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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

                       ----------------------------------

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________to______________________

Commission  File No. 33-9030

                             MAGNAVISION CORPORATION
             (exact name of registrant as specified in its charter)

         DELAWARE                                               22-2741313
--------------------------                                   ----------------
(State or other jurisdiction                                  (IRS Employer
     of incorporation                                      Identification No.)

                     1725 ROUTE 35, WALL, NEW JERSEY       07719
                 -------------------------------------------------
                (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (732) 449-1200

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:  NONE

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ ] No [x]

The aggregate market value of the voting stock held by nonaffiliates of the
registrant is not available due to the unavailability of price quotations for
the Registrant's securities.

The number of shares of Registrant's Common Stock outstanding on March 31, 2000
was 1,154,390.

Documents Incorporated by Reference:  None.

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                                    P A R T  I

ITEM 1. BUSINESS

All common share amounts and prices presented in this report reflect the effects
of the 1-for-20 reverse split effected May 8, 1997.

THE STATEMENTS CONTAINED IN THIS ANNUAL REPORT ON FORM 10-K, INCLUDING THE
EXHIBITS HERETO, RELATING TO MAGNAVISION CORPORATION'S FUTURE OPERATIONS MAY
CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. ACTUAL RESULTS OF THE COMPANY MAY DIFFER
MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS AND MAY BE AFFECTED BY A
NUMBER OF FACTORS INCLUDING THE COMPANY'S ABILITY TO EXECUTE ITS WIRELESS PLAN,
THE COMPANY'S ABILITY TO GENERATE REVENUE, THE ABILITY OF THE COMPANY TO
COMPLETE PROJECTS, TO ATTRACT ONE OR MORE NEW STRATEGIC PARTNERS, THEIR
WILLINGNESS TO ENTER INTO ARRANGEMENTS WITH MAGNAVISION CORPORATION ON A TIMELY
BASIS AND THE TERMS OF SUCH ARRANGEMENTS, THE RECEIPT OF REGULATORY APPROVALS
FOR ALTERNATIVE USES OF ITS MMDS SPECTRUM, THE COMMERCIAL VIABILITY OF ANY
ALTERNATIVE USE OF MMDS SPECTRUM CONTEMPLATED BY THE COMPANY'S BUSINESS PLAN,
CONSUMER ACCEPTANCE OF ANY NEW PRODUCTS OFFERED OR TO BE OFFERED BY MAGNAVISION
CORPORATION, SUBSCRIBER EQUIPMENT AVAILABILITY, TOWER SPACE AVAILABILITY,
ABSENCE OF INTERFERENCE AND THE ABILITY OF ITS COMPANY TO REDEPLOY OR SELL
EXCESS EQUIPMENT, THE ASSUMPTIONS, RISKS AND UNCERTAINTIES SET FORTH BELOW IN
THIS "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" AND ELSEWHERE HEREIN, AS WELL AS OTHER FACTORS CONTAINED HEREIN AND
IN THE COMPANY'S OTHER SECURITIES FILINGS. FURTHERMORE, THE FINANCING OBTAINED
BY THE COMPANY TO DATE WILL NOT ENABLE IT TO MEET ITS FUTURE CASH NEEDS AS
CONTEMPLATED IN THE BUSINESS PLAN.

GENERAL

Magnavision Corporation (the "Registrant" or the "Company") was incorporated
under the name Yardley Ventures Inc. in Delaware on April 3, 1986 for the
purpose of acquiring one or more potential businesses. Effective December 30,
1991, the Registrant acquired all of the issued and outstanding capital stock of
Magnavision Corporation, a New Jersey corporation ("Magnavision - N.J."), in a
tax-free, stock-for-stock acquisition. The shareholders of Magnavision - N.J.
received newly issued shares of common stock in the Registrant for their
Magnavision - N.J. shares. The newly issued shares constituted approximately 98%
of the Registrant's outstanding common stock. In connection with the
acquisition, the Registrant effected a one-for-400 reverse split of its common
stock and changed its name to Magnavision Corporation. In addition, the board of
directors of Magnavision - N.J. became the board of directors of the Registrant
and Magnavision - N.J. became a wholly owned subsidiary of the Registrant.


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The Registrant does no business and has no significant assets other than its
stock in Magnavision - N.J. Unless otherwise specified herein, the terms
"Magnavision" and the "Company" shall be deemed to refer to the Registrant
and/or Magnavision - N.J.

In August 1995, the Company entered into a $5,000,000 lending facility with a
bank and two small business investment companies. In May 1997, pursuant to an
Exchange Agreement, the Company and its lenders agreed to exchange the entire $5
million of the lending facility for 8% redeemable preferred stock due in 2002.
The then current loan balance, along with the unused balance of the $5 million
line was exchanged for redeemable preferred stock, which has five-year mandatory
redemption provisions, which are accelerated upon certain liquidity events. In
connection with this transaction, all covenants and defaults under the former
lending facility were waived. At closing, the Company drew down the balance of
its line of approximately $800,000 after expenses. The Company issued redeemable
preferred stock (Series A preferred stock) in the amount of $5 million, with an
8% preferred dividend, and issued additional warrants (new warrants) to purchase
additional shares of common stock, representing approximately 20% of the common
stock at $2.00 per share after a 1-for-20 reverse stock split. The exercise
price of the original issued warrants, $.27 and $.38 per share, was reduced to
$.10 per share prior to such reverse stock split.

The Series A Preferred Shareholders received a total of 1,826,932 warrants at an
exercise price of $2.00 per share to purchase 58% of the Company's common stock,
acquired the right to and have elected a majority of the Board of Directors, and
thus have effected a change of control of the Company. In connection with the
exchange, the Company issued a note to its lenders totaling $105,468. This note,
bearing 10% interest, represented the interest due in May 1997. Both interest
and principal were originally payable on May 8, 1998. At year end 1997, the
redeemable preferred stockholders agreed to extend the maturity of the note to
May 8, 1999 and at year end 1998 agreed to extend the maturity to May 8, 2000.

In September 1997, the Company and Access Capital, Inc. agreed to a $1,250,000
three-year revolving line of credit to be used to expand the Company's private
cable business. At December 1997, the Company had borrowed approximately
$405,000 under the line of credit. Interest was payable currently at the rate of
prime plus 5.5% and was current. The lender received 138,536 warrants at an
exercise price of $2.00 per share to purchase approximately 4% of the Company's
stock on a fully diluted basis.

Subsequent to the fiscal year ended December 31, 1997, the Company was not in
compliance with the working capital and other covenants under the line of
credit. The Company requested a waiver thereof together with a separate working
capital advance. By letter dated May 8, 1998 Access Capital proposed a
restructuring of the financial covenants, an increase in the line of credit to
$3 million dollars and an increase in its warrant ownership of the Company. The
Company elected not to accept the offer and paid back the loan on July 3, 1998.

On July 3, 1998 the Company and BSB Bank and Trust Company entered into an
agreement to refinance the Company's existing credit line and supply working
capital.

Pursuant thereto, Magnavision borrowed the sum of $2.5 million dollars which
bears interest at a fixed rate of 10% per annum and has a 5 year term. The loan
requires monthly installments of interest, plus 9 annual payments of principal,
payable in arrears, in accordance with the agreed upon schedule starting October
1998. The loan was utilized to refinance existing debt and the remaining

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approximately $1.9 million was used to finance the completion of outstanding
contracts for private cable television service at various locations and to
complete the Fordham University data distribution system, and for working
capital.

BSB Bank & Trust Company also granted the Company a $500,000 line of credit, to
be used for future installations of private cable systems and general corporate
purposes. This line of credit, of which $250,000 has been used as of December
31, 1999, is at an interest rate of prime plus 1.5% payable monthly and will
mature in June of this year. Interest and principal payments are current.

In connection with the above transaction BSB Bank & Trust Company received
146,176 warrants to purchase approximately 4% of Magnavision's issued and
outstanding capital stock on a fully diluted basis at an exercise price of $2.00
per share.

DEVELOPMENT OF BUSINESS

The Company was initially formed for the purpose of owning and operating a
multi-channel, wireless cable television system in the New York market. In
August 1990, the Company entered into an agreement to lease channel capacity
(the "Channel Lease Agreement") from the Department of Education of the
Archdiocese of New York (the "Department"). The Channel Lease Agreement
(subsequently amended in January 1994) grants the Company a lease through
January 2004 (with a right to extend for an additional five years, and a right
of first refusal for subsequent renewals), which entitles the Company to use
twenty-eight (28) wireless cable licenses (168 MHz of spectrum), located on
seven different transmitting towers (24 MHz per tower) in New York State. Eight
(8) of these channels (48 MHz of spectrum) are located in New York City.

Since entering into the Channel Lease Agreement, the Company has conducted
various marketing and engineering activities to facilitate the planned operation
of a wireless system and, pursuant to the requirements of the Channel Lease
Agreement, made an escrow deposit of approximately $900,000 to the Department in
September 1995 which is to be utilized for system reconstruction. However, as of
the date hereof, the Company has not commenced operation of a wireless system
and will require substantial additional funding in order to do so. There is no
assurance that such funding will be available. The Company is exploring finding
potential joint venture partners to use the spectrum available to it under the
Channel Lease Agreement or a sale of the Agreement. There can be no assurance
that there will be consumer demand for use of the spectrum including Internet
access services, that the Company and its partners will be able to compete
against other providers, that the Company and its partners can attract and
retain qualified personnel, that the Company can find a joint venture partner,
that the Company and its partners will be able to achieve profitability from
such services in future years, or that the Company will be able to sell the
Agreement.

Apart from development of its wireless television system, the Company has been
engaged since 1992 in the business of offering a private cable television
service to colleges, universities, nursing homes and hospitals throughout the
Eastern Portion of the United States.


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PRIVATE CABLE BUSINESS

General

Private cable television service is a multi-channel subscription television
service where the programming is received at a facility by satellite receiver
and then transmitted via coaxial cable and fiber throughout private property,
often multiple dwelling units ("MDUs"). Private cable companies operate under
agreements with private landowners to service a specific MDU, institution, or
commercial establishment.

Since 1992, the Company has offered private cable television services to various
colleges, universities and nursing home facilities, primarily in the
northeastern United States. To date, the Company has entered into or been
awarded contracts with 39 facilities.

As of December 31, 1999, the Company had long term (generally 5-10 year)
agreements with a total of 39 institutions located primarily in the New York,
New Jersey, Pennsylvania area, but extending as far north as Massachusetts, and
as far south as North Carolina. For the year ended December 31, 1999, the
Company generated approximately $2,962,016 of revenues (which constituted 100%
of the Company's total revenues for the year) from this business. For the year
ended December 31, 1999, revenues from Fordham University which utilized both a
data system and the Company's private cable television services was 21% and
Montclair State University and North Calolina A&T account for about 8% of total
revenues each.

The Company has started offering a high-speed data system using cable modem
technology to deliver data over the television cable system. The benefit of
using this system is that an Institution can access high-speed data and Internet
access without the expense of rewiring the campus. The Company has successfully
implemented this system at Fordham University.

In the Spring of 1999, the Board of Directors instructed management to explore
various strategic alternatives for the Company. Management reported on various
alternatives at numerous meetings and the Board of Directors approved certain
initiatives.

On the March 30, 2000, the majority shareholders of Magnavision voted to accept
the following sale of the private cable assets to Lamont Television Systems,
Inc.

On March 15, 2000, Magnavision Corporation and Lamont Television Systems, Inc.
entered into an Asset Purchase Agreement as of February 29, 2000, to purchase
the service contracts and related fixed assets of Magnavision Corporation's
Private Cable Operation for $7.5 million. The transaction closed on March 30,
2000, with the Company receiving approximately $6,700,000 of the proceeds in
cash after the establishment of an escrow account of approximately $200,000 and
other closing adjustments. The Company used part of the proceeds to pay off its
loan to BSB Bank & Trust Company in the amount of $1,954,000 and its notes to
both IBJS Whitehall and KOCO Capital totaling $105,468 in the aggregate plus the
accrued interest. Other portions of the net proceeds were be used to pay
commissions of $300,000 due under this transaction and to establish accruals for
severance and retention payments and legal fees totaling $330,000. The Company
also will accrue approximately $1.2 million for State and Federal taxes. In
addition, the May 1997 Exchange Agreement and the Company's Certificate of
Incorporation as amended requires a payment of 25% of the net proceeds of the
sale or approximately $1.7 million to be used to retire a portion of the
Company's Series A Preferred Stock and the related preferred stock accumulated
dividend outstanding. The number of shares of Series A Preferred Stock remaining
after the 25% payoff is 3,643,692 shares and the accumulated preferred stock
dividend has been reduced by $314,664.


