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

                                   FORM 10-KSB
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the fiscal year ended: DECEMBER 31, 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 No

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this form, and no  disclosure  will be
contained,  to the best of registrant's knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [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 $.1875 per share, as reported by The
Nasdaq Stock Market, Inc.

     As of March 15, 2001, there were a total of 18,750,818 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.


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                   INDEX TO THE DECEMBER 31, 2000 FORM 10-KSB

                                                                         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, 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.

INTRODUCTORY COMMENT - FORWARD-LOOKING STATEMENTS.

     Statements contained in this Annual Report on Form 10-KSB include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which could cause our
actual results, performance and achievements, whether expressed or implied by
such forward-looking statements, not to occur or be realized. Such
forward-looking statements generally are based upon 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:

     -     the market acceptance and amount of sales of our products and
           services;
     -     the success of our professional internet and technology solutions
           offerings, such as business strategy formation, web site interface
           design, and systems integration;
     -     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;
     -     our ability to develop long-lasting relationships with our
           clients and attract new clients;
     -     our ability to develop long-lasting relationships with our industry
           partners and vendors and attract new industry partners and vendors;
     -     the competitive environment within the industries in which we
           operate;
     -     our ability to raise additional capital;
     -     the extent to which we are successful in developing, acquiring or
           licensing technologies which are accepted by the market;
     -     our ability to attract and retain qualified personnel;
     -     business and consumer trends, and economic conditions; and
     -     the other factors and information disclosed and discussed under
           "Risk Factors" below and in other sections of this Annual Report
           on Form 10-KSB.

     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 other technologies and
information-based technologies. We help businesses use the internet 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.

     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:

     -     Business strategy formation
     -     E-commerce applications
     -     Web content management
     -     Web interface design and branding
     -     Systems planning and development
     -     Systems integration
     -     Value-added reselling
     -     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:

     -     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;
     -     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;
     -     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
     -     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:

     -     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;
     -     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;
     -     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;

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      -     Web interface design and branding, in which we produce the graphic
            interface design of a web site and promote a client's brand and
            market presence online;
      -     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;
      -     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;
     -      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
     -      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:
          -     development of a local or wide area network;
          -     development of specific components of a network, such as
                enterprise and work group client/server design and optimization;
          -     integration of a network with a back-end system, such as a
                product fulfillment center;
          -     integration of a network or system with a client's internet,
          -     intranet or extranet; and
          -     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.
     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.

     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.

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<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

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

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<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

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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:
     -     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;
     -     Technology consulting firms, such as Diamond Technology Partners and
           Metzler Group;
     -     Technology integrators, such as Accenture, Cambridge Technology
           Partners, Cap Gemini, EDS, IBM, Sapient, 5B Technologies Corporation,
           and WM-Data;
     -     Strategic consulting firms, such as Bain & Company, Booz-Allen &
           Hamilton, Boston Consulting Group and McKinsey & Company; and
     -     In-house information technology, marketing and design service
           departments of our potential clients.

     We 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:

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

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 True
                                                  North Communications
   Chase Manhattan Bank                      Chelsea Property Group
   Comedy Central                            DDB Worldwide

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<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.

     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
          Tectronix                Uunet

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

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<PAGE>


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
ADVANCED PRESENTATIONS, HARVARD GRAPHICS PRO PRESENTATIONS, and additional
products in the HARVARD GRAPHICS 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 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.

                                       16

<PAGE>

     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 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:

     -     develop our professional internet and technology solutions
           business,
     -     develop, produce and distribute additional products and services,
     -     de-emphasize other products and services,
     -     implement our growth strategy, and
     -     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 $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.

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<PAGE>

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:

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

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

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:

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

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<PAGE>


     -     the impact of amortizing goodwill and other intangible assets of
           acquired companies on our results of operations,
     -     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,
     -     diversion of management's attention,
     -     increases in our expenses in order to advertise and promote acquired
           companies and their and our products and services,
     -     unusual impacts on our financial condition due to the timing
           of acquisitions, and
     -     expenses of any undisclosed or potential legal liabilities of an
           acquired company.

