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

                                  FORM 10-KSB/A
                                   (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, 2000
[ ]  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.)

        3512 Veterans Memorial Highway                             11716
               Bohemia, New York                                 (Zip Code)
     (Address of principal executive offices)

                     300 Frank W. Burr Boulevard, 7th Floor
                                Teaneck, NJ 07666
                 (Address of former principal executive offices)

Issuer's telephone number:  (631) 981-5500

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/A or any amendment to this Form 10-KSB/A. [X]

     State issuer's net revenues for its most recent fiscal year: $13,457,629

     The aggregate market value of the voting stock held by non-affiliates of
the registrant was $3,106,982, at March 15, 2001, based on the closing sale
price of the Common Stock on such date of $1.88 per share, as reported by The
Nasdaq Stock Market, Inc.

     As of March 15, 2001, there were a total of 1,875,082 shares of the Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
     Portions of the definitive proxy statement to be delivered to shareholders
in connection with the Annual Meeting of Shareholders to be held in 2001 are
incorporated by reference into Part III of this Form 10-KSB/A.

<PAGE>

                  INDEX TO THE DECEMBER 31, 2000 FORM 10-KSB/A

                                                                            PAGE
                                                                            ----

                                     PART I

Item 1.  Description of Business.........................................     3

Item 2.  Description of Property.........................................    20

Item 3.  Legal Proceedings...............................................    21

Item 4.  Submission of Matters to a Vote of Security Holders.............    21

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters........    22

Item 6.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations....................................    26

Item 7.  Financial Statements............................................    32

Item 8.  Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure.....................................    32

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act............    33

Item 10. Executive Compensation..........................................    33

Item 11. Security Ownership of Certain Beneficial Owners and Management..    33

Item 12. Certain Relationships and Related Transactions..................    33

Item 13. Exhibits and Reports on Form 8-K................................    33

<PAGE>

     Throughout this Annual Report on Form 10-KSB/A, the terms "we," "us," "our"
and "our company" refer to Vizacom Inc. and, unless the context indicates
otherwise, our subsidiaries, Software Publishing Corporation, Renaissance
Multimedia, Inc. and PWR Systems, Inc., and other subsidiaries on a consolidated
basis.

     All shares amounts and prices in this 10-KSB/A have been adjusted to
reflect a one-for-ten (1:10) reverse stock split that became effective May 23,
2001.

INTRODUCTORY COMMENT - FORWARD-LOOKING STATEMENTS.

     Statements contained in this Annual Report on Form 10-KSB/A 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 our 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:
     o    the market acceptance and amount of sales of our products and
          services;
     o    the success of our professional internet and technology solutions
          offerings, such as business strategy formation, web site interface
          design, and systems integration;
     o    our success in integrating the operations of acquired companies,
          including Renaissance Multimedia (also known as Vizy Interactive New
          York) and PWR Systems (also known as Vizy Interactive-PWR Systems)
          into a coordinated and complementary operation;
     o    our ability to develop long-lasting relationships with our clients and
          attract new clients;
     o    our ability to develop long-lasting relationships with our industry
          partners and vendors and attract new industry partners and vendors;
     o    the competitive environment within the industries in which we operate;
     o    our ability to raise additional capital;
     o    the extent to which we are successful in developing, acquiring or
          licensing technologies which are accepted by the market;
     o    our ability to attract and retain qualified personnel;
     o    business and consumer trends, and economic conditions; and
     o    the other factors and information disclosed and discussed under "Risk
          Factors" below and in other sections of this Annual Report on Form
          10-KSB/A.

     You 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

     Vizacom provides professional internet and technology solutions to
companies seeking to benefit from the use of internet and information-based
technologies. We help businesses use the internet and other technologies to
build their competitive advantage, improve efficiencies, and market and brand
their business, products and services. Our solutions are comprehensive, and
include business strategy formation, web interface design and systems planning,
development and integration. As of December 31, 2000, we continued to operate
our historical software operations, which we divested in the first quarter of
2001.

     We gained our competencies in providing professional internet and
technology solutions through our acquisitions in 2000 of Renaissance Multimedia,
Inc. and PWR Systems, Inc. We combined these two companies under Vizy
Interactive Inc., which is a subsidiary company we formed in 2000 to market and
provide our



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professional internet and technology solutions. Specifically, we refer to
Renaissance Multimedia as Vizy Interactive New York, and to PWR Systems as Vizy
Interactive-PWR Systems.

     Our professional internet and technology solutions include:

     o     Business strategy formation
     o     E-commerce applications
     o     Web content management
     o     Web interface design and branding
     o     Systems planning and development
     o     Systems integration
     o     Value-added reselling
     o     Data center services.

     We deploy our solutions through a process we developed. This process is
designed to provide flexibility, so that we can address each client's particular
requirements, as well as efficiency, so that we may make the best use of our
resources to complete a client project in a timely manner. The process consists
of the following components: discover, strategize, design, build, launch and
grow.

     Our clients primarily consist of divisions and local offices of large,
multi-national corporations, as well as small- and mid-sized companies, and
early stage internet ventures. We strive to, and believe we generally are
successful at, forming long-term relationships with our clients. Our clients
include many well-recognized domestic and international companies, such as MTV
Networks, Computer Associates, Bozell New York, Martha Stewart Living,
Petrossian Paris, SoBe Beverage, and Sony Music.

     We believe that our strategic alliances with other computer product and
professional service providers plays a fundamental role in the success of our
business. Some of the important benefits we derive from our strategic alliances
include enhanced capability to deploy solutions, expanded range of solutions,
greater name recognition in the marketplace, and enhanced client lead and
revenue generation. Our current strategic allies include Microsoft Corporation,
Intel, 3Com, Apple Computer, Cable & Wireless, and IBM.

     We believe that our professional internet and technology solutions business
has several competitive advantages. We believe that as internet technologies
become more complex and interdependent, companies increasingly will demand the
broad spectrum of related solutions we currently offer. Our responsiveness to
client needs and focus on delivering customized solutions enables us to
cultivate long lasting relationships with our clients and industry partners.
Additionally, we believe our list of clients and strategic alliances gives us
significant credibility that helps us to solicit new client projects.

     Vizacom was formed as a CD-ROM publisher in 1992. We completed our initial
public offering in 1995. In 1996, we acquired the Serif and SPC companies to
become a provider and marketer of visual communications computer software
products. In 1999, we began to transition our business to become a provider of
professional internet and technology solutions. This transition involved the
acquisition of Renaissance Multimedia and PWR Systems in the U.S., as well as
two firms, Junction15 and interMETHODS, which operated in the U.K.

     As of December 31, 2000, we continued to develop and market visual
communications products, to operate international direct marketing and contact
centers, and to own VisualCities.com, a content and e-commerce web site for
visual communications computer products users. As of December 31, 2000, we also
operated an internet solutions business in London, England, called Vizy
Interactive London, which was comprised of Junction 15 Limited and interMETHODS
Limited. We have placed these two companies into voluntary creditors liquidation
in the United Kingdom. In early 2001, pursuant to a restructuring initiative, we
divested our visual communications, contact center and international operations.


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INDUSTRY BACKGROUND

     The internet continues to evolve as a key component of today's businesses.
Easy-to-use internet browsers, faster networks, e-commerce applications and an
increasingly sophisticated and growing user base have transformed the internet
in recent years from a medium for disseminating information to a business tool
capable of facilitating complex transactions between a company and its
customers. The result of these developments is that internet commerce is growing
significantly.

     Additionally, companies increasingly are seeking to integrate their web
initiatives with existing, physical business operations. In doing so, companies
expect to maximize efficiencies, deepen relationships with their customers,
suppliers, vendors and partners, and better promote their brand, products and
services.

     We expect that the continuing evolution of the internet from an
information-based medium to a commerce-based transaction platform integrated
with physical systems will increase the reliance today's businesses have for
providers of comprehensive professional internet and technology solutions. IDC
projects that the growing complexity of projects will spur an increase in the
worldwide market for internet services to $99.1 billion in 2004 from $16.2
billion in 1999. We believe there are several, specific reasons for the growing
reliance companies have on outside experts:

     o    One, the sophistication of internet-related technologies and speed of
          innovation is expected to continue to force companies to turn to
          specialists who possess the dedicated technology and strategic
          consulting expertise required to develop an effective web operation
          within an efficient period of time;
     o    Two, as internet technologies become more interrelated and integrated
          with physical business systems, companies can be expected to more
          frequently engage providers who can offer a broad range of combined
          expertise and solutions;
     o    Three, the trend of companies to integrate their web initiatives with
          physical business systems is expected to spur growth in the market for
          strategic consulting services. Currently, companies must often engage
          several firms to implement different components of their web
          initiative and integrate it with existing systems. Providers of
          comprehensive solutions can often formulate a strategic vision that
          will guide the most effective deployment of interrelated solutions;
          and
     o    Four, as projects increase in complexity and scale, companies will
          seek to form lasting relationships with single providers that can
          offer them a suite of related, ongoing consulting, implementation and
          maintenance solutions.

     Because of the foregoing factors, we believe companies are expected to seek
to engage, in ever greater numbers, the services of those internet solutions
providers that offer a breadth of strategy, creative and technological
capabilities

OUR SOLUTIONS

     We provide a broad range of comprehensive professional internet and
technology solutions that help our clients compete in today's digital economy.
We define a solution as an aggregate of specific, interrelated disciplines. Our
professional internet and technology solutions include:

     o    Business strategy formation, in which we conceptualize, develop and
          guide the strategy and implementation of a client's internet, intranet
          or extranet business model and objectives;
     o    E-commerce applications, in which we develop or customize applications
          that facilitate commerce over the internet, and integrate those
          applications with a client's web and physical technology systems;
     o    Web content management, in which we help our clients to procure,
          implement and deploy the most effective applications for managing
          their web site's informational content, or develop or customize such
          applications;
     o    Web interface design and branding, in which we produce the graphic
          interface design of a web site


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          and promote a client's brand and market presence online;
     o    Systems planning and development, in which we design and develop the
          technology components of a client's network connectivity, back-end
          systems, or internet, intranet and extranet initiatives;
     o    Systems integration, in which we integrate the components of a
          client's technology infrastructure. These solutions may include
          integrating a new information technology system with the components of
          a prior, legacy network. We also can integrate a client's network with
          its internet, intranet and extranet initiatives and other systems;
     o    Value-added reselling, in which we help a client to locate, purchase,
          test, install and learn to employ a diverse range of computer products
          that will help the client meet its business and technology objectives;
          and
     o    Data center services, in which we may host a client's web site on our
          server or remotely manage a client's network. We also act as an
          application service provider of streaming media solutions, including
          internet-based audio and video.

     We primarily deploy our business strategy formation, e-commerce
applications, web content management, and web interface design and branding
solutions through our Vizy Interactive New York subsidiary. Collectively, we
refer to these solutions as "web site development" solutions. We primarily
deploy our systems planning and development, systems integration, value-added
reselling, and data center services through our Vizy Interactive-PWR Systems
subsidiary. Collectively, we refer to these solutions as "technology
integration" solutions.

     We deploy our web site development and technology integration solutions
through a process we developed. This process is designed to provide flexibility,
so that we can address each client's particular requirements, as well as
efficiency, so that we may make the best use of our resources to complete a
client project in a timely manner. The process involves the following
components: discover, strategize, design, build, launch and grow. We describe
the steps by which we deploy this process for our web site development and
technology integration solutions in the sections "Web Site Development" and
"Technology Integration" below.

     We intend to further integrate our web site development and technology
integration solutions to create combined, end-to-end solutions that meet the
demands of the most challenging client projects. In doing so, we expect to
further differentiate ourselves from those competitors who do not provide a
range of solutions as extensive as our current service offerings.

Web Site Development
--------------------

     Our web site development solutions are intended to help our clients develop
competitive advantage through the strategic deployment of internet-related
technologies. In delivering our solutions, we build the client's brand online,
facilitate e-commerce between the client and its customers, and provide an
online vehicle for communicating, interacting and transacting with customers,
employees, partners, suppliers and vendors.

     We use a team-based approach in creating our web site development
solutions. A typical project involves an account manager, a producer, one or
more designers, and three or more programmers. Our approach emphasizes close
collaboration between our client and staff at all stages of the development of
the client's web initiative. This process helps to assure that our solutions
meet the client's expectations.

     We deploy our solutions through a process that involves the following
components: discover, strategize, design, build, launch and grow:

     Discover - Identifying and clarifying the client's needs. We strive to
     understand the client's business, clarify its immediate and long term
     goals, and assess its current technological and operational capabilities.
     We also assess the client's competitive position through a formal review
     and analysis of its competitors' web presence and online branding
     initiatives.


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     Strategize - Defining the Vision. Once we have identified the client's
     needs, current capabilities, and competitive position in its marketplace,
     we formulate a strategic plan. This strategic plan defines the business
     objectives for the client's web initiative, and outlines the steps and
     services involved in meeting those objectives. We also define the
     initiative's functional, technical and creative requirements, and establish
     the project's scope and budget. Additionally, we create a set of
     milestones, and assess how we will measure the success of the project.

     Design - Creating the User Experience. Once a strategy is in place, we
     develop the architecture for the client's web initiative. This architecture
     outlines the various content and technical components of the site and how
     the components will interact. So as to promote maximum efficiency, we
     typically construct a web site with a template architecture, and customize
     it to each client's particular requirements.

     Build - Making the Vision a Reality. Once the structural foundation is
     established, we focus on developing the interaction and interface design
     aspects of the project. Our designers use standard development tools such
     as Photoshop, Dreamweaver, Flash, Fireworks, Shockwave and other digital
     construction to create the graphic and multimedia components of the site's
     interface. We have a dedicated staff of programmers who may create or
     customize a variety of e-commerce, database, content management,
     administration, and additional software applications to add interactive and
     e-commerce capabilities to the client's web site. Our programmers employ
     the latest development tools and platforms, such as Perl, XML, ColdFusion,
     Java, Linux, and PHP, as well as development solutions provided by Oracle,
     Microsoft, InterShop and IBM.

     Many of the web initiatives we create for our clients involve the
     development of comprehensive e-commerce capabilities. For these clients, we
     customize a highly sophisticated e-commerce application module, which we
     developed, to meet their exact requirements. Compatible with several
     operating systems, this application module facilitates online cross- and
     up-sell, inventory management, administration and fulfillment capabilities,
     all of which we can integrate with the client's back-end systems. This
     application also is extensible, meaning it can accommodate the addition of
     new features without significant development, and scalable, meaning it can
     be tailored to changes in the scale of the client's systems.

     In addition to our design and programming services, we also can deploy, if
     required, several ancillary services, such as copywriting and multimedia
     presentation. Additionally, 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 develop system server requirements and can recommend our systems
     integration services to the client.

     Launch - Proving the Solution. The final web site is built and launched. If
     necessary, we integrate the solution with the client's existing information
     technology infrastructure. 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.

     Grow - Enhancement and Maintenance. After implementing the solution, we
     monitor it for a specified period of time and analyze how the solution
     performs. We typically are requested by our clients to provide updates,
     regular maintenance and other support and consulting services. 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-users' requirements evolve.

     Additionally, we offer a wide range of marketing services to promote the
client's web presence and online brand, including focus groups; web site usage
tracking; web banners and interactive product advertising; search engine
referencing; and interactive sales tools. We may deploy these services during
one or more of the development stages described above.


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Technology Integration
----------------------

     Our technology integration solutions are intended to develop for a client a
technological infrastructure that maximizes efficiencies and facilitates the
attainment of key business objectives through the strategic use of internet,
information and computer technologies. Our technology integration solutions
consist of systems planning and development; systems integration; value-added
reselling; and data center services.

     We use a team-based approach in deploying our technology integration
solutions. A typical project involves an account manager, service manager, and
two or more technical engineers. Our approach emphasizes close collaboration
between our client and staff at all stages of the development of the project's
initiative. This process helps to assure that our solutions meet the client's
expectations.

     We deploy our solutions using the same fundamental process we use to
develop a client's web site, tailored to the particular requirements of a
technology integration solution. This process consists of the following
components: discover, strategize, design, build and grow:

     Discover - Identifying and clarifying the client's needs. We consult with
     the client to understand the client's immediate and long-term business
     objectives and its current technical capabilities. We perform an on-site
     survey to understand the environment in which we will build the client's
     integration solution. Based on our experience and research, we may also
     assess the client's technical capabilities relative to those to of its
     nearest competitors.

     Strategize - Defining the Vision. In this stage, we prepare a proposal
     describing the client's current technological environment, and the
     deficiencies that we believe currently exist in its technical capabilities.
     We recommend the goods and services that we believe are required to
     optimize these capabilities. These often include the purchase of new
     software, hardware and network equipment, which we are authorized to resell
     to our clients. Lastly, we propose a customized solution, and define the
     project's scope and budget.

     Design - Developing the Plan. Once a strategy is in place, we develop a
     network topology schematic, which graphically depicts the various
     components of the optimized technological infrastructure we intend to
     develop for the client. We may also prepare a work-flow analysis, which
     outlines the process by which the various components of the client's new
     infrastructure will interact.

     Build - Making the Vision a Reality. Using the network topology schematic
     and work-flow analysis, we focus on developing the client's particular
     solution. Depending on the requirement, a typical job may include one or
     more of the following solutions, which we deploy on-site:

          o    development of a local or wide area network;
          o    development of specific components of a network, such as
               enterprise and work group client/server design and optimization;
          o    integration of a network with a back-end system, such as a
               product fulfillment center;
          o    integration of a network or system with a client's internet,
               intranet or extranet; and
          o    extension of a client's enterprise resource management system to
               incorporate interaction with trading partners, suppliers and
               vendors online.

     We often purchase and install a wide range of computer hardware, software
     and network equipment in connection with the solutions we provide. We have
     access to thousands of computer products, including desktop and laptop
     computers, digital video editing software, and network equipment, such as
     computer servers, switches and firewalls. 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 and any
     enhancements and upgrades our customers may require.

     Additionally, we provide several data center service solutions through our
     data center in Great River, New York. These solutions include web hosting;
     co-location management; data warehousing and security; contingency planning
     and recovery; and application service provider solutions. 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


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     the client's data. We also provide contingency planning and recovery
     services, where we provide redundant support for the client's network. As
     an application service provider, we specialize in streaming media
     solutions, which involve the presentation of video, audio, animation,
     graphics and content over a network or the internet. We also can warehouse
     a client's mission-critical data, and have strategic alliances with third
     parties to supplement our own internal resources in the areas of data
     security application programming.

     Grow - Expanding the Solution. Because the solutions we deliver are highly
     complex and can involve several technologies, our clients often hire us for
     ongoing maintenance, enhancement and support. Additionally, our broad range
     of solutions and commitment to client excellence often enables us to
     successfully promote new services to a client once the original project is
     complete.

     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, and 3Com.
We concentrate particularly in the resale of hardware and software products
manufactured by Apple Computer. The loss of our relationship as an authorized
dealer of products manufactured by Apple Computer would have a material negative
impact on our business.

     Our broad range of expertise in dealing with many computer equipment
products allows us to deliver unique services that differentiate us from our
competitors. Our technical staff is highly experienced in Novell, Windows NT,
Apple OS X, Linux and UNIX operating systems, as well as virtually all major
hardware and software manufacturers. This expertise allows us to provide our
clients with a customized, long-term technology plan and reduces the expense and
frustration our clients would otherwise incur dealing with multiple vendors. We
believe our expertise in multiple product solutions also enables us to create
unique solutions that differentiate us from competitors. For example, our
expertise in both PC and Apple products makes our solutions particularly
attractive to publishers, advertisers, entertainment and new media companies
that use PC systems for corporate administration and MAC systems for creative
media projects.

     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.

