases.
     Purchases from such vendors  represented  26.8% and 14.4% of the Companies'
     combined purchases for the year ended December 31, 1998.

12.  SUBSEQUENT EVENT / SALE OF BUSINESSES

     In  February  2000,  Storageland  and  VDOFX,  Inc.,  another company owned
     by the  shareholders  of PWR,  merged into PWR. On November 12,  1999,  the
     Companies  entered  into a  nonbinding  letter of intent to be  acquired by
     Vizacom Inc.,  ("Vizacom") a publicly held entity.  The aggregate  purchase
     price of  $6,000,000  will be payable in both cash and Vizacom  stock.  The
     acquisition is subject to Vizacom  raising a certain level of financing and
     the  completion  of due  diligence by both  parties.  The  transaction  was
     consummated  on March 27, 2000.  Upon the closing of this  merger,  PWR has
     become a C Corporation.

                                      F-60
<PAGE>


P.C. WORKSTATION RENTALS, INC., AND STORAGELAND, INC.

SUPPLEMENTAL SCHEDULE OF COMBINING BALANCE SHEETS
DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                         P.C.
                                     WORKSTATION         STORAGELAND          INTERCOMPANY          COMBINED
                                     RENTALS, INC.           INC.             ELIMINATIONS           AMOUNTS
ASSETS
CURRENT ASSETS:
  <S>                                <C>                 <C>                  <C>                   <C>
  Cash . . . . . . . . . . . . . .   $   353,793         $  104,057           $        --           $  457,850
  Accounts receivable - net
    (Notes 2, 5, and 11) . . . . .     3,634,677             57,547                    --            3,692,224
  Inventories (Notes 2 and 5). . .       567,836                 --                    --              567,836
  Prepaid expenses . . . . . . . .            --              3,426                    --                3,426
                                     ------------        -----------          ------------          -----------
     Total current assets. . . . .     4,556,306            165,030                    --            4,721,336
PROPERTY AND EQUIPMENT -
  Net (Notes 2 and 3). . . . . . .         5,142              1,047                    --                6,189
INTERCOMPANY RECEIVABLES
  (Note 2) . . . . . . . . . . . .            --             43,329               (43,329)                  --
DEFERRED TAX ASSET
  (Notes 2 and 7). . . . . . . . .         1,918                 31                    --                1,949
OTHER ASSETS . . . . . . . . . . .        16,955                 --                    --               16,955
                                     ------------        -----------          ------------          -----------
     TOTAL . . . . . . . . . . . .   $ 4,580,321         $  209,437           $   (43,329)          $4,746,429
                                     ============        ===========          ============          ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Revolving lines of credit
    (Note 5) . . . . . . . . . . .   $ 1,748,131         $       --           $        --           $1,748,131
  Note payable (Note 6). . . . . .       850,000                 --                    --              850,000
  Accounts payable and accrued
    expenses . . . . . . . . . . .     1,312,611             27,549                    --            1,340,160
  Accrued pension (Note 9) . . . .        37,900                 --                    --               37,900
  Deferred revenue (Note 2). . . .         8,388                 --                    --                8,388
                                     ------------        -----------          ------------          -----------
    Total current liabilities. . .     3,957,030             27,549                    --            3,984,579
                                     ------------        -----------          ------------          -----------
INTERCOMPANY PAYABLES
  (Note 2) . . . . . . . . . . . .        43,329                 --               (43,329)
COMMITMENTS (Note 10)
SHAREHOLDERS' EQUITY:
  Common stock (Note 8). . . . . .            10                  2                    --                   12
  Contributed capital. . . . . . .         9,610              7,498                    --               17,108
  Retained earnings. . . . . . . .       570,342            210,673                    --              781,015
  Treasury stock (Note 8). . . . .            --            (36,285)                   --              (36,285)
                                     ------------        -----------          ------------          -----------
    Total shareholders' equity . .       579,962            181,888                    --              761,850
                                     ------------        -----------          ------------          -----------
TOTAL. . . . . . . . . . . . . . .   $ 4,580,321         $  209,437           $   (43,329)          $4,746,429
                                     ============        ===========          ============          ===========
</TABLE>

                                      F-61
<PAGE>


P.C. WORKSTATION RENTALS, INC., AND STORAGELAND, INC.