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

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

     If appropriate opportunities present themselves, we intend to acquire
businesses, technologies, services or products. The process of integrating the
operations of any acquisition 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

                                       19

<PAGE>

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 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 corporate 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 150,000 shares
of our common stock which we canceled upon termination of the investment banking
agreement, and legal and other expenses in connection with the arbitration. 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
Untied 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
iterMETHODS 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.
<TABLE>
<CAPTION>
                                                High Bid             Low Bid
Fiscal 1999
-----------
<S>                                              <C>                 <C>
First Quarter. . . . . . . . . . . . . .         1-31/32               15/16
Second Quarter . . . . . . . . . . . . .          4-7/16             1-21/32
Third Quarter. . . . . . . . . . . . . .           4-1/4               2-1/4
Fourth Quarter . . . . . . . . . . . . .               4               2-1/8

Fiscal 2000
-----------
First Quarter. . . . . . . . . . . . . .           9-3/4                   3
Second Quarter . . . . . . . . . . . . .           6-1/4               2-1/8
Third Quarter. . . . . . . . . . . . . .         1-15/16              1-1/32
Fourth Quarter . . . . . . . . . . . . .          1-5/16                7/32
</TABLE>
     As of March 28, 2001, the closing price for our Common Stock as reported on
Nasdaq was $.15625. 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:

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

                                       22

<PAGE>


     -     changes in our revenue and revenue growth rates as a whole or for
           individual geographic areas, business units, products or product
           categories,
     -     responses to our strategies,
     -     unscheduled system interruptions,
     -     additions or departures of key personnel,
     -     changes in financial estimates by securities analysts,
     -     conditions or trends in the internet and technology solutions
           industries,
     -     changes in the market valuations of other internet or technology
           solutions companies,
     -     developments in internet regulations,
     -     announcements by us or our competitors of significant acquisitions,
           strategic partnerships, joint ventures or capital commitments,
     -     our ability to raise needed capital sales of our common stock or
           other securities in the open market, and
     -     other events or factors that may be beyond our control.

     Statements or changes in opinions, ratings, or earnings estimates made by
brokerage firms or industry analysts relating to the market in which we do
business or relating to us could result in an immediate and adverse effect on
the market price of our common stock. In addition, the stock market has from
time to time experienced extreme price and volume fluctuations which have
particularly affected the market price for the securities of many 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 2001 which
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 226,695
shares of our common stock to a total of fifteen individuals and entities for
gross proceeds of $469,226 upon exercise of warrants held by these individuals
and entities. The issuances of such shares were private transactions exempt from
registration under Section 4(2) of the Securities Act.

     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 650,000 three-year warrants exercisable at $3.00 per share. One
hundred thousand of these warrants are exercisable immediately, and 400,000
warrants are exercisable upon the attainment of specified performance targets.
In addition, 150,000 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 449,870 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 681,818 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 order 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 1,500,000 shares of our common stock to the former shareholders
of PWR Systems. In December 2000, we issued an additional 570,176 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 936,954 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 762,471
shares of our common stock to eleven foreign investors for gross proceeds of
$3,392,996. The issuances of these shares were private transactions exempt from
registration pursuant to Section 4(2) of, and Regulation S promulgated under,
the Securities Act.

     In the second quarter of 2000, we issued an aggregate of 129,103 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 14,036 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 311,518 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 1,560,017 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 9,000 and 13,000 shares of our common stock,
respectively, at an exercise price of $.7812 and $.8438 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 50,000 shares of our common stock at an exercise price
of $.7812 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 220,000 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 60,000 shares of our common stock. 30,000 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 1,233,368 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 200,000 shares of our common stock. 150,000 of the total 200,000
shares are currently being held in escrow. 25,000 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
1,490,000 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 450,000 shares of our common stock and three-year warrants to
purchase 600,000 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. 150,000 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 300,000 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 300,000 shares of our common stock (100,000 of which shares are
subject to a lockup agreement that prohibits their sale prior to July 15, 2001),
(b) three-year warrants to purchase 100,000 shares of our common stock which are
immediately exercisable at an exercise price of $.25 per share, and (c)
three-year warrants to purchase 100,000 shares of our common stock exercisable
commencing July 15, 2001 at an exercise price of $1.00 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 32,000 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 146,000 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 23,000
shares of our common stock at an exercise price of $.25 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 4,761,881 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:

     -     we have entered into an agreement to sell our Aachen, Germany contact
           center operation to a third party for $100,000 in gross proceeds;
     -     in February 2001, we placed Junction 15 and interMETHODS
           into creditors voluntary liquidation in the United Kingdom, thereby
           divesting these assets; and
     -     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                                 $  13,457,629    $         -    $13,457,629     $         -
Cost of sales                                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, business
  processes and methodologies, 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 holding 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, and
$1,934,974, or 14%, of our 2000 net sales from continuing operations were
generated by Vizy NY. 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 by Vizy 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 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, consulting, legal and
other professional fees, 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 and 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 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 2,010,943 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 conditions. In
January 2001, we sold 1,490,000 shares of common stock for aggregate gross
proceeds of $372,500.