     Our sourcing network is intended to provide our clients with constrained
and allocated product delivery and avoid customer complaints of erratic
delivery. We are not dependent on a single purchasing or product source.
However, 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 a relationship with a significant
source of computer equipment could interrupt our business and have a material
adverse impact on us.

     Our hardware sales include the warranty provided by the manufacturers of
the products sold, and we often can provide options on extended warranties and
service contracts available from manufacturers. We typically sell our products
on a net 30 day basis. 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.

BUSINESS STRATEGY

     Our objective is to develop a leadership position in the professional
internet and technology solutions industry in the U.S. We also seek to establish
cash flow positive operations and earnings to enhance our investment value for
stockholders. Key components of our growth plan include:

     Deliver Integrated Solutions. We believe that companies are increasingly
     searching for a professional services firm that can deliver a full range of
     solutions that combine strategy, creative content and technology. We also
     believe that companies are increasingly requiring a professional services
     firm that can integrate an internet strategy with existing business
     operations. We believe our advantage lies in our ability to develop a
     particular internet and technology business strategy for each client, and
     integrate that strategy with the client's existing business processes and
     objectives. We intend to continue to develop this


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     advantage by further integrating our current services so that we may
     satisfy the demands of clients requiring a comprehensive solution to their
     web and technology initiatives.

     Develop the Market for our Technology Services. We intend to continue to
     develop sales opportunities for our systems design, development and
     integration solutions and our data center services. We believe sales of
     these offerings typically experience greater margins than our value added
     reselling. We believe we possess marketable expertise and competency in
     systems planning, development and integration, as well as data center
     services, and may be able to build our position in the markets for these
     solutions.

     Develop New Solutions. Through our years of operation, we have gained
     significant expertise in specific industries and types of business
     solutions. We believe this expertise, as well as our willingness to
     actively collaborate with clients to meet their business and technology
     objectives, makes us adept at developing new services that complement our
     existing range of solutions. By creating new solutions, we believe we will
     be able to access previously untapped sales opportunities from our
     relationships with existing clients. We also expect the creation of new
     solutions will allow us to enter new markets and solicit additional, new
     clients.

     Build Industry Partnerships and Strategic Alliances. We believe that much
     of our success is due to the relationships we have formed with several
     well-known computer software and hardware manufacturers. These
     relationships allow us to provide a broad range of combined product-service
     solutions to our clients and other end users. Currently, our industry
     partners and strategic allies include Microsoft Corporation, Intel, 3Com,
     Cable & Wireless, and Apple Computer. We intend to strive to maintain
     long-term relationships with these industry partners as well as develop new
     relationships with other top companies whose products and services will
     enhance or expand our offerings.

     Invest in Intellectual Capital. We believe we have developed several highly
     sophisticated e-commerce, content management and other internet-related
     application modules, and possession of these applications enhances our
     competitive advantage. 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 further develop our
     library of partially pre-built internet solutions that combine our
     methodologies, services and reusable software and content objects with
     third party software.

     Build Our Market Position. We intend to continue leveraging our market
     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 professional internet and
     technology solutions to meet the most demanding business needs. We also
     intend to continue to pursue a wide range of marketing and sales
     initiatives, including participation in trade shows and other industry
     events and editorial coverage in top industry and trade media. We also
     intend to further integrate the sales and marketing initiatives of our Vizy
     Interactive Inc. companies to strengthen our overall brand and better
     communicate the value of our combined services.

     Promote Service Excellence. We strive to meet or exceed the highest
     standards within each of our service disciplines. We strive to collaborate
     with our clients to develop an in-depth understanding of their particular
     business and objectives. We are committed to responding to our clients'
     concerns and objectives. In order to maintain high levels of creativity and
     quality, we place great importance on recruiting and retaining qualified
     employees.

     Pursue Strategic Acquisitions. We may pursue strategic acquisitions of
     companies that provide additional service disciplines, management and staff
     talent, client and partner relationships and geographic coverage.


                                       10
<PAGE>

     We intend to only pursue acquisitions of companies whose operations would
     facilitate our establishment of positive cash flows.

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

     Our failure to successfully compete for internet and technology
professionals may affect our business operations. We are dependent on key
personnel, and 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
internet services market. The markets for the sale of goods over the internet
continue to develop. Our future revenues and growth will be substantially
dependent upon the widespread acceptance of the internet as a medium for
commerce by consumers, and the decision of companies and organizations to
develop web initiatives to tap e-commerce markets. Rapid growth in the use of
and interest in the internet and e-commerce is a recent phenomenon and there can
be no assurance that this growth will 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.
Additionally, investment in the types of new start-up internet companies that
may require professional internet and technology solutions may decline.

     Our 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
communications for providing reliable internet access and services. 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. 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. 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.

     We may enter into fixed-price contracts which involve financial risks. Many
of our services contracts are on a fixed-price basis, rather than on a time and
materials basis. Further, as the average size of our 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. If we 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


                                       11
<PAGE>

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 enter into long-term contracts with our clients,
although we generally do enter into per-project contracts with clients that wish
to retain our services to develop for them a web operation or technology
solution. We anticipate that these clients generally will continue to retain us
on a project by project basis, rather than under long-term contracts that
include fees for maintenance and ongoing support. 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 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
engagements involve the development and implementation of 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 operations 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 business into markets found in different geographic areas of the U.S. We
may seek to acquire companies whose operations would allow us to tap markets in
major metropolitan areas around the U.S. However, there can be no assurance that
we will acquire any company or expand our business operations nationally or
otherwise.

         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:

          o    the demand for our products and services;
          o    the size, timing and timely fulfillment of orders for our
               products and services; o the level of product, price and service
               competition;
          o    changes in our sales incentive strategy, as well as sales
               personnel changes;
          o    federal, state or local government regulation;
          o    our ability to upgrade and develop our systems and infrastructure
               to accommodate growth;
          o    the success of our brand building and marketing campaigns; and
          o    general economic conditions and economic conditions specific to
               the internet service 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 maintaining and growing our operations. 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.


                                       12
<PAGE>

     Our growth may depend on our ability to continue to develop our brands. We
believe that strengthening our brands may be critical to achieving widespread
acceptance of our services. Promoting and positioning our brands will depend
largely on the success of our marketing efforts and our ability to provide high
quality services. In order to promote our brands, we may 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 clients, they
may not 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 may be harmed.

SALES AND MARKETING

     Our sales and marketing initiatives strive to communicate our competitive
differentiators to existing and potential clients. We believe our competitive
differentiators include our broad range of comprehensive solutions, industry and
technical expertise, respected clients and industry partners, and the ability
and willingness to actively collaborate with our clients to meet their business
goals and ensure service excellence.

     We market our solutions to companies in a broad range of industries,
including entertainment, advertising, publishing, new media, financial, health
care, retail, and real estate. We believe we have a recognized and respected
presence in the professional internet and technology solutions industry. We also
believe we are particularly well-known in our industry in the greater New York
City and Boston areas, where we primarily operate and concentrate our sales and
marketing efforts. We believe our established presence in our industry
contributes to our ability to solicit new clients and maintain relationships
with existing clients. We primarily market and promote our solutions through
sponsorships and participation in industry trade shows, exhibitions and other
special events, referrals from clients, industry partners and vendors, promoting
new services to existing clients, advertising in trade and business media, and
promoting editorial coverage of our accomplishments in trade and business media.

     We believe many of the solutions we currently provide through our Vizy
Interactive New York and Vizy Interactive-PWR Systems companies are related and
complementary. A client whose web site we develop through Vizy Interactive New
York, for example, may also benefit from the web site hosting, network
integration and other solutions we provide through Vizy Interactive-PWR Systems.
We intend to continue to cross-train and further integrate the marketing and
sales staffs and marketing initiatives of our Vizy Interactive companies. In
doing so, we expect to create a combined list of clients to which we may offer a
broader range of competitive solutions than what they may currently access from
our competitors.

     We also promote our solutions through our web site at vizyinteractive.com
and through referrals from online B2B exchanges. Additionally, we operate a web
site, at store.PWRSystems.com, for the online promotion and sale of computer and
digital communication equipment that we are authorized to sell. This web site is
targeted to our regular value added reselling clients and the B2B market.

CLIENT CONCENTRATION AND CREDIT RISK

     No client represented more than 10% of our total net sales for 2000 or
1999. For the year ended December 31, 1999, one client accounted for 19% of our
consolidated net accounts receivable. We are not aware of any significant
concentration of business transacted with a particular client that could, if
suddenly eliminated, have a material adverse impact on our operations. We are
dependent on the availability of two short term loans from financial
institutions to finance our operations. Neither lender has any long term
commitment to lend. The unavailability of either or both of these borrowings
would have a material adverse effect on our business. Except for such dependency
on these two short term loans, we do 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 our operations.


                                       13
<PAGE>

COMPETITION

     The professional internet and technology solutions market is both highly
competitive and growing. The market is also fragmented, with different service
providers focusing on different types of solutions. For example, a web
development firm may design the graphic web interface for a client. A technology
integrator may integrate a company's web initiative with an existing network. A
consultant may oversee the process of developing an online business strategy for
a client, and even recommend an appropriate web development firm or integrator
to fulfill specific functions.

     We believe our competitors include:
     o    Web development firms, such as Scient, Viant, Agency.com, Icon
          Medialab, iXL, Modem Media, Poppe Tyson, Organic Online, Pixelpark,
          Proxicom, Razorfish, Rare Medium, Xceed Inc., USWeb/CKS, Lante and 5B
          Technologies;
     o    Technology consulting firms, such as Diamond Technology Partners and
          Metzler Group;
     o    Technology integrators, such as Accenture, Cambridge Technology
          Partners, Cap Gemini, EDS, IBM, Sapient, 5B Technologies Corporation,
          and WM-Data;
     o    Strategic consulting firms, such as Bain & Company, Booz-Allen &
          Hamilton, Boston Consulting Group and McKinsey & Company; and
     o    In-house information technology, marketing and design service
          departments of our potential clients.

     We believe that our ability to provide a broad range of creative,
technology, and consulting services is an important advantage that
differentiates us from many of our competitors. However, several of our
competitors have announced their intention to develop additional solutions.
Furthermore, many of our competitors may have greater resources than we
currently possess. 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 services than we can to our services. In addition, the lack of
significant barriers to entry into this market may permit new market entrants
and further intensify competition.

     We believe that the principal competitive factors in the professional
internet and technology solutions markets are:

     o     the ability to attract and retain professionals,
     o     technical knowledge and creative skills,
     o     brand recognition and reputation,
     o     reliability of the delivered solutions,
     o     client service, and
     o     price.

CLIENTS

     We define a client as any organization that hires us to perform either a
single project or several, combined projects over an extended period of time. We
strive to, and believe we are successful at, developing long-term relationships
with our clients. We believe our ability to develop long-term client
relationships with well-known companies and organizations gives us credibility
when soliciting new clients. We also believe it is generally more cost efficient
to promote new solutions to an existing base of clients than to prospective
clients. Our clients operate in a diverse range of industries and primarily
consist of large, multi-national corporations, small- and mid-sized companies,
and early stage internet ventures. Our clients include:

     ADI Security Systems                        ADP Brokerage
     American Lawyer Media                       Audiovox
     Avon                                        Bozell Group, a division of
     Chase Manhattan Bank                         True North Communications
     Comedy Central                              Chelsea Property Group
                                                 DDB Worldwide


                                       14
<PAGE>

     Essence Magazine                            First Alert
     Gruner Jahr, a division of Bertlesman       HBO
     Loral Space & Communication                 Manhattan Bagel
     Manhattanville College                      MasterCard
     Martha Stewart Living                       Merck
     MTV Networks                                New England Journal of Medicine
     Nickolodeon                                 Petrossian Paris
     Phillips Van-Heusen (IZOD)                  Polo Ralph Lauren
     PriceWaterhouse Coopers                     Quick International
     RCA                                         Ready Guard
     Reckson Associates                          Sara Lee Bakery
     Schering-Plough                             Simon and Schuster
     Smithsonian Magazine                        SoBeBeverage
     Sony Music                                  Sprint Communications
     Time Warner                                 Tishman Construction
     V-Clubs                                     Verizon
     WGBH, a division of PBS                     Young & Rubicam

INDUSTRY PARTNERS

We believe that our industry partnerships and strategic alliances with other
computer products and professional services providers play a fundamental role in
the success of our business. We define industry partnerships and strategic
alliances as involving mutual investments of resources, such as training and
staff time. Some of the important benefits we derive from our strategic
alliances and partnerships include enhanced capability to deploy solutions,
expanded range of solutions, greater name recognition in the marketplace, and
enhanced client lead and revenue generation. Most of our strategic allies and
partners are manufacturers of software, hardware and additional computer
equipment we resell in connection with out technology solution offerings. In
some instances, we will enter into formal partnership agreements with these
companies that are designed to supplement agreements by which we become an
authorized reseller of a company's products. Through our partnership agreements,
we may agree with a partner to dedicate money and staff time to implement
marketing activities, including developing strategic marketing initiatives to
implement on a collaborative basis. We therefore refer to these relationships as
strategic. Such activities may include organizing events to promote products to
clients and training our employees in the installation and sale of a partner's
products. In other instances, we may not formalize our relationships with our
partners, although we may collaborate closely with these partners to form
joint-marketing and business development initiatives that are substantially
similar to the marketing and training programs we implement with those companies
with which we have entered into formal partnership agreements.

     The term strategic ally refers to companies with which we are involved in
developing joint business development, marketing and training strategies aimed
at promoting long-term business growth for both the ally and us. An industry
partner is any entity with which we develop joint marketing, business
development and training programs that do not require a commitment by us or the
partner to implement additional activities as part of a long-term collaborative
business development strategy. We may or may not enter into formal partnership
agreements with a strategic ally or partner. We differentiate between a
strategic ally or partner on the basis of the substance of our collaborative
activities with that ally or partner and not necessarily on the basis of any
formal agreements

     Our current industry partners and strategic allies include:

     3Com                                        Adobe
     Apple Computer                              Bond Technologies
     Cable & Wireless                            Cisco Systems
     Compaq Computer                             Epson
     IBM                                         Intel
     iomega                                      Hewlett Packard
     Microsoft Corporation                       Microtech
     NEC                                         Novell
     SGI                                         Silicon Graphics
     Storage Computer                            Symantec
     Tektronix                                   UUNET


                                       15
<PAGE>

GOVERNMENTAL REGULATION

     We believe that we do not need any government approval in connection with
our current internet and technology solutions operations. In addition, we know
of no governmental regulations, either federal, state or local, which currently
materially affect our internet and technology solutions operations or products.
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 internet solutions operations.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

     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. We have, however, developed a highly sophisticated e-commerce
application module, which we often customize for our clients. We believe such
module is protected by common law copyright laws although we have not yet
applied for a copyright registration in respect of such module.

     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.

EMPLOYEES

     As of March 15, 2001, we had a total of 221 employees, 205 of whom worked
full time. Of such employees, 79 were located in the United States and 142 were
located internationally. Our total number of employees decreased by 171 to 50
upon consummation of the sale of our visual communications operations on March
31, 2001. From time to time, we also utilize independent contractors in
connection with our various business activities. None of our employees are
represented by a labor union and we have never experienced a work stoppage. We
believe that we have satisfactory relations with our employees and contractors.

BACKLOG

     As of December 31, 2000, we had a backlog of $137,822 in our internet and
technology solutions business.

DISCONTINUED OPERATIONS

     As of December 31, 2000, we continued to develop and market visual
communications graphics software products. Through our Serif subsidiaries, we
developed and marketed Serif PagePlus 7, Serif DrawPlus 5 and additional
Serif-branded products in the U.S. and Europe. Also through our Serif
subsidiaries, we operated an international direct marketing and contact center
operation that sold our Serif and other products. Our Serif subsidiaries also
marketed and sold our contact center capabilities as services, marketed under
the brand name Dialog24, to third parties. Through our Software Publishing
Corporation (SPC) subsidiaries, we developed and marketed Harvard Graphics(R)
Advanced Presentations, Harvard Graphics(R) Pro Presentations, and additional
products in the Harvard Graphics(R) product line in the U.S. and Europe.
Additionally, we continued to own VisualCities.com, a content and e-commerce web
site for visual communications computer products users.

     We developed our historical graphics software products from proprietary
technologies. We historically protected the intellectual property associated
with these proprietary technologies through 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
believe that no governmental approval was necessary for the production and sale
of our


                                       16
<PAGE>

software products. In addition, we know of no governmental regulations, either
federal, state or local, which materially affected our software operations or
products. Furthermore, we know of no environmental law, either federal, state or
local, which materially affected 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.

     The market for our software products was highly competitive. We had
numerous competitors to our software business, many of whom had greater
financial, technical and marketing resources, greater name recognition and a
larger customer base.

     In January 2001, we commenced a restructuring initiative, which we expect
to enable us to improve our operating results and better focus our resources on
growing our professional internet and technology solutions business, Vizy
Interactive, in the United States. As part of this restructuring initiative, in
February 2001, we divested through English law creditors' voluntary liquidation
our two interactive service firms in the United Kingdom, Junction 15 Limited and
interMETHODS Limited. We have terminated the employment of the two executives of
Junction 15 Limited, and we currently intend to pursue indemnification claims
for breaches of representations and warranties by the sellers of both Junction
15 Limited and interMETHODS Limited.

     On March 31, 2001, we sold our visual communications operations to the
management of our Serif subsidiaries. We received $150,000 in cash at closing.
We also hold a promissory note from Serif Inc. in the aggregate principal amount
of $987,500, which note bears interest at a rate of 10% per annum, and which is
payable $40,000 per month, except for April and November, in which months the
payments are $30,000 and $50,000, respectively. We or one of our subsidiaries
remain responsible for some potential liabilities. Serif (Europe) Limited
received a 12-month exclusive license in Europe and a 24-month non-exclusive
license in the rest of the world with respect to the software of our SPC
subsidiary. Serif (Europe) Limited was also granted a non-exclusive license to
use the Harvard Graphics(R) brand name for the purpose of selling repackaged
Serif products using such name. Each of such licenses shall be renewed if
minimum royalty and other conditions are met. In consideration therefor, Serif
(Europe) Limited will pay a royalty fee of 12.5% in respect of sales of SPC
software and 3% of sales of repackaged Serif software. While we continue to own
SPC, we agreed not to compete with Serif in the software business as long as the
licenses are in effect.

                                  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 twelve months
ended December 31, 2000, we had a net loss attributable to common stockholders
of approximately ($19,090,000). For the year ended December 31, 1999, we had a
net loss of approximately ($5,683,000). Our operating losses may increase as we:

     o    develop our professional internet and technology solutions business,
     o    develop, produce and distribute additional products and services,
     o    de-emphasize other products and services,
     o    implement our growth strategy, and
     o    restructure our operations to focus on our core U.S. professional
          internet and technology solutions business.

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

WE HAD A WORKING CAPITAL DEFICIENCY AT DECEMBER 31, 2000 AND BELIEVE WE WILL
NEED TO RAISE ADDITIONAL CAPITAL.

     We had a working capital deficiency of approximately $4,685,000 at December
31, 2000. The report of our accountants as to our financial statements as at and
for the period ended December 31, 2000 contains a paragraph as to our ability to
continue as a going concern. We believe that over the next twelve months, we
will need to raise at least


                                       17
<PAGE>

$1,500,000 to meet currently anticipated liquidity and capital expenditure
requirements. We intend to seek additional financing through one or more debt,
equity, or convertible securities offerings, through the sale of assets or
through a merger or acquisition. There can be no assurance that we will be
successful in completing any such financings or other transactions, or that the
terms of any such financings or other transactions will be beneficial to us or
our stockholders.

OUR RESTRUCTURING PLAN MAY NOT BE SUCCESSFUL.