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Magnavision continues to hold long-term rights to use fixed wireless spectrum at
seven existing transmission sites in New York and additional sites in New
Jersey. The Company intends to use its best efforts to either develop or sell
the wireless spectrum, although, no assurances can be made that it will either
be developed or sold.

Agreements with Institutions

The Company has long-term agreements to provide service to 39 facilities used by
students and patients, with approximately 16,000 outlets for television and
3,200 data drops.

From the date a contract is signed, it generally takes approximately three
months to complete an installation and to make a site operational or place it
"on line". Except for one college and two senior living facilities where the
Company bills residents directly, the Company receives its fees on a monthly
basis (nine (9) months a year for colleges and universities) directly from these
institutions, which include such charges in the tuition or other fees to
students or residents of the subject facilities.

The Company believes that the potential market for this segment of its business
is, in the near term, located in the Eastern portion of the United States. Only
a small portion of the Company's revenues to date include fees from advertisers.

Sales and Marketing

The Company's sales and marketing efforts in the private cable business, be it
television or data system, were focused primarily upon institutions with
concentrated populations, such as colleges and universities with dormitories,
nursing homes and other such locations. Institutional subscribers were asked to
commit to long-term agreements. Some state institutions are prohibited from
entering into long-term agreements, but the Company expects that once it had
wired the subject facility and provided private cable television service the
relationship will become one of long term duration.

Competition

The Company's competition in the residential private cable business consists of
numerous private cable operators located throughout the United States, none of
which is deemed to be a dominant factor. Among the private cable operators, the
largest provider to colleges and universities appears to be Campus Televideo,
which has purchased the Private Cable assets of the Company. In addition to this
competition, any local cable operator, as well as any other cable television
programming distributor, can service these institutions in direct competition
with the Company.

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Regulation

The Telecommunications Act of 1996 (the "1996 Act") changed the rules with
respect to the 1992 Cable Act's uniform rate requirement and MDUs (Multiple
Dwelling Units). Prior to the adoption of the 1996 Act, franchised cable
operators were required to offer uniform rates within franchise areas and with
respect to bulk service contracts for MDUs. Now franchised cable operators may
establish different rates across franchise areas in which they are subject to
effective competition and may offer bulk service contracts to MDUs without any
uniform pricing requirement, except that the franchised cable operator may not
engage in predatory pricing, which concept is undefined in the 1996 Act.

The FCC has adopted a Final Rule and Order on inside wiring known as ICTA. This
rule relates to MDU (multi-housing unit) and delineates procedures for MDUs to
purchase the inside wire at the end of a cable contract. Under this rule the MDU
will notify the current service provider at the end of the contract and the
provider will choose to either sell, abandon or remove the inside wiring.

WIRELESS CABLE BUSINESS

Wireless Technology

In 1983 the Federal Communications Commission ("FCC") reallocated a portion of
the electromagnetic radio spectrum located between 2500 and 2700 MHz and
permitted this spectrum to be used for commercial purposes. Today, there are a
maximum of thirty-three microwave channels used for wireless cable in each
market. These include thirteen Multipoint/Multichannel Distribution Service
("MMDS") channels (Channels 1, 2 or 2A, E1-E4, F1-F4 and H1-H3) and the excess
capacity on up to 20 additional Instructional Television Fixed Services ("ITFS")
channels (Channels A1-A4, B1-B4, C1-C4, D1-D4 and G1-G4). Grandfathered ITFS
stations on the eight E and F channels also lease excess capacity to wireless
cable operators. Except in limited circumstances, the 20 ITFS channels (120 MHz)
in each market can generally be licensed only to qualified non-profit
educational organizations and, in general, each of these channels or an
equivalent video transmission must be used a minimum of 20 hours per week for
instructional programming. The remaining "excess air time" on an ITFS Channel
may be leased to wireless cable operators for commercial use. In addition, the
13 MMDS channels (78 MHz) are made available by the FCC for full time usage
without programming restrictions. The ITFS spectrum is now licensed by the FCC
for one-way video and data transmission.

Two-way Services

In 1998, the FCC issued a report and order on two-way service for MMDS and ITFS.
The order makes provisions for protected service areas for existing licensed
MMDS and ITFS main transmitters, for booster stations, response stations, and
response hubs within protected service areas, and new interference protection
requirements among stations with potential co-channel or adjacent channel
interfaces.

Wireless Business Plan

A typical wireless cable system consists of headend equipment at transmission
locations and reception equipment at each subscriber location. Headend equipment


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includes microwave transmitters, antennas and other broadcast equipment, and
headend equipment for reception of programming and or data, such as earth
stations and satellite receivers or high-speed data lines. For downstream data
transmission, headend equipment also includes routers, servers and Internet
access lines, all known as an Internet Point-of-Presence (PoP). An Internet
Service Provider (ISP) must also provide equipment for upstream data, such as
routers and modems. Reception equipment consists of an antenna and frequency
converter. A set-top converter is generally required for video reception. For
data, a single or multiport wireless modem is required.

The Company, with a potential joint venture partner, intends to develop a
digital wireless cable system with its ITFS leased spectrum as an alternative
use of this spectrum including data and Internet access or the Company intends
to sell its rights in the lease. Recent developments in technology and
regulatory changes now allow ITFS spectrum to be used for high speed Internet
access. The modems used at a receive site can receive data at speeds up to 27
MBPS, almost 1000 times faster than the typical modem used today (28.8 KBPS).
Several operators are operating one-way Internet over their spectrum using the
phone lines for the less demanding return path. The Company's business plan
calls for one or more strategic partners to participate in the development and
include a large portion of such expenditures to be borne by such partners.

The Company believes there is a market for businesses which require high speed
Internet access and data in the New York market. However, Internet service over
wireless is a newly developed business. The Company does not currently have the
funds or partner(s) to implement such service and there is no assurance that the
proposed service by the Company, if such funds were available, could be deployed
in a commercially viable system or if the Company chooses to sell it's rights
that it can effect a sale.

Channel Lease Agreement

On August 20, 1990, the Company entered into the Channel Lease Agreement to
lease from the Department the use of a portion of three (6 MHz) ITFS channels (a
total of 18 MHz) located on seven different tower locations (a total of 126
MHz), with an option to utilize one additional 6 MHz ITFS channel also located
on each of the seven tower locations when the Department obtains the necessary
FCC approvals for such channels. Under the Channel Lease Agreement, the Company
also leases three operationally fixed microwave service ("OFS") channels
(serving as links between the ITFS tower sites), with an option for one
additional OFS channel. The Channel Lease Agreement expires in January, 2004,
although the Company has an option to extend the lease for five years if the FCC
renews the Department's license. Following expiration of the option term (if
extended) in 2009, the Company has a right of first refusal covering the leased
channels. Extension and/or renewal of the Channel Lease Agreement is contingent
upon FCC renewal of the Department's license for the channels, of which there
can be no assurance.

The Company also paid a total of $213,224 in monthly royalties to the Department
during 1999 and will be required to pay additional monthly royalties during 2000
through the expiration of the Channel Lease Agreement, equal to the greater of
$18,464 plus five cents ($.05) per subscriber, or five (5) percent of the gross
receipts per month.

The Channel Lease Agreement includes the Company's right to use space leased to
the Department at the seven transmission sites, including the Empire State
Building, Staten Island, NY, Yonkers, NY, Loomis, NY, Rhinecliff, NY,
Haverstraw, NY and Beacon, NY. Additional space is also available at all other


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locations owned or leased by the Department and can be made available to the
Company by the Department for use in providing the Company's service. The
Agreement provides for certain content restrictions on transmittal materials.

Available Market

There are approximately seven million households located in the New York Area of
Dominant Interest ("ADI") market. The Company estimates that approximately 70%
of these households can receive wireless cable transmission. The greater New
York City area contains the largest commercial market in the country with over a
half million businesses.

Competition

The Company faces competition in data services from a number of sources, some of
which have significantly greater resources, both financial and other. Some of
these are traditional providers of data services, such as local telephone
companies. Others are cable television operators and other wireless data
services.

Telephone Companies

Most Internet access today is provided at relatively low data rates through a
local telephone company using dial-up access at speeds of up to 56 Kilobits per
second (KBPS). Local telephone companies ("Telcos") and competitive access
providers ("CAPS") may also offer services using integrated service data network
("ISDN") technology at 128 KBPS. This service requires an improved Telco
connection and special equipment at the subscriber end. ISDN technology allows a
subscriber to simultaneously communicate using voice and data on a single line.
ISDN is not available in all areas.

A new technology being deployed by the Telcos and CAPS is asynchronous digital
subscriber line (ADSL). ADSL is intended to provide high-speed digital voice and
data services over Telco local loop twisted pair service lines. This service
requires a pre-conditioned ("clean") service line.

Local Telcos, CAPS and Internet service providers ("ISP") may also offer
services using leased lines. These are available at a variety of data rates,
beginning at Frame Relay (256 KBPS), T-1 (1.54 MBPS) and up to T-3 (45 MBPS).
Leased lines may be available on an exclusive or shared use basis.

In addition to Bell Atlantic, there are at least three major CAPS of
telecommunications services that have proprietary fiber optic networks in the
New York Market: MCI WorldCom, RCN Corporation, and AT&T.

Cable Television Operators

Cable television companies have recently been offering cable modem service to
their customers for Internet access. Cable modems operate at speeds similar to
the wireless modems in that it sends data over a "television" channel. Cable
modems may be either unidirectional or bi-directional.

Several of the country's largest cable operators have franchised cable systems
in the greater New York Market. These include Time Warner Cable, Cablevision

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Systems, TCI Cable and Comcast Cablesystems. Some of these operators have been
upgrading their CATV plant and deploying for digital video and data
transmissions.

Direct Broadcast Satellite

Direct Broadcast Satellite ("DBS") service provider now offers to bring
unidirectional Internet service to customers. Hughes Corporation's DirecPC
service offers this Internet service. Subscribers must purchase and install a
21" satellite dish and a special computer modem adapter card and must maintain a
separate ISP account for the upstream path.

Other Wireless Multichannel Multipoint Distribution

MCI Worldcom, Inc. is the only other MMDS/ITFS provider operating in the New
York Market and is believed to be offering high speed Internet access to
customers. Cellular Vision, WinStar, and Telegent are also offering wireless
data services in the New York market but are using a higher frequency of at
least 28 GHz or higher.

Government Regulation

General. The wireless cable industry is subject to regulation by the FCC
pursuant to the Communications Act of 1934, as amended. The Communications Act
empowers the FCC, among other things, to issue, revoke, modify and renew
licenses within the spectrum available to wireless cable; to approve the
assignment and/or transfer of control of such licenses; to approve the location
of wireless cable systems; to regulate the kind, configuration and operation of
equipment used by wireless cable systems; and to impose certain equal employment
opportunity and other reporting requirements on wireless cable operators.

The FCC has determined that wireless cable systems are not "cable systems" for
purposes of the Communications Act. Accordingly, a wireless cable system does
not require a local franchise and is subject to fewer local regulations than a
hardwire cable system. Moreover, all transmission and reception equipment for a
wireless cable system can be located on private property; hence, there is no
need to make use of utility poles, dedicated easements or public rights-of-way.
Although wireless cable operators typically have to lease the right to use
wireless cable channels from the holders of channel licenses, unlike hardwire
cable operators they do not have to pay local franchise fees.

Recently, legislation has been introduced in some states to authorize state and
local authorities to impose on all video program distributors (including
wireless cable distributors) a tax on the distributor's gross receipts
comparable to the franchise fees cable operators' pay. While the proposals vary
among states, the bills all would require, if passed, as much as 5% percent of
gross receipts to be paid by wireless distributors to local authorities.

Under the retransmission consent provisions of the Communications Act, wireless
and hardwire cable operators seeking to retransmit certain commercial television
broadcast signals must first obtain the permission of the broadcast station in
order to retransmit the station's signal. However, wireless cable and private
cable systems, unlike hardwire cable systems, are not required under the FCC's
"must carry" rules to retransmit a specified number of local commercial
television or qualified low power television signals.


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Under current FCC regulations, a wireless cable operator generally may broadcast
anywhere within the line-of-sight of its transmission facility, provided that
its signal does not violate interference standards in the FCC-protected area of
another wireless license holder. Existing wireless license holders generally are
protected from interference within 35 miles of the transmission site; however,
if that site is moved, the protection remains only within the original 35 mile
zone and approval from the FCC is required before a transmission site may be
moved.

On July 10, 1996, the FCC adopted an Order in which it authorized the interim
use of certain digital compression technologies for the provision of video,
voice and data services over MDS and ITFS frequencies. Such technologies may be
utilized by a wireless cable operator or an MDS or ITFS licensee, after applying
for, and being granted, such an authorization by the FCC. Upon receiving a
digital authorization, a licensee also may transmit one-way downstream Internet
service.