SUPPLEMENTAL SCHEDULE OF STATEMENTS OF OPERATIONS AND
RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                         P.C.
                                     WORKSTATION         STORAGELAND          INTERCOMPANY          COMBINED
                                     RENTALS, INC.           INC.             ELIMINATIONS          AMOUNTS

<S>                                  <C>                 <C>                  <C>                   <C>
NET SALES (Notes 2 and 11) . . .     $ 14,325,574        $  3,027,721         $(1,425,090)          $15,928,205
COST OF SALES. . . . . . . . . .       11,883,140           2,636,314          (1,425,090)           13,094,364
                                     -------------       -------------        ------------          ------------
  GROSS PROFIT . . . . . . . . .        2,442,434             391,407                  --             2,833,841
SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES. . . .        2,082,388             289,368                  --             2,371,756
                                     -------------       -------------        ------------          ------------
INCOME FROM OPERATIONS . . . . .          360,046             102,039                  --               462,085
INTEREST EXPENSE (Notes 5 and
  6) . . . . . . . . . . . . . .           81,491               1,540                  --                83,031
                                     -------------       -------------        ------------          ------------
INCOME BEFORE PROVISION
  FOR INCOME TAXES . . . . . . .          278,555             100,499                  --               379,054
                                     -------------       -------------        ------------          ------------
PROVISION FOR INCOME TAXES
  (Notes 2 and 7). . . . . . . .            4,216               8,325                  --                12,541
                                     -------------       -------------        ------------          ------------
NET INCOME . . . . . . . . . . .          277,539              92,174                  --               366,513

RETAINED EARNINGS,
  BEGINNING OF YEAR. . . . . . .          491,634              98,499                  --               590,133
NET (DISTRIBUTIONS TO)
  CONTRIBUTIONS FROM
  PRINCIPAL SHAREHOLDERS . . . .         (195,631)             20,000                  --              (175,631)
                                     -------------       -------------        ------------          ------------
RETAINED EARNINGS,
  END OF YEAR. . . . . . . . . .     $    573,542        $    210,673         $        --           $   781,015
                                     =============       =============        ============          ============
</TABLE>

                                      F-62
<PAGE>


P.C. WORKSTATION RENTALS, INC., AND STORAGELAND, INC.

SUPPLEMENTAL SCHEDULE OF COMBINING BALANCE SHEETS
DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                       P.C.
                                     WORKSTATION          STORAGELAND         INTERCOMPANY          COMBINED
                                     RENTALS, INC.            INC.            ELIMINATIONS          AMOUNTS
ASSETS
CURRENT ASSETS:
  <S>                                <C>                 <C>                  <C>                   <C>
  Cash . . . . . . . . . . . . .     $  225,265          $    3,961           $        --           $  229,226
  Accounts receivable - net
    (Notes 2, 5, and 11) . . . .      1,948,848             668,403                    --            2,617,251
  Inventories (Notes 2 and 5). .        143,061              44,079                    --              187,140
                                     -----------         -----------          -----------           -----------
     Total current assets. . . .      2,317,174             716,443                    --            3,033,617
PROPERTY AND EQUIPMENT
  Net (Notes 2 and 3). . . . . .          9,877               3,141                    --               13,018
INTERCOMPANY RECEIVABLES
  (Note 2) . . . . . . . . . . .        102,478                  --              (102,478)                  --
DEFERRED TAX ASSET (Notes 2
  and 7) . . . . . . . . . . . .          1,249               8,031                    --                9,280
OTHER ASSETS . . . . . . . . . .         16,955                  --                    --               16,955
                                     -----------         -----------          ------------          -----------
TOTAL. . . . . . . . . . . . . .     $2,447,733          $  727,615           $  (102,478)          $3,072,870
                                     ===========         ===========          ============          ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Revolving lines of credit
   (Note 5). . . . . . . . . . .     $  779,732          $       --           $        --           $  779,732
  Accounts payable and
   accrued expenses. . . . . . .        958,811             550,423                    --            1,509,234
  Accrued pension (Note 9) . . .         34,078               5,000                    --               39,078
  Deferred revenue (Note 2). . .        173,858                  --                    --              173,858
                                     -----------         -----------          ------------          -----------
   Total current liabilities . .      1,946,479             555,423                    --            2,501,902
                                     -----------         -----------          ------------          -----------
INTERCOMPANY PAYABLES
  (Note 2) . . . . . . . . . . .             --             102,478              (102,478)                  --
DEFERRED TAX LIABILITY
  (Notes 2 and 7). . . . . . . .             --                  --                    --                   --
COMMITMENTS (Note 10)
SHAREHOLDERS' EQUITY:
  Common stock (Note 8). . . . .             10                   2                    --                   12
  Contributed capital. . . . . .          9,610               7,498                    --               17,108
  Retained earnings. . . . . . .        491,634              98,499                    --              590,133
  Treasury stock (Note 8)                    --             (36,285)                   --              (36,285)
                                     -----------         -----------          ------------          -----------
   Total shareholders' equity. .        501,254              69,714                    --              570,968
                                     -----------         -----------          ------------          -----------
  TOTAL. . . . . . . . . . . . .     $2,447,733          $  727,615           $  (102,478)          $3,072,870
                                     ===========         ===========          ============          ===========
</TABLE>