     In January 2001, we began implementing a plan to restructure our operations
and management team. We have moved our principal executive offices to the
Bohemia, New York offices of our Vizy Interactive-PWR Systems subsidiary and
closed our Teaneck, New Jersey office as part of an effort to significantly
reduce our expenses. We also sold our visual communications operations and have
placed our London internet solutions businesses into creditors voluntary
liquidation in order to focus on our core U.S. professional internet and
technology solutions business.

     We have taken these actions pursuant to a plan that is intended to result
in improving our operating results. We believe that, by continuing to develop
and enhance our U.S. professional internet and technology solutions business and
eliminating excess overhead costs, including those associated with overseas
operations, we can establish a positive cash flow and enhance our focus on core
business objectives; however, no assurance can be given that the restructuring
plan will be implemented successfully or otherwise yield the desired results.

WE HAVE LIMITED EXPERIENCE AS A PROFESSIONAL INTERNET AND TECHNOLOGY SOLUTIONS
PROVIDER.

     Our historical operations have been as a developer and marketer of software
products, primarily visual communication applications. We have only within the
last fiscal year focused our resources on competing in the professional internet
and technology solutions market. Accordingly, there is little historical
information on which you can base an evaluation of our new businesses and
prospects.

     As a professional internet and technology solutions company, we face risks
and uncertainties that are different than the risks and uncertainties we have
faced with our software operations. To address these new risks and
uncertainties, we must, among other things, do the following:

     o    continue to raise working capital to be able to compete effectively in
          the professional internet and technology solutions market with
          well-funded competition,
     o    attract, integrate, retain and motivate qualified personnel, o
          maintain and enhance our brands,
     o    successfully execute our business acquisition and marketing strategy,
     o    continue to develop and upgrade our technology and information
          processing systems,
     o    provide superior customer service, and o 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.

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 internet and technology 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:

     o    costs associated with incomplete or poorly implemented acquisitions,
     o    expenses, delays and difficulties of integrating acquired companies
          into our existing organization,


                                       18
<PAGE>

     o    the impact of amortizing goodwill and other intangible assets of
          acquired companies on our results of operations,
     o    dilution of the interest of existing stockholders if we issue our
          stock in making acquisitions or if we sell stock to raise cash for
          acquisitions,
     o    diversion of management's attention,
     o    increases in our expenses in order to advertise and promote acquired
          companies and their and our products and services,
     o    unusual impacts on our financial condition due to the timing of
          acquisitions, and
     o    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 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 in our operating units, including
possible future acquisitions. We could also experience financial or other
setbacks if any of the acquired businesses experience unanticipated problems, as
was the case with our London operations. Further, we may experience disputes
with the sellers of acquired businesses and may fail to retain key acquired
personnel. 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 AN IRS CLOSING AGREEMENT COULD RESULT IN A LARGE TAX PAYMENT.

     On November 6, 2000, we applied to the Internal Revenue Service for a
closing agreement regarding the dual consolidated losses of our Software
Publishing Corporation subsidiary. 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. We believe that
we have demonstrated to the IRS that we meet the requirements for a closing
agreement and that the IRS will agree to provide us with one, although the IRS
has again requested additional information in connection with our application.
No assurance can be given that the IRS will agree to the closing agreement or if
so, when, 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 SPC 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 our December 31,
2000 consolidated financial statements contains a paragraph emphasizing these
dual consolidated losses.

WE MAY BE DELISTED FROM THE NASDAQ STOCK MARKET.

     On March 1, 2001, we received correspondence from The Nasdaq Stock Market
stating that our stock would be delisted from trading because the bid price of
our common stock did not equal or exceed $1.00 for a minimum of ten consecutive
trading days prior to March 1, 2001. We have appealed this determination and
requested a hearing before a Nasdaq Listing Qualifications Panel. The hearing is
scheduled for April 6, 2001. The delisting is stayed pending a decision by the
Nasdaq Listing Qualification Panel. A delisting of our common stock from


                                       19
<PAGE>

Nasdaq could have an adverse effect on the market price of our common stock and
the ability and capacity of persons to acquire or sell shares of our common
stock.

NO ASSURANCE THAT KEY EMPLOYEES WILL BE RETAINED.

     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 Vincent DiSpigno, our president, Alan W. Schoenbart, our vice
president - finance and chief financial officer, and David Salav and Andrew
Edwards, our vice presidents. Mr. DiSpigno, Mr. Salav and Mr. Edwards have each
entered into an employment agreement with us, but Mr. Schoenbart currently is
not subject either to an employment or non-competition agreement with us. The
loss or unavailability to us of any of Messrs. DiSpigno, Schoenbart, Salav or
Edwards 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 our 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 do not have "key man" life insurance covering any of
Messrs. DiSpigno, Schoenbart, Salav or Edwards.

WE ARE DEPENDENT ON SHORT TERM LOANS, THE LOSS OF WHICH WOULD MATERIALLY
ADVERSELY AFFECT OUR OPERATIONS.

     We are dependent on the availability of two short term loans from financial
institutions to finance our operations. Neither lender has any long term
commitment to lend. The unavailability of either or both of these borrowings
would have a material adverse affect on our business.

ITEM 2.  DESCRIPTION OF PROPERTY.

     Our principal executive offices are located at 3512 Veterans Memorial
Highway, Bohemia, New York, 11716. The lease for this facility terminates in
January 31, 2004 and provides for average annual rental costs of approximately
$66,000, for approximately 5,000 square feet of space. Prior to March 29, 2001,
our principal executive offices were at Glenpointe Centre East, 300 Frank W.
Burr Boulevard - 7th Floor, Teaneck, New Jersey 07666. Our Serif Inc.
subsidiary, which we sold on March 31, 2001, leased approximately 25,400 square
feet of office and warehouse space in Nashua, New Hampshire pursuant to a lease
ending in March 2002. This facility served as our primary North American
telemarketing, customer support, product development, warehouse and fulfillment
contact center. Rental costs for the Nashua facility averaged approximately
$97,000 per year. Our Serif (Europe) Limited subsidiary, which we also sold on
March 31, 2001, leased approximately 20,000 square feet of office and warehouse
space in Nottingham, England under a lease which terminates in May 2002. This
facility served as our United Kingdom contact center and European warehouse and
fulfillment center. The rental cost for the Nottingham facility averaged
approximately $116,000 per year (based on current exchange rates). Through
December 2000, we also leased approximately 4,000 square feet of office space in
Aachen, Germany pursuant to a lease which expires in September, 2001, with an
annual rental cost of approximately $53,000 (based on current exchange rates).
We sold our Aachen, Germany operations effective December 2000, and the buyer
assumed our obligations under this lease. Through February 2, 2001, our Junction
15 and interMETHODS subsidiaries, which we placed into creditors voluntary
liquidation on such date, occupied approximately 1,000 square feet of office
space in London, England, with an annual rent cost of approximately $16,000 per
year.

     We conduct our website design services primarily from the offices of our
Vizy Interactive New York subsidiary. Vizy Interactive New York currently
occupies approximately 5,000 square feet of office space in New York City under
a lease expiring in December 2007. Our current rental costs for this space are
approximately $156,200 per year.

     We conduct the systems integration business of our Vizy Interactive-PWR
Systems subsidiary primarily from our executive offices in Bohemia, New York, a
suburb of New York City. Vizy Interactive-PWR Systems also has offices in our
Vizy Interactive New York subsidiary's New York City office and in Boston, for
the use by our employees in their sales and support functions. The current
annual rental costs for the Boston office aggregates


                                       20
<PAGE>

approximately $9,768. In addition, PWR leases an additional 3,817 square feet of
space in Great River, New York for its data center facility, the annual rent for
which aggregates approximately $75,200.

     Through March 29, 2001, we coordinated our executive, administrative,
accounting, product development, sales, marketing, purchasing and scheduling
functions primarily from our executive offices in Teaneck, New Jersey. We intend
to enter into a Sublease Termination Agreement for our former Teaneck, New
Jersey headquarters location. Under the anticipated agreement, we expect our
remaining lease obligations will terminate. Since such date, we have performed
such functions at a combination of the New York offices of Vizy Interactive New
York and the Bohemia offices of Vizy Interactive-PWR Systems. We believe that
our existing space provides us with adequate space for our present operations
for the near future.

     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.

     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. 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. Neither SPC nor we currently have any offices at this location. SPC has
filed an answer in this action denying the plaintiffs' claims. This action
currently is in the discovery phase. In October 2000, the plaintiff amended its
complaint to name Neil M. Kaufman, our Chairman of the Board and corporate
counsel, as a defendant. While it is reasonably possible that SPC may have some
liability to the plaintiff, we believe this action, including the claim against
Mr. Kaufman, is without merit and intend to vigorously defend this action.

     In February 2000, we received a demand for arbitration before the American
Arbitration Association with respect to certain fees payable in connection with
an investment banking agreement with Early Bird Capital.com (formerly known as
Southeast Research Partners) which we terminated. The claim calls for payment of
$45,000 and reinstatement or other value of warrants to purchase 15,000 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. The
arbitration is currently in the discovery stage. We believe that the claims in
this arbitration matter are without merit and intend to vigorously defend this
action.

     In January 2001, we placed Junction 15 Ltd. and interMETHODS Ltd., our two
Vizy Interactive-London subsidiaries, into creditors voluntary liquidation under
United Kingdom law. KPMG has been appointed as the liquidator. We have
terminated the employment of the two executives of Junction 15 Limited for
cause, and we currently intend to pursue indemnification claims for breaches of
representations and warranties by the sellers of both Junction 15 Limited and
interMETHODS Limited. Subject to the foregoing, we do not expect to have any
liability to any creditors of these companies.

     On January 9, 2001, we entered into an agreement with a German company to
sell certain assets and liabilities of our Aachen, Germany contact center
operation, including the assumption of the remaining lease obligation. The
agreement calls for a payment of approximately $100,000, of which approximately
$50,000 would be utilized to pay remaining tax obligations. The $100,000 payment
has not been received and is past due. We have commenced legal proceedings to
collect this amount.

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

     Our annual meeting of stockholders is scheduled for 10:00 a.m., May 17,
2001, at the office of Vizy Interactive-PWR Systems at the Long Island
Technology Center, 3500 Sunrise Highway, Great River, New York 11739.


                                       21
<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. The information reflects inter-dealer prices, without
retail mark-ups, mark-downs or commissions and may not necessarily represent
actual transactions.

                                              High Bid          Low Bid
                                              --------          -------
Fiscal 1999
-----------
First Quarter.............................      19.70              9.38
Second Quarter............................      44.40             16.50
Third Quarter.............................      42.50             22.50
Fourth Quarter............................      40.00             21.25

Fiscal 2000
-----------
First Quarter.............................      97.50             30.00
Second Quarter............................      62.50             21.30
Third Quarter.............................      19.40             10.30
Fourth Quarter............................      13.10              2.19

     As of March 28, 2001, the closing price for our Common Stock as reported on
Nasdaq was $15.63. As of the close of business on March 28, 2001, we had
approximately 720 stockholders of record. We estimate, based upon surveys
conducted by our transfer agent in connection with our 2000 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.

     On March 1, 2001, we received correspondence from The Nasdaq Stock Market
Inc. stating that our common stock would be delisted from trading because the
bid price of our common stock did not equal or exceed $1.00 for a minimum of ten
consecutive trading days prior to March 1, 2001 as required by Nasdaq
Marketplace Rule 4310(c)(4). We have appealed this determination and requested a
hearing before a Nasdaq Listing Qualifications Panel. This hearing, at which we
are required to demonstrate our ability to maintain long-term compliance with
all Nasdaq listing maintenance requirements, is scheduled for April 6, 2001. The
delisting of our common stock has been stayed pending the decision by the Nasdaq
Qualifications Panel. In the event that our common stock is delisted from
Nasdaq, we expect that our common stock will continue to be listed on the Boston
Stock Exchange and would also trade on the NASD's OTC Bulletin Board.

     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:

     o    the results of our Nasdaq Listing Qualifications Panel hearing,
     o    variations in our operating and financial results,
     o    announcements of technological innovations or new products by us or
          our competitors,
     o    changes in prices of our products or our competitors' products and
          services,


                                       22
<PAGE>

     o    changes in the product mix of our sales,
     o    changes in our revenue and revenue growth rates as a whole or for
          individual geographic areas, business units, products or product
          categories,
     o    responses to our strategies,
     o    unscheduled system interruptions,
     o    additions or departures of key personnel,
     o    changes in financial estimates by securities analysts,
     o    conditions or trends in the internet and technology solutions
          industries,
     o    changes in the market valuations of other internet or technology
          solutions companies,
     o    developments in internet regulations,
     o    announcements by us or our competitors of significant acquisitions,
          strategic partnerships, joint ventures or capital commitments,
     o    our ability to raise needed capital
     o    sales of our common stock or other securities in the open market, and
     o    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 technology
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 sales and issuances of our
equity securities occurring during 2000 and the first quarter of 2001which we
have not otherwise disclosed in any of our Quarterly Reports on Form 10-QSB.

     In the first quarter of 2000, we sold and issued an aggregate of 22,670
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.

     On January 8, 2000, we entered into a three-year agreement for consulting
services primarily related to acquisition and financing assistance pursuant to
which we issued 65,000 three-year warrants exercisable at $30 per share. Ten
thousand of these warrants are exercisable immediately, and 40,000 warrants are
exercisable upon the attainment of specified performance targets. In addition,
15,000 warrants are being held in escrow and are to be released on January 7,
2003, or earlier with our approval. The issuance of these warrants was a private
transaction exempt from registration pursuant to Section 4(2) of the Securities
Act.

     In connection with our acquisition of Renaissance Multimedia in February
2000, we issued an aggregate of 44,987 shares of our common stock to the former
shareholders of Renaissance Multimedia. The issuance 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 Limited in March 2000, we
issued an aggregate of 68,182 shares of our common stock to the former
shareholders of Junction 15 Limited. The issuance of such shares was a private
transaction exempt from registration under Section 4(2) of the Securities Act.
We have placed stop transfer orders on these shares pending the outcome of
indemnification claims for breaches of representations and warranties which we
intend to assert against the former shareholders of Junction 15.

     In connection with our acquisition of PWR Systems in March 2000, we issued
an aggregate of 150,000 shares of our common stock to the former shareholders of
PWR Systems. In December 2000, we issued an additional 57,018 shares to the
former shareholders of PWR Systems as post closing adjustments. The issuances of
such shares were private transactions exempt from registration under Section
4(2) of the Securities Act.


                                       23
<PAGE>

     In March 2000, we sold a total of 93,695 shares of our common stock to 45
accredited investors for proceeds of $4,216,294. The issuances of these 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 76,247
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.

     In the second quarter of 2000, we issued an aggregate of 12,910 shares of
common stock to a total of eight individuals for gross proceeds of $149,933 upon
the exercise of options and warrants held by these individuals. The issuances of
such shares were private transactions exempt from registration under Section
4(2) of the Securities Act.

     On May 27, 2000, we issued 1,404 shares of our common stock to Alberdale &
Co., valued at $46,320, in partial payment of a fee due Alberdale in connection
with our acquisition of Junction 15. The issuance of such shares was a private
transaction exempt from registration under Section 4(2) of the Securities Act.

     On July 31, 2000, we accepted subscriptions from three investors for a
total of 31,152 shares of common stock for gross proceeds of $1,386,255. The
issuance of these shares were private transactions exempt from registration
under Section 4(2) of, and Regulation S promulgated under, the Securities Act.

     In connection with the Company's acquisition of interMETHODS Limited in
October 2000 we issued an aggregate of 156,002 shares of our common stock to the
former shareholders of interMETHODS. The issuance of such shares was a private
transaction exempt from registration under Section 4(2) of the Securities Act.
We have placed stop transfer orders on these shares pending the outcome of
indemnification claims for breaches of representations and warranties which we
intend to assert against the former stockholders of interMETHODS.

     On November 10, 2000 and November 14, 2000 we issued five-year warrants to
Alberdale & Co. to purchase 900 and 1,300 shares of our common stock,
respectively, at an exercise price of $7.81 and $8.44 per share, respectively,
in payment of fees owed to it. The issuances of these warrants were private
transactions exempt from registration pursuant to Section 4(2) of the Securities
Act.

     On November 10, 2000 we issued five-year warrants to Sunrise Financial
Group, Inc. to purchase 5,000 shares of our common stock at an exercise price of
$7.81 per share. The issuance of these warrants was a private transaction exempt
from registration pursuant to Section 4(2) of the Securities Act.

     Pursuant to a consulting agreement, dated as of November 28, 2000, with
Morgan J. Wilbur, pursuant to which Mr. Wilbur agreed to perform financial
advisory services to our company, we issued to Mr. Wilbur 22,000 shares of our
common stock. The issuance of these shares was a private transaction exempt from
registration pursuant to Section 4(2) of the Securities Act.

     Pursuant to a consulting agreement, dated as of December 27, 2000, with
Joshua A. Ader, pursuant to which Mr. Ader agreed to perform consulting services
for us, we issued to Mr. Ader 6,000 shares of our common stock. 3,000 of such
shares have been canceled as a result of our termination of this agreement with
Mr. Ader. The issuance of these shares was a private transaction exempt from
registration pursuant to Section 4(2) of the Securities Act.

     Pursuant to an amendment to our consulting agreement with Target Capital
Corp. and Yitz Grossman, in December 2000 we issued 123,337 shares of our common
stock to Target Capital Corp., at the then market value of such shares, in lieu
of $269,860.99 of cash payments to which it was entitled as of December 31,
2000. The issuance of these shares was a private transaction exempt from
registration pursuant to Section 4(2) of the Securities Act.


                                       24
<PAGE>

     Pursuant to a consulting agreement, dated as of December 31, 2000, with
Triple Crown Consulting Ltd., pursuant to which Triple Crown agreed to perform
financial advisory services to our company, we have issued to Triple Crown an
aggregate of 20,000 shares of our common stock. 15,000 of the total 20,000
shares are currently being held in escrow. 2,500 of such shares will be released
quarterly beginning June 2001 so long as the agreement remains in effect. The
issuance of these shares was a private transaction exempt from registration
pursuant to Section 4(2) of the Securities Act.

     In January 2001, we accepted subscriptions for and sold a total of 149,000
shares of our common stock to 13 accredited investors for gross proceeds of
$372,500. The issuance of these shares were private transactions exempt from
registration pursuant to Section 4(2) of, and Regulation D promulgated under,
the Securities Act.

     We entered into an agreement, dated as of January 2, 2001, with Salomon
Grey Financial Corporation pursuant to which we retained Salomon Grey for the
purpose of providing financial advisory and investment banking advice for a
one-year term. Pursuant to this agreement, we issued to Salomon Grey an
aggregate of 45,000 shares of our common stock and three-year warrants to
purchase 60,000 shares of our common stock. The issuance of these shares and
warrants was a private transaction exempt from registration pursuant to Section
4(2) of the Securities Act. 15,000 of such shares, and all of such warrants,
have been cancelled pursuant to an agreement with Salomon Grey, dated as of
February 28, 2001, to terminate this agreement.

     On January 15, 2001, we issued 30,000 shares of our common stock to Mark E.
Leininger, our former President and Chief Executive Officer, in connection with
his Settlement and Release Agreement with us. The issuance of these shares was a
private transaction exempt from registration pursuant to Section 4(2) of the
Securities Act.

     We have entered into an agreement dated as of January 15, 2001 with SOS
Resource Services Inc. pursuant to which we retained SOS Resource for the
purpose of providing investor relations, public relations and corporate
communications and other services for a one-year term. We can terminate this
agreement at any time. Pursuant to this agreement, we issued to SOS Resource (a)
an aggregate of 30,000 shares of our common stock (10,000 of which shares are
subject to a lockup agreement that prohibits their sale prior to July 15, 2001),
(b) three-year warrants to purchase 10,000 shares of our common stock which are
immediately exercisable at an exercise price of $2.50 per share, and (c)
three-year warrants to purchase 10,000 shares of our common stock exercisable
commencing July 15, 2001 at an exercise price of $10 per share. The issuance of
these shares and warrants was a private transaction exempt from registration
pursuant to Section 4(2) of the Securities Act.