                                       29

<PAGE>


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 and 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 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. 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

                                       30

<PAGE>

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 has been granted a third
lien on PWR's assets.

     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 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.

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


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 285,088 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 220,000 shares of our common stock; (v) the retaining of Triple
Crown Consulting, Ltd. for financial advisory advice for consideration of
200,000 shares of our common stock; (vi) the retaining of Salomon Grey Financial
Corporation as a financial advisor and investment banker for aggregate
consideration of 450,000 shares of our common stock and warrants to purchase
600,000 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 1,490,000 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

                                      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>
ASSETS
<S>                                                                                     <C>
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, 16,190,869 shares issued                                    16,191
   Additional paid-in capital                                                             70,837,263
   Accumulated deficit                                                                   (66,954,898)
   Accumulated other comprehensive income (loss)                                            (134,525)
   Treasury stock, 3,095 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                                                          $ 13,457,629           $         -
Cost of sales                                                        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                                           $      (0.78)          $     (0.27)
   Discontinued operations                                         $      (0.87)          $     (0.68)
                                                                   -------------          ------------
   Net loss per common share - basic and diluted                   $      (1.65)          $     (0.95)
                                                                   =============          ============
   Weighted average number of common shares
     outstanding - basic and diluted                                 11,556,760             5,996,507
                                                                   =============          ============
</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    5,083,653    $ 5,084    $ 45,385,487
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                   -            -    1,804,066      1,804       3,111,080
Issuance of options and warrants for services                     -            -            -          -         996,954
Common stock issued on exercise of warrants and  options          -            -      217,835        218          52,155
Common stock issued for payment of legal services                 -            -       50,000         50         181,200
Common stock issued  in settlement of liabilities                 -            -       80,024         80         215,369
                                                            --------  -----------   ----------   --------   -------------
Balance at December 31, 1999                                      -   $        -    7,235,578    $ 7,236    $ 49,851,699
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                   -            -    2,010,943      2,011       7,588,278
Common stock issued on exercise of warrants and options           -            -      455,063        455         803,951
Common stock issued in connection with acquisitions               -            -    4,775,917      4,776      11,160,191
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                                             -            -    1,713,368      1,713         864,144
                                                            --------  -----------  -----------   --------   -------------
Balance at December 31, 2000                                      -   $        -   16,190,869    $16,191    $ 70,837,263
                                                            ========  ===========  ===========   ========   =============

                                                                                 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>

                                      F-5

See accompanying notes to consolidated financial statements.

<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                    Year ended December 31,
                                                                                ------------------------------
                                                                                    2000              1999
                                                                                ------------      ------------
OPERATING ACTIVITIES:
<S>                                                                             <C>               <C>
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 royalty.  Revenue for software product sales is generally recognized
     upon shipment of products to customers and is recognized  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 1,490,000  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 449,870 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 600,000  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 681,818  shares of the  Company's  common
     stock and a $250,000 cash payment.  The direct costs include  14,036 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 250,000
     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 $3.00 per share, and payable in equal monthly  installments
     with  interest of 6.3% per annum,  and  1,500,000  shares of the  Company's
     common  stock,  valued  at  $3.00  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  $1.00 per share for any  thirty  consecutive  trading-day
     period.  On  December  6,  2000,  the  Company  issued  to the PWR  selling
     shareholders  an aggregate of 560,000  shares of common stock in payment of
     this  contingent  consideration.  On  December  6,  2000  the  PWR  selling
     shareholders  received  10,176  shares  of common  stock and will  receive,
     subject to stockholder approval, another 912,900 shares in 2001 as a result
     of the  decline  in the  Company's  share  price  below  $1.00  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 750,000  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.

     Under an August 1999  agreement  with a third party,  the Company agreed to
     transfer  certain of its  marketable  securities,  consisting  of shares of
     common  stock  of  Xceed  Inc.,  based  upon  the  consideration  paid  for
     acquisitions of any company  identified by this third party.  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


                                      F-12


                                       5
<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.   ACQUISITIONS (CONTINUED)

     period ended  December  31, 2000  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.