The Department has filed and has received grants of applications for digital
authorizations for its ITFS system located at the Empire State Building.

In March 1997, various wireless cable industry companies petitioned the FCC to
permit the grant of applications for two-way transmission of interactive
services over MDS and ITFS frequencies. The petition proposes rule changes,
which would allow the FCC to routinely grant such licensees the right to
implement two-way wireless services. There can be no assurance that the petition
will be granted, or if granted, that the Company will be able to develop
commercially successful products using two-way transmission.

1996 Telecommunications Act. In February 1996, Congress passed and the President
signed into law the 1996 Act. Some of the provisions of the 1996 Act that
directly affect wireless cable television operators are discussed below. Beyond
those specific provisions, the 1996 Act contains provisions intended to increase
competition in the telephone, radio, broadcast television, and hardwire and
wireless cable television businesses. The long term effect of the 1996 Act
cannot be determined at this time, although competition in the video programming
delivery industry is likely to increase as a result of the adoption of the 1996
Act.

The 1996 Act may change the competitive environment of the wireless cable
business. The 1996 Act changes the definition of cable television system so that
the definition excludes any systems that serve customers without using any
public right of way. This change will allow wireless cable system operators to
wire together apartment complexes and other similar properties, as long as the
wiring system does not cross a public right-of-way, without the need to apply
for a local cable television franchise. The 1996 Act will also reduce the
regulatory authority over cable company rates, allow telephone companies, under
certain conditions, to distribute video and afford relief to DBS and wireless
cable providers by exempting them from certain local restrictions on antennas.

The 1996 Act also requires all providers of telecommunications services (as
defined by the 1996 Act) to contribute to a national Universal Service Fund (the
"Fund"). The Fund was created to promote the availability of telecommunications
services to those in low income, rural, insular, and high cost areas at rates
that are reasonably comparable to the lower rates charged in urban areas. The
1996 Act expanded the purpose of the Fund to include provision of affordable
access to advanced telecommunications services for schools, classrooms, health
care facilities, and libraries. Previously, only telephone companies were
required to contribute to the Fund. The FCC is considering whether and to what


                                      -11-
<PAGE>

extent wireless cable operators, such as the Company, must contribute to the
Fund. This matter remains pending before the FCC.

Pursuant to the 1996 Act, video-programming distributors, including wireless
cable operators, will be required to provide closed-captioned video programming
on a phased-in basis starting on January 1, 2000. Requirements to pass-through
captions already contained in programming and to maintain captioning at 1997
levels became effective on January 1, 1998. Because ITFS programming as a class
is exempt from captioning requirements, wireless cable operators that transmit
such programming are not required to provide closed captioning.

Other Regulations. Wireless cable license holders are subject to regulation by
the Federal Aviation Administration with respect to the construction of
transmission towers and to certain local zoning regulations affecting
construction of towers and other facilities. There may also be restrictions
imposed by local authorities. There can be no assurance that the Company will
not be required to incur additional costs in complying with such regulations and
restrictions.

Copyright. Under the federal copyright laws, permission from the copyright
holder generally must be secured before a video program may be retransmitted.
Under Section 111 of the Copyright Act, certain "cable systems" are entitled to
engage in the secondary transmission of programming without the prior permission
of the holders of copyrights in the programming. In order to do so, a cable
system must secure a compulsory copyright license. Such a license comes into
existence upon the filing of certain reports with the payment of certain fees to
the U.S. Copyright Office. In 1994, Congress enacted the Satellite Home Viewer
Act of 1994, which enables operators of wireless cable television systems to
rely on the cable compulsory license under Section 111 of the Copyright Act.

TRADEMARKS, COPYRIGHTS, PATENTS

The Company holds no copyrights or patents but has received a federal service
mark registration for the name Magnavision. The Company does not believe that
these proprietary rights are material to its business.

PERSONNEL

At December 31, 1999, the Company had a staff of 11 full time employees (1 in
sales, 4 in installations and service, 1 in customer service and marketing, 3 in
administration, and 2 in management) and various part time consultants, advisors
and subcontractors, none of whom is a member of a union.

The Company does not plan to expand its staff until it begins to generate
sufficient revenue or receives funding to support expansion. The Company
considers its relationship with its employees to be good.

MAJORITY SHAREHOLDER

At December 31, 1999, Cacomm, Inc., a New Jersey corporation ("Cacomm"), was the
majority shareholder of the Registrant. The Company believes, but could not
confirm, that Cacomm owned approximately 73% at the end of 1999 and 77.5% at the
end of 1998 of the Company's outstanding common stock.


                                      -12-
<PAGE>

The Registrant has been advised that Cacomm is a 25% partner in a general
partnership known as The Grand MMDS Alliance (the "Alliance"), a designated
selectee of the FCC for four MMDS channels in the New York metropolitan market.

The possibility exists that the Alliance could commence business in direct
competition with the Registrant and the Registrant's former Chief Executive
Officer, in his letter of resignation, indicated that he intends to launch such
competitive activities. The Company has no reliable information as to whether
the Grand MMDS Alliance has commenced business operations as of the date of this
report.

The Company continues periodic discussions with the Alliance (the other partners
of which are unaffiliated with the Registrant) for the purpose of exploring
various alternatives relating to the MMDS channels held by the Alliance.
However, such discussions have not proven fruitful in the past, and there is no
assurance that such discussions will be productive in the future.

ITEM 2. PROPERTIES

The Registrant's principal offices are located at 1725 Highway 35, The Wedgewood
Building, Wall, New Jersey, where it occupies approximately 1200 square feet
under a lease agreement which expires in May 2000.

As part of the Channel Lease Agreement with the Department, the Company acquired
the right to use a portion of the Department's transmitting space at the Empire
State Building, in Yonkers, New York and on Staten Island, New York. The Company
pays no additional consideration for this space beyond the fees due to the
Department under the Channel Leasing Agreement.

ITEM 3. LEGAL PROCEEDINGS

CACOMM, INC vs. MAGNAVISION CORPORATION ETAL.
Reference is made in the Company's 10-Q for March 31, 1999. On or about June 1,
1999, the Company was informed that the complaint filed in the court of Chancery
of the State of Delaware entitled Cacomm, Inc. vs. Magnavision Corporation et.al
filed on May 13, 1999, was dismissed by Cacomm, Inc., without the appointment of
a director.

PATRICK MASTRORILLI vs. MAGNAVISION CORPORATION
On June 21, 1999, the Company received a complaint filed in the Superior Court
of New Jersey Legal Division in an action entitled Patrick Mastrorilli vs.
Magnavision Corporation. This litigation relates to a former director and
officer's claim for alleged future commissions due him on contracts and current
renewals placed by him. Discovery is pending in this matter, and the Company can
make no predictions as to its final outcome at this time.

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

        Not applicable.


                                      -13-
<PAGE>



                                   P A R T  I I

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

        (a) The Common Stock has been trading in the over-the-counter market
            under the symbol "MAGV". The following table sets forth for the
            periods indicated the range of high and low bid quotations for the
            Company's Common Stock since January 1, 1998 as reported by the
            National Quotation Bureau, Inc. and as reported by the National
            Association of Securities Dealers composite feed or other qualified
            inter quotation dealer medium. These quotations represent
            inter-dealer prices, without retail mark-up, mark-down or
            commissions and do not necessarily represent actual transactions. As
            trading in the Common Stock has historically been sporadic and in
            small volumes, the Company cannot assure that an active public
            trading market will develop or be sustained.

                                                         CLOSING BID
                                                         -----------
              1998                              HIGH                  LOW
              ----                              ----                  ---
January 2nd through March 31st                  1.8125                .9375
April 1st through June 30th                     1.0625                .9375
July 1st through September 30th                 1.0000                .6250
October 1st through December 31st                .6250                .4375

              1999
              ----
January 4th through March 31st                   .6875                .4375
April 1st through June 30th                    14.0000                .6250
July 1st through September 30th                16.2500               6.0000
October 1st through December 31st               9.7500               6.2500

        (b) As of December 31, 1999, according to the Registrant's transfer
            agent, the approximate number of holders of record of the
            Registrant's common stock was 463.

        (c) The Registrant has never paid any cash dividends on its Common Stock
            and none are presently anticipated. Under the Company's agreements
            with its redeemable preferred stockholders and its principal lender,
            the Company is prohibited, without their consent, from declaring or
            paying any dividends on its Common Stock until the loans made by the
            lender have been repaid and the preferred stock is redeemed, in
            full. As of December 31, 1999, the Company had accumulated dividends
            of $1,057,778 on its 8% Series A preferred stock . The Company is
            not required to pay dividends until the redemption date of May 2002,
            unless accelerated by certain liquidity events, further described in
            Note 13. The redeemable preferred stock will have a preference over
            the common stock as to any dividends that may be legally available
            for declaration and payment.

                                      -14-
<PAGE>



ITEM 6. SELECTED FINANCIAL DATA

The following is a summary of selected financial data. This data should be read
in conjunction with "Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Item 8-Financial Statements and
Schedules."








                                      -15-

<PAGE>


Income Statement Data
---------------------
<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                             ------------------------
                                                      1999            1998             1997             1996            1995
                                                      ----            ----             ----             ----            ----
<S>                                               <C>             <C>               <C>              <C>               <C>
Revenues                                         $ 2,962,016     $ 3,652,389       $ 1,607,049      $ 1,285,442      $   666,366
                                                 ===========     ===========       ===========      ===========      ===========
Loss Before Extraordinary Item                   $  (418,216)    $  (428,409)      $(1,152,529)     $(1,411,509)     $  (844,493)
                                                 ===========     ===========       ===========      ===========      ===========
Extraordinary Item-Loss From
 Extinguishment of Debt                          $         -     $   165,779       $   275,844      $         -      $         -
                                                 ===========     ===========       ===========      ===========      ===========
Net Loss                                         $  (418,216)      ($594,188)      $(1,428,373)     $(1,411,509)     $  (844,493)
                                                 ===========     ===========       ===========      ===========      ===========
Redeemable Preferred Stock Dividend
 Requirement                                     $   400,000     $   400,000       $   257,778      $         -      $         -
                                                 ===========     ===========       ===========      ===========      ===========
Accretion of Preferred Stock                     $    92,593     $    92,593       $    54,012      $         -      $         -
                                                 ===========     ===========       ===========      ===========      ===========
Net Loss Applicable to Common
 Stockholders                                    $  (910,809)    $(1,086,781)      $(1,740,163)     $(1,411,509)     $  (844,493)
                                                 ===========     ===========       ===========      ===========      ===========
Basic & Diluted Loss Per Common Share
 From Continuing Operations                      $      (.79)    $      (.80)      $     (1.27)     $     (1.23)     $      (.66)
                                                 ===========     ===========       ===========      ===========      ===========
Basic & Diluted Weighted Average Common
 Shares Outstanding                                1,157,005       1,154,354         1,152,504        1,147,030        1,276,539
                                                 ===========     ===========       ===========      ===========      ===========
</TABLE>

Balance Sheet Data
------------------
<TABLE>
<CAPTION>
                                                                                  At December 31,
                                                                                  ---------------
                                                      1999            1998             1997             1996            1995
                                                      ----            ----             ----             ----            ----
<S>                                              <C>             <C>               <C>              <C>              <C>
Working Deficit                                  $(1,674,984)    $  (366,025)      $  (682,031)     $(4,338,083)     $  (213,988)
                                                 ===========     ===========       ===========      ===========      ===========
Total Assets                                     $ 3,064,313     $ 3,953,476       $ 2,427,163      $ 2,196,994      $(2,065,771)
                                                 ===========     ===========       ===========      ===========      ===========
Long Term Debt                                             -     $ 1,899,468       $   111,509      $    10,563      $ 2,678,784
                                                 ===========     ===========       ===========      ===========      ===========
Redeemable Preferred Stock                       $ 4,683,642     $ 4,591,049       $ 4,498,456      $         -      $         -
                                                 ===========     ===========       ===========      ===========      ===========
Stockholders' Equity (Deficit)                   $(5,635,544)    $(4,086,356)      $(3,403,335)     $(2,608,645)     $(1,272,472)
                                                 ===========     ===========       ===========      ===========      ===========
</TABLE>

                                      -16-
<PAGE>

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

Certain statements under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" and elsewhere in
this Form 10-K constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from any future
results, performance or achievements of the Company, or industry results
expressed or implied by such forward-looking statements. Such factors include
among others, general economic and business conditions, which will, among other
things, impact demand for the Company's services; changes in public taste,
trends and demographic changes; competition from other SMATV and/or cable
companies, which may affect the Company's ability to generate revenues;
political, social and economic conditions and laws, rules and regulations, which
may affect the Company's results of operations; timely completion of
construction projects for new systems; changes in business strategy or
development plans; the significant indebtedness of the Company; quality of
management; availability of qualified personnel; changes in, or the failure to
comply with, government regulations; and other factors referenced in the Form
10-K.