     On January 22, 2001, we issued 3,200 shares of our common stock to HD Brous
& Co., Inc. in full satisfaction of outstanding fees owed to HD Brous. The
issuance of these shares was a private transaction exempt from registration
pursuant to Section 4(2) of the Securities Act.

     On January 24, 2001, we issued 14,600 shares of our common stock to
Alberdale & Co. in full satisfaction of outstanding fees owed to Alberdale. The
issuance of these shares was a private transaction exempt from registration
pursuant to Section 4(2) of the Securities Act.

     On January 26, 2001, we issued three-year warrants to purchase 2,300 shares
of our common stock at an exercise price of $2.50 per share to Lee M. Shapiro as
a finders fee in connection with our January 2001 private placement. The
issuance of such warrants was a private transaction exempt from registration
pursuant to Section 4(2) of 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 acquisitions of Renaissance
Multimedia, Junction 15, PWR Systems and interMETHODS, among other
consideration, we issued an aggregate of 476,188 shares of our common stock and
paid approximately $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


                                       25
<PAGE>

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 OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

General:

     In 2000, we became a provider of professional internet and technology
solutions in addition to continuing our historical visual communications
business, which included our software operations. In connection with this, we
acquired four companies: Renaissance Multimedia and PWR Systems in the United
States, and Junction 15 and interMETHODS in London, England. In early 2001, we
determined to divest our visual communications and overseas operations so as to
better focus on developing our internet and technology solutions business in the
U.S. Accordingly:

     o    we have entered into an agreement to sell our Aachen, Germany contact
          center operation to a third party for $100,000 in gross proceeds;
     o    in February 2001, we placed Junction 15 and interMETHODS into
          creditors voluntary liquidation in the United Kingdom, thereby
          divesting these assets; and
     o    in March 2001, we sold our visual communications operations.

     Our visual communications and international operations have been classified
as discontinued operations, and our 1999 statement of operations has been
reclassified accordingly. Our results of continuing operations reflect the
results of our Vizy Interactive professional internet and technology solutions
business in the U.S., which consists of Vizy Interactive New York, formerly
known as Renaissance Multimedia ("Vizy NY") and Vizy Interactive-PWR Systems,
formerly known as PWR Systems ("PWR"). The results of our discontinued software
and overseas operations are presented separately below. As a result, our
historical financial statements are of limited use.

Continuing Operations:

     General: Continuing operations are represented by the operations of our
Vizy Interactive business, together with our corporate overhead. We acquired
Vizy NY and PWR on February 15 and March 27, 2000, respectively. Accordingly,
their results of operations reflect their approximate ten and nine-month periods
of operation, respectively, under our ownership.

     The results of operations for our Vizy Interactive business and corporate
overhead for the years ended December 31, 2000 and 1999 is set forth below:

<TABLE>
<CAPTION>

                                                            2000                              1999
                                    ------------------------------------------------     ------------
                                      Vizy Interactive    Corporate        Total          Corporate
                                    ------------------------------------------------     ------------
<S>                                    <C>              <C>             <C>              <C>
Net Sales
  Hardware                             $ 11,176,975               --      11,176,975     $         --
  Website design and other services       2,280,654               --       2,280,654               --
                                       ------------     ------------    ------------     ------------
                                         13,457,629               --      13,457,629               --
                                       ------------     ------------    ------------     ------------
Cost of sales
  Hardware                                9,731,978               --       9,731,978               --
  Website design and other services       1,385,875               --       1,385,875               --
                                       ------------     ------------    ------------     ------------
                                         11,117,853               --      11,117,853               --
                                       ------------     ------------    ------------     ------------

Gross profit                              2,339,776               --       2,339,776               --
Gross profit %                                   17%                              17%

Selling, general, and administrative      2,839,869        3,647,627       6,487,496        2,585,994
Amortization of goodwill, etc             1,559,758               --       1,559,758               --
Impairment loss                           4,116,038               --       4,116,038               --
Gains on marketable securities:
 Realized gain                                   --       (1,095,348)     (1,095,348)        (642,444)
 Unrealized holing gain                          --               --              --         (322,652)
Interest and other expense, net             135,530          174,922         310,452          (48,891)
                                       ------------     ------------    ------------     ------------
                                          8,651,195        2,727,201      11,378,396        1,572,007
                                       ------------     ------------    ------------     ------------
Net loss - continuing operations       $ (6,311,419)    $ (2,727,201)   $ (9,038,620)    $ (1,572,007)
                                       ============     ============    ============     ============
</TABLE>


                                       26
<PAGE>

     Net sales. Our net sales for 2000 continuing operations were derived from
our Vizy Interactive professional internet and technology solutions business.
$11,522,655, or 86%, of these net sales were attributable to PWR, consisting of
$11,176,975 of hardware sales and $345,680 of service sales; and $1,934,974, or
14%, of our 2000 net sales from continuing operations were generated by Vizy NY.
Vizy NY sales were all service sales. We had no net sales from continuing
operations in 1999, since we acquired our continuing operations in early 2000.
Pro forma net sales would have increased $580,436, or 3%, to $18,040,041, from
pro forma 1999 net sales of $17,459,605, assuming that our continuing operations
had been acquired on January 1, 1999.

     Gross Profit. $1,484,377, or 63%, of our gross profit was generated by PWR,
and $855,399, or 37%, of our gross profit was generated byVizy NY. This resulted
in an overall 17% gross margin from continuing operations. PWR's net sales
consisted primarily of lower margin hardware and hardware related components
with a small portion of such revenues attributable to higher margin service
revenues. Vizy NY's net sales generally are attributable to higher margin
professional web site development and consulting services. We intend to attempt
to increase our gross margins by increasing PWR's net sales attributable to
higher margin services and by increasing our sales derived from Vizy NY. In
light of recent adverse economic conditions, we can give no assurance that these
goals can be achieved. Pro forma 2000 gross profit would have decreased
$558,436, or 15%, to $3,259,903 from pro forma 1999 gross profit of $3,818,751,
assuming that our continuing operations had been acquired on January 1, 1999.
Gross margin as a percent of net sales on a pro forma basis declined to 18% in
2000 from 22% in 1999.

     Selling, General, and Administrative. Selling, general, and administrative
expenses ("SG&A") increased by $3,901,502, or 151%, to $6,487,496 in 2000 from
$2,585,994 in 1999. PWR and Vizy NY represented 35% and 38%, respectively, or
73% in the aggregate, of the increase in SG&A. Corporate overhead increased by
$1,050,633, or 41%, from $2,585,994 in 1999 to $3,647,627 in 2000, primarily due
to increased administrative and executive compensation associated with our
expansion of our operations of approximately $268,000, consulting, legal and
other professional fees associated with additional services required as a result
of the increased complexity of our business of approximately $693,000, and other
costs associated with operating our additional subsidiaries, including expanded
international operations, in 2000.

     Impairment Loss. We recorded a goodwill impairment charge of $4,116,038 in
the fourth quarter of 2000 based on our evaluation of our assets and
liabilities. We determined that our results of operations and projected future
cash inflows did not support the carrying amount of goodwill.

     Realized and Unrealized Gains on Marketable Securities. The realized gain
of $1,095,348 in 2000 represents the gain recognized upon the transfer of 59,813
shares of Xceed, Inc. common stock to a finder in connection with an August 1999
agreement, based upon the appreciation in the market value of such shares. The
agreement set forth a formula to determine the number of shares to be paid the
finder upon the closing of an acquisition target identified by such finder. The
finder received 14,953 Xceed shares for the Renaissance acquisition and 44,860
Xceed shares for the PWR acquisition, resulting in the recognition of respective
gains of $371,962 and $723,386.

     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 shares of Xceed common stock, which we owned, at a
price of $18.44 per 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 in 1999 on the exchange of
our marketable securities in connection with this transaction.

     The unrealized holding gain of $322,652 in 1999 represented the increase in
market value of our investment in marketable securities characterized as trading
securities.

     Interest and other expense, net of other income. Interest and other
expense, net of other income decreased $359,343, or 735%, from income of
($48,891) in 1999 to an expense of $310,452 in 2000. The 2000 amount consisted
of $135,530 of expenses from our newly acquired subsidiaries, which was
comprised primarily of interest expense at our PWR subsidiary, and $191,000 of
interest charges resulting from amortization of a warrant issued in connection
with a $1,000,000 line of credit facility. The 1999 amount represented net
interest income.


                                       27
<PAGE>

Discontinued Operations:

     General: Discontinued operations consist of our London internet solutions
business acquired in 2000, our historical visual communications products
segment, which included our software subsidiaries, Serif (Europe) Limited and
subsidiaries, Serif Inc., Software Publishing Corporation and subsidiaries, our
Dialog24 operations and our VisualCities.com operations.

     On January 9, 2001, we entered into an agreement with a German company to
purchase certain assets and assume certain liabilities of our Aachen, Germany
contact center operation, including the assumption of the remaining lease
obligations. The agreement calls for a payment of approximately $100,000, of
which we expect to utilize approximately $50,000 to pay remaining tax
obligations. The $100,000 payment has not been received and is past due. We have
commenced legal proceedings to collect this amount.

     In February 2001, we divested through English law creditors voluntary
liquidation our two interactive service firms in the United Kingdom, Junction 15
Limited and interMETHODS Limited. As of December 31, 2000 all of the assets and
liabilities of these entities were written-off, resulting in an impairment
charge of $4,511,063. We terminated the employment of the two executives of
Junction 15 Limited and interMETHODS Limited, and we currently intend to pursue
indemnification claims for breaches of representations and warranties by the
sellers of both Junction 15 Limited and interMETHODS Limited.

     On March 31, 2001, we sold our visual communications operations to the
management of our Serif subsidiaries. We received $150,000 in cash at closing.
We also hold a promissory note from Serif Inc. in the aggregate principal amount
of $987,500, which note bears interest at a rate of 10% per annum, and which is
payable $40,000 per month, except for April and November, in which months the
payments are $30,000 and $50,000, respectively. We or one of our subsidiaries
remain responsible for some potential liabilities. Serif (Europe) Limited
received a 12-month exclusive license in Europe and a 24-month non-exclusive
license in the rest of the world with respect to the software of our SPC
subsidiary. Serif (Europe) Limited was also granted a non-exclusive license to
use the Harvard Graphics(R) brand name for the purpose of selling repackaged
Serif products using such name. Each of such licenses shall be renewed if
minimum royalty and other conditions are met. In consideration therefor, Serif
(Europe) Limited will pay a royalty fee of 12.5% in respect of sales of SPC
software and 3% of sales of repackaged Serif software. While we continue to own
SPC, we agreed not to compete with Serif in the software business as long as the
licenses are in effect.

     The results of operations of these discontinued operations for the years
ended December 31, 2000 and 1999 is set forth below:

<TABLE>
<CAPTION>
                                                       2000                               1999
                                  ----------------------------------------------     ------------
                                                      London
                                      Visual         Internet                            Visual
                                  Communications    Operations          Total       Communications
                                  ----------------------------------------------     ------------
<S>                               <C>              <C>              <C>              <C>
Net sales                         $ 13,054,064     $  1,368,241     $ 14,422,305     $ 19,891,357
Cost of sales                        3,051,808          921,003        3,972,811        6,371,106
                                  ----------------------------------------------     ------------
Gross Profit                        10,002,256          447,238       10,449,494       13,520,251
GP%                                         77%              33%              72%              68%

Selling, general and
  administrative                    13,401,051        1,269,832       14,670,883       14,589,527
Product development                    744,944               --          744,944        1,027,447
Amortization of goodwill,
  business processes and
  methodologies, etc                   118,665          530,409          649,074        2,219,363
Impairment loss                             --        4,511,063        4,511,063               --
Interest and other expense, net        (24,609)           2,898          (21,711)         (10,612)
                                  ----------------------------------------------     ------------
                                    14,240,051        6,314,202       20,554,253       17,825,725

Loss before taxes                   (4,237,795)      (5,866,964)     (10,104,759)      (4,305,474)
Income tax benefit                     (53,116)              --          (53,116)        (250,979)
                                  ----------------------------------------------     ------------
Net loss                          $ (4,184,679)    $ (5,866,964)    $(10,051,643)    $ (4,054,495)
                                  ==============================================     ============

</TABLE>


                                       28
<PAGE>

     Net Sales. Net sales from discontinued operations decreased $5,469,052, or
27%, from $19,891,357 in 1999 to $14,422,305 in 2000. Visual Communications
sales declined $6,837,293, or 34%, from $19,891,357 to $13,054,064. $5,366,428,
or 78%, of the decline in visual communications sales was attributable to the
discontinuance of sales of digital cameras. The balance of the decline, or
$1,470,865, is attributable in part to our not having a new software product
introduction until late fourth quarter of 2000 as compared to 1999, when we had
one in early third quarter. These declines more than offset $1,368,241 in net
sales of our former Vizy London operations in 2000, in which we had no sales in
1999.

     Gross Profit. Gross profit improved to 72% in 2000 from 68% in 1999 due to
an improvement from 68% to 77% in the margins of our visual communications
operations, primarily as a result of the discontinuance of lower margin digital
camera sales in the first half of the year. Our Vizy London operations had gross
margins of 33% in 2000.

     Selling, General and Administrative. SG&A declined $81,356, or less than
1%, from $14,589,527 in 1999 to $14,670,883 in 2000. An increase of $1,269,832
associated with Vizy London was offset by a decrease in SG&A of $1,188,476
attributable to our visual communications operations. Most of the decline in our
visual communications operations SG&A is associated with lower selling expenses
due to a decrease in to direct mail activity. SG&A for our visual communications
operations as a percentage of our visual communications net sales increased from
73% in 1999 to 103% in 2000, primarily because of lower direct mail response
rates in 2000 compared to 1999.

     Product development. Product development costs declined $282,503, or 28%,
from $1,027,447 in 1999 to 744,944 in 2000. Product development as a percentage
of net sales was 5.2% in both periods despite the decline in the expense, due to
declining revenues.

     Impairment loss. We recorded an impairment charge of $4,511,063 in the
fourth quarter of 2000 based on our evaluation of the assets and liabilities
relating to our London internet operations. We determined that our results of
operations and projected future cash inflows did not support maintaining this
business.

     Interest and other expenses, net of other income. Interest and other
expense, net of other income increased $11,099, or 104%, to ($21,711) in 2000
from ($10,612) in 1999 primarily due to gains on foreign currency transactions.

     Income taxes (benefit.) The income tax (benefit) for 2000 and 1999
consisted of ($53,116) and ($216,044) received under a state sponsored
technology program which allowed for the assignment of value to previously
established net operating loss benefits. 1999 also included ($34,934), relating
principally to foreign tax benefits.

LIQUIDITY AND CAPITAL RESOURCES

     Our cash and cash equivalents decreased by $886,659 to $843,836 at December
31, 2000 from $1,730,495 at December 31, 1999. In 2000, the Company received
$6,468,011 in net proceeds from financing activities, used $4,884,080 of cash
for operations, and used $2,090,172 primarily for investments relating to the
cash portion of the purchase price of companies which we acquired.

     We had a working capital deficiency of ($4,684,707) at December 31, 2000, a
decline of $5,337,681 from our working capital at December 31, 1999 of $652,974,
primarily as a result of our net loss and investments in our businesses acquired
in 2000, which more than offset our receipt of proceeds from offerings of our
securities. In March and July 2000, we completed private placements of our
common stock for an aggregate of 201,094 shares raising aggregate gross
proceeds of $8,955,545, before associated placement costs. We utilized
approximately $5,000,000 of these proceeds to fund our acquisitions and the
costs associated therewith; for the working capital needs of Renaissance
Multimedia, Junction 15, interMETHODS, PWR and our historical business; and for
repayment of our $1,000,000 line of credit loan. In the third and fourth quarter
of 2000, we attempted to conduct several private placements of common stock, but
each of these offerings was canceled due to adverse market


                                       29
<PAGE>

     conditions. In January 2001, we sold 149,000 shares of common stock for
aggregate gross proceeds of $372,500. We used the proceeds of this offering for
working capital and general corporate purposes. We believe that over the next
twelve months we will need to raise at least an additional $1,500,000 to meet
our currently anticipated liquidity and capital expenditure requirements. We
have received $150,000 in 2001 from our international and visual communications
operations and we expect to receive an additional approximately $400,000 in 2001
therefrom. We intend to seek additional financing through one or more debt,
equity, or convertible securities offerings, through the sale of assets or
through a merger or acquisition. There can be no assurance that we will be
successful in completing any such offering or offerings, sale of assets or
merger or acquisition, or any other offerings or transactions, or that the terms
of any such offering or offerings, transaction or transactions, will be
beneficial to the Company or its stockholders.

     We intend to utilize our available funds in 2001 to finance the working
capital requirements of our Vizy Interactive professional internet and
technology solutions business. Our cash requirements, however, may change
depending upon numerous factors, including, without limitation, the cost of
integrating our businesses, as well as increased personnel costs, inventory and
accounts receivable arising from the sale and shipment of new or additional
products, and other expansion of our Vizy Interactive business. 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.

     On January 9, 2001, we entered into an agreement with a German company to
purchase certain assets and assume certain liabilities of our Aachen, Germany
contact center operation, including the assumption of the remaining lease
obligations. The agreement calls for a payment of approximately $100,000, of
which we expect to utilize approximately $50,000 to pay remaining tax
obligations. The $100,000 payment has not been received and is past due. We have
commenced legal proceedings to collect this amount.

     In February 2001, we divested through English law creditors voluntary
liquidation our two interactive service firms in the United Kingdom, Junction 15
Limited and interMETHODS Limited. As of December 31, 2000 all of the assets and
liabilities of these entities were written-off, resulting in an impairment
charge of $4,511,063. We terminated the employment of the two executives of
Junction 15 Limited and interMETHODS Limited, and we currently intend to pursue
indemnification claims for breaches of representations and warranties by the
sellers of both Junction 15 Limited and interMETHODS Limited.

     On March 31, 2001, we sold our visual communications operations to the
management of our Serif subsidiaries. We received $150,000 in cash at closing.
We also hold a promissory note from Serif Inc. in the aggregate principal amount
of $987,500, which note bears interest at a rate of 10% per annum, and which is
payable $40,000 per month, except for April and November, in which months the
payments are $30,000 and $50,000, respectively. We or one of our subsidiaries
remain responsible for some potential liabilities. Serif (Europe) Limited
received a 12-month exclusive license in Europe and a 24-month non-exclusive
license in the rest of the world with respect to the software of our SPC
subsidiary. Serif (Europe) Limited was also granted a non-exclusive license to
use the Harvard Graphics(R) brand name for the purpose of selling repackaged
Serif products using such name. Each of such licenses shall be renewed if
minimum royalty and other conditions are met. In consideration therefor, Serif
(Europe) Limited will pay a royalty fee of 12.5% in respect of sales of SPC
software and 3% of sales of repackaged Serif software. While we continue to own
SPC, we agreed not to compete with Serif in its software business as long as the
licenses are in effect.

     Our 2000 financing activities consisted of the receipt of net proceeds of
$7,590,289 from private placements of our common stock, and $804,406 from option
and warrant exercises, net payments of $1,078,237 in respect of borrowings from
financial institutions, the repayment of $111,167 of debt and lease obligations
and the repayment of $698,878 of related party notes to the selling stockholders
of PWR.