                                      F-63
<PAGE>


P.C. WORKSTATION RENTALS, INC. AND STORAGELAND, INC.

SUPPLEMENTAL SCHEDULE OF COMBINING STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                        P.C.
                                     WORKSTATION         STORAGELAND          INTERCOMPANY          COMBINED
                                     RENTALS, INC.           INC.             ELIMINATIONS           AMOUNTS

<S>                                  <C>                 <C>                  <C>                   <C>
NET SALES (Notes 2 and 11) . . .     $8,762,724          $3,301,389           $  (632,231)          $11,431,882
COST OF SALES. . . . . . . . . .      7,351,457           2,895,399              (632,231)            9,614,625
                                     -----------         -----------          ------------          ------------
  GROSS PROFIT . . . . . . . . .      1,411,267             405,990                    --             1,817,257
SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES. . . .      1,287,972             312,257                    --             1,600,229
                                     -----------         -----------          ------------          ------------
INCOME FROM OPERATIONS . . . . .        123,295              93,733                    --               217,028
INTEREST EXPENSE (Notes 5
  and 6) . . . . . . . . . . . .         30,445               3,916                    --                34,361
                                     -----------         -----------          ------------          ------------
INCOME BEFORE PROVISION
  FOR INCOME TAXES . . . . . . .         92,850              89,817                    --               182,667
                                     -----------         -----------          ------------          ------------
PROVISION FOR INCOME TAXES
  (Notes 2 and 7). . . . . . . .          2,791              33,580                    --                36,371
                                     -----------         -----------          ------------          ------------
NET INCOME . . . . . . . . . . .         90,059              56,237                    --               146,296
RETAINED EARNINGS,
  BEGINNING OF YEAR. . . . . . .        489,225              42,262                    --               531,487
NET DISTRIBUTIONS TO
  PRINCIPAL SHAREHOLDERS . . . .        (87,650)                 --                    --               (87,650)
                                     -----------         -----------          ------------          ------------
RETAINED EARNINGS,
  END OF YEAR. . . . . . . . . .     $  491,634          $   98,499           $        --           $   590,133
                                     ===========         ===========          ============          ============
</TABLE>


                                      F-64
<PAGE>

                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
has duly  caused  this  report to be signed  on its  behalf by the  undersigned,
thereunto duly authorized.

Dated: April 11, 2000                               VIZACOM INC.


                                        By:  /s/ Mark E. Leininger
                                                 Mark E. Leininger
                                           President and Chief Operating Officer

                                POWER OF ATTORNEY

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Annual Report on Form 10-KSB has been signed on April 11, 2000 by
the following persons in the capacities indicated. Each person whose signature
appears below constitutes and appoints Mark E. Leininger, with full power of
substitution, his/her true and lawful attorney-in-fact and agent to do any and
all acts and things in his/her name and on his/her behalf in his/her capacities
indicated below which he may deem necessary or advisable to enable Vizacom Inc.
to comply with the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
connection with this Annual Report on Form 10-KSB, including specifically, but
not limited to, power and authority to sign for him/her in his/her name in the
capacities stated below, any and all amendments thereto, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in such connection, as
fully to all intents and purposes as he/her might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.


   /s/ Mark E. Leininger         President, Chief Executive Officer and Director
----------------------------     (Principal Executive Officer)
   Mark E.  Leininger

   /s/ Alan W. Schoenbart        Vice President - Finance and Chief Financial
----------------------------     Officer (Principal Account Officer)
     Alan W. Schoenbart

     /s/ Marc E. Jaffe           Chairman of the Board, Secretary and Director
----------------------------
       Marc E. Jaffe

  /s/ Norman W. Alexander        Director
-----------------------------
    Norman W. Alexander

    /s/ Vincent DiSpigno         Vice President and Director
-----------------------------
      Vincent DiSpigno

     /s/ Werner G. Haase         Director
-----------------------------
       Werner G. Haase

    /s/ Neil M. Kaufman          Director
-----------------------------
        Neil M. Kaufman

    /s/ David N. Salav           Vice President and Director
-----------------------------
        David N. Salav

                                     -134-

<PAGE>

                                  VIZACOM INC.