RESULTS OF OPERATIONS

All of the Company's current revenues are derived from its private cable
operations, which now include data services. The wireless channel capacity
operations have not commenced, therefore, no revenue has been derived from the
wireless operation.

The Registrant and its wholly owned subsidiary began service in February 1992 to
various colleges, nursing homes, and hospital facilities in the New York/New
Jersey area utilizing direct satellite technology. This involves the use of
antennas, which are installed at the facility and then separately wired on a
room-by-room basis. The Company has long-term agreements with 39 facilities
under which it is currently providing service to students and patients through
approximately 16,000 outlets in rooms and common areas at such institutional
facilities.

The Company has an agreement to serve over 3,200 students located at certain
Fordham facilities with a data service using cable modems and the cable
television network backbone.

The majority of the facilities using the Company's private cable service are in
New Jersey and New York, but the market area currently reaches from North
Carolina to Massachusetts and as far west as Wisconsin .

Many colleges and senior living and nursing homes in the United States do not
have cable television, but the current trend is for these institutions to
install cable television. Each installation is comprised of a number of billing
outlets. A billing outlet represents a hookup for a television.

                                      -17-
<PAGE>

The Company collects revenue from each television on-line. For the most part,
the colleges are on a nine month billing cycle starting in September and ending
in June of the subsequent year. The nursing homes and hospitals are on a 12
month billing cycle.

1999 vs. 1998

Net loss for 1999 was $418,216 compared to a net loss of $594,188 in 1998. The
Company had an extraordinary item of $165,779 related to the extinguishment of
debt to Access Capital, Inc., in 1998. Also in 1998, the Company refinanced its
debt with BSB Bank & Trust Company. The net income from the private cable
operation was $31,905 in 1999, compared to a loss of $173,693 in 1998. The
income in 1999 was due to the revenue from the new sites and a full year of
revenue from Fordham University Data System. The loss from the Company's
wireless cable for 1999 was $450,121 compared to $420,495 in 1998. The loss was
related to expenses such as the channel lease expense, professional fees,
engineering fees, and salaries.

Revenue decreased $690,373 and gross profit increased $132,682 over last year.
The decrease in revenue and cost of sales were primarily a result of a
full-years of operation for both the outlets installed in 1998 and data delivery
services at Fordham University.

The cost of sales in 1998 was exaggerated by items for building systems. In
1998, the Company installed data delivery service outlets at Fordham University
which resulted in installation revenue earned in 1998. This installation revenue
was non-recurring in 1999.

Operating expenses primarily consist of salaries, depreciation and amortization
and general and administrative expenses. Operating expenses for 1999 were
$2,173,677, an increase of $74,669 over 1998. Salaries accounted for $49,977 of
the increase and deprecation represented $168,068 of the increase. This increase
was offset by a decrease in general and administrative expenses of $143,376. The
additional depreciation related to the purchase of equipment.

Interest expense increased to $237,647 in 1999 from $184,425 in 1998. In the
first half of 1998, the Company was borrowing from Access Capital, Inc., which
was a significantly lower loan balance. Starting in July, interest payments were
based on $2.5 million outstanding term loan with BSB Bank & Trust Company. The
increase in 1999 represents a full-year interest on the BSB Bank and Trust
Company Term Loan Agreement and a partial-year on the line-of-credit under which
the Company borrowed during the summer of 1999.

1998 vs. 1997

Net loss for 1998 was $594,188 compared to a net loss of $1,428,373 in 1997. In
1998, the Company had an extraordinary item of $165,779 related to the
extinguishment of debt to Access Capital, Inc. In 1998, the Company refinanced
its debt with BSB Bank & Trust Company. The net loss from the private cable
operation was $173,693 in 1998, compared to $889,289 in 1997.

The reduction in the loss in 1998 was partially due to the profit on the sale of
equipment to Fordham University. The loss from the Company's wireless cable for
1998 was $420,495 compared to $539,084 in 1997. The loss was related to expenses
such as the channel lease expense, professional fees, engineering fees, and
salaries.

                                      -18-
<PAGE>


Revenues increased $2,045,340 and gross profit increased $905,359 over last
year. The increases were primarily a result of increased outlets on line in the
fall of 1998, revenue related to the data contract at Fordham University, and
non-reoccurring revenue from the installed equipment at various sites.

Operating expenses primarily consist of salaries, depreciation and amortization
and general and administrative expenses. Operating expenses for 1998 was
$2,099,008, an increase of $264,177 over 1997. Salaries accounted for $87,708 of
the increase and deprecation represented $185,091 of the increase. The
additional deprecation was related to the purchase of equipment.

Interest expense decreased to $184,425 in 1998 from $280,546 in 1997. The
interest in 1997 includes interest for a partial year of senior debt over $4
million dollars prior to the conversion in June of 1997. In 1998 the Company
incurred interest expense for Access Capital, Inc. and starting in July interest
on $2.5 million for BSB Bank & Trust Company term loan.

The extraordinary item in 1998 related to the write-off of deferred financing
cost and a prepayment penalty after the pay off of the Access Capital, Inc. line
of credit after refinancing the existing debt with BSB Bank & Trust Company in
July 1998. The extraordinary item in 1997 related to the write-off of deferred
financing costs upon the extinguishment of the debt after the conversion to
Preferred Stock.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

Year Ending 1999

For the year ending December 31, 1999, total cash increased by $2,926. The net
cash provided by operating activities was $469,470 in 1999 compared to net cash
used of $749,723 in 1998. The primary reason for the cash provided during 1999
was related to a $467,000 payment received during 1999 from Fordham University
related to the data delivery system.

The cash used in investing activities was $1,136,172 in 1998 compared to
$108,210 in 1999. Funds were used primarily to purchase equipment used to
increase the outlet count on cable systems.

Net cash provided by financing activities was $1,971,440 in 1998 compared to net
cash used of $358,334 in 1999. The cash used in financing activities in 1999 was
principally used to reduce the BSB Bank & Trust Term Loan, which were somewhat
offset by the borrowings under the BSB Bank & Trust line-of-credit. The cash
provided by financing activities in 1998 related primarily to the proceeds under
the BSB Bank & Trust facility offset by the payoff of the Access Capital, Inc.,
facility.

Year Ending 1998

For the year ending December 31, 1998, total cash increased by $85,545. The net
cash used in operating activities increased to $749,723 in 1998 compared to
$447,166 in 1997. The primary reason for the increase was a note from Fordham
for the payment of the data system for which the Company funded the
installation.

                                      -19-
<PAGE>


The cash used in investing activities increased from $674,320 in 1997 to
$1,136,172 in 1998. The funds were used primarily to purchase equipment used to
increase the outlet count on the cable side and for the data system.

Net cash provided by financing activities increased from $1,098,736 in 1997 to
$1,971,440 in 1998. Cash flow from financing activities in 1998 was principally
from the proceeds of the BSB Bank term loan of which a portion was used to
payoff the Access Capital, Inc. loan, both described below.

Liquidity and Capital

Since the inception of service in 1992, the Company has experienced operating
losses, has been in default of certain provisions of its senior debt, and has
had negative cash flow. At December 31, 1999, the Company had a working capital
deficiency and a shareholders' deficit.

The Company's capital commitments at December 31, 1999 include additional
capital to construct facilities at the Department of Education of the
Archdiocese of New York, capital to build the Monmouth and Ocean County ITFS
channel sites, the payments required under the BSB Bank & Trust Company term
loan, and the payment of the preferred shareholders principal and accumulated
dividend due December 31, 2002. As of the date hereof, the Company has not
commenced operation of a wireless system and, if it is executed, will require
substantial additional funding in order to do so.

The management plan is to either a sale of the ITFS spectrum or develop the ITFS
spectrum with a strategic partner(s) willing to participate with the Company in
the development of alternative uses of its ITFS spectrum. The Company's business
plan depends on either a sale or the Company securing a strategic partner(s) for
the capital resources required and the expertise required to run the Wireless of
the business. There is no assurance that the Company will be able to secure
additional financing or strategic relationships or a sale on terms or conditions
satisfactory to the Company, or at all.

Failure to obtain financing or a partner or to sell the ITFS spectrum lease will
have a material adverse effect on the Company. Also, there can be no assurance
that, even with additional financing, the Company will be able to launch its
alternative use of ITFS spectrum in a commercially successful manner.

On March 15, 2000, Magnavision Corporation and Lamont Television Systems, Inc.
entered into an Asset Purchase Agreement as of February 29, 2000, to purchase
the service contracts and related fixed assets of Magnavision Corporation's
Private Cable Operation for $7.5 million. The transaction closed on March 30,
2000, with the Company receiving approximately $6,700,000 of the proceeds in
cash after the establishment of an escrow account of approximately $200,000 and
other closing adjustments. The Company used part of the proceeds to pay off its
loan to BSB Bank & Trust Company in the amount of $1,954,000 and its notes to
both IBJS Whitehall and KOCO Capital totaling $105,468 in the aggregate plus the
accrued interest. Other portions of the net proceeds were be used to pay
commissions of $300,000 due under this transaction and to establish accruals for
severance and retention payments and legal fees totaling $330,000. The Company
also will accrue approximately $1.2 million for State and Federal taxes. In
addition, the May 1997 Exchange Agreement and the Company's Certificate of
Incorporation as amended requires a payment of 25% of the net proceeds of the
sale or approximately $1.7 million to be used to retire a portion of the
Company's Series A Preferred Stock and the accumulated related preferred stock
dividend outstanding.

                                      -20-
<PAGE>


The Company plans to meet short term liquidity requirements for it's wireless
plan from the cash received from the Private Cable System. There can be no
assurance that the Company will be able to obtain additional financing on a
timely basis or at all.

Access Capital, Inc. Line of Credit

In September 1997, the Company and Access Capital, Inc. agreed to a $1,250,000
three year revolving line of credit to be used to expand the Company's private
cable business. At December 31, 1997, the Company had borrowed approximately
$405,000 under the line of credit. Interest was payable currently at the default
rate of prime plus 8%. The line was secured by a pledge of private cable
contracts and other Company assets.

The lender received 138,536 warrants at an exercise price of $2.00 per share to
purchase approximately 4% of the Company's stock on a fully diluted basis. This
loan was paid off in July 1998. The warrants remain outstanding as of December
31, 1999.

BSB Bank & Trust Company Term Loan

On July 3, 1998, the Company and BSB Bank & Trust Company entered into an
agreement to refinance its existing credit line and supply working capital.
Pursuant thereto, the Company borrowed the sum of $2.5 million dollars which
bears interest at a fixed rate of 10% per annum and has a 5 year term.
Installments of principal plus interest, payable in arrears, will be made in
accordance with the agreed upon schedule of which $634,000 was paid in 1999.
This loan was utilized to refinance existing debt and the remaining
approximately $1.9 million was used to finance the completion of outstanding
contracts for private cable television service at various locations, to complete
the Fordham University Internet distribution system, and for working capital.
BSB Bank & Trust Company also granted the Company a $500,000 line of credit, to
be used for future installations of private cable systems and general corporate
purposes. This line of credit is at an interest rate of prime plus 1.5% payable
monthly and will mature in June 2000.

In the above transaction, BSB Bank & Trust Company received warrants to purchase
146,176 shares of Magnavision's issued and outstanding capital stock on a fully
diluted basis at an exercise price of $2.00 per share. The warrants remain
outstanding as of the date of this filing.

In connection with the sale of the private cable business, the Company paid off
both the BSB Term Loan and line of credit with the proceeds from the sale.

Exchange of Debt for Redeemable Preferred Stock

In August 1995, the Company entered into a $5 million lending facility with a
bank and two small business investment companies. See "Item 13- Certain
Relationships and Related Transactions" for further information with regard to
the transactions described above.

As of December 31, 1996, the Company was not in compliance with several
covenants under its senior debt agreement and, as of March 31, 1997, the Company
did not make its quarterly interest payment of $122,095. On May 8, 1997, the
Company agreed with its lenders to exchange its senior subordinated notes into
redeemable Series A Preferred Stock.

                                      -21-
<PAGE>


Under the terms thereof, the Company's outstanding subordinated notes,
aggregating approximately $4.1 million, together with accrued interest and
detachable warrants, were exchanged for $5 million of 8% Series A Preferred
Stock due December 31, 2002.

In connection with the exchange, the lenders also funded the Company the
remaining balance on the existing line. In addition, the note holders received
1,826,932 warrants to purchase up to 58% of the common stock on a fully diluted
basis at an exercise price of $2.00 per share after the Company effected a
1-for-20 reverse stock split, and have the right, which they have exercised, to
elect the majority of the Board of Directors. The warrants remain outstanding as
of December 31, 1999.