     In the first quarter of 2000 we entered into an unsecured line of credit
agreement for maximum borrowings of $1,000,000, at an 8% interest rate, with a
foreign company, Churchill Consulting. We borrowed $1,000,000 under this
agreement in February 2000. This loan was repaid in full with accrued interest
on March 20, 2000. We have letter of credit facilities of approximately $240,000
relating to certain lease obligations. Our PWR subsidiary has $1,200,000 of bank
short-term renewable notes payable, which we have guaranteed and which are
secured by PWR's assets. On July 21, 2000, PWR terminated its relationship with
its inventory finance lender and repaid its outstanding inventory loan balance
of approximately $925,000 with existing working capital. PWR also has an interim
inventory financing facility for up to $500,000 in purchases. The line is
presently collateralized by a second lien on all of the assets of PWR and is
guaranteed by the Company. Additionally, a major supplier of PWR, Ingram Micro,
has been granted a third lien on PWR's assets.


                                       30
<PAGE>

     Our exposure to foreign currency gains and losses has been partially
mitigated as we have incurred operating expenses in the principal foreign
currencies in which we have invoiced foreign customers. As of December 31, 2000,
the Company had no foreign exchange contracts outstanding. The Company's foreign
exchange gains and losses are expected to be eliminated given the divestiture of
our international operations.

     In 1999, we entered into a five-year consulting agreement with Target
Capital Corporation pursuant to which we are required to pay 0.3% 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, as amended December
2000, may be extended automatically by an additional eighteen months if we
report annual net revenues of $45,000,000, and an additional eighteen months
should net revenues exceed $65,000,000. Any revenues of acquired companies not
introduced directly or indirectly by the consultant are excluded from the above
revenue thresholds.

NET OPERATING LOSS CARRYFORWARDS

     We estimate our consolidated tax net operating loss carryforwards to be
approximately $38 million at December 31, 2000, after consideration for
limitations on the use thereof, which expire in years 2003 through 2020. 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. 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 carryforwards. 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 pre-acquisition dual consolidated losses. The IRS
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 submitted these filings in an application for relief from these deficiencies.
On August 23, 2000, we received notification from the IRS that it had accepted
this application for relief. On November 6, 2000, we re-applied to the IRS for a
closing agreement. We believe that the IRS should agree to such a closing
agreement, although the IRS has again requested additional information in
connection with our application. No assurance can be given that the IRS will
agree to the closing agreement or if so when, 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, 2000 consolidated financial statements contains a
paragraph emphasizing these dual consolidated losses.


                                       31
<PAGE>

SEASONALITY

     We believe that our professional internet and technology solutions business
is not characterized by significant fluctuations, though the fourth quarter of
each year may be our period of strongest financial performance as corporations
attempt to meet their budget allocations.

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/A.

<TABLE>
<CAPTION>

Item                                                                                              Page*
----                                                                                              -----
<S>                                                                                                <C>
Independent Auditors' Reports                                                                      F-1
Consolidated Balance Sheet at December 31, 2000                                                    F-3
Consolidated Statements of Operations for the years ended December 31, 2000 and 1999               F-4
Consolidated Statements of Changes in Stockholders' Equity for the years ended
  December 31, 2000 and 1999                                                                       F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2000 and 1999               F-6
Notes to Consolidated Financial Statements                                                         F-7

</TABLE>

----------
*    Page F-1 follows page 33 to this Annual Report on Form 10-KSB/A.

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

Not applicable.


                                       32
<PAGE>

                                    PART III

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

     The information under the captions "Our Executive Officers and Directors",
"The Three Classes of Our Board", "Director Compensation", "Board Committees",
and "Section 16(a) Beneficial Ownership Reporting Compliance" in our definitive
Proxy Statement for our Annual Meeting of Stockholders to be held in 2001 is
incorporated herein by reference.

ITEM 10.   EXECUTIVE COMPENSATION.

     The information under the captions "Executive Compensation", "Stock Option
Grants in 2000", "Aggregate Option Exercises in 2000 and Year-End Option Values"
and "Employment Agreements" in our definitive Proxy Statement for our Annual
Meeting of Stockholders to be held in 2001 is incorporated herein by reference.

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

     The information under the caption "Security Ownership" in our definitive
Proxy Statement for our Annual Meeting of Stockholders to be held in 2001 is
incorporated herein by reference.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information under the caption "Certain Relationships and Related
Transactions" in our definitive Proxy Statement for our Annual Meeting of
Stockholders to be held in 2001 is incorporated herein by reference.

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

     (a)  Exhibits.

     The exhibits listed in the accompanying index to exhibits are filed or
incorporated by reference as a part of this annual report.

     (b)  Reports on Form 8-K.

     On January 11, 2001, we filed a Current Report on Form 8-K (Date of Report:
January 10, 2001) with the Commission, as an Item 5 disclosure, reporting (i)
the issuance on December 6, 2000 of an additional 28,509 shares of our common
stock to each of Vincent DiSpigno and David N. Salav pursuant to post-closing
adjustments under the PWR Merger Agreement; (ii) that we were informed by the
Nasdaq Listings Investigation Unit that it had closed its investigation
regarding our common stock without taking any action; (iii) the receipt by us
from Nasdaq on December 1, 2000 of correspondence stating that our common stock
may be delisted from trading on or about March 1, 2001 if the minimum bid price
does not equal or exceed $1.00 for at least 10 consecutive trading days; (iv)
the retaining of Morgan J. Wilbur as a consultant for consideration of 22,000
shares of our common stock; (v) the retaining of Triple Crown Consulting, Ltd.
for financial advisory advice for consideration of 20,000 shares of our common
stock; (vi) the retaining of Salomon Grey Financial Corporation as a financial
advisor and investment banker for aggregate consideration of 45,000 shares of
our common stock and warrants to purchase 60,000 shares of our common stock with
varying exercise prices; (vii) the application by us to the Internal Revenue
Service for a closing agreement regarding the dual consolidated losses of our
Software Publishing Corporation subsidiary; and (viii) the amendment to our
consulting agreement with Target Capital Corp. and Yitz Grossman.

     On January 30, 2001, we filed a Current Report on Form 8-K (Date of Report:
January 15, 2001) with the Commission, as an Item 5 disclosure, setting forth
(i) a restructuring of our operations and management team; (ii) the retaining of
SOS Resource Services, Inc. to provide investor relations, public relations and
corporate communications services; (iii) the acceptance of subscriptions for the
sale of 149,000 shares of our common stock to 13 accredited investors for gross
proceeds of $372,500; and (iv) the filing of an amendment to our Form 10-KSB for
the year ended December 31, 1999.


                                       33
<PAGE>


INDEPENDENT AUDITORS' REPORT

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

We have audited the consolidated balance sheet of Vizacom Inc. and subsidiaries
as of December 31, 2000, 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, 2000. 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 constituting 13.5% of the related consolidated
total for 2000, and net losses constituting 17% and 43% of net losses from
discontinued operations for 2000 and 1999, respectively. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits 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. and subsidiaries as of
December 31, 2000, 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, 2000 in conformity with accounting principles generally accepted in
the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has experienced recurring net losses, and has
a working capital deficiency that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also discussed in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

As described in Note 10, 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 23, 2001,
except as to Notes 2 and 17,
the date of which is March 31, 2001,
and Note 18, the date of which
is May 23, 2001.


                                      F-1
<PAGE>

REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Serif (Europe) Limited

We have audited the balance sheets of Serif (Europe) Limited as of December 31,
2000 and 1999, and the related profit and loss accounts and statements of total
recognised gains and losses, cash flows and shareholders' equity for each of the
two years in the period ended December 31, 2000 (not separately included
herein). These financial statements are the responsibility of the Company's
directors. 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 and
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, 2000 and 1999, and the results of its operations and its cash flows
for each of the two years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United Kingdom.

Accounting principles generally accepted in the United Kingdom vary in certain
respects from accounting principles generally accepted in the United States. The
application of the latter would not have materially affected the determination
of the shareholders' equity as of December 31, 2000 and 1999 or the
determination of net loss for each of the two years in the period ended December
31, 2000.

As discussed in Note 1, the Company's businesses have not been profitable and
the Company is in need of financial support. Note 1 describes the directors'
plans to address this issue. Since the majority of these plans have not yet been
implemented there is substantial doubt about the Company's ability to continue
as a going concern.


/s/ Ernst & Young
Ernst & Young
Registered Auditors
Nottingham

Date 26 March 2001


                                      F-2
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2000
                 (SEE NOTE 5 REGARDING DISCONTINUED OPERATIONS)

<TABLE>
<CAPTION>

<S>                                                                                   <C>
ASSETS
Current assets:
    Cash and cash equivalents                                                         $    843,836
    Marketable securities                                                                      797
    Receivables
        Trade, less allowances of $608,975                                               3,341,960
        Other                                                                              155,025
        Notes                                                                               60,336
    Inventories                                                                            864,031
    Prepaid expenses and other current assets                                              329,152
                                                                                      ------------
        Total current assets                                                             5,595,137

Property and equipment, net                                                                818,132
Goodwill, net of accumulated amortization of $1,442,475                                  1,670,040
Business processes and methodologies, workforce, and customer lists, net of
 accumulated amortization of $1,823,746                                                  3,758,254
Restricted cash                                                                            239,838
Deferred consulting costs                                                                1,371,823
Other assets                                                                               628,973
                                                                                      ------------
         Total assets                                                                 $ 14,082,197
                                                                                      ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Bank notes payable                                                                $  1,214,172
    Related party notes payable                                                            563,867
    Current portion of long-term debt                                                      390,155
    Current portion of capital lease obligations                                            74,950
    Accounts payable                                                                     5,027,736
    Accrued liabilities                                                                  2,622,875
    Sales and value-added taxes payable                                                    386,089
                                                                                      ------------
        Total current liabilities                                                       10,279,844
Long term debt, less current maturities                                                      4,138
Capital lease obligations, less current portion                                             44,579
                                                                                      ------------
        Total liabilities                                                               10,328,561
                                                                                      ------------
Commitments and contingencies

Stockholders' equity:
    Serial Preferred Stock, par value $.001 per share, 1,939,480 shares
      authorized
    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, 1,619,087 shares issued                                  1,619
    Additional paid-in capital                                                          70,851,835
    Accumulated deficit                                                                (66,954,898)
    Accumulated other comprehensive income (loss)                                         (134,525)
    Treasury stock, 310 shares, at cost                                                    (10,395)
                                                                                      ------------
        Total stockholders' equity                                                       3,753,636
                                                                                      ------------
        Total liabilities and stockholders' equity                                    $ 14,082,197
                                                                                      ============

</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>

                                                                               Year ended December 31,
                                                                     ----------------------------------------
                                                                           2000                     1999
                                                                     ---------------           --------------
<S>                                                                   <C>                       <C>
Net sales
       Hardware                                                       $ 11,176,975              $         --
       Website design and other services                                 2,280,654                        --
                                                                      ------------              ------------
                                                                        13,457,629                        --
                                                                      ------------              ------------
Cost of sales
       Hardware                                                          9,731,978                        --
       Website design and other services                                 1,385,875                        --
                                                                      ------------              ------------
                                                                        11,117,853                        --
                                                                      ------------              ------------

Gross profit                                                             2,339,776                        --

Selling, general and administrative expenses                             6,487,496                 2,585,994
Amortization of goodwill, business processes and
  methodologies, workforce, and customer lists                           1,559,758                        --
Impairment loss                                                          4,116,038                        --
Realized gain on marketable securities                                  (1,095,348)                 (642,444)
Unrealized holding gain on marketable securities                                --                  (322,652)
Interest and other expense, net of other income
  of $108,787 and $90,513                                                  310,452                   (48,891)
                                                                      ------------              ------------
                                                                        11,378,396                 1,572,007

       Loss from continuing operations                                  (9,038,620)               (1,572,007)

Discontinued operations:
       Loss from discontinued operations, less applicable
         income tax benefit of $53,116 in 2000 and $250,979 in 1999    (10,051,643)               (4,054,495)
                                                                      ------------              ------------

       Net loss                                                        (19,090,263)               (5,626,502)

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

       Net loss attributable to common stockholders                   $(19,090,263)             $ (5,683,143)
                                                                      ============              ============


Net loss per common share attributable to common stockholders:
       Continuing operations                                          $      (7.82)                    (2.62)
       Discontinued operations                                        $      (8.70)             $      (6.86)
                                                                      ------------              ------------
       Net loss per common share - basic and diluted                  $     (16.52)             $      (9.48)
                                                                      ============              ============
       Weighted average number of common shares
         outstanding - basic and diluted                                 1,555,676                   599,651
                                                                      ============              ============

</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                                                    Additional
                                                              Preferred Stock                 Common Stock            Paid-In
                                                            Shares       Amount          Shares         Amount        Capital
                                                            ------       ------          ------         ------        -------

<S>                                                           <C>      <C>             <C>            <C>          <C>
Balance at December 31, 1998                                  930      $  930,000         508,365     $      508   $ 45,390,063
Net loss                                                       --              --              --             --             --
Increase in market value of marketable securities              --              --              --             --             --
Currency translation adjustment                                --              --              --             --             --
TOTAL COMPREHENSIVE LOSS                                       --              --              --             --             --
Exchange of Class A preferred for Class C
  preferred stock and warrants, less related
  costs                                                        --              --              --             --        (33,905)
Redemption of preferred stock                                (930)       (930,000)             --             --             --
Dividends paid on preferred stock                              --              --              --             --        (56,641)
Sale of common stock in private placements, net                --              --         180,407            180      3,112,704
Issuance of options and warrants for services                  --              --              --             --        996,954
Common stock issued on exercise of warrants and
  options                                                      --              --          21,784             22         52,351
Common stock issued for payment of legal services              --              --           5,000              5        181,245
Common stock issued in settlement of liabilities               --              --           8,002              8        215,441
                                                           ------      ----------       ---------     ----------   ------------
Balance at December 31, 1999                                   --      $       --         723,558     $      723   $ 49,858,212
Net loss                                                       --              --              --             --             --
Decline in market value of marketable securities               --              --              --             --             --
Realization of increase in market value on
  transfer of marketable securities in connection
  with acquisitions                                            --              --              --             --             --
Currency translation adjustment                                --              --              --             --             --
TOTAL COMPREHENSIVE LOSS                                       --              --              --             --             --
Sale of common stock in private placements, net                --              --         201,094            201      7,590,088
Common stock issued on exercise of warrants and
  options                                                      --              --          45,506             46        804,360
Common stock issued in connection with
  acquisitions                                                 --              --         477,592            478     11,164,489
Issuance of options to consultants for an
  acquisition                                                  --              --              --             --        186,500
Issuance of warrants in connection with line of
  credit                                                       --              --              --             --        382,500
Issuance of common stock, options and warrants for
   consulting services                                         --              --         171,377            171        865,686
                                                           ------      ----------       ---------     ----------   ------------
Balance at December 31, 2000                                   --              --       1,619,087     $    1,619   $ 70,851,835
                                                           ======      ==========      ==========     ==========   ============

<CAPTION>

                                                                              Accumulated
                                                                                 Other                      Total
                                                             Accumulated     Comprehensive   Treasury    Stockholders'
                                                               Deficit       Income (Loss)    Stock         Equity
                                                               -------       -------------    -----         ------
<S>                                                         <C>             <C>             <C>         <C>
Balance at December 31, 1998                                $(42,238,133)   $         --    $ (10,395)  $  4,072,043
Net loss                                                      (5,626,502)             --           --             --
Increase in market value of marketable securities                     --       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 for Class C
  preferred stock and warrants, less related
  costs                                                               --              --           --        (33,905)
Redemption of preferred stock                                         --              --           --       (930,000)
Dividends paid on preferred stock                                     --              --           --        (56,641)
Sale of common stock in private placements, net                       --              --           --      3,112,884
Issuance of options and warrants for services                         --              --           --        996,954
Common stock issued on exercise of warrants and
  options                                                             --              --           --         52,373
Common stock issued for payment of legal services                     --              --           --        181,250
Common stock issued in settlement of liabilities                      --              --           --        215,449
                                                            -------------   -------------   ----------  -------------
Balance at December 31, 1999                                $(47,864,635)   $  1,750,626    $ (10,395)  $  3,734,531
Net loss                                                     (19,090,263)             --           --             --
Decline in market value of marketable securities                      --        (743,010)          --             --
Realization of increase in market value on
  transfer of marketable securities in connection
  with acquisitions                                                   --      (1,095,348)          --             --
Currency translation adjustment                                       --         (46,793)          --             --
                                                            -------------   -------------
TOTAL COMPREHENSIVE LOSS                                     (19,090,263)     (1,885,151)          --    (20,975,414)
                                                            -------------   -------------
Sale of common stock in private placements, net                       --              --           --      7,590,289
Common stock issued on exercise of warrants and
  options                                                             --              --           --        804,406
Common stock issued in connection with
  acquisitions                                                        --              --           --     11,164,967
Issuance of options to consultants for an
  acquisition                                                         --              --           --        186,500
Issuance of warrants in connection with line of
  credit                                                              --              --           --        382,500
Issuance of common stock, options and warrants for
  consulting services                                                 --              --           --        865,857
                                                            -------------   -------------   ----------  -------------
Balance at December 31, 2000                                $(66,954,898)   $   (134,525)   $ (10,395)  $  3,753,636
                                                            =============   =============   ==========  =============

</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                      Year ended December 31,
                                                                             --------------------------------------
                                                                                  2000                     1999
                                                                             -------------            -------------
<S>                                                                          <C>                      <C>
OPERATING ACTIVITIES:
Loss from continuing operations                                              $(9,038,620)             $(1,572,007)
Adjustments to reconcile loss from continuing operations
  to net cash used in operating activities:
       Depreciation and amortization                                           2,165,589                  477,512
       Impairment loss                                                         4,116,038                       --
     Provision for doubtful accounts                                              91,864                       --
     Realized and unrealized gains on marketable securities                   (1,095,348)                (965,096)
     Common stock and stock options issued for legal and licensing matters            --                  101,712
     Warrants and stock options issued for services                              321,504                       --
     Changes in assets and liabilities, net of effects of acquisitions:
       Receivables                                                               365,114                  158,813
       Inventories                                                                79,152                       --
       Prepaid expenses and other current assets                                 (73,881)                  41,885
       Other assets                                                                   --                   12,173
       Accounts payable                                                          628,825                  (94,964)
       Accrued liabilities                                                       719,810                  128,160
       Sales and value-added taxes payable                                       (27,257)                      --
                                                                             -----------              -----------
            Net cash used in continuing operations                            (1,747,210)              (1,711,812)
            Net cash used in discontinued operations                          (3,136,870)              (1,391,798)
                                                                             -----------              -----------
            Net cash used in operating activities                             (4,884,080)              (3,103,610)
                                                                             -----------              -----------
INVESTING ACTIVITIES:
Purchase of property and equipment                                               (73,952)                 (93,499)
Decrease (increase) in restricted cash                                            20,000                  (59,838)
Increase in security deposits                                                    (13,628)                      --
Payment for acquisitions, net of cash acquired                                  (996,460)                      --
                                                                             -----------              -----------
            Net cash used in continuing operations                            (1,064,040)                (153,337)
            Net cash used in discontinued operations                          (1,026,132)                (657,772)
                                                                             -----------              -----------
            Net cash used in investing activities                             (2,090,172)                (811,109)
                                                                             -----------              -----------

FINANCING ACTIVITIES:
Proceeds from sale of common stock - net                                       7,590,289                3,125,675
Proceeds from exercise of warrants and options                                   804,406                   52,373
Proceeds from long-term debt                                                     217,378                       --
Borrowings under bank notes payable                                           (1,078,237)                      --
Payment of related party notes                                                  (698,878)                      --
Payment of long-term debt and capital lease obligations                         (111,167)                 (44,485)
Costs related to issuance of equity instruments                                       --                  (33,905)
                                                                             -----------              -----------
            Net cash used in continuing operations                             6,723,791                3,099,658
            Net cash used in discontinued operations                            (255,780)                 167,908
                                                                             -----------              -----------
            Net cash provided by financing activities                          6,468,011                3,267,566
                                                                             -----------              -----------

Effect of exchange rate changes on cash and cash equivalents                    (380,418)                      --

Decrease in cash and cash equivalents                                           (886,659)                (647,153)
Cash and cash equivalents at beginning of year                                 1,730,495                2,377,648
                                                                             -----------              -----------
Cash and cash equivalents at end of year                                     $   843,836              $ 1,730,495
                                                                             ===========              ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
     Interest
       Continuing operations                                                 $   184,390              $        --
       Discontinued operations                                               $    25,723              $    47,329
     Income taxes
       Continuing operations                                                 $       477              $        --
       Discontinued operations                                               $     8,945              $    15,233

</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF BUSINESS

     Vizacom Inc. and subsidiaries (collectively, the "Company") is a provider
     of professional internet and technology solutions. The Company's solutions
     are intended to build and maintain a web-based business and technology
     infrastructure for businesses. Specific solutions include: e-business
     strategy formation, web interface design, and systems planning, development
     and integration. The Company's clients primarily consist of large,
     multi-national corporations, small- and mid-sized companies, and early
     stage internet ventures from a broad range of industries. In early 2001,
     the Company determined to sell its historical visual communications
     operations and discontinued its operations in Europe (see Note 5). These
     actions were taken to enhance the Company's focus on growing its
     professional internet and technology solutions business in the United
     States.