                           ANNUAL REPORT ON FORM 10-K
                       FISCAL YEAR ENDED DECEMBER 31, 1999

                                 EXHIBIT INDEX

Exhibit
Number    Description of Exhibit
-------   ----------------------

3.1       Composite of Certificate of Incorporation  of the Company,  as amended
          to date.  (Incorporated  by  reference  to  Exhibit  3.1 to the
          Company's Current Report on Form 8-K (Date of Report: July 1, 1999)
          (Commission File Number: 1-14076), filed with the Commission on July
          15, 1999.)
3.2       By-laws of the Company,  as amended.  (Incorporated by reference to
          Exhibit 3.3 to the  Company's  Annual  Report on Form  10-KSB
          (Commission  File  Number: 1-14076),  for the year ended December
          31, 1997, filed with the Commission on April 16, 1998.)
4.1       Specimen Common Stock  Certificate.  (Incorporated by reference to
          Exhibit 4.1 to the Company's  Annual Report on Form 10-KSB (Commission
          File Number:  1-14076),  for the year ended December 31, 1997,
          filed with the  Commission on April 16, 1998.)
10.1      Company 1994 Long Term Incentive Plan, as amended to date.
          (Incorporated by reference to Exhibit 10.3 to the Company's Current
          Report on Form 8-K (Date of Report:  July 1, 1999) (Commission File
          Number: 1-14076), filed with the Commission on July 15, 1999.)
10.2      Company Outside Director and Advisor Stock Option Plan, as amended  to
          date.  (Incorporated  by  reference  to  Exhibit  10.4 to the
          Company's  Current  Report  on Form 8-K  (Date of  Report:  July 1,
          1999) (Commission File Number:  1-14076),  filed with the Commission
          on July 15, 1999.)
10.3      SPC 1989 Stock Plan. (Incorporated by reference to Exhibit 4.2
          to the Company's  Registration Statement on Form S-8 (Registration
          Number: 333-19509),  filed with the Commission on January 10, 1997.)
10.4      SPC 1991 Stock  Option  Plan.  (Incorporated  by  reference to Exhibit
          4.3 to the Company's   Registration  Statement  on  Form  S-8
          (Registration  Number: 333-19509),  filed with the  Commission on
          January 10, 1997.)
10.5      Form of Indemnification   Agreement  between  the  Registrant  and its
          executive officers and directors.  (Incorporated by reference to
          Exhibit 10.8 to the Company's  Registration  Statement  on  Form  SB-2
          (Registration  Number: 33-97184),  filed with the Commission on
          September 21, 1995.)
10.6      Form of Underwriters'  Purchase Option  (Specimen).  (Incorporated by
          reference to Exhibit 10.18 to the Company's Annual Report on Form
          10-KSB,  for the year ended  December 31, 1997,  filed with the
          Commission  on April 16, 1998.)
10.7      Registration  Rights  Agreement,  dated July 31,  1996,  between the
          Company and the former stockholders  of Serif Inc. and Serif (Europe)
          Limited.  (Incorporated by reference to Exhibit 10.31 to the Company's
          Current  Report on Form 8-K (Date of Report:  July 31,  1996)
          (Commission File Number: 1-14076), filed with the Commission on August
          13, 1996.)
10.8      Lease Agreement, dated September 7, 1995, between Community Towers LLC
          and the Company,  for facilities located at 111 North Market Street,
          San Jose, California.  (Incorporated  by  reference  to  Exhibit 10.22
          to  Software Publishing  Corporation's  Annual  Report  on Form 10-K
          (Commission  File Number: 0-14025), for the fiscal year ended
          September 30, 1995, filed with the Commission on December 29, 1995.)
10.9      Option, dated October 23, 1997, issued to Ronald L. Altman.
          (Incorporated by reference to Exhibit 10.53 to the Company's Quarterly
          Report on Form 10-QSB  (Commission  File Number: 1-14076),  for the
          quarter  ended  September  30,  1997,  filed  with the Commission  on
          November 14,  1997.)
10.10     Rights  Agreement,  dated as of March 31, 1998,  between the Company
          and American  Stock  Transfer & Trust Company.  (Incorporated  by
          reference to Exhibit  10.51 to the Company's Annual Report on Form
          10-KSB  (Commission File Number: 1-14076),  for the year ended
          December  31,  1997,  filed with the Commission  on April 16, 1998.)
10.11     Warrant,  dated April 7, 1998, registered in the name of Boru
          Enterprises,  Inc.,  with respect to 50,000 shares of Common Stock
          (before giving  effect to the  Company's  one-for-three  reverse stock
          split made effective

                                     -135-
<PAGE>
                                  VIZACOM INC.