This resulted in a change in control of the Company. The agreement also requires
the warrant holders to surrender up to 10% of their stock on a fully diluted
basis, if, as and when certain liquidity events occur. In addition, warrant
holders have the right to require the Company to repurchase the warrants under
certain conditions. This option can only be exercised upon the sale of an asset
of the Company. The value of the warrants was estimated at $555,556 and
represents a discount to the face value of the redeemable preferred stock.

The cost of the put can not be determined at this time since it is based upon
the value of a sale of a significant asset which has not occurred or cannot be
assured. Also, one of the warrant holders has entered into a management service
agreement with the Company. See Item 10, "Directors and Executive Officers of
the Registrant."

Non-Qualified Stock Option Plan

During the first quarter of 1999, Magnavision adopted a non-qualified stock
option plan (the "Plan"). Under the Plan, options to purchase an aggregate of
not more than 349,986 shares of common stock may be granted from time to time to
key employees, including officers, advisors, and independent consultants or to
any other persons. Under the Exchange Agreement (a copy which was filed with the
Company's 10-K for the year ending December 31, 1997) and when the Plan was
complete, options were also to be granted to employees under the Plan. Also
under a letter agreement, the President and C.E.O. was to receive 150,000
options at an exercise price of $1.00.

As of January 19, 1999, the compensation committee awarded or caused to be
issued 223,974 options including: 150,000 options to Robert Hoffman, 43,974
options issued pursuant to the Company's obligation under the Exchange Agreement
at an exercise price of $2.00 per share and awarded 30,000 options to various
employees at an exercise price of $2.00 per option.

During the year, employees exercised 16,154 options that were issued under the
Plan.

The Company accounts for stock options issued to employees under A.P.B. No. 25
"Accounting for Stock Issued to Employee," as permitted by FAS No. 123 under
which no compensation cost has been recognized for the options granted as they
were issued above market value.

                                      -22-
<PAGE>

Change-of-Control Policies

During the third quarter 1999, the Company adopted policies for the purpose of
retaining the services of its employees during a change-of-control of the
Company and paying severance to employees who are terminated as a result of a
change-of-control. The policies are limited in scope and duration, and are
effective only if there is a change-of-control prior to January 1, 2000.

The Company has extended this policy until January 1, 2001.

A change-of-control is defined in the policies as any event that would be
reportable in Item 1(a) of SEC Form 8-K, including, without limitation, any
event that causes any person, directly or indirectly, to become the beneficial
owner of 50% or more of the securities ordinarily having the right to vote at
the election of directors of the Company or the sale of all or substantially all
of the Company's assets or the assets of a wholly owned subsidiary.

The change-of-control policy for non-officer employees calls for both retention
pay and severance pay. The amount of retention incentive pay is up to three
months' base pay for each eligible employee. The amount of severance pay is up
to nine months' base pay for each eligible employee with three or more years of
service and up to six months' base pay for each eligible employee with more than
one year of service.

The change-of control policy for employees who are corporate officers, with the
exception of the President and C.E.O. who has a separate plan, provides for
severance pay in an amount up to 12 months base pay for each eligible employee
and immediate vesting of all issued and outstanding stock options, subject to
certain limitations.

The change-of-control agreement for the President and C.E.O. provides for
severance pay in an amount equal to 12 months base pay upon a change-of-control
prior to June 1, 2000.

Inflation

Management believes that inflation and changing prices will have a minimal
effect on operations. The above should be read in conjunction with the Company's
consolidated financial statements included elsewhere herein.

Seasonality of Installation Activities

The Company installs most of its college and university subscribers over the
summer because the institutions are, for the most part, vacant. Therefore, the
Company experiences lower revenues and higher capital expenditures during the
summer.

                                      -23-

<PAGE>

Year 2000

The Company experienced no issues related to the "Year 2000" problem.

ITEM 7 (a). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            No effect

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

            See pages F-1 through F-21.

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

            None.


                                      -24-
<PAGE>


                                  P A R T  I I I

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information with respect to the directors
and officers of the Registrant. These individuals serve in the same capacities
with Magnavision - N.J.

<TABLE>
<CAPTION>
                                                                                          Director or
Name                       Age       Position                                             Office Since
----                       ---       --------                                             ------------
<S>                        <C>       <C>                                                 <C>
Robert E. Hoffman          55        Director, Chairman, President (1) (2)                1998

Jeffrey Haertlein          52        Chief Financial Officer                              1996

Keith Heilos               37        Vice President                                       1991

Brian Mastrorilli          31        Vice President (1) (2) (3) (4)                       1991
                                     (resigned January 31, 2000)

Evan Wildstein             29        Director (1) (2) (4)                                 1997

Geoffrey Thompson          59        Director (4) (3)                                     1997

George Zombek              36        Director (4)                                         1997

Kevin Falvey               43        Director (1) (2) (3) (4)                             1997
</TABLE>

Pursuant to the Exchange Agreement of May 8, 1997 and the related Stockholders
Agreement of such date, Cacomm retained the right to designate three (3) out of
the Registrant's seven (7) member Board of Directors. Pursuant thereto, Cacomm
appointed Messrs. Nicholas Mastrorilli, Sr., Nicholas Mastrorilli, Jr. and
Patrick Mastrorilli to the Registrant's Board of Directors. Effective upon Mr.
Mastrorilli Sr.'s resignation, Cacomm designated Mr. Hoffman as one of its
designees.

The Registrant received a letter dated April 24, 1998 from Cacomm removing
Nicholas Mastrorilli, Jr. and Patrick Mastrorilli as designees of Cacomm to the
Registrant's Board of Directors. The letter indicated that Cacomm would, in the
near future, appoint replacement designees. Such designees, if not from existing
management, must be reasonably acceptable to the preferred stockholders. By
letter dated February 5, 1999 Cacomm recommended the appointment of Mr. Joseph
M. Carlino as director. The Board of Directors did not seat Mr. Carlino and
Cacomm sued the Company. On May 13, 1999, Cacomm dismissed the suit.

On June 3, 1999, the Board of Directors approved the election of Cacomm Inc.'s
appointee, Brian Mastrorilli, to the Board. Mr. Mastrorilli served as Vice
President of Technical Operations at Magnavision from April 1991 to January
2000. He was also a Director of Cacomm Inc. until May 1999, when he resigned to
become a Director of Magnavision.

                                      -25-
<PAGE>

On January 31, 2000, Mr. Brian Mastrorilli resigned from his position as Vice
President and Director of Magnavision. The Company received a letter from Cacomm
removing him as a designee of Cacomm to the Registrants' Board of Directors on
the same day. The letter indicated that Cacomm would appoint a replacement
designee, which has not as of the date of this report, occurred yet.

(1)      Member of Executive Committee.

(2)      Member of Audit Committee. The Audit Committee assists the Board of
         Directors in fulfilling its responsibilities with respect to the
         Company's accounting and financial reporting activities.

(3)      Member of Compensation Committee. The Compensation Committee determines
         the compensation to be paid by the Company to its officers.

(4)      Messrs. Wildstein and Thompson and Messrs. Zombek and Falvey are
         representatives of KOCO Capital Company, LP ("KOCO") and IBJS Capital
         Company, Inc. ("IBJS"), respectively, and serve on the Registrant's
         Board of Directors pursuant to the terms of a certain Stockholders
         Agreement dated as of May 8, 1997 between the Registrant, KOCO, IBJS,
         Cacomm and Nicholas Mastrorilli, Sr. The Stockholders Agreement
         provides for the Registrant to have a Board of Directors consisting of
         not more than seven (7) persons, of which, so long as KOCO and IBJS own
         20% or more of the fully diluted common stock, such investors shall
         each have the right to designate two (2) directors and so long as
         Cacomm holds 20% or more of the fully diluted common stock, it has the
         right to designate three (3) directors that are members of the
         Registrant's management or are approved by KOCO and IBJS. Cacomm,
         pursuant to such agreement, previously designated Robert E. Hoffman,
         Nicholas Mastrorilli, Jr. and Patrick Mastrorilli its designees to
         serve on Registrant's Board of Directors. As noted above, by letter
         dated April 24, 1998, Cacomm removed Nicholas Mastrorilli, Jr. and
         Patrick Mastrorilli as its designees to be members of the Board of
         Directors. Should there be an increase in the size of the Board of
         Directors, KOCO and IBJS have the right to designate additional
         directors such that their nominees at all times constitute a simple
         majority of the Board of Directors. The parties to the Stockholders
         Agreement also agreed to appoint one KOCO director and one IBJS
         director to serve on the Audit, Compensation and Executive Committees
         of the Board of Directors and one management director to serve on the
         Compensation and Executive Committees of the Board of Directors. As a
         result of the implementation of the Stockholders Agreement, a change in
         control of the Registrant was effected. Reference is made to the
         Exhibits attached as part of this Form 10-K for additional information
         contained in the Exchange Agreement and the Stockholders Agreement of
         May 8, 1997.

The directors and officers, other than Mr. Hoffman, who serves pursuant to the
terms of the Employment Agreement described in Item 11, Executive Compensation,
will hold office until the next annual meeting of shareholders and directors,
respectively, or until their successors are duly elected and qualified.

Robert E. Hoffman, became Chairman and Chief Executive Officer of the Registrant
and its subsidiaries on January 8, 1998, effective upon the resignation from
such positions by Nicholas Mastrorilli, Sr. Mr. Hoffman was also elected
President on such date. Prior thereto, and from August 1996, Mr. Hoffman was a
self-employed technology consultant to telecommunications businesses in wireless
cable, television, communications products and DTH satellite television.

                                      -26-
<PAGE>


Prior thereto and concurrent therewith, Mr. Hoffman was President of Wireless
America, Inc., a private company which held and leased frequency licenses for
use in wireless cable television systems. Wireless America, Inc. sold all the
assets and was liquidated in February 1997. From June of 1994 through July of
1996, Mr. Hoffman was Vice President, Engineering for C-COR Electronics, a
manufacturer of cable television distribution equipment.

From January of 1993 through June of 1994, Mr. Hoffman was Vice President,
Engineering for Cincinnati Microwave, Inc., a domestic manufacturer of specialty
consumer electronics and communication products. Prior thereto and from July of
1986 through December 1992, he was President of Comband Technologies, Inc., a
supplier of systems, equipment and services to the wireless (microwave) cable
television industry. Mr. Hoffman received a Bachelors and a Masters degree in
Electrical Engineering from Rensselaer Polytechnic Institute in 1966 and 1971,
respectively.

Jeffrey Haertlein, was elected as the Company's Chief Financial Officer
effective as of January 1, 1996 with responsibility for all of the Registrant's
financial matters. Mr. Haertlein was previously Assistant Vice President of
MidAtlantic Corporation from 1978 to 1995 with responsibility for financial
planning and reporting for such bank holding company and its various
subsidiaries. Prior thereto and from 1977 to 1978, Mr. Haertlein was employed by
Chase Manhattan Bank in the capacity of Internal Auditor. Mr. Haertlein received
a B.A. degree from Monmouth College in accounting/marketing.

Keith M. Heilos, has been Vice President, Customer Relations for the Registrant
since April 1991. Prior to 1991, Mr. Heilos served as Director of Video
Production for Cacomm, Inc. from July of 1987 to April 1991. Mr. Heilos is
directly responsible for customer relations and is the liaison between the
Company and its client base. Mr. Heilos received a B.A. degree from Montclair
State College in 1986.

Brian J. Mastrorilli, served as Vice President, Technical Operations since April
1991 to January 2000. He has also informed the Company that he has been a Vice
President and Director of Cacomm, Inc. from April 1991 to May 1999. On June 3,
1999, the Board of Directors approved the election of Mr. Mastrorilli as Cacomm
Inc.'s appointee to the Board. Mr. Mastrorilli was responsible for all the
Company's technical projects, including system design and documentation,
construction coordination and FCC licensing of the private cable systems and
design and management of the cable modem systems.

Mr. Mastrorilli resigned as of January 31, 2000 as Vice President and as a
Director of the Company.

Evan Wildstein, has been a director of the Registrant since June 1997 as a
representative of Koco Capital Company, LP ("KOCO"), a Small Business Investment
Company. Mr. Wildstein is President of Kisco Capital Corporation, the general
partner of KOCO, and is a principal at Kohlberg & Company, LLC which he joined
in October 1994. Prior to that, Mr. Wildstein was a financial analyst at Dean
Witter Reynolds, Inc. from August 1993 to October 1994. Mr. Wildstein received a
bachelor's degree in Business Administration from the University of Michigan in
1993.

                                      -27-
<PAGE>


Geoffrey Thompson, has been a Director of the Registrant since November 1997 as
a representative of KOCO. Mr. Thompson joined Kohlberg & Company as Principal in
1996 and resigned in 1998. Previously, he was managing partner of Norman
Broadbent International (1995-1996), President of Nordeman Grimm (1993-1994) and
President/CEO of Marine Midland Banks, Inc. from 1981-1993. He holds a
bachelor's degree from Columbia College (1963) and an MBA degree from Harvard
University (1967).