     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. 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 from hardware sales and related services are generally recognized
     upon shipment of products to customers and recorded net of allowances for
     anticipated returns. 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. Revenue for software royalties is
     generally recognized upon the sales which give rise to the royalties.
     Revenue for software product sales 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-7
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   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 4. 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 basis) 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 $4,473,000 in
     2000 and $7,582,000 in 1999 substantially all of which relates to
     discontinued operations.

     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.

     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.

     GOODWILL

     Goodwill represents the excess of the purchase price over the estimated
     fair values of net assets acquired in the purchases of businesses. Goodwill
     is amortized on a straight-line basis over a period of 5 to 7 years.


                                      F-8
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     BUSINESS PROCESSES AND METHODOLOGIES, WORKFORCE, AND CUSTOMER LISTS

     The values of business processes and methodologies, workforce, and customer
     lists represent the fair values of these assets acquired in the purchases
     of businesses, as determined by independent appraisals. Business processes
     and methodologies, workforce, and customer lists are being amortized on a
     straight-line basis over periods of 3 to 7 years.

     VALUATION OF LONG-LIVED ASSETS

     Long-lived assets such as property and equipment, goodwill, business
     processes and methodologies, workforce, customer lists, and investments are
     reviewed for impairment when events or changes in circumstances indicate
     that the carrying amount of the assets may not be recoverable. An
     impairment loss is recognized when estimated future undiscounted cash flows
     expected to result from the use of the asset and its eventual disposition
     are less than its carrying amount.

     PRODUCT DEVELOPMENT COSTS

     Costs incurred in the development of new software products were expensed as
     incurred until technological feasibility was established. The costs of
     significant enhancements of products which have established technological
     feasibility were capitalized, and capitalization is discontinued when the
     product is available for sale. Approximately $561,000 of product
     enhancement costs relating to discontinued operations remain capitalized at
     December 31, 2000, and are included in other assets (see Note 5).
     Amortization, which commences when the products are available for general
     release to customers, is 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. All
     product development activities were in connection with discontinued
     operations.

     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 amortization periods of goodwill and
     other intangibles. 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 at 220% of expected claims 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.


                                      F-9
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     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, 2000 was fully reserved since management presently
     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 2000 and
     1999 since they were anti-dilutive.

     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 utilized letters of credit to collateralize certain short-term
     purchases. In the Company's past experience, no claims were 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. Therefore management 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. This statement is effective for all fiscal quarters of
     fiscal years beginning after June 15, 2000. In June 2000, SFAS 133 was
     amended by SFAS 138, which amended or modified certain issues in SFAS 133.
     SFAS 138 is also effective for all fiscal quarters of fiscal years
     beginning after June 15, 2000. The Company does not believe that SFAS 133
     and SFAS 138 will have a material impact on its financial statements.

     In December 1999, the Securities and Exchange Commission (SEC) issued Staff
     Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
     (SAB 101). SAB 101 summarizes certain of the SEC's views in applying
     generally accepted accounting principles to revenue recognition in
     financial statements. The Company has been in compliance with the
     provisions of SAB 101 and therefore does not believe that SAB 101 will have
     a material impact on its financial statements.

     RECLASSIFICATIONS

     Certain reclassifications have been made to the 1999 amounts to conform
     with the 2000 presentation.


                                      F-10
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.   LIQUIDITY AND BUSINESS RISKS

     The accompanying financial statements have been prepared assuming that the
     Company will continue as a going concern. The Company has experienced
     recurring net losses since its inception and had a working capital
     deficiency of ($4,684,707) at December 31, 2000. In January 2001, the
     Company sold 149,000 shares of common stock for aggregate gross proceeds
     of $372,500. The Company believes that over the next twelve months it will
     need to raise at least an additional $1,500,000 to meet its currently
     anticipated liquidity and capital expenditure requirements. The promissory
     note held by the Company from its former visual communications subsidiary
     provides for the Company to receive $360,000 in 2001. Management intends to
     seek additional financing through one or more debt, equity, or convertible
     securities offerings, through the sale of assets or through a merger or
     acquisition. There can be no assurance that the Company will be successful
     in completing any such offering or offerings, sale of assets or merger or
     acquisition, or any other offerings or transactions, or that the terms of
     any such offering or offerings, transaction or transactions will be
     beneficial to the Company or its stockholders. The financial statements do
     not include any adjustments that might result from the outcome of this
     uncertainty.

3.   STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                       2000           1999
                                                                                     --------       --------
     <S>                                                                           <C>            <C>
     Supplemental disclosure of non-cash financing and investing
       activities:

     Continuing operations:
       Unrealized holding (loss) gain on marketable securities                     $  (743,010)   $ 1,753,929
       Warrants issued for deferred consulting costs                               $   656,993    $   923,730
       Issuance of common stock/stock options in payment of liabilities            $   269,361    $   100,000
       Fair value of net assets acquired for common stock, stock options,
         and notes payable                                                         $ 8,157,555    $        --
       Redemption of Class C Preferred Stock with marketable securities            $        --    $   930,000
       Payment of preferred stock dividends with marketable securities             $        --    $    56,641
       Fixed assets acquired with capital lease obligations                        $    16,259    $        --
       Listing fees accrued for capital stock transactions                         $        --    $   (22,828)

     Discontinued operations:
       Fair value of net assets acquired for common stock and notes payable        $ 4,560,832    $        --
       Issuance of common stock / stock options in payment of liabilities          $        --    $   191,249

</TABLE>

4.   ACQUISITIONS

     On February 15, 2000, the Company acquired Renaissance Computer Art Center,
     Inc., d/b/a Renaissance Multimedia, a New York City based interactive web
     site design firm. The aggregate purchase price, including all direct costs,
     was $2,706,563 and was paid through the issuance of 44,987 shares of the
     Company's common stock and a $250,000 cash payment to the Renaissance
     stockholders. The Company entered into a three-year employment contract
     with the President of Renaissance Multimedia at an annual salary of
     $175,000, with certain performance bonus targets. Additionally, the Company
     granted options to purchase an aggregate of 60,000 shares of its common
     stock under its 1994 Long Term Incentive Plan to certain employees of
     Renaissance Multimedia. The $2,483,130 cost in excess of the fair value of
     the net tangible assets acquired of $223,433 was allocated to goodwill,
     business processes and methodologies, workforce, and customer lists in
     accordance with independent appraisals.


                                      F-11
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.   ACQUISITIONS (CONTINUED)

     On March 9, 2000, the Company acquired all of the outstanding shares of
     Junction 15 Limited, a London based interactive web site design firm. The
     aggregate purchase price, including all direct costs, was $2,729,593 and
     was paid through the issuance of 68,182 shares of the Company's common
     stock and a $250,000 cash payment. The direct costs include 1,404 shares
     of the Company's common stock which was paid as a finders fee. The Company
     entered into three-year employment agreements with two directors and
     stockholders of Junction 15, with annual salaries of approximately $150,000
     and $80,000, respectively, with various provisions for pensions,
     commissions, and bonuses. In January 2001, these employment agreements were
     terminated. The Company granted options to purchase an aggregate of 25,000
     shares of its common stock under its 1994 Long Term Incentive Plan to
     certain employees of Junction 15. The $2,724,422 cost in excess of the fair
     value of the net tangible assets acquired of $5,171 was allocated to
     goodwill, business processes and methodologies, workforce, and customer
     lists in accordance with independent appraisals. On February 2, 2001
     Junction 15 Limited was placed into creditors voluntary liquidation in the
     United Kingdom (see Note 5).

     On March 27, 2000, the Company acquired PWR Systems, a Long Island, New
     York based interactive integrator and value-added reseller of computer and
     digital information equipment, for $8,907,578. The purchase price was paid
     in the form of a $1,000,000 cash payment, one-year promissory notes in the
     aggregate principal amount of $500,000, convertible into the Company's
     common stock at $30 per share, and payable in equal monthly installments
     with interest of 6.3% per annum, and 150,000 shares of the Company's common
     stock, valued at $30 per share, issued to the two selling stockholders 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 was further
     obligated to issue additional common stock if, during the twelve months
     following the acquisition, the market price of the Company's common stock
     fell below $10 per share for any thirty consecutive trading-day period. On
     December 6, 2000, the Company issued to the PWR selling shareholders an
     aggregate of 56,000 shares of common stock in payment of this contingent
     consideration. On December 6, 2000 the PWR selling shareholders received
     1,017 shares of common stock and will receive, subject to stockholder
     approval, another 91,290 shares in 2001 as a result of the decline in the
     Company's share price below $10 for thirty consecutive days. The Company
     entered into three-year employment agreements with PWR's selling
     stockholders providing for annual salaries of $200,000 each, and provisions
     for bonuses upon attaining specified performance thresholds. Additionally,
     the Company granted options to purchase an aggregate of 75,000 shares of
     its common stock under its 1994 Long Term Incentive Plan to officers,
     employees and independent contractors of PWR. Furthermore, the Company
     agreed to prepay, upon receipt of gross proceeds, commencing as of November
     12, 1999, of $15,000,000 from equity offerings, 6.3% notes payable in the
     aggregate principal amount of $762,745 to the PWR selling stockholders,
     equivalent to the retained earnings of PWR at the closing date. Otherwise,
     these 6.3% notes will be paid in quarterly installments through March 2001.
     On January 10, 2001, the foregoing notes were amended to extend the payment
     schedule until December 2001. The $8,620,960 cost in excess of the fair
     value of the net tangible assets acquired of $286,618 was allocated to
     goodwill, business processes and methodologies, workforce, and customer
     lists in accordance with independent appraisals. In connection with the
     Company's periodic evaluation of its intangible assets, the Company
     recorded an impairment charge of $4,116,038 in the fourth quarter of 2000
     relating to the goodwill recorded by the Company in this acquisition.

     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 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 shares of Xceed common stock in August
     1999, or 66,185 shares of Xceed common stock, 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. The Company
     recorded a realized gain of $1,095,348 during the period ended December 31,
     2000


                                      F-12
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.   ACQUISITIONS (CONTINUED)

     related to 59,813 shares of Xceed common stock transferred to this third
     party in connection with the Company's acquisitions of Renaissance
     Multimedia and PWR. The gain represents the realization of the appreciation
     in market value at the dates of these acquisitions. The third party
     received 14,953 shares of Xceed common stock for the Renaissance Multimedia
     acquisition and 44,860 shares of Xceed common stock for the PWR
     acquisition, resulting in respective gains of $371,962 and $723,386. The
     market value of the Xceed shares at the time of the Renaissance Multimedia
     and PWR acquisitions during the first quarter of 2000 has been recorded as
     an additional cost of these acquisitions.

     On October 11, 2000, the Company acquired all of the outstanding shares of
     interMETHODS Limited, a London based e-business technology solutions
     provider. The aggregate purchase price, including all direct costs, was
     $2,499,476 and was paid through the issuance of 156,002 shares of the
     Company's common stock and an obligation to make a $104,075 deferred
     payment, which bears interest at 8% per annum and was due January 11, 2001.
     The Company entered into three-year employment agreements with the three
     former stockholders of interMETHODS Limited, with annual salaries of
     approximately $120,000 each, with various provisions for pensions and
     bonuses. Additionally, the Company granted options to purchase an aggregate
     of 25,000 shares of its common stock under its 1994 Long Term Incentive
     Plan to certain employees of interMETHODS. The $2,357,939 cost in excess of
     the fair value of the net tangible assets acquired of $141,537 was
     reflected as goodwill. On February 2, 2001 interMETHODS Limited was placed
     into creditors voluntary liquidation in the United Kingdom (see Note 5).

     The following table summarizes the net assets of such acquired businesses
     at the dates of acquisition:

<TABLE>
<CAPTION>

                                                                            Subsequently discontinued
                                                                                    (see Note 5)
                                                                            -------------------------
                                         Renaissance      PWR                        inter-
          Category                       Multimedia     Systems      Junction 15     METHODS        Total
------------------------------------     -----------   -----------   -----------    -----------   -----------
<S>                                      <C>           <C>           <C>            <C>           <C>
Current assets                           $   365,983   $ 3,853,423   $   294,204    $   263,383   $ 4,776,993
Noncurrent assets                             97,990        21,436        42,728         88,353       250,507
                                         -----------   -----------   -----------    -----------   -----------
Total assets                                 463,973     3,874,859       336,932        351,736     5,027,500
                                         -----------   -----------   -----------    -----------   -----------

Current liabilities                          209,997     3,588,241       331,444        210,199     4,339,881
Noncurrent liabilities                        30,543            --        33,174             --        63,717
                                         -----------   -----------   -----------    -----------   -----------
Total liabilities                            240,540     3,588,241       364,618        210,199     4,403,598
                                         -----------   -----------   -----------    -----------   -----------

Net assets (liabilities) acquired            223,433       286,618       (27,686)       141,537       623,902
Goodwill                                   1,004,130     5,561,960     1,713,279      2,357,939    10,637,308
Business processes and methodologies         656,000       496,000       484,000             --     1,636,000
Workforce                                    413,000       413,000       180,000             --     1,006,000
Customer lists                               410,000     2,150,000       380,000             --     2,940,000
                                         -----------   -----------   -----------    -----------   -----------
Purchase price                           $ 2,706,563   $ 8,907,578   $ 2,729,593    $ 2,499,476   $16,843,210
                                         ===========   ===========   ===========    ===========   ===========

</TABLE>

     The following unaudited pro forma summary presents the consolidated results
     of continuing operations as if the acquisitions had occurred on January 1,
     1999 and does not purport to be indicative of what would have occurred on
     the date indicated or of the results which may occur in the future.

                                               2000                      1999
                                               ----                      ----

Net sales from continuing operations      $ 18,040,041            $  17,459,605
Loss before extraordinary item            $ (9,456,250)           $  (3,120,778)
Net loss                                  $ (9,456,250)           $  (3,120,778)
Net loss per share                        $      (8.18)           $       (3.90)


                                      F-13
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.   DISCONTINUED OPERATIONS

     On January 9, 2001, the Company entered into an agreement with a German
     company for the purchase of certain assets and assumption of liabilities of
     the Company's Aachen, Germany contact center operation, including the
     assumption of the remaining lease obligation. The agreement calls for a
     payment to the Company of approximately $100,000, of which approximately
     $50,000 would be utilized to pay remaining tax obligations. The $100,000
     payment has not been received and is past due. The Company has commenced
     legal proceedings to collect this amount.

     In February 2001, the Company divested through English law creditors
     voluntary liquidation the Company's two interactive service firms in the
     United Kingdom, Junction 15 Limited and interMETHODS Limited. As of
     December 31, 2000 all of the assets and liabilities of these entities were
     written off, resulting in an impairment charge of $4,511,063.

     On March 31, 2001, the Company sold its visual communications operations to
     the management of its Serif subsidiaries. The Company received $150,000 in
     cash at closing. The Company also holds a promissory note from Serif Inc.
     in the aggregate principal amount of $987,500, which note bears interest at
     a rate of 10% per annum, and which is payable $40,000 per month, except for
     April and November, in which months the payments are $30,000 and $50,000,
     respectively. The Company or one of its subsidiaries remain responsible for
     some potential liabilities. Serif (Europe) Limited received a 12-month
     exclusive license in Europe and a 24-month non-exclusive license in the
     rest of the world with respect to the software of the Company's SPC
     subsidiary. Serif (Europe) Limited was also granted a non-exclusive license
     to use the Harvard Graphics brand name for the purpose of selling
     repackaged Serif products using such name. Each of such licenses shall be
     renewed if minimum royalty and other conditions are met. In consideration
     therefor, Serif (Europe) Limited will pay a royalty fee of 12.5% in respect
     of sales of SPC software and 3% of sales of repackaged Serif software.
     While the Company continues to own SPC, it agreed not to compete with Serif
     in its software business as long as the licenses are in effect.

     The Company's visual communications operations and London interactive
     business have been accounted for as discontinued operations and,
     accordingly, their operating results are segregated and reported as
     discontinued operations in the accompanying consolidated statements of
     operations and cash flows for all years presented.

     Information relating to the results of operations of the discontinued
     operations for the year ended December 31, 2000 and 1999 is set forth
     below:

<TABLE>
<CAPTION>

                                                             2000             1999
                                                             ----             ----

        <S>                                              <C>             <C>
        Net sales                                        $ 14,422,305    $ 19,891,357
        Cost of sales                                       3,972,810       6,371,106
                                                         ------------    ------------
        Gross profit                                       10,449,495      13,520,251

        Selling, general, and administrative               14,670,883      14,720,043
        Product development                                   744,944         896,931
        Amortization of acquired software and goodwill        649,074       2,219,363
        Impairment loss                                     4,511,063              --
        Interest and other expense, net                       (21,710)        (10,612)
                                                         ------------    ------------
                                                           20,554,254      17,825,725

        Loss before income taxes                          (10,104,759)     (4,305,474)
        Income tax benefit                                    (53,116)       (250,979)
                                                         ------------    ------------
        Loss from discontinued operations                $(10,051,643)   $ (4,054,495)
                                                         ============    ============
</TABLE>


                                      F-14
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.   DISCONTINUED OPERATIONS (CONTINUED)

     The assets and liabilities of the discontinued operations are set forth
     below as of December 31, 2000.

     Current assets:
     Cash                                                      $   532,726
     Receivables
       Trade, net                                                  211,313
       Other                                                        80,719
       Notes                                                        60,336
     Inventories, net                                              685,323
     Prepaid expenses and other current assets                     120,086
                                                               -----------
     Total current assets                                        1,690,503

     Property and equipment, net                                   548,200
     Other assets                                                  588,668
                                                               -----------
     Total assets                                              $ 2,827,371
                                                               ===========

     Current liabilities:
     Accounts payable                                            2,247,643
     Accrued liabilities                                         1,578,210
     Sales and value-added taxes payable                           343,966
     Current portion of lease obligations                           82,337
                                                               -----------
                                                                 4,252,156
     Capital lease obligation, long term portion                    39,980
                                                               -----------
     Total liabilities                                         $ 4,292,136
                                                               -----------

     Net assets (liabilities):
       Discontinued operations                                 $(1,464,765)
                                                               ===========

     Assets and liabilities of Junction 15 Limited and interMETHODS Limited as
     of December 31, 2000, which were written-off as of that date because these
     entities were placed into creditors voluntary liquidation in the United
     Kingdom on February 2, 2001, were as follows as of December 31, 2000:

     Current assets                                              $  111,621
     Noncurrent assets                                            4,612,103
                                                                 ----------
                                                                  4,723,724
     Current liabilities                                            212,661
                                                                 ----------
                                                                 $4,511,063
                                                                 ==========


                                      F-15
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.   PROPERTY AND EQUIPMENT

     Property and equipment consists of the following as of December 31, 2000:

     Computer equipment ................................         $  856,779
     Computer software .................................            220,712
     Office furniture and equipment ....................            616,431
     Leasehold improvements ............................            329,220
                                                                 ----------
                                                                  2,023,142
     Less accumulated depreciation .....................          1,205,010
                                                                 ----------
     Total .............................................         $  818,132
                                                                 ==========

     Depreciation expense for the years ended December 31, 2000 and 1999 was
     $474,060 (of which $423,758 was from discontinued operations) and $255,974
     (of which $182,648 was from discontinued operations), respectively.
     Property and equipment included above which relates to discontinued
     operations had a net book value of $548,200 at December 31, 2000. See Note
     5.