                           ANNUAL REPORT ON FORM 10-K
                       FISCAL YEAR ENDED DECEMBER 31, 1999

                                 EXHIBIT INDEX

Exhibit
Number    Description of Exhibit
-------   ----------------------

          May 27, 1998).  (Incorporated  by reference to Exhibit 10.54 to the
          Company's  Quarterly  Report on Form 10-QSB (Commission  File Number:
          1-14076),  for the quarter ended March 31, 1998, filed with the
          Commission on May 13, 1998.)
10.12     Stock Exchange Agreement, dated December 15, 1998, between the Company
          and Seafish  Partners.  (Incorporated  by reference to Exhibit 10.2 to
          the Company's Current Report on Form 8-K (Date of Report: December 15,
          1998)  (Commission  File  Number:  1-14076),  filed with the
          Commission on December 16, 1998.)
10.13     Letter Agreement, dated January 4, 1999, between the Company and
          Seafish Partners. (Incorporated by reference to  Exhibit  10.3 to the
          Company's Current  Report  on Form 8-K (Date of Report:  January 11,
          1999) (Commission File Number:  1-14076),  filed with the Commission
          on January 20, 1999.)
10.14     Consulting  Agreement  between the Company and Target Capital Corp.
          (Incorporated by reference to Exhibit 10.1 to the Company's Current
          Report on Form 8-K (Date of Report:  January 11, 1999) (Commission
          File Number:  1-14076), filed with the Commission on January 20,
          1999.)
10.15     Consulting  Agreement  between the Company and Michel  Ladovitch.
          (Incorporated  by  reference  to  Exhibit  10.2 to the Company's
          Current  Report on Form 8-K (Date of Report:  January 11, 1999)
          (Commission  File Number:  1-14076),  filed with the Commission on
          January 20, 1999.)
10.16     Warrant  Certificate,  with respect to 520,000  shares of Common
          Stock, registered in the name of Target Capital Corp. (Incorporated
          by reference to Exhibit 10.5 to the Company's  Current  Report on Form
          8-K (Date of Report:  January 11, 1999)  (Commission  File  Number:
          1-14076), filed with the Commission on January 20, 1999.)
10.17     Warrant Certificate,  with respect to 120,000 shares of Common Stock,
          registered in the name of United Krasna Organizations. (Incorporated
          by reference to Exhibit 10.6 to the  Company's  Current  Report on
          Form 8-K (Date of Report:  January  11, 1999)  (Commission  File
          Number:  1-14076),  filed with the  Commission on January 20,  1999.)
10.18     Warrant  Certificate,  with respect to 260,000 shares of Common Stock,
          registered  in the name of  Seafish  Partners. (Incorporated by
          reference to Exhibit 10.8 to the Company's Current Report on Form 8-K
          (Date of Report:  January 11, 1999)  (Commission  File Number:
          1-14076),  filed with the  Commission  on January 20, 1999.)
10.19     Warrant  Certificate, with respect to 600,000 shares of Common Stock,
          registered in the name of Regency  Investment  Partners. (Incorporated
          by reference to Exhibit 10.7 to the Company's  Current Report on Form
          8-K (Date of Report: January  11,  1999)  (Commission  File  Number:
          1-14076),  filed with the Commission on January 20, 1999.)
10.20     Letter  Agreement,  dated  December 17, 1998, between the Company Marc
          E. Jaffe. (Incorporated by reference to Exhibit 10.4 to the Company's
          Current Report on Form 8-K (Date of Report: January  11,  1999)
          (Commission  File  Number:  1-14076),  filed with the Commission  on
          January 20, 1999.)
10.21     Advice of Borrowing  Terms,  dated December 29, 1998, between Serif
          (Europe) Limited and National Westminster Bank PLC, and Mortgage
          Debenture,  dated  October 9, 1989,  between Serif (Europe)  Limited
          and  National  Westminster  Bank PLC.  (Incorporated  by reference to
          Exhibit 10.45 to the  Company's  Annual Report on Form 10-KSB
          for the year ended  December 31, 1998  (Commission  File Number
          1-14076), filed with the  Commission  on April 15,  1999.)