George Zombek, has been a Director of the Registrant since June 1997 as a
representative of IBJS, a Small Business Investment Company and a wholly-owned
subsidiary of IBJ Whitehall Financial Group. Mr. Zombek is Chief Operating
Officer of IBJS and joined such firm in 1997. Prior thereto and from its
inception in 1995, Mr. Zombek was a principal at Canterbury Mezzanine Capital, a
mezzanine finance fund. From 1992 through 1995, Mr. Zombek was affiliated with
the BZW Mezzanine Group and briefly during such period with its Mergers and
Acquisitions Group. Mr. Zombek received an MBA degree in Finance from University
of Chicago in 1989 and a BA degree from New York University in 1985.

Kevin Falvey, has been a Director of the Registrant since November 1997 as a
representative of IBJS. Mr. Falvey joined IBJS in November 1997. From 1992 to
February 1997, Mr. Falvey was a Vice President of CIT Group/Equity Investments,
Inc. Prior thereto and from 1986 to 1991, he was Managing Director of
Manufacturers Hanover Capital Partners, Inc. Mr. Falvey received an MBA degree,
with distinction, from New York University in 1987 and a B.B.A. degree from the
University of Massachusetts in 1978.

ITEM 11. EXECUTIVE COMPENSATION

Set forth below is the aggregate remuneration paid or accrued by the Company
during the years ended December 31, 1999, 1998 and 1997 to the Company's Chief
Executive Officer. No other executive officer of the Company received salary and
bonus aggregating in excess of $100,000 in any of those years.

The Company has a Non-competition and Non-solicitation Agreement with its three
officers, one of which has taken a position with Lamont TeleVision Systems Inc.

                           SUMMARY COMPENSATION TABLE

Name and Principal Position    Year         Salary       Bonus         Options
---------------------------    ----         ------       -----         -------

Robert E. Hoffman              1999         $175,000     $62,500       150,000

Robert E. Hoffman(1)           1998         $ 74,038     $15,000             -

Nicholas Mastrorilli, Sr.(2)   1997         $109,800           -             -


(1) Effective January 8, 1998, the Company entered into an agreement with Robert
    E. Hoffman.  Pursuant thereto, Mr. Hoffman has agreed to act as Chairman,
    President and Chief Executive Officer of the Registrant, for which service
    an executive search firm was paid the sum of $17,500 monthly together with
    additional amounts if Mr. Hoffman became an employee on a long term basis.
    These payments are not reflected in the chart above

                                      -28-
<PAGE>


    In June 1998, Robert E. Hoffman became an employee acting as Chairman,
    President, and Chief Executive Officer at an annual salary of $125,000 per
    year, annual living allowance of $2,000 per month until December 1998 and a
    $15,000 cash payment. Effective starting January 1, 1999, his annual salary
    was $175,000. He participated in the bonus compensation program in 1999 and
    received 150,000 options under the 1999 option plan at $1.00 per share,
    which vested upon issuance.

(2) Effective as of January 8, 1998, Nicholas Mastrorilli, Sr. resigned as an
    officer, director and employee of the Registrant and its subsidiaries. In
    connection therewith, the Registrant agreed to continue Mr. Mastrorilli's
    base salary of $105,000 per annum and all health benefits up to the sum of
    $500.00 per month, until January 8, 1999.



                                      -29-

<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         (a) Security Ownership of Certain Beneficial Owners:

The following table contains information as of December 31, 1999 as to the
beneficial ownership of shares of Common Stock of the Registrant of each person
who, to the knowledge of the Registrant at that date, was the beneficial owner
of 5% or more of its outstanding shares.

<TABLE>
<CAPTION>

Name and Address of                            Amount and Nature of
 Beneficial Owner                              Beneficial Ownership          % of Class
-------------------                            --------------------          ----------
<S>                                                   <C>                        <C>
Cacomm, Inc.                                          853,889                    73.0
P.O. Box 163
Sea Girt, NJ  08750

KOCO Capital Company, LP                              730,773 (1)                38.5
111 Radio Circle
Mt. Kisco, NY  10549

IBJS Whitehall Capital Corporation                  1,096,159 (2)                48.4
One State Street
New York, NY  10004

Robert E. Hoffman
521 Susan Constant Drive                              159,000 (3)                12.1
Virginia Beach, VA  23451

Access Capital, Inc.
405 Park Avenue                                       138,536 (4)                10.6
New York, NY  10022

BSB Bank & Trust Company
58-68 Exchange Street                                 146,176 (5)                11.1
Binghamton, NY  13902-1056
</TABLE>


(1) Constitutes shares subject to currently exercisable warrants issued to KOCO
    Capital Company, LP.
(2) Constitutes shares subject to currently exercisable warrants issued to IBJS
    Whitehall Capital Corporation.
(3) Constitutes shares subject to currently exercisable options and shares of
    Common Stock  held by Mr. Robert E. Hoffman.
(4) Constitutes shares subject to currently exercisable warrants issued to
    Access Capital, Inc.
(5) Constitutes shares subject to currently exercisable warrants issued to BSB
    Bank & Trust Company.

                                      -30-
<PAGE>


         (b) Security Ownership of Management:

Set forth below is certain information, as of December 31, 1999, concerning the
number and percentage of shares of Common Stock of the Registrant owned of
record and beneficially by each officer and director of the Registrant and by
all officers and directors as a group.

<TABLE>
<CAPTION>
                Name of                             Amount of Nature of
            Beneficial Owner                        Beneficial Ownership                % of Class
            ----------------                        --------------------                ----------
<S>                                                     <C>                              <C>
Robert E. Hoffman                                       159,000 (1)                         12.1

Brian Mastrorilli                                        25,888 (2)                          2.2

Keith Heilos                                             26,837 (3)                          2.2

Jeffrey Haertlein                                        10,382 (4)                           .9

All officers and directors as a group                   222,107 (5)                         16.0
(4 persons)
</TABLE>

(1)  Constitutes options currently exercisable and shares of common stock held
     by Robert Hoffman.

(2)  Constitutes shares subject to currently exercisable warrants, options and
     shares of common stock held by Mr. Mastrorilli. Mr. Mastrorilli resigned as
     of January 31, 2000, and, therefore, forfeited 5,000 of his options.

(3)  Includes shares subject to currently exercisable warrants, options and
     shares of common stock held by Mr. Heilos.

(4)  Includes shares subject to currently exercisable options held by Mr.
     Haertlein.

(5)  Includes 211,295 shares subject to currently exercisable warrants and
     options held by all officers and directors. Excludes 1,826,932 shares
     subject to currently exercisable warrants held in the aggregate by IBJS
     Whitehall Capital Corporation and KOCO Capital Company, L.P.,
     beneficial ownership of which is disclaimed by Messrs. Zombek and
     Falvey and by Messrs. Wildstein and Thompson, respectively, on behalf
     of IBJS Capital Company, Inc. and KOCO Capital Company, L.P.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As described in Part I of this Form 10-K, in August 1995, the Company obtained a
$5,000,000 lending facility from IBJ Schroder Bank & Trust Co., IBJS Whitehall
Capital Corporation and KOCO Capital Company, L.P. (the "Lenders").

In August 1995, the Company entered into a $5,000,000 lending facility with a
bank and two small business investment companies. On June 3, 1996, the Company
amended the facility with its lenders and at various times during 1996 and 1997,
the Company, which had borrowed $4,062,932 and had issued senior subordinated
notes in exchange therefore, had not met several covenants under this Agreement
and failed to make its quarterly interest payment of $122,095. In May 1997,

                                      -31-

<PAGE>

pursuant to an Exchange Agreement, the Company and its lenders agreed to
exchange the entire $5 million of the lending facility for 8% redeemable
preferred stock due in 2002. The then current loan balance, along with the
unused balance of the $5 million line was exchanged for redeemable preferred
stock, which has five-year mandatory redemption provisions, which are
accelerated upon certain liquidity events. In connection with this transaction,
all covenants and defaults under the former lending facility were waived. At
closing, the Company drew down the balance of its line of approximately $800,000
after expenses. The Company issued redeemable preferred stock (Series A
preferred stock) in the amount of $5 million, with an 8% preferred dividend, and
issued additional warrants (new warrants) to purchase additional shares of
common stock, representing approximately 20% of the common stock at $2.00 per
share after a 1-for-20 reverse stock split. The exercise price of the original
issued warrants, $.27 and $.38 per share, was reduced to $.10 per share prior to
such reverse stock split.

The preferred shareholders received a total of 1,826,932 warrants at an exercise
price of $2.00 per share to purchase 58% of the Company's common stock, acquired
the right to and have elected a majority of the Board of Directors, and thus
have effected a change of control of the Company. In connection with the
exchange, the Company issued a note to its lenders totaling $105,468. This note,
bearing 10% interest, represented the interest due in May 1997. Both interest
and principal were originally payable on May 8, 1998. At year end 1997, the
redeemable preferred stockholders agreed to extend the maturity of the note to
May 8, 1999 and at year end 1998 agreed to extend the maturity to May 8, 2000.

The Company also entered into a management service agreement with one of the
preferred stockholders to provide management services at $24,000 per year plus
expenses.

The description of the terms and conditions of the 1995 and 1996 agreements with
the Lenders is qualified in its entirety by reference to the entire agreements,
copies of which have been filed as exhibits to Form 10-K dated July 19, 1996 and
is incorporated herein in full by reference thereto. The description of the May,
1997 Exchange Agreement and related documents is qualified in entirety by
reference to the entire agreement, copies of which have been filed as an exhibit
Form 10-K 1997.


                                      -32-
<PAGE>


                                   P A R T  I V
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(a) (1) Financial Statements.  The following financial statements are included
in Part II, Item 8:

<TABLE>
<CAPTION>
                                                                                                        Page
                                                                                                        ----
<S>                                                                                                        <C>
Report of Independent Auditors ....................................................................      F-1

Consolidated Balance Sheets as of December 31, 1999 and 1998 ......................................      F-2

Consolidated Statements of Operations for years ended
December 31, 1999, 1998 and 1997 ..................................................................      F-3

Consolidated Statements of Stockholders' Deficiency for years ended December 31, 1999,
1998 and 1997 .....................................................................................      F-4

Consolidated Statements of Cash Flows for years ended December 31, 1999, 1998 and 1997 ............      F-5

Notes to Consolidated Financial Statements ........................................................      F-6
</TABLE>

(a) (2) Schedules. All schedules are omitted since the required information is
either not applicable or not present in amounts sufficient to require submission
of the schedule.

(a) (10) Exhibits

<TABLE>
<CAPTION>
                                                                                             Page or Document
                                                                                             Incorporated
 No.        Description of Document                                                          by Reference
----        -----------------------                                                          ----------------
<S>         <C>                                                                             <C>
(2)         Merger Agreement dated September 13,                                             Form 8-K
            1991 between Yardley Ventures, Inc.                                              dated 9/17/91
            and Magnavision Corporation

(3)    (a)  Articles of Incorporation and By Laws                                            Form
S-1                                                                                          dated 12/29/86

(3)    (b)  Amendment to Certificate of Incorporation                                        Form
8-K                                                                                          dated 9/17/91

(10)   (a)  License Agreement dated August 20, 1990                                          Form 10-K
            between Magnavision Corporation and                                              dated 12/31/91
            Department of Education, Archdiocese
            of New York

       (b)  Amended License Agreement dated January                                          Form 10-K
            6, 1994 between Magnavision Corporation                                          dated 12/31/93
            and Department of Education, Archdiocese
            of New York
</TABLE>

                                      -33-

<PAGE>

<TABLE>
<CAPTION>

<S>         <C>                                                                              <C>
       (c)  Microcell Systems Corporation Agreement                                          Form 10-K
            dated December 15, 1993                                                          dated 12/31/93

       (d)  Securities Purchase Agreement dated as of                                        Form 10-K
            August 25, 1995 among the Registrant, Magnavision                                dated 4/19/96
            Corporation (N.J.), IBJS Whitehall Capital Corporation,
            IBJ Schroder Bank & Trust Company and Koco Capital
            Company, L.P.