7.   LEASES

     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 received certain sublease income at one of its
     locations. Restricted cash of $239,838 at December 31, 2000 represents
     collateral of $200,000 for a letter of credit of like amount which served
     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 $39,838 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 intends to terminate the lease in Teaneck.
     See Note 17.

     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, 2000:

     Computer equipment .................................          $ 72,159
     Computer software ..................................             7,775
     Office equipment ...................................           202,017
                                                                   --------
                                                                    281,951
     Less accumulated amortization ......................           126,414
                                                                   --------
     Total ..............................................          $155,537
                                                                   ========

     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, 2000 are as
     follows:


                                      F-16
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.   LEASES (CONTINUED)
                                                      Capital       Operating
                                                      Leases         Leases
                                                      ------         ------
         Year ending December 31:
         ---- ------ -------- ---
     2001 .......................................   $   83,500     $  551,148
     2002 .......................................       42,770        367,223
     2003 .......................................        2,881        327,510
     2004 .......................................        2,244        278,009
     2005 .......................................           --        236,029
                                                    ----------     ----------
     Total minimum lease payments ...............      131,395     $1,759,919
                                                                   ==========
     Less amount representing interest (at rates
     ranging from 9.5% to 25.8%) ................       11,866
                                                    ----------
     Present value of net minimum capital lease
     payments ...................................      119,529
     Less current installments ..................       74,950
                                                    ----------
     Capital lease obligations ..................   $   44,579
                                                    ==========

     Total rental expense for operating leases charged to operations for the
     years ended December 31, 2000 and 1999 was approximately $690,000 (of which
     approximately $440,000 was from discontinued operations) and $198,000 (of
     which $123,000 was from discontinued operations), respectively.

     Of the total $1,759,919 of operating lease commitments, the amounts related
     to discontinued operations are $215,759 in 2001 and $54,337 in 2002, or
     $270,096 in the aggregate.

8.   DEBT

     The bank notes payable consist of ninety-day renewable term notes which are
     secured by the assets of PWR and guaranteed by the Company. The notes bear
     interest at prime plus one-half percent (10% at December 31, 2000).

     On July 21, 2000, PWR terminated its relationship with its inventory
     financing lender and repaid the outstanding inventory loan balance of
     approximately $925,000 with existing working capital. On August 25, 2000,
     PWR entered into a temporary $500,000 inventory financing security
     agreement with a finance company. The temporary financing facility provides
     for 21 to 30 day financing without interest as long as payment is made
     within the allowable terms. The line is presently collateralized by a
     second lien on all of the assets of PWR and is guaranteed by the Company.
     In December 2000, one of PWR's major suppliers was granted a third lien on
     its assets.


                                      F-17
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.   DEBT (CONTINUED)

     The related party notes consist of notes payable to the two PWR selling
     stockholders and consist of the following at December 31, 2000:

     Notes payable to stockholders, interest at 6.3%:
     Convertible notes, payable in monthly installments
       through March 2001                                          $170,372
     Notes payable in monthly installments through
       December 2001                                               $393,495
                                                                   --------
                                                                   $563,867
                                                                   ========

     On January 8, 2000, the Company entered into an agreement, which was
     amended as of March 15, 2000, for a maximum $1,000,000 unsecured line of
     credit note arrangement with a foreign company. Advances under the
     arrangement bear interest at 8%. The Company borrowed $1,000,000 on
     February 17, 2000. This borrowing was paid in full with accrued interest on
     March 20, 2000. In connection with this credit facility, the Company issued
     seven-year warrants to purchase an aggregate of 25,000 shares of its
     common stock exercisable at $3 per share. The warrants were valued at
     $382,500 and are being charged to interest expense over the two-year
     benefit period.

     Long term debt consists of the following at December 31, 2000:

     Directors and officers insurance premium financing, 9.5%,
       monthly installments of $17,104 through September 2001           $217,378
     Amount payable to former stockholder of interMETHODS, 8%            104,175
     Note payable to finance company, 13.7%, through November 2002        53,044
     Note payable to landlord, 10%, monthly installments of $1,402
       through March 2002                                                 19,696
                                                                        --------
                                                                         394,293
     Less current maturities                                             390,155
                                                                        --------
     Long term portion                                                  $  4,138
                                                                        ========

9.   STOCKHOLDERS' EQUITY

     a)   Common Stock

     In 1999, the Company issued 21,784 shares of its common stock pursuant to
     the exercise of warrants and stock options, for aggregate consideration of
     $52,373.

     On April 6, 1999, the Company entered into certain financial advisory and
     investment banking agreements whereby the Company issued warrants to
     purchase 10,000 and 4,500 shares, respectively, of common stock of the
     Company at an exercise price of $11.25. 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 2,500 shares of its common stock to employees of its
     corporate counsel, at an exercise price of $10.31 per share. On July 8,
     1999 options to purchase 2,500 shares of its common stock were issued to a
     member of its corporate counsel. On July 20, 1999, the Company issued
     warrants to purchase an aggregate of 22,500 shares of its common stock at
     an exercise price of $20 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


                                      F-18
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.   STOCKHOLDERS' EQUITY (CONTINUED)

     20, 1999 the Company issued warrants to purchase an aggregate of 10,000
     shares of its common stock at an exercise price of $20 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 2,500 shares of its common stock at an exercise price of
     $20 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 canceled 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. A dispute relating to these
     warrants is subject to a pending arbitration proceeding. See further
     discussion in Note 16. Transaction 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 52,500 shares of Common Stock
     for aggregate gross proceeds of $1,050,000, before associated transaction
     costs of $175,702, in a private placement. On July 1, 1999, the Company
     sold an aggregate of 76,265 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 $27.50 per share
     for a three-year period from date of sale. The Company sold 51,641 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 5,000 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 13.

     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 976 shares of
     common stock valued at $25,000. Also in December 1999, the Company issued
     7,027 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.

     On January 8, 2000, the Company entered into a three-year agreement for
     consulting services primarily related to acquisition and financing
     assistance pursuant to which the Company issued 65,000 three-year warrants
     exercisable at $30 per share. Ten thousand of these warrants are
     exercisable immediately, and 40,000 warrants are exercisable upon the
     attainment of specified performance targets. In addition, 15,000 warrants
     are being held in escrow and are to be released on January 7, 2003, or
     earlier with the Company's approval. The Company has recorded a charge of
     $172,404 related to the currently exercisable 10,000 warrants.


                                      F-19
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.   STOCKHOLDERS' EQUITY (CONTINUED)

     In March and July 2000, the Company completed two private placements in
     which it sold 201,094 shares of its common stock for gross proceeds of
     $8,995,545. Under one of these private placements, the Company sold 93,695
     shares of its common stock and received gross proceeds of $4,216,294
     primarily from U.S. investors. In the other private placement, the Company
     sold 76,247 shares of common stock in March and 31,152 shares of common
     stock in July and received gross proceeds of $3,392,996 and $1,386,255,
     respectively, primarily from European investors.

     On November 28, 2000, the Company entered into an agreement for consulting
     services relating to financial advisory advice and introductions to
     investors and investment banking firms for a six-month term. The Company
     agreed to issue 22,000 shares for these services. The agreement may be
     terminated at any time.

     On December 27, 2000, the Company entered into an agreement for consulting
     services relating to financial advisory advice and introductions to
     investors and investment banking firms for a six-month term. The Company
     agreed to issue 6,000 shares for these services. This agreement has been
     terminated and 3,000 of the shares have been cancelled.

     On December 28, 2000, the Company agreed to issue 123,367 shares of common
     stock to a consultant in payment of his accrued fees totaling $269,861. In
     addition, certain warrants owned by the consultant, its affiliates and a
     charity were amended to reduce the exercise price thereof to $2.19 per
     share.

     On December 31, 2000, the Company entered into an agreement for consulting
     services relating to financial advisory advice and introductions to
     investors, investment banking firms, and acquisition targets for a two-year
     term. The Company agreed to issue 20,000 shares for these services. The
     agreement may be terminated at any time and contains escrow provisions for
     17,500 of the shares, 2,500 of which are scheduled to be released
     quarterly over the term of the agreement.

     The value of common stock and warrants issued for financial advisory
     services is being amortized over the terms of the related agreements and
     the related deferred charges are included in deferred consulting costs.

     As of December 31, 2000, the Company had reserved 1,532,912 shares of
     common stock (not including shares reserved for issuance pursuant to the
     Rights Agreement, dated as of March 31, 1998, between the Company and
     American Stock Transfer & Trust Company) consisting of 361,637 for issued
     and outstanding non-plan options and warrants, 1,079,985 for the Company's
     various stock option plans, and, 91,290 shares due the PWR selling
     shareholders, subject to stockholder approval in 2001 (see Note 4).

     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


                                      F-20
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.   STOCKHOLDERS' EQUITY (CONTINUED)

     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 26,000 shares of Common Stock, at an
     exercise price of $10.63 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 in 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 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 shares of 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.

     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.


                                      F-21
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.  INCOME TAXES

     At December 31, 2000, the Company has available U.S. net operating loss
     carryforwards of approximately $38,000,000, after consideration of certain
     limitations described below, that expire in years 2003 through 2020. The
     significant components of the Company's deferred tax assets, as of December
     31, 2000, are as follows:

     Current:
         Reserve for accounts receivable, inventory and other   $    688,000
     Non-current:
         Depreciation .......................................      1,723,000
         Net operating loss carryforwards ...................     15,291,000
                                                                ------------
     Total deferred tax assets ..............................     17,702,000
         Valuation allowance for deferred tax assets ........    (17,702,000)
                                                                ------------
     Net deferred tax assets ................................   $          0
                                                                ============

     The Company's loss before income taxes is comprised of the following:

                                                    Year ended December 31,
                                                    -----------------------
                                                   2000               1999
                                                   ----               ----
     United States ......................     $(10,561,627)      $ (4,085,861)
     Foreign ............................       (8,581,752)        (1,791,619)
                                              ------------       ------------
                                              $(19,143,379)      $ (5,877,480)
                                              ============       ============

     The income tax benefit of ($53,116) for 2000 and ($250,978) for 1999
     consists principally of the sale of certain net operating losses in
     connection with a state technology transfer program.

     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,
                                                                                       -----------------------
                                                                                         2000            1999
                                                                                         ----            ----
     <S>                                                                            <C>             <C>
     Tax (benefit) at United States federal statutory rates .....................   $ (6,509,000)   $ (1,998,000)
     Non-usable net operating loss carryforwards and other
         permanent differences ..................................................      8,226,000      23,598,000
     Change in valuation allowance ..............................................     (1,717,000)    (21,600,000)
     Foreign and state income taxes (benefit) ...................................        (53,116)       (250,978)
                                                                                    ------------    ------------
                                                                                    $    (53,116)   $   (250,978)
                                                                                    ============    ============
</TABLE>


                                      F-22
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.  INCOME TAXES (CONTINUED)

     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. 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 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 pre-acquisition dual consolidated losses. The IRS
     determined not to act on the Company's application until SPC submitted
     certain filings pertaining to pre-acquisition consolidated tax year return
     filings made by SPC. The Company submitted these filings in an application
     for relief from these deficiencies. On August 23, 2000 the Company received
     notification from the IRS that it had accepted its application for relief.
     On November 6, 2000, the Company re-applied to the IRS for a closing
     agreement. The Company believes that the IRS should agree to such a closing
     agreement, although the IRS has again requested additional information in
     connection with the Company's application. No assurance can be given that
     the IRS will agree to the closing agreement or if so when, 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.

11.  STOCK OPTION PLANS

     The Company has five stock options plans: the 2000 Equity Incentive Plan,
     the 1994 Long-Term Incentive Plan (the "1994 Incentive Plan"), the Outside
     Directors and Advisors Stock Option Plan (the "Outside Directors and
     Advisors 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.


                                      F-23
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  STOCK OPTION PLANS (CONTINUED)

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

     THE 2000 EQUITY INCENTIVE PLAN - In August 2000, the Company's stockholders
     approved the 2000 Equity Incentive Plan. Under the terms of the 2000 Equity
     Incentive Plan, the Company's Board of Directors or a committee thereof may
     grant stock options, stock bonuses, restricted stock, stock appreciation
     rights, performance grants and other types of awards 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). The maximum number of shares of
     common stock that initially may be issued under the 2000 Equity Incentive
     Plan is 500,000.

     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 stock options, stock appreciation rights, restricted
     stock, performance grants and other types of awards 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 133,333 to
     500,000. The options currently outstanding vest over a period of up to
     five years and expire after 10 years.

     THE OUTSIDE DIRECTORS AND ADVISORS 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 2,500 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 2,500 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 16,666 to 75,000. The
     options vest over a period of two years and expire after 10 years.

     The SPC Stock 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 22,304.

     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-24
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  STOCK OPTION PLANS (CONTINUED)

     Activities under the plans and for the non-plan options are detailed in the
     following table:

<TABLE>
<CAPTION>

                                                                                                                          Weighted
                                                                  Outside                                                 Average
                                                      1994        Directors                   2000 Equity                 Exercise
                                                   Incentive     and Advisors      SPC         Incentive       Non-       Price Per
                                                      Plan           Plan          Plans         Plan          Plan         Share
                                                   ---------     ------------     -----       -----------      -----      ---------
<S>                                                  <C>             <C>           <C>           <C>           <C>        <C>
Outstanding at January 1, 1999 ..................      114,170        15,566           804            --         1,666    $  20.43
Granted .........................................       40,000         7,500        21,500            --        44,203       15.80
Forfeited .......................................      (17,721)       (5,556)         (506)           --          (300)     (22.70)
Exercises .......................................       (1,349)         (222)           --            --          (175)      13.50
                                                    ----------    ----------    ----------    ----------    ----------    --------
Outstanding at December 31, 1999 ................      135,100        17,288        21,798            --        45,394    $  21.30
Granted .........................................      376,138        10,000            --        29,000            --       38.20
Forfeited .......................................      (43,820)       (5,000)       (3,876)         (500)           --      (33.40)
Exercises .......................................       (7,732)       (1,069)       (1,124)           --          (225)      18.50
                                                    ----------    ----------    ----------    ----------    ----------    --------
Outstanding at December 31, 2000 ................      459,686        21,219        16,798        28,500        45,169    $  32.50
                                                    ==========    ==========    ==========    ==========    ==========    ========

Exercisable at December 31, 2000 ................      178,724        14,260        11,135         2,000        26,286    $  30.50
                                                    ==========    ==========    ==========    ==========    ==========    ========

Exercisable at December 31, 1999 ................       79,588        11,628         7,814            --        17,403       25.90
                                                    ==========    ==========    ==========    ==========    ==========    ========

</TABLE>

     As of December 31, 2000, 1,079,985 shares of common stock are reserved for
     issuance under the plans described above.

     The weighted average fair value of options granted was $22.70 and $9.30 for
     2000 and 1999, respectively. At December 31, 2000, for each of the
     following classes of options as determined by range of exercise price, set
     forth below is information regarding weighted-average exercise prices and
     weighted average remaining contractual lives of each class:

<TABLE>
<CAPTION>

                                                                  Weighted                                Weighted
                                                                   Average                                Average
                                                                  Remaining          Number of         Exercise Price
                                              Weighted          Contract Life        Options             of Options
                           Number of      Average Exercise     of Outstanding       Currently            Currently
Option Class                Options        Price of Options       Options          Exercisable          Exercisable
---------------------------------------------------------------------------------------------------------------------
<S>       <C>              <C>               <C>                    <C>             <C>                 <C>
$  5.90 - $ 19.70..          239,848         $   12.70              8.55              120,839           $   11.70
$ 20.30 - $ 38.30..          166,046         $   32.70              8.81               58,550           $   33.90
$ 53.10 - $ 75.00..          157,199         $   57.00              9.03               45,286           $   58.10
$102.90 - $235.00..            8,281         $  136.10              5.23                7,732           $  135.50

</TABLE>

     Pro forma information regarding net loss and net 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 2000 and 1999, respectively: weighted-



                                      F-25
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  STOCK OPTION PLANS (CONTINUED)

     average risk-free interest rates of 5.9% for 2000 and 5.3% for 1999; no
     dividends; volatility factors of the expected market price of the Company's
     common stock of 100% for 2000 and 1999; and a weighted-average expected
     life of the options of 3 years for 2000 and 2 years for 1999.

     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>

                                                                        2000               1999
                                                                        ----               ----
     <S>                                                           <C>                <C>
     Pro forma net loss                                            $(23,083,116)      $ (7,036,731)
     Pro forma net loss per share - basic and diluted              $     (20.00)      $     (11.80)

</TABLE>

     The pro forma disclosures presented above for 2000 and 1999, 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.

12.  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 $3,444 and $3,310 for 2000 and
     1999, respectively. The Company provides similar plans for the benefit of
     eligible employees at its European subsidiaries.

13.  RELATED PARTY TRANSACTIONS

     In April 1999, the Company issued options to purchase 2,500 shares of its
     common stock to employees of its corporate law firm, of which the Company's
     Chairman of the Board is a member, at an exercise price of $10.30. In July
     1999, 5,000 shares of common stock were issued to the members of this law
     firm, in payment of legal fees. In addition, in June and July 1999, options
     to purchase an aggregate of 10,000 shares of common stock were granted to
     the members of this law firm at exercise prices of $27.50 and $30.80 per
     share. Options to purchase 7,500 of these shares were granted under the
     Company's 1994 Long Term Incentive Plan.

     On January 28, 2000 the Company issued options to purchase 2,400 shares of
     its common stock to employees of the Company's corporate law firm.

     In 1999 and 2000, the Company compensated its former Chairman of the Board
     of Directors for his services as such at the rate of $60,000 per annum. 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.


                                      F-26
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.  RELATED PARTY TRANSACTIONS (CONTINUED)

     The Company incurred legal expenses of approximately $1,095,000 in 2000 and
     $447,000 in 1999 (of which approximately $500,000 in 2000 and $123,000 in
     1999 related to equity transactions and was charged to additional paid in
     capital) to a law firm in which the current Chairman of the Board of the
     Company is a member. $677,000 and $124,000 of these amounts is included in
     accounts payable at December 31, 2000 and 1999, respectively.

     The Company has certain note obligations to the two PWR selling
     stockholders, who are also two directors and officers of the Company and
     its PWR subsidiary. See Note 8.

14.  SEGMENT INFORMATION

     During 2000, the Company completed four acquisitions described in Note 4.
     The two domestic acquisitions formed the foundation for the Company's
     professional internet and technology solutions business, which is referred
     to as Vizy Interactive and consists of Vizy Interactive New York, formerly
     known as Renaissance Multimedia, and Vizy Interactive-PWR Systems, formerly
     known as PWR Systems. Revenues from this business segment consist primarily
     of e-commerce consulting, web site design, web and systems integration
     services and computer hardware sales.