                                     -136-
<PAGE>


                                  VIZACOM INC.

                           ANNUAL REPORT ON FORM 10-K
                       FISCAL YEAR ENDED DECEMBER 31, 1999

                                 EXHIBIT INDEX

Exhibit
Number    Description of Exhibit
-------   ----------------------

10.22     Letter  Agreement, dated  April  20,  1999,   between  the  Company
          and  Seafish   Partners. (Incorporated  by  reference to Exhibit
          10.1 to the  Company's  Quarterly Report on Form 10-QSB for the period
          ended March 31, 1999 (Commission File Number  1-14076),  filed  with
          the  Commission  on May 20,  1999.)
10.23     Agreement,  dated July 1, 1999,  between the Company and Seafish
          Partners. (Incorporated by reference to Exhibit 10.1 to the Company's
          Current Report on Form 8-K  (Date of  Report:  July 1,  1999)
          (Commission  File  Number: 1-14076),  filed with the  Commission on
          July 15, 1999.)
10.24     Employment Agreement,  dated  July  14,  1999, between  Vizacom  Inc.
          and  Mark  E. Leininger.  (Incorporated  by reference  to Exhibit 10.2
          to the  Company's Current Report on Form 8-K (Date of Report: July 1,
          1999) (Commission File Number:  1-14076),  filed with the  Commission
          on July 15,  1999.)
10.25     Agreement and Plan of Merger, dated as of February 15, 2000, among
          Vizacom Inc., RCAC Acquisition Corp.,  Renaissance  Computer Art
          Center,  Inc. and the  former   stockholders  of  Renaissance
          Computer  Art  Center,  Inc. (Incorporated by reference to Exhibit
          10.1 to the Company's Current Report on Form 8-K (Date of Report:
          February 15, 2000)  (Commission File Number: 1-14076),  filed with the
          Commission  on February 22, 2000.)
10.26     Escrow Agreement,  dated as of February 15, 2000, among Vizacom Inc.,
          Renaissance Computer Art Center Inc., the former stockholders of
          Renaissance  Computer Art Center,  Inc.,  Andrew Edwards and Kaufman
          & Moomjian,  LLC, as escrow agent. (Incorporated by reference to
          Exhibit 10.2 to the Company's Current  Report on Form 8-K (Date of
          Report:  February 15, 2000)  (Commission  File Number:  1-14076),
          filed with the Commission on February 22, 2000.)
10.27     Form of Lock-Up  Agreement.  (Incorporated by reference to Exhibit
          10.3 to the  Company's  Current  Report on Form 8-K (Date of Report:
          February 15, 2000)  (Commission  File Number:  1-14076),  filed with
          the  Commission on February  22,  2000.)
10.28     Registration  Rights  Agreement,  dated as of February 15, 2000, among
          Vizacom Inc., and each of the former stockholders of Renaissance
          Computer Art Center,  Inc.  (Incorporated  by reference to Exhibit
          10.4 to the Company's  Current Report on Form 8-K (Date of Report:
          February  15, 2000)  (Commission  File  Number:  1-14076),  filed with
          the Commission on February 22, 2000.)
10.29     Employment Agreement,  dated as of February  15,  2000, by and between
          Vizacom  Inc.  and Andrew  Edwards. (Incorporated by reference to
          Exhibit 10.5 to the Company's Current Report on Form 8-K (Date of
          Report:  February 15, 2000)  (Commission File Number: 1-14076),  filed
          with the  Commission on February 22, 2000.)
10.30     Line of Credit Facility Agreement, dated January 8, 2000, between
          Vizacom Inc. and Churchill  Consulting.  (Incorporated  by reference
          to Exhibit 10.6 to the Company's  Current Report on Form 8-K (Date of
          Report:  February 15, 2000) (Commission File Number:  1-14076),  filed
          with the Commission on February 22,  2000.)
10.31     Letter  Agreement,  dated March 15, 2000, by and between Vizacom  Inc.
          and  Churchill  Consulting.  (Incorporated  by reference to Exhibit
          10.7 to the Company's  Current Report on Form 8-K (Date of Report:
          March  9,  2000)  (Commission  File  Number:  1-14076),  filed  with
          the Commission on March 21, 2000.)
10.32     Line of Credit Note, dated January 8, 2000,  in the  principal  amount
          of  $1,000,000 and payable to  Churchill Consulting.  (Incorporated
          by reference to Exhibit 10.7 to the  Company's Current Report on Form
          8-K (Date of Report: February  15, 2000) (Commission File Number:
          1-14076),  filed with the  Commission on February 22, 2000.)
10.33     Warrant Certificate, dated February 17, 2000, registered in the name
          of Churchill Consulting. (Incorporated by reference to Exhibit 10.8 to
          the Company's  Current Report on Form 8-K (Date of Report:  February
          15, 2000) (Commission File Number:  1-14076),  filed with the
          Commission on February  22, 2000.)