       (e)  Form of Senior Subordinated Note of the                                          Form 10-K
            Registrant and Magnavision Corporation (N.J.)                                    dated 4/19/96
            due February 26, 2001

       (f)   Form of Warrant to Purchase Shares of Registrant's                              Form 10-K
            Common Stock expiring on August 26, 2003                                         dated 4/19/96

       (g)  Security Agreement and Collateral Assignment dated                               Form 10-K
            as of August 25, 1995 among Magnavision Corporation                              dated 4/19/96
            (N.J.), University Connection, Inc. and IBJS Capital
            Corporation as agent

       (h)  Registration Rights Agreement dated as of                                        Form 10-K
            August 25, 1995 among the Registrant and the investors                           dated 4/19/96
            listed therein

       (i)  Stockholders' Agreement dated as of August 25, 1995                              Form 10-K
            among the Registrant, the investors and the other                                dated 4/19/96
            parties listed therein

       (j)  Non-Competition Agreement dated as of August 25, 1995                            Form 10-K
            between Magnavision Corporation (N.J.) and                                       dated 4/19/96
            Nicholas Mastrorilli, Sr.

       (k)  Indemnification Agreement dated as of August 25, 1995                            Form 10-K
            between the Registrant, Cacomm, Inc., and the investors                          dated 4/19/96
            listed therein

       (l)  Lockbox Service Agreement dated as of August 25, 1995                            Form 10-K
            among Magnavision Corporation (N.J.), University                                 dated 4/19/96
            Connection, Inc., IBJS Whitehall Capital Corporation and IBJ
            Schroder Bank & Trust Company.

       (m)  Amendment No. 1 dated as of June 3, 1996 to                                      Form 10-K
            Securities Purchase Agreement dated as of August                                 dated 4/19/96
            25, 1995 among the Registrant, Magnavision
            Corporation (N.J.), Magnavision Wireless Cable, Inc.,
            IBJS Whitehall Capital Corporation, IBJ Schroder Bank & Trust
            Company and Koco Capital Company, L.P.
</TABLE>

                                      -34-
<PAGE>

<TABLE>
<CAPTION>

<S>         <C>                                                                              <C>
       (n)  Amended and Restated Stockholders' Agreement dated                               Form 10-K
            as of June 3, 1996 among the Registrant,                                         dated 4/19/96
            Magnavision Corporation (N.J.), Magnavision
            Wireless Cable, Inc. and the investors and
            other parties listed therein

       (o)  Amendment No. 1 dated as of June 3, 1996                                         Form 10-K
            to the Registration Rights Agreement dated as                                    dated 4/19/96
            of August 25, 1995 among the Registrant and
            the investors listed therein

       (p)  Amendment No. 1 dated as of June 3, 1996 to                                      Form 10-K
            the Security Agreement and Collateral Assignment                                 dated 4/19/96
            dated as of August 25, 1995 among Magnavision
            Corporation (N.J.) Magnavision Wireless Cable,
            Inc., Magnavision Private Cable, Inc., University
            Connection, Inc. and IBJS Whitehall Capital
            Corporation, as agent

       (q)  Amended and Restated Lockbox Service Agreement                                   Form 10-K
            dated as of June 3, 1996 among Magnavision                                       dated 4/19/96
            Corporation (N.J.), University Connection, Inc.,
            Magnavision Private Cable, Inc., IBJS Capital
            Corporation and IBJ Schroder Bank & Trust Company

       (r)  Pledge Agreement dated as of June 3, 1996 between                                Form 10-K
            Magnavision Corporation (N.J.) and IBJS Capital                                  dated 4/19/96
            Corporation as agent

       (s)  Pledge Agreement dated as of June 3, 1996 between                                Form 10-K
            Magnavision Corporation (N.J.) and IBJS Capital                                  dated 4/19/96
            Corporation as agent

       (t)  General Indenture of Conveyance, Assignment and                                  Form 10-K
            Transfer dated as of June 3, 1996 from Magnavision                               dated 4/19/96
            Corporation (N.J.) and University Connection, Inc.
            to Magnavision Private Cable, Inc.

       (u)  General Indenture of Conveyance, Assignment and                                  Form 10-K
            Transfer dated as of June 3, 1996 from Magnavision                               dated 4/19/96
            Corporation (N.J.) to Magnavision Wireless Cable, Inc.

       (v)  Indenture of Assumption of Liabilities dated                                     Form 10-K
            as of June 3, 1996 from Magnavision Private                                      dated 4/19/96
            Cable, Inc. to Magnavision Corporation (N.J.) and
            University Connection, Inc.
</TABLE>
                                      -35-
<PAGE>

<TABLE>
<CAPTION>

<S>         <C>                                                                              <C>
       (w)  Indenture of Assumption of Liabilities dated                                     Form 10-K
            as of June 3, 1996 from Magnavision Wireless                                     dated 4/19/96
            Cable, Inc. to Magnavision Corporation (N.J.)

       (x)  Irrevocable Proxy dated June 3, 1996 issued by                                   Form 10-K
            Magnavision Corporation (N.J.) to IBJS Capital                                   dated 4/19/96
            Corporation as agent

       (y)  Form of Amended and Restated Senior Subordinated                                 Form 10-K
            Notes dated June 3, 1996                                                         dated 4/19/96

       (z)  Form of Warrant to Purchase Shares of Registrant's                               Form 10-K
            Common Stock expiring on June 4, 2004                                            dated 4/19/96

       (aa) Letter Agreement dated July 11, 1995 between the                                 Form 10-K
            Registrant, Cacomm, Inc. and George S. Callas                                    dated 4/19/96

       (bb) Letter Agreement dated August 25, 1995 among the                                 Form 10-K
            Registrant, Midlantic Bank, N.A. and George S. Callas                            dated 4/19/96

       (cc) Letter Agreement dated April 3, 1997 between the                                 Form 10-K
            Registrant, KOCO Capital Company, L.P. and IBJS                                  dated 4/19/96
            Capital Corporation

       (dd) Form of Indemnification Agreement for executive officers and                     Form 10-K
            directors                                                                        dated 6/5/98

       (ee) Exchange Agreement dated May 8, 1997 among the Registrant and                    Form 10-K
            the investors listed therein.                                                    dated 6/5/98

       (ff) Stockholders Agreement dated May 8, 1997 among the Registrant                    Form 10-K
            and the other parties listed therein.                                            dated 6/5/98

       (gg) Registration Rights Agreement dated May 8, 1997 among the                        Form 10-K
            Registrant and the other parties listed therein.                                 dated 6/5/98

       (hh) Warrant to purchase shares of Common Stock dated May 8, 1997                     Form 10-K
            among the Registrant and the other parties listed therein                        dated 6/5/98

       (ii) Employment Agreements dated May 8 1997 between the                               Form 10-K
            Registrant and Nicholas Mastrorilli, Sr., Nicholas Mastrorilli, Jr.,             dated 6/5/98
            and Patrick Mastrorilli, respectively.

       (jj) Management Agreement dated May 8, 1997 between the                               Form 10-K
            Registrant and KOCO Capital Company, L.P.                                        dated 6/5/98

       (kk) Common Stock Purchase Warrant dated September 10, 1997                           Form 10-K
            issued by the Registrant to the Lender listed therein.                           dated 6/5/98
</TABLE>
                                      -36-
<PAGE>

<TABLE>
<CAPTION>

<S>         <C>                                                                              <C>
       (ll)   Loan and Security Agreement dated September 10, 1997 by                        Form 10-K
              and among the Registrant, Access Capital, Inc. and the other                   dated 6/5/98
              parties listed therein.

       (mm)   Resignation letter from Nicholas Mastrorilli, Sr. to the Registrant            Form 10-K
              dated January 8, 1998.                                                         dated 6/5/98

       (nn)   Employment Agreement dated January 9, 1998 between the                         Form 10-K
              Registrant and IMCOR concerning Robert E. Hoffman.                             dated 6/5/98

       (oo)   Letter from Cacomm, Inc. to the Registrant dated April 24,1998.                Form 10-K
                                                                                             dated 6/5/98
       (pp)   Form of Promissory Note of the Company to BSB Bank & Trust Company
              Dated July 3, 1998

       (qq)   Form of Loan Agreement dated as of July 3, 1998 between the Company and        Form 10-K
              BSB Bank & Trust Company                                                       dated 4/6/99

       (rr)   Form of Commercial Security Agreement dated July 3, 1998 between the           Form 10-K
              Company and BSB Bank & Trust Company                                           dated 4/6/99

       (ss)   Form of Commercial Pledge and Security Agreement between the                   Form 10-K
              Company and BSB Bank & Trust Company dated July 3, 1998                        dated 4/6/99

       (tt)   Form of Warrant to purchase shares of the Company's Common Stock               Form 10-K
              expiring on July 3, 2008                                                       dated 4/6/99

       (uu)   Form of Non-Qualified Stock Option Plan of 1999 date as of
              January 19, 1999.

       (vv)   Form of Asset Purchase Agreement between Lamont Television Systems,
              Inc., and Magnavision Corporation dated as of February 29, 2000.
</TABLE>

(21)   Subsidiaries of Registrant


                                   SIGNATURES

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

                                              MAGNAVISION CORPORATION


DATE: April 14, 2000                          By: /s/ Robert E. Hoffman
                                                  ------------------------
                                                  ROBERT E. HOFFMAN
                                                  Principal Executive Officer

                                      -37-

<PAGE>


                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                        Page
                                                                                                        ----
<S>                                                                                                        <C>
Report of Independent Auditors ....................................................................      F-1

Consolidated Balance Sheets as of December 31, 1999 and 1998 ......................................      F-2

Consolidated Statements of Operations for years ended
December 31, 1999, 1998 and 1997 ..................................................................      F-3

Consolidated Statements of Stockholders' Deficiency for years ended December 31, 1999,
1998 and 1997 .....................................................................................      F-4

Consolidated Statements of Cash Flows for years ended December 31, 1999, 1998 and 1997 ............      F-5

Notes to Consolidated Financial Statements ........................................................      F-6
</TABLE>

<PAGE>

                          Independent Auditors' Report



The Board of Directors and Shareholders
Magnavision Corporation


We have audited the accompanying consolidated balance sheets of Magnavision
Corporation and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' deficiency, and cash flows
for each of the years in the three-year period ended December 31, 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 estimate 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Magnavision
Corporation and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999 in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in note 1 to the
consolidated financial statements, the Company has suffered recurring losses
from operations, and has a shareholders' deficiency which raises substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are described in note 1. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

                                              /s/ KPMG LLP

Short Hills, New Jersey
February 25, 2000, except as to note 17,
which is as of March 30, 2000


                                      F-1

<PAGE>

MAGNAVISION CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER  31,1999 AND 1998
<TABLE>
<CAPTION>
ASSETS                                                                              1999            1998
                                                                                ----------        ----------
<S>                                                                            <C>               <C>
CURRENT ASSETS
     Cash                                                                       $  230,017        $  227,091
     Trade accounts and other receivables                                          382,045           276,203
     Notes receivable from customer                                                441,271           467,000
     Shareholder loans receivable                                                   20,000            38,707
     Prepaid expenses and other current assets                                      33,428             1,986
                                                                                ----------        ----------
          Total current assets                                                   1,106,761         1,010,987
                                                                                ----------        ----------
PROPERTY AND EQUIPMENT
     Property and equipment, at cost                                             3,175,990         3,077,185
     Less:  accumulated depreciation                                            (1,657,176)       (1,122,022)
                                                                                ----------        ----------
          Net property and equipment                                             1,518,814         1,955,163

OTHER ASSETS
     Notes receivable from customer, net of current portion                             --           441,271
     Prepaid lease expense                                                         436,748           543,716
     Deposits                                                                        1,990             2,339
                                                                                ----------        ----------

TOTAL ASSETS                                                                    $3,064,313        $3,953,476
                                                                                ==========        ==========
LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
     Accounts payable                                                              $97,127          $212,390
     Accrued expenses                                                              165,385           169,384
     Deferred revenues                                                             369,765           354,596
     Current portion of long-term debt                                           1,794,000           640,642
     Line of credit                                                                250,000                --
     Term loans due to stockholders                                                105,468                --
                                                                                ----------        ----------
          Total current liabilities                                              2,781,745         1,377,012

Security deposits payable                                                          176,692           172,303
Long-term debt, net of current portion                                                  --         1,899,468

Commitments and contingencies

Series A Preferred Stock, $1 par value, 9,850,000
       shares authorized; issued and outstanding, 5,000,000
       shares, net of unamortized discount and including
       accumulated dividend                                                      4,683,642         4,591,049

Series A Preferred Stock accumulated dividend                                    1,057,778                --

SHAREHOLDERS' DEFICIENCY
     Series B Preferred Stock, $1 par value , 150,000 shares                       131,889           131,889
         authorized; issued and outstanding, 131,889 shares.
     Common Stock, $0.08 par value, 10,000,000 shares
          authorized; issued and outstanding, 1,168,931 shares
          at December 31,1999 and 1,154,390 shares at December 31, 1998             93,513            92,350
     Additional paid-in capital                                                  3,911,617         3,880,601
     Accumulated deficit                                                        (9,772,563)       (8,191,196)
                                                                                ----------        ----------
Total shareholders' deficiency                                                  (5,635,544)       (4,086,356)
                                                                                ----------        ----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                                  $3,064,313        $3,953,476
                                                                                ==========        ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       F-2

<PAGE>

MAGNAVISION CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,1999, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                                   1999             1998            1997
                                                                                ----------       ----------      ----------
<S>                                                                             <C>             <C>             <C>
REVENUES
     Gross revenues                                                             $2,962,016       $3,652,389      $1,607,049
     Cost of sales                                                                 994,491        1,817,546         677,565
                                                                                ----------      -----------     -----------
     GROSS PROFIT                                                                1,967,525        1,834,843         929,484
     Salaries                                                                      765,041          715,064         627,356
     Depreciation                                                                  550,357          382,289         197,198
     General and administrative expenses                                           858,279        1,001,655       1,010,277
                                                                                ----------      -----------     -----------
TOTAL OPERATING EXPENSES                                                         2,173,677        2,099,008       1,834,831
OPERATING LOSS                                                                    (206,152)        (264,165)       (905,347)
OTHER INCOME (EXPENSE)
     Interest expense                                                             (237,647)        (184,425)       (280,546)
     Interest income                                                                30,954           25,032          35,824
     Other                                                                              --               --           1,529
                                                                                ----------      -----------     -----------
          Total other income (expense)                                            (206,693)        (159,393)       (243,193)
LOSS BEFORE PROVISION FOR INCOME TAXES AND EXTRAORDINARY ITEM                     (412,845)        (423,558)     (1,148,540)
PROVISION FOR INCOME TAXES                                                           5,371            4,851           3,989
                                                                                ----------      -----------     -----------
LOSS BEFORE EXTRAORDINARY ITEM                                                    (418,216)        (428,409)     (1,152,529)
EXTRAORDINARY ITEM -LOSS ON EXTINGUISHMENT OF DEBT                                      --          165,779         275,844
                                                                                ----------      -----------     -----------
NET LOSS                                                                          (418,216)        (594,188)     (1,428,373)
                                                                                ----------      -----------     -----------
Preferred stockholders dividend requirement                                        400,000          400,000         257,778
Accretion of preferred stock                                                        92,593           92,593          54,012
                                                                                ----------      -----------     -----------
Net loss to common stockholders                                                  ($910,809)     ($1,086,781)    ($1,740,163)
                                                                                ----------      -----------     -----------
Net loss per common share basic and diluted:
Loss from continuing operations                                                     ($0.79)          ($0.80)         ($1.27)
Extraordinary item - loss on extinguishment of debt                                     --           ($0.14)         ($0.24)
Net loss per common share: basic                                                    ($0.79)          ($0.94)         ($1.51)
Weighted average common shares used to compute net loss per share:
Basic and diluted                                                                1,157,005        1,154,354       1,152,504

</TABLE>

See accompanying notes to consolidated financial statements.                 F-3
<PAGE>

MAGNAVISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                             Series B
                                                                          Preferred Stock                  Common Stock
                                                                      Shares          Amount         Shares            Amount
                                                                    -------------------------       --------------------------
<S>                                                                 <C>                <C>                <C>          <C>
Balance, December 31,1996                                                  --              --       1,152,222          $92,178
Common stock issued                                                        --              --             354               28
Conversion of shareholder loan to Series B Preferred Stock            131,889         131,889
Allocation to warrants issued
Purchase of fractional shares                                                                             (66)              (6)
Net loss
Accretion of preferred stock
                                                                    ---------        --------       ---------          -------
Balance, December 31, 1997                                            131,889         131,889       1,152,510           92,200

Common stock issued                                                                                     1,880              150
Net loss
Accretion of preferred stock
                                                                    ---------        --------       ---------          -------
Balance, December 31, 1998                                            131,889         131,889       1,154,390           92,350
Common stock issued  upon the exercise of stock options                                                16,154            1,292
Repurchase and retirement of common stock                                                              (1,613)            (129)
Series A Preferred Stock accumulated dividend
Net loss
Accretion of preferred stock
                                                                    ---------        --------       ---------          -------
Balance, December 31, 1999                                            131,889        $131,889       1,168,931          $93,513
</TABLE>

[RESTUB]

<TABLE>
<CAPTION>
                                                                    Additional                               Total
                                                                     Paid in           Accumulated        Stockholders'
                                                                     Capital              Deficit           Deficiency
                                                                    ----------         ------------       -------------
<S>                                                                        <C>               <C>                <C>
Balance, December 31,1996                                           $3,321,207          ($6,022,030)      ($2,608,645)
Common stock issued                                                        679                   --               707
Conversion of shareholder loan to Series B Preferred Stock                                                    131,889
Allocation to warrants issued                                          555,556                                555,556
Purchase of fractional shares                                             (451)                                  (457)
Net loss                                                                                 (1,428,373)       (1,428,373)
Accretion of preferred stock                                                                (54,012)          (54,012)
                                                                    ----------          -----------        ----------
Balance, December 31, 1997                                           3,876,991           (7,504,415)       (3,403,335)

Common stock issued                                                      3,610                                  3,760
Net loss                                                                                   (594,188)         (594,188)
Accretion of preferred stock                                                                (92,593)          (92,593)
                                                                    ----------          -----------        ----------
Balance, December 31, 1998                                           3,880,601           (8,191,196)       (4,086,356)
Common stock issued  upon the exercise of stock options                 31,016                                 32,308
Repurchase and retirement of common stock                                                   (12,780)          (12,909)
Series A Preferred Stock accumulated dividend                                            (1,057,778)       (1,057,778)
Net loss                                                                                   (418,216)         (418,216)
Accretion of preferred stock                                                                (92,593)          (92,593)
                                                                    ----------          -----------        ----------
Balance, December 31, 1999                                          $3,911,617          ($9,772,563)      ($5,635,544)

</TABLE>

See accompanying notes to consolidated financial statements.                 F-4

<PAGE>

MAGNAVISION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                                        1999            1998              1997
                                                                                     ---------        ---------       -----------
<S>                                                                                 <C>               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss                                                                        (418,216)        ($594,188)      ($1,428,373)
     Adjustments to reconcile net loss to net cash used in operating activities
         Extraordinary item                                                                --           165,779           275,844
          Depreciation and amortization                                               550,357           382,289           197,198
          Amortization of deferred financing costs                                         --            31,123            80,475
          Amortization of channel lease prepayments                                   106,968           106,968           106,968
          Changes in assets and liabilities:
               Increase in trade accounts and
                     other receivables                                               (105,842)          (39,828)          (80,123)
               Increase (decrease) in deferred revenues                                15,169           140,106            39,142
               (Increase) decrease in prepaid expenses and other current assets       (31,442)            6,530              (457)
               Decrease in deposits                                                       349             2,214               133
               Increase (decrease) in accounts payable                               (115,263)           22,291           206,769
               (Decrease) increase in accrued expenses                                 (3,999)           32,768            12,579
               (Decrease) increase in accrued severance payment                            --          (117,000)          117,000
               Decrease (increase) in note receivable from customer                   467,000          (908,271)               --
               Increase  in security deposits payable                                   4,389            20,238            25,679
               (Decrease) income taxes payable                                             --              (741)               --
                                                                                   ----------        ----------        ----------
                    Net cash provided by (used in) operating activities               469,470          (749,723)         (447,166)

CASH FLOWS FROM INVESTING ACTIVITIES
              Decrease shareholder loans receivable                                     5,798             5,103               351
              Purchases of property and equipment                                    (114,008)       (1,141,275)         (674,671)
                                                                                   ----------        ----------        ----------
                    Net cash used in investing activities                            (108,210)       (1,136,172)         (674,320)

CASH FLOW FROM FINANCING ACTIVITIES
     Payments of long-term debt                                                      (640,642)           (3,624)           (3,983)
     Decrease in due to shareholders                                                       --                --            (8,000)
     Proceeds from issuance of preferred stock, net                                        --                --           863,811
     Proceeds from issuance of common stock                                            32,308             3,760               707
     Proceeds from issuance debt                                                      250,000         2,428,000           405,295
     Payment of access capital line of credit, including penalty                           --          (456,696)               --
     Payment of financing fees                                                             --                --          (158,637)
     Purchase of common stock                                                              --                --              (457)
                                                                                   ----------        ----------        ----------
                    Net cash provided by (used in) financing activities              (358,334)        1,971,440         1,098,736
                           Net increase (decrease) in cash                              2,926            85,545           (22,750)
    Cash beginning of year                                                            227,091           141,546           164,296
                                                                                   ----------        ----------        ----------
    Cash end  of year                                                                $230,017          $227,091          $141,546
                                                                                   ==========        ==========        ==========

Supplemental schedule of cash paid during year for :
Interest                                                                             $230,093           $91,129           $84,161
Income tax                                                                             $5,371            $4,851            $3,989

NON CASH ITEMS:
Series A Preferred Stock accumulated dividend                                      $1,057,778                --                --
Repayment of shareholder loan recievable with common stock                            $12,909                --                --
Exchange of senior debt to redeemable preferred stock                                      --                --        $4,062,932
Conversion of senior debt accrued interest to term loan                                    --                --          $105,468
Conversion of amounts due to shareholder to preferred stock                                --                --          $131,889
Value assigned to warrants issued                                                          --                --          $555,556
</TABLE>
See accompanying notes to consolidated financial statements.                 F-5

<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


NOTE 1 - OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

     a. Consolidated Financial Statements - The accompanying financial
        statements present the consolidated accounts of Magnavision Corporation,
        a Delaware corporation (formerly Yardley Ventures, Inc.), and its wholly
        owned subsidiary, Magnavision Corporation, a New Jersey corporation, and
        its wholly owned subsidiaries, University Connection, Inc., a New Jersey
        corporation, Accu-Trek, Inc., a New Jersey corporation and Magnavision
        Laboratories, Inc., a Delaware corporation (collectively "the Company").
        As required by the amended senior debt agreement of June 4, 1996,
        Magnavision Corporation, a New Jersey corporation, formed two additional
        wholly owned subsidiaries, Magnavision Private Cable, Inc., established
        to hold the private cable contracts and Magnavision Wireless Cable,
        Inc., established to hold the wireless lease. The consolidated financial
        statements include all of the assets, liabilities, income, expenses and
        cash flows for these companies. All significant intercompany
        transactions and balances have been eliminated in consolidation.
        Effective at the end of June 1998, the Company merged Accu-Trek, Inc.
        and University Connection, Inc. into Magnavision Corporation (New
        Jersey). These subsidiaries had no assets, liabilities or operations
        and, therefore, the transaction had no impact on the Company's
        consolidated financial statements.

     b. Organization, Operations and Liquidity - Magnavision Corporation was
        incorporated in Delaware on April 3, 1986 to seek to acquire one or more
        potential businesses. Magnavision Corporation and its subsidiaries were
        established to conduct the business of providing wireless and private
        cable television, which is now the business purpose of the Company, to
        segments where cable television is not available and as an alternative
        to cable television. Magnavision Corporation of New Jersey was formed on
        June 15, 1989, pursuant to the laws of the State of New Jersey. As a
        result of the amended lending agreement, the Company created two new
        subsidiaries, Magnavision Private Cable and Magnavision Wireless Cable.

        The accompanying consolidated financial statements have been prepared
        assuming the Company will continue as a going concern, which
        contemplates the realization of assets and the satisfaction of
        liabilities in the normal course of business. However, the Company has
        suffered recurring losses from operations and has a shareholders'
        deficiency at December 31, 1999. The funds received from the sale of the
        assets of the Private Cable business (see Note 17) are not sufficient to
        execute its current Wireless business plan. The Company will require
        additional funding in order to execute its Wireless business plan.

                                      F-6
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


        If the Company can not execute the sale of its Wireless assets, or a
        restructuring of the Company, the Company will have insufficient
        liquidity to pay the preferred stock dividend and preferred stock and
        may experience liquidity shortfalls in meeting its ongoing obligations.

        The Company plans to meet short-term liquidity requirements with the
        funds received from the sale of the Private Cable business. On a
        long-term basis for its Wireless business plan, the Company is currently
        seeking long-term arrangements with a strategic partner(s) for financing
        or a sale of the lease. This business plan is dependent upon the Company
        securing the necessary capital resources, as well as engineering and
        other expertise required to offer this alternative service. There can be
        no assurance that the Company will be able to secure financing or a
        strategic relationship or partnership or sale on terms and conditions
        satisfactory to the Company, if at all.

        Failure to obtain such financing and the expertise required to develop
        the wireless business plan or the sale of the lease would have a
        significant impact on the Company's future performance.

        Also, there can be no assurance that, even with financing and receipt of
        necessary regulatory authorization, the Company will be able to launch
        this wireless alternative service or that it will be commercially
        successful.

     c. Property and Equipment - Property and