     In early 2001, the Company determined to divest its software and overseas
     operations so as to better focus on developing its internet and technology
     solutions business in the U.S. Accordingly, on January 9, 2001 the Company
     entered into an agreement with a German company for the sale of certain
     assets and assumption of liabilities of the Company's Aachen, Germany
     contact center operation. On February 2, 2001, Junction 15 Limited and
     interMETHODS Limited, two companies in London, England which the Company
     acquired in 2000, were placed into creditors voluntary liquidation in the
     United Kingdom, and in early 2001, the Company determined to dispose of its
     software operations (See Note 5). These software and overseas operations
     are reflected in discontinued operations.

     The Company's historical business consisted primarily of its direct sale of
     software and digital cameras, collectively referred to as visual
     communications products, utilizing the Company's direct mail marketing and
     telemarketing operations at its Nashua, New Hampshire, Nottingham, England
     and Aachen, Germany call center locations. The Company's web-enabled call
     center business is referred to as Dialog24. The results of the Company's
     VisualCities.com website business and Dialog24 business are included in
     "Visual Communications Products."


                                      F-27
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.  SEGMENT INFORMATION (CONTINUED)

     Information concerning the Company's segment operations is set forth below:

<TABLE>
<CAPTION>

                                                        Foreign          Visual
                                                     Operations in    Communications      Vizy
                                                      Liquidation        Products      Interactive       Corporate     Consolidated
                                                      -----------------------------------------------------------------------------
<S>                                                  <C>               <C>             <C>             <C>             <C>
YEAR ENDED DECEMBER 31, 2000:

CONTINUING OPERATIONS
Net sales                                            $         --      $         --    $ 13,457,929    $         --    $ 13,457,929
Investment gains                                               --                --              --      (1,095,348)     (1,095,348)
Depreciation and amortization                                  --                --       1,580,585         585,004       2,165,589
Impairment loss                                                --                --       4,116,038              --       4,116,038
Warrants and stock options for consulting services             --                --              --         321,504         321,504
Segment profit (loss)                                          --                --      (6,311,419)     (2,727,201)     (9,038,620)
Total assets                                                   --                --       9,179,616       2,075,211      11,254,827

DISCONTINUED OPERATIONS
Net sales                                            $  1,368,241      $ 13,054,064    $         --    $         --    $ 14,422,305
Depreciation and amortization                             651,669         1,256,909              --              --       1,908,578
Impairment loss                                         4,511,063                --              --              --       4,511,063
Segment profit (loss)                                  (5,866,964)       (4,184,679)             --              --     (10,051,643)
Total assets                                                   --         2,827,370              --              --       2,827,370

YEAR ENDED DECEMBER 31, 1999:

CONTINUING OPERATIONS
Net sales                                            $         --      $         --    $         --    $         --              --
Investment gains                                               --                --              --        (965,096)       (965,096)
Depreciation and amortization                                  --                --              --         477,512         477,512
Warrants and stock options for consulting services             --                --              --         101,712         101,712
Segment profit (loss)                                          --                --              --      (1,628,648)     (1,628,648)
Total assets                                                   --                --              --       4,586,789        4586,789

DISCONTINUED OPERATIONS
Net sales                                            $         --      $ 19,891,357    $         --    $         --    $ 19,891,357
Depreciation and amortization                                  --         2,430,246              --              --       2,430,246
Warrants and stock options for consulting services             --            25,000              --              --          25,000
Segment profit (loss)                                          --        (4,054,495)             --              --      (4,054,495)
Total assets                                                   --         5,888,182              --              --       5,888,182

</TABLE>

15.  CLIENT CONCENTRATION AND CREDIT RISK; CONCENTRATION OF DEBT

     For the year ended December 31, 2000, no single customer represented a
     significant sales concentration or credit risk. For the year ended December
     31, 1999, one customer accounted for 19% of the Company's consolidated net
     accounts receivable. 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 is dependent on the availability of two short term loans from
     financial institutions to finance its operations. Neither lender has any
     long term commitment to lend. The unavailability of either or both of these
     borrowings would have a material adverse effect on its business. Except for
     such dependency on these two short term loans, 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.


                                      F-28
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16.  COMMITMENTS AND CONTINGENCIES

     Litigation

     In the fourth quarter of 1998, an action was commenced against Software
     Publishing Corporation ("SPC") in California in which plaintiff is seeking
     $300,000 in damages for SPC'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.
     Neither the Company nor SPC currently has any offices at this location. SPC
     has filed an answer in this action denying the plaintiffs' claims. This
     action currently is in the discovery stage. In October 2000, the plaintiff
     amended its complaint to name Neil M. Kaufman, the Company's chairman of
     the board, as a defendant. While it is reasonably possible that SPC may
     have some liability to the plaintiff, the Company believes this action,
     including the claim against Mr. Kaufman, is without merit and intends to
     vigorously defend 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 or the value of warrants to purchase 15,000 shares of common
     stock cancelled upon termination of the investment banking agreement or
     payment of the value of such warrants, and legal and other expenses in
     connection with the arbitration. The arbitration is in the discovery stage.
     The Company believes that the claims in this arbitration action are without
     merit and intends to vigorously defend this action.

     In addition to the aforementioned litigation, the Company has other
     litigation matters in progress in the ordinary course of business. The
     Company has made provision for the estimated charges which it expects to
     incur in resolving litigation in progress and, in the opinion of
     management, all pending litigation of the Company will be resolved without
     a further material effect on the Company's financial position, results of
     operations or cash flows.

     On January 9, 2001, the Company entered into an agreement with a German
     company to sell certain assets and liabilities of the Company's Aachen,
     Germany contact center operation, including the assumption of the remaining
     lease obligation. The agreement calls for a payment of approximately
     $100,000, of which approximately $50,000 would be utilized to pay remaining
     tax obligations. The $100,000 payment has not been received and is past
     due. The Company has commenced legal proceedings to collect this amount.

     On February 2, 2001, the Company divested Junction 15 Limited and
     interMETHODS Limited, its London-based subsidiaries acquired during 2000,
     through creditors voluntary liquidation in the United Kingdom. The Company
     terminated the employment of the two executives of Junction 15 Limited and
     interMETHODS Limited, and it currently intends to pursue indemnification
     claims for breaches of representations and warranties by the sellers of
     both Junction 15 Limited and interMETHODS Limited.

     Long Term Consulting Agreement

     In 1998, the Company 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, as
     amended December 2000, may be automatically extended by an additional
     eighteen months if the Company reports annual net revenues of $45,000,000,
     and an additional eighteen months should net revenues exceed $65,000,000.
     Any revenues of acquired companies not introduced directly or indirectly by
     the consultant are excluded from the above revenue thresholds.


                                      F-29
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

     Employment Agreement

     On July 14, 1999, the Company entered into a three-year employment
     agreement with the Company's then president and chief executive officer.
     Under the terms of the agreement, the chief executive was to 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. The
     chief executive was to receive a $25,000 bonus upon the Company's
     attainment of its first profitable fiscal quarter. The conditions for
     payment of the bonus were not met. The chief executive was also to receive
     a quarterly bonus of 3% of the Company's income before extraordinary items.
     In the event of a change of control, the agreement provided that the chief
     executive had 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 the chief executive over the
     previous five years, less $1.00. The agreement further contained
     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.

     On January 15, 2001 the Company's chief executive resigned. Pursuant to a
     settlement and release agreement, he will receive $10,500 monthly for
     consulting services through April 15, 2001 and received 30,000 shares of
     the Company's common stock. Additionally he will receive five percent of
     the gross proceeds received by the Company from the sale of our visual
     communications operations.

17.  SUBSEQUENT EVENTS

     On January 2, 2001 the Company retained a consultant for the purpose of
     providing financial advisory and investment banking advice for a one-year
     term. Pursuant to this agreement, the Company agreed to issue 45,000
     shares of its common stock and three-year warrants to purchase 60,000
     shares of common stock. On February 28, 2001, this agreement was
     terminated, and the consultant returned all Company owned securities
     obtained pursuant to the agreement which were still owned by it.

     On January 15, 2001 the Company retained a consultant for the purpose of
     providing investor relations, public relations and corporate communications
     and other services for a one-year term. Pursuant to this agreement, the
     Company agreed to issue 30,000 shares of its common stock, 10,000 of
     which shares are subject to a lockup agreement that prohibits their sale
     prior to July 15, 2001, and three-year warrants to purchase 20,000 shares
     of common stock; 10,000 immediately exercisable at an exercise price of
     $2.50 per share, and 10,000 exercisable commencing July 15, 2001 at an
     exercise price of $10 per share.

     On January 26, 2001, the Company accepted subscriptions for a total of
     149,000 shares of common stock from 13 accredited investors for gross
     proceeds of $372,500.

     In February 2001, the Company divested through English law creditors
     voluntary liquidation the Company's two interactive service firms in the
     United Kingdom, Junction 15 Limited and interMETHODS Limited. See Note 5.


                                      F-30
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17.  SUBSEQUENT EVENTS (CONTINUED)

     On March 31, 2001, the Company sold its visual communications operations to
     the management of its Serif subsidiaries. The Company received $150,000 in
     cash at closing. The Company also holds a promissory note in the aggregate
     principal amount of $987,500, which note bears interest at a rate of 10%
     per annum, and which is payable $40,000 per month, except for April and
     November, in which months the payments are $30,000 and $50,000,
     respectively. The Company or one of its subsidiaries remain responsible for
     some potential liabilities. Serif (Europe) Limited received a 12-month
     exclusive license in Europe and a 24-month non-exclusive license in the
     rest of the world with respect to the software of the Company's SPC
     subsidiary. Serif (Europe) Limited was also granted a non-exclusive license
     to use the Harvard Graphics brand name for the purpose of selling
     repackaged Serif products using such name. Each of such licenses shall be
     renewed if minimum royalty and other conditions are met. In consideration
     therefor, Serif (Europe) Limited will pay a royalty fee of 12.5% in respect
     of sales of SPC software and 3% of sales of repackaged Serif software.
     While the Company continues to own SPC, it agreed not to compete with Serif
     in its software business as long as the licenses are in effect.

     The Company intends to enter into a Sublease Termination Agreement for its
     former Teaneck, New Jersey corporate headquarters location. Under the
     anticipated agreement the Company expects its remaining lease obligations
     will terminate.

18.  SUBSEQUENT REVERSE STOCK SPLIT

     On May 23, 2001, the Company effected a one-for-ten (1:10) reverse stock
     split. All of the share amounts and share prices in the Company's financial
     statements and notes thereto have been adjusted to reflect this event.

<PAGE>

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        VIZACOM INC.


Dated: March 14, 2002               By: /s/ Vincent DiSpigno
                                        ----------------------------
                                            Vincent DiSpigno
                                            President
                                            (Principal Executive Officer)


Dated: March 14, 2002               By: /s/ Alan W. Schoenbart
                                        ----------------------------
                                            Alan W. Schoenbart
                                            Vice President - Finance, Treasurer
                                            and Chief Financial Officer
                                            (Principal Financial Officer)


In accordance with the requirements of the Exchange Act, this report has been
signed below by the following persons in the capacities indicated, on the 14th
day of March, 2002.


   /s/ Vincent DiSpigno                  President and Director
--------------------------------         (Principal Executive Officer)
       Vincent DiSpigno


  /s/ Alan W. Schoenbart                 Vice President - Finance and Chief
--------------------------------         Financial Officer
      Alan W. Schoenbart                 (Principal Accounting Officer)


 /s/  David N. Salav                     Vice President and Director
--------------------------------
      David N. Salav

             *                           Director
--------------------------------
      Francis X. Murphy

             *                           Director
--------------------------------
      David A. Buckel




*By:  /s/ Vincent DiSpigno
     ---------------------------
     Vincent DiSpigno as
     Attorney-in-fact

<PAGE>

                                  VIZACOM INC.
                                INDEX TO EXHIBITS

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 2000 Equity Incentive Plan (Incorporated by reference to
          Exhibit 4 to the Company's Registration Statement on Form S-8
          (Registration Number: 333-46994) filed with the Commission on
          September 29, 2000.)
10.2      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.)
10.3      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.)
10.4      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.)
10.5      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.)
10.6      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.)
10.7      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.)
10.8      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.)
10.9      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.)
10.10     Amendment, dated as of December 28, 2000, to the Consulting Agreement,
          dated as of December 17, 1998, between the Company, Target Capital
          Corp., and Yitz Grossman (Incorporated by reference to Exhibit 10.8 to
          the Company's Current Report on Form 8-K (Date of Report: January 10,
          2001) (Commission File Number: 1-14076) filed with the Commission on
          January 11, 2001.)
10.11     Consulting Agreement, dated as of December 18, 1998, 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.)

<PAGE>

10.12     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.)
10.13     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.)
10.14     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.)
10.15     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.)
10.16     Settlement and Release Agreement, dated as of January 15, 2001,
          between the Company and Mark E. Leininger (Incorporated by reference
          to Exhibit 10.1 to the Company's Current Report on Form 8-K (Date of
          Report: January 15, 2001) (Commission File Number: 1-14076) filed with
          the Commission on January 31, 2001.)
10.17     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.)
10.18     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.)
10.19     Form of Lock-Up Agreement with former stockholders of Renaissance.
          (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.)
10.20     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.)
10.21     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.)
10.22     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.)
10.23     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.)
10.24     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.)

<PAGE>

10.25     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.)
10.26     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.)
10.27     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.)
10.28     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.)
10.29     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.)
10.30     Amendment No. 1, dated March 27, 2000, to Merger Agreement 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.)
10.31     Amendment No. 2, dated January 10, 2001, to Merger Agreement among
          Company, PWR Systems, Inc., Vincent DiSpigno and David Salav
          (Incorporated by reference to Exhibit 10.1 to the Company's Current
          Report on Form 8-K (Date of Report: January 10, 2001) (Commission File
          Number: 1-14076), filed with the Commission on January 11, 2001.)
10.32     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.)
10.33     Convertible Note, dated March 27, 2000, of Vizacom Inc. in the
          principal amount of $250,000 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.)
10.34     Convertible Note, dated March 27, 2000, of Vizacom Inc. in the
          principal amount of $250,000 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.)
10.35     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.)
10.36     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.)

<PAGE>

10.37     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.)
10.38     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.)
10.39     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.)
10.40     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.)
10.41     Form of new Promissory Note, dated January 10, 2001, of PWR Systems,
          Inc. in the aggregate principal amount of $393,494.62 and payable to
          Vincent DiSpigno and David Salav. (Incorporated by reference to
          Exhibit 10.41 to the Company's December 31, 2000 Form 10-KSB
          Commission File Number: 1-14076), filed with the Commission on April
          2, 2001)
10.42     Promissory Note issued by PWR to The Chase Manhattan Bank dated
          January 30, 2001. (Incorporated by reference to Exhibit 10.42 to the
          Company's December 31, 2000 Form 10-KSB Commission File Number:
          1-14076), filed with the Commission on April 2, 2001)
10.43     Promissory Note issued by PWR to The Chase Manhattan Bank dated
          December 22, 2000. (Incorporated by reference to Exhibit 10.43 to the
          Company's December 31, 2000 Form 10-KSB Commission File Number:
          1-14076), filed with the Commission on April 2, 2001)
10.44     Security Agreement between PWR and The Chase Manhattan Bank dated
          March 31, 1999. (Incorporated by reference to Exhibit 10.7 to the
          Company's Quarterly Report on Form 10-Q for the period ended September
          30, 2000 (Commission File Number: 1-14076) filed with the Commission
          on November 16, 2000.)
10.45     Company guaranty of Chase notes dated April 3, 2000. (Incorporated by
          reference to Exhibit 10.8 to the Company's Quarterly Report on Form
          10-Q for the period ended September 30, 2000 (Commission File Number:
          1-14076) filed with the Commission on November 16, 2000.)
10.46     Agreement for Wholesale Financing (Security Agreement) dated August
          25, 2000 between IBM Credit Corporation and PWR Systems, Inc.
          (Incorporated by reference to Exhibit 10.9 to the Company's Quarterly
          Report on Form 10-Q for the period ended September 30, 2000
          (Commission File Number: 1-14076) filed with the Commission on
          November 16, 2000.)
10.47     Guaranty, dated August 23, 2000, by the Company of Security Agreement,
          dated August 25, 2000 between IBM Credit Corporation and PWR Systems,
          Inc. (Incorporated by reference to Exhibit 10.10 to the Company's
          Quarterly Report on Form 10-Q for the period ended September 30, 2000
          (Commission File Number: 1-14076) filed with the Commission on
          November 16, 2000.)
10.48     Consulting Agreement, dated as of January 28, 2000, between Vizacom
          Inc., Arel AMG, Inc., and Charles S. Lazar (Incorporated by reference
          to Exhibit 10.49 to the Company's Annual Report on Form 10-KSB for the
          year ended December 31, 1999 (Commission File Number: 1-14076) filed
          with the Commission on April 14, 2000.)
10.49     Agreement, dated as of November 28, 2000, between Morgan J. Wilbur and
          the Company (Incorporated by reference to Exhibit 10.4 to the
          Company's Current Report on Form 8-K (Date of Report: January 10,
          2001)(Commission File Number: 1-14076), filed with the Commission on
          January 11, 2001.)
10.50     Agreement, dated as of December 31, 2000, between the Company and
          Triple Crown Consulting (Incorporated by reference to Exhibit 10.2 to
          the Company's Current Report on Form 8-K (Date of Report: January 10,
          2001)(Commission File Number: 1-14076), filed with the Commission on
          January 11, 2001.)

<PAGE>

10.51     Escrow Agreement, dated as of December 31, 2000, among the Company,
          Triple Crown Consulting, and Kaufman & Moomjian, LLC, as escrow agent
          (Incorporated by reference to Exhibit 10.3 to the Company's Current
          Report on Form 8-K (Date of Report: January 10, 2001)(Commission File
          Number: 1-14076), filed with the Commission on January 11, 2001.)
10.52     Agreement, dated as of January 15, 2001, between SOS Resource
          Services, Inc. and the Company (Incorporated by reference to Exhibit
          10.2 to the Company's Current Report on Form 8-K (Date of Report:
          January 15, 2001)(Commission File Number: 1-14076), filed with the
          Commission on January 30, 2001.)
10.53     Lock-Up Agreement, dated as of January 15, 2001, between SOS Resource
          Services, Inc. and the Company. (Incorporated by reference to Exhibit
          10.3 to the Company's Current Report on Form 8-K (Date of Report:
          January 15, 2001)(Commission File Number: 1-14076), filed with the
          Commission on January 30, 2001.)
10.54     Lease, dated December 9, 1998, between Burtson Realty Co. and P.C.
          Workstation Rentals, Inc. d/b/a PWR Systems, Inc. (Incorporated by
          reference to Exhibit 10.54 to the Company's December 31, 2000 Form
          10-KSB Commission File Number: 1-14076), filed with the Commission on
          April 2, 2001)
10.55     Lease, dated June 1, 2000, between Spacely LLC and PWR Systems, Inc.
          (Incorporated by reference to Exhibit 10.1 to the Company's Quarterly
          Report on Form 10-QSB for the period ended June 30, 2000 (Commission
          File Number 1-14076) filed with the Commission on August 14, 2000)
21        Subsidiaries of the Company. (Incorporated by reference to Exhibit 21
          to the Company's December 31, 2000 Form 10-KSB (Commission File
          Number: 1-14076), filed with the Commission on April 2, 2001)
23.1      Consent of Richard A. Eisner & Company, LLP.
23.2      Consent of Ernst & Young (Incorporated by reference to Exhibit 23.2 to
          the Company's December 31, 2000 Form 10-KSB (Commission File Number:
          1-14076), filed with the Commission on April 2, 2001).
24        Powers of Attorney (set forth on the signature page of the Annual
          Report on Form 10-KSB) (Incorporated by reference to the Signature
          Page of the Company's December 31, 2000 Form 10-KSB Commission File
          Number: 1-14076), filed with the Commission on April 2, 2001).