                                     -137-
<PAGE>
                                  VIZACOM INC.

                           ANNUAL REPORT ON FORM 10-K
                       FISCAL YEAR ENDED DECEMBER 31, 1999

                                 EXHIBIT INDEX

Exhibit
Number    Description of Exhibit
-------   ----------------------

10.34     Stock Acquisition  Agreement,  dated March 9, 2000, among Vizacom Inc.
          and  the  former   stockholders  of  Junction  15  Limited.
          (Incorporated by reference to Exhibit 10.1 to the Company's Current
          Report on Form 8-K (Date of  Report:  March 9,  2000)  (Commission
          File  Number: 1-14076),  filed with the  Commission  on March 21,
          2000.)
10.35     Form of Lock-Up  Agreement for use by directors of Junction 15 Limited
          at the time of the  acquisition.  (Incorporated  by  reference  to
          Exhibit 10.2 to the Company's  Current  Report on Form 8-K  (Date of
          Report:  March 9,  2000) (Commission File Number:  1-14076), filed
          with the Commission on March 21, 2000.)
10.36     Form  of  Lock-Up  Agreement  for use by  non-directors  of Junction
          15  Limited  at the time of the  acquisition.  (Incorporated  by
          reference  to Exhibit  10.3 to the  Company's  Current  Report on Form
          8-K (Date of Report: March 9, 2000) (Commission File Number: 1-14076),
          filed with  the  Commission  on  March  21,  2000.)
10.37     Registration  Rights Agreement,  dated as of March 9, 2000, among
          Vizacom Inc., and each of the former shareholders of Junction 15
          Limited.  (Incorporated by reference to  Exhibit 10.4 to the Company's
          Current Report on Form 8-K (Date of Report: March  9,  2000)
          (Commission  File  Number:   1-14076),  filed  with  the Commission
          on March 21, 2000.)
10.38     Agreement and Plan of Merger,  dated as of February 28, 2000,  among
          Vizacom Inc., PWR  Acquisition  Corp.,  PC Workstation  Rentals, Inc.,
          d/b/a PWR Systems and the stockholders of PC Workstation Rentals, Inc.
          (Incorporated by reference to Exhibit 10.1 to the Company's Current
          Report on Form 8-K (Date of Report:  March 27, 2000) (Commission File
          Number:  1-14076),  filed with the Commission on April 2, 2000.)
10.39     Amendment No. 1 to Merger  Agreement,  dated March 27, 2000,
          among Vizacom Inc., PWR Acquisition Corp., PC Workstation  Rentals,
          Inc., d/b/a PWR Systems and the shareholders of PC Workstation
          Rentals,  Inc. (Incorporated by reference to Exhibit 10.2 to the
          Company's Current Report on Form 8-K (Date of Report:  March 27, 2000)
          (Commission  File  Number: 1-14076),  filed  with the  Commission  on
          April 2,  2000.)
10.40     Letter Agreement, dated March 27, 2000 among Vizacom Inc., PWR
          Acquisition Corp., PC Workstation Rentals, Inc., d/b/a PWR Systems and
          the stockholders of PC Workstation  Rentals,  Inc.  (Incorporated by
          reference to Exhibit 10.1 to  the Company's Current Report on Form 8-K
          (Date of Report:  March 27, 2000) (Commission File Number:  1-14076),
          filed with the Commission on April 2, 2000.)
10.41     Convertible  Note,  dated March 27, 2000, of Vizacom Inc. in the
          principal  amount  of  $250,000  and  payable  to  Vincent  DiSpigno.
          (Incorporated by reference to Exhibit 10.3 to the Company's Current
          Report on Form 8-K (Date of Report:  March 27,  2000)  (Commission
          File  Number: 1-14076),  filed with the Commission on April 2, 2000.)
10.42     Convertible Note,  dated March 27, 2000,  of Vizacom Inc. in the
          principal  amount of $250,000 and payable to David Salav.
          (Incorporated by reference to Exhibit 10.4 to the Company's  Current
          Report on Form 8-K (Date of Report:  March 27, 2000) (Commission File
          Number:  1-14076), filed with the Commission on April 2, 2000.)
10.43     Lock-Up  Agreement,  dated March 27, 2000,  between Vizacom Inc. and
          Vincent  DiSpigno.  (Incorporated by reference to Exhibit
          10.5 to the Company's  Current  Report on Form 8-K (Date of Report:
          March 27, 2000) (Commission File Number:  1-14076), filed with the
          Commission on  April 2, 2000.)
10.44     Lock-Up  Agreement,  dated March 27, 2000,  between  Vizacom Inc. and
          David Salav.  (Incorporated  by reference to Exhibit 10.6 to the
          Company's  Current  Report on Form 8-K (Date of Report:  March 27,
          2000) (Commission  File Number: 1-14076),  filed with the  Commission
          on April 2, 2000.)