     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 1,560,017 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 250,000  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.

<TABLE>
<CAPTION>
                                                      2000                      1999
                                                 -------------               ------------
<S>                                              <C>                        <C>
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                               $       (.82)              $      (0.39)
</TABLE>

                                      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  and 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.

<TABLE>
<CAPTION>
     Current assets:
<S>                                                 <C>
     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)
</TABLE>
                                                    ============

          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:

<TABLE>
<S>                                                 <C>
     Current assets                                 $   111,621
     Noncurrent assets                                4,612,103
                                                    ------------
                                                      4,723,724
     Current liabilities                                212,661
                                                    ------------
                                                    $ 4,511,063
                                                    ============
</TABLE>


                                      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:
<TABLE>

<S>                                                 <C>
     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
                                                    ============
</TABLE>

               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:

<TABLE>
<S>                                                 <C>
     Computer equipment. . . . . . .                $    72,159
     Computer software . . . . . . .                      7,775
     Office equipment . . . . . . . .                   202,017
                                                        281,951
     Less accumulated amortization. .                   126,414
     Total. . . . . . . . . . . . . .               $   155,537
</TABLE>

          Future   minimum   lease   payments  under   noncancellable  operating
          leases  primarily for office and warehouse space and the present value
          of future  minimum lease  payments under capital leases as of December
          31, 2000 are as follows:


                                      F-16
<PAGE>


                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7.   LEASES (CONTINUED)
<TABLE>
<CAPTION>
                                                 Capital              Operating
                                                 Leases                Leases
                                                 -------              ---------
     Year ending December 31:
<S>  <C>                                       <C>                  <C>
     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
</TABLE>

     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:

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

     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 250,000  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:

<TABLE>
<S>                                                              <C>
     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
                                                                 ============
</TABLE>

9.   STOCKHOLDERS' EQUITY

     A)   COMMON STOCK

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

     On  April  6,  1999,  the  Company entered into certain financial  advisory
     and investment  banking  agreements  whereby the Company issued warrants to
     purchase  100,000 and 45,000 shares,  respectively,  of common stock of the
     Company at an exercise price of $1.125.  The warrants are  exercisable  for
     the period from April 6, 2000  through  April 6, 2004.  The  warrants  were
     valued at $69,742  and  $31,523,  respectively,  and the  related  deferred
     charges are included in deferred  consulting costs. The Company also issued
     options to purchase  25,000  shares of its common stock to employees of its
     corporate  counsel,  at an exercise price of $1.03125 per share. On July 8,
     1999 options to purchase 25,000 shares of its common stock were issued to a
     member of its  corporate  counsel.  On July 20,  1999,  the Company  issued
     warrants to purchase an aggregate of 225,000  shares of its common stock at
     an exercise price of $2.00 per share,  through July 20, 2004, in connection
     with a  five-year  consulting  agreement.  Such  warrants  were  valued  at
     $605,250,  are  being  amortized  over the term of the  related  consulting
     agreement,  and the  related  deferred  charges  are  included  in deferred
     consulting. On October 20,


                                      F-18

<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.   STOCKHOLDERS' EQUITY (CONTINUED)

     1999  the  Company   issued   warrants  to purchase an aggregate of 100,000
     shares of its common stock at an exercise price of $2.00 per share, through
     October  20,  2004,  in  connection  with a five-year  marketing  and sales
     advisory  agreement.  Such  warrants  were  valued at  $196,000,  are being
     amortized  over  the  term of the  related  marketing  and  sales  advisory
     agreement,  and the  related  deferred  charges  are  included  in deferred
     consulting.  On November 11, 1999, the Company issued  warrants to purchase
     an aggregate of 25,000  shares of its common stock at an exercise  price of
     $2.00 per share, through November 10, 2002, in connection with a consulting
     agreement.  Such warrants were valued at $52,500 and have been expensed. On
     December 6, 1999,  the Company  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 525,000  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 762,653  shares of common  stock for  aggregate  gross
     proceeds of $1,510,000, before associated transaction costs of $210,867, in
     a private placement.  During the period September through October 1999, the
     Company  sold units in a private  placement,  each unit  consisting  of one
     share of common  stock plus  one-quarter  of a warrant.  Each  warrant will
     allow its holder to purchase  one share of common  stock at $2.75 per share
     for a three-year  period from date of sale.  The Company sold 516,413 units
     for aggregate  gross  proceeds of $1,097,375.  The  associated  transaction
     costs for the September and October offering were $157,922.

     On July 8, 1999,  the Company  issued  50,000 shares of common stock to the
     members of its corporate  counsel,  in payment of $100,000 of accrued legal
     fees due to such law firm. See Note 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 9,756 shares of
     common stock valued at $25,000.  Also in December  1999, the Company issued
     70,268  shares of common  stock,  valued at $191,249,  to three  vendors in
     settlement  of past  trade and  licensing  liabilities.  Transaction  costs
     associated with the issuance of these shares totaled $800.

     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 650,000 three-year warrants
     exercisable at $3.00 per share.  One hundred thousand of these warrants are
     exercisable  immediately,  and 400,000  warrants are  exercisable  upon the
     attainment of specified performance targets. In addition,  150,000 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 100,000 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  2,010,943  shares of its common stock for gross  proceeds of
     $8,995,545. Under one of these private placements, the Company sold 936,954
     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 762,471  shares of common stock in March and 311,518  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  220,000  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 60,000 shares for these  services.  This agreement has been
     terminated and 30,000 of the shares have been cancelled.

     On December  28,  2000,  the Company  agreed to issue  1,233,368  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 $.2188 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 200,000  shares for these  services.  The
     agreement may be terminated at any time and contains escrow  provisions for
     175,000  of the  shares,  25,000  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 15,350,412 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 Transer & Trust Company)  consisting of 3,637,658 for issued
     and outstanding non-plan options and warrants, 10,799,854 for the Company's
     various  stock option plans,  and,  912,900  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  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


                                      F-20

<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.   STOCKHOLDERS' EQUITY (CONTINUED)

     Preferred shares for the issuance of 930 shares of the Class C Preferred of
     the  Company,  and the issuance of warrants to purchase  260,000  shares of
     Common  Stock,  at an  exercise  price of $1.0625  per  share,  exercisable
     immediately and expiring in January 2006.

     Holders  of  shares  of  Class  C Preferred  were  entitled  to  cumulative
     dividends of $110 per share per annum, payable  semi-annually.  The Company
     retained the right to redeem the Class C Preferred, in part or 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:

<TABLE>
<S>                                                               <C>
     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
                                                                  =============
</TABLE>

     The Company's loss before income taxes is comprised of the following:
<TABLE>
<CAPTION>
                                                   Year ended December 31,
                                                ----------------------------
                                                2000                    1999
                                                ----                    ----

<S>                                            <C>                  <C>
     United States. . . . . . . . . . . . .    $(10,561,627)        $(4,085,861)
     Foreign. . . . . . . . . . . . . . . .      (8,581,752)         (1,791,619)
                                               -------------        ------------
                                               $(19,143,379)        $(5,877,480)
                                               =============        ============
</TABLE>

     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.

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


                                      F-23

<PAGE>

                          VIZACOM INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.  STOCK OPTION PLANS (CONTINUED)

     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 5,000,000.

     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  1,333,333  to
     5,000,000.  The options  currently  outstanding vest over a period of up to
     five years and expire after 10 years.

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

     THE SPC 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 223,040.

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


                                      F-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. .        1,141,697         155,662            8,040                    -       16,666    $     2.43
Granted . . . . . . . . . . . . .          400,000          75,000          215,000                    -      442,033          1.58
Forfeited . . . . . . . . . . . .         (177,212)        (55,555)          (5,055)                   -       (3,000)        (2.27)
Exercises . . . . . . . . . . . .          (13,478)         (2,222)               -                    -       (1,750)         1.35
Outstanding at December 31, 1999.        1,351,007         172,885          217,985                    -      453,949    $     2.13
Granted . . . . . . . . . . . . .        3,761,384         100,000                -              290,000            -          3.82
Forfeited . . . . . . . . . . . .         (438,196)        (50,000)         (38,763)              (5,000)           -         (3.34)
Exercises . . . . . . . . . . . .          (77,329)        (10,694)         (11,242)                   -       (2,250)         1.85
Outstanding at December 31, 2000.        4,596,866         212,191          167,980              285,000      451,699    $     3.25

Exercisable at December 31, 2000.        1,787,244         142,602          111,355               20,000      262,865    $     3.05

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

</TABLE>

     As of December 31, 2000, 10,799,854 shares of common stock are reserved for
     issuance under the plans described above.

     The weighted  average fair value of options  granted was $2.27 and $.93 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>
$ 0.59 -  $ 1.97..                       2,398,478      $           1.27           8.55            1,208,388        $      1.17
$ 2.03 -  $ 3.83..                       1,660,463      $           3.27           8.81              585,499        $      3.39
$ 5.31 -  $ 7.50..                       1,571,985      $           5.70           9.03              452,859        $      5.81
$10.29 -  $23.50..                          82,810      $          13.61           5.23               77,320        $     13.55

</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                        $      (2.00)      $     (1.18)
</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  25,000 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 $1.03.  In July
     1999,  50,000 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 100,000  shares of common stock were granted to
     the  members  of this law firm at  exercise  prices  of $2.75 and $3.08 per
     share.  Options to purchase  75,000 of these shares were granted  under the
     Company's 1994 Long Term Incentive Plan.

     On January 28, 2000 the Company issued options to purchase 24,000 shares of
     its common stock to 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 2000 segment operations is set forth
below:
<TABLE>
<CAPTION>
                                                   Foreign             Visual
                                                Operations in      Communications       Vizy
                                                 Liquidation          Products       Interactive      Corporate       Consolidated

YEAR ENDED DECEMBER 31, 2000:

 CONTINUING OPERATIONS
<S>                                             <C>                <C>              <C>               <C>             <C>
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         4,586,789

 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 effet 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 150,000 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 300,000 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  450,000
     shares of its common  stock and  three-year  warrants to  purchase  600,000
     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  300,000  shares of its common  stock,  100,000 of
     which shares are subject to a lockup  agreement that  prohibits  their sale
     prior to July 15, 2001, and three-year  warrants to purchase 200,000 shares
     of common stock;  100,000  immediately  exercisable at an exercise price of
     $.25 per share,  and  100,000  exercisable  commencing  July 15, 2001 at an
     exercise price of $1.00 per share.

     On  January  26,  2001,  the  Company accepted subscriptions for a total of
     1,490,000  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 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 our 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.


                                      F-31
<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: April 2, 2001                 By:    /s/ Vincent DiSpigno
                                        ----------------------------------
                                            Vincent DiSpigno
                                            President
                                            (Principal Executive Officer)


Dated: April 2, 2001                 By:    /s/ Alan W. Schoenbart
                                        ----------------------------------

                                           Alan W. Schoenbart
                                            Vice President - Finance, Treasurer
                                            and Chief Financial Officer
                                            (Principal Financial Officer)


                                POWER OF ATTORNEY

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this Annual Report on Form 10- KSB has been signed on April 2, 2001 by the
following persons in the capacities indicated. Each person whose signature
appears below constitutes and appoints Vincent DiSpigno and Neil M. Kaufman,
with full power of substitution, his/her true and lawful attorney-in-fact and
agent to do any and all acts and things in his/her name and on his/her behalf in
his/her capacities indicated below which he may deem necessary or advisable to
enable Vizacom Inc. to comply with the Securities Exchange Act of 1934, as
amended, and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with this Annual Report on Form 10-KSB,
including specifically, but not limited to, power and authority to sign for
him/her in his/her name in the capacities stated below, any and all amendments
thereto, granting unto said attorney-in-fact and agent, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in such connection, as fully to all intents and purposes as he/her might or
could do in person, hereby ratifying and confirming all that said attorney-in-
fact and agent, or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.

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


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


   /s/ Neil M. Kaufman             Chairman of the Board and Secretary
---------------------------------
      Neil M. Kaufman


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


   /s/ Marc E. Jaffe               Director
---------------------------------
      Marc E. Jaffe


  /s/ Francis X. Murphy            Director
---------------------------------
      Francis X. Murphy


   /s/ David A. Buckel             Director
---------------------------------
      David A. Buckel



<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 ofReport:
         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 RegencyInvestment 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 11, 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 11, 2001) (Commission File
         Number: 1-14076), filed with the Commission on January 30, 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 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 payable to
        Vincent DiSpigno and David Salav.
10.42   Promissory Note issued by PWR to The Chase Manhattan Bank dated January
        30, 2001.
10.43   Promissory Note issued by PWR to The Chase Manhattan Bank dated December
        22, 2000.
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.
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.
23.1    Consent of Richard A. Eisner & Company, LLP.
23.2    Consent of Ernst & Young.
24      Powers of Attorney (set forth on the signature page of this Annual
        Report on Form 10-KSB).