                                     -138-

<PAGE>
                                  VIZACOM INC.

                           ANNUAL REPORT ON FORM 10-K
                       FISCAL YEAR ENDED DECEMBER 31, 1999

                                 EXHIBIT INDEX

Exhibit
Number    Description of Exhibit
-------   ----------------------

10.45     Registration Rights Agreement, dated March 27, 2000, among Vizacom
          Inc.,  Vincent  DiSpigno and David Salav.  (Incorporated  by
          reference  to Exhibit  10.7 to the  Company's  Current  Report on Form
          8-K (Date of Report: March 27, 2000) (Commission File Number:
          1-14076), filed with the Commission on April 2, 2000.)
10.46     Employment  Agreement,  dated March 27, 2000,  between Vizacom Inc.
          and Vincent DiSpigno.  (Incorporated by reference to Exhibit 10.8 to
          the Company's  Current  Report on Form 8-K (Date of Report: March 27,
          2000) (Commission File Number:  1-14076), filed  with the Commission
          on April 2, 2000.)
10.47     Employment  Agreement,  dated March 27, 2000, between  Vizacom Inc.
          and David Salav.  (Incorporated  by reference to Exhibit  10.9 to the
          Company's  Current  Report on Form 8-K (Date of Report: March 27,
          2000) (Commission File Number:  1-14076), filed with the  Commission
          on April 2, 2000.)
10.48     Form of  Promissory  Note, dated March 27, 2000,  of PC  Workstation
          Rentals,  Inc. in the aggregate principal amount of $888,638  and
          payable to Vincent  DiSpigno  and David Salav.  (Incorporated  by
          reference  to  Exhibit  10.10 to the Company's Current  Report on
          Form 8-K (Date of Report:  March 27, 2000)  (Commission File Number:
          1-14076), filed with the Commission on April 2, 2000.)
10.49     Consulting Agreement,  dated as of January 28, 2000, between Vizacom
          Inc., Arel AMG,  Inc.,  and Charles S. Lazar.
10.50     Warrant  Certificate,  with respect to 100,000  shares of our common
          stock,  registered in the name of Arel AMG, Inc.
10.51     Warrant Certificate, with respect to 40,000 shares of our common
          stock,  registered in the name of Arel AMG, Inc.
10.52     Warrant Certificate, with respect to 70,000 shares of our common
          stock, registered in the name of Arel AMG, Inc.
10.53     Warrant  Certificate,  with respect to 90,000  shares of our common
          stock,  registered  in the name of Arel AMG, Inc.
10.54     Warrant  Certificate,  with  respect to 50,000  shares of our
          common  stock,  registered  in the name of Arel AMG,  Inc.
10.55     Warrant Certificate,   with  respect  to  150,000  shares  of  our
          common  stock, registered in the name of Arel AMG, Inc.
10.56     Warrant  Certificate,  with respect to 150,000  shares of our common
          stock,  registered in the name of Arel AMG, Inc.
10.57     Distribution and Marketing Agreement,  dated July 27, 1999,  between
          Nova Development  Corporation and all Serif subsidiaries of
          Vizacom Inc.
21        Subsidiaries of the Company.
23.1      Consent of Richard A. Eisner & Company,  LLP.
23.2      Consent of Ernst & Young.
23.3      Consent of Silver & Levene.
24        Powers of Attorney (set forth on the signature  page of this Annual
          Report on Form 10-KSB).
27        Financial Data Schedule.

                                      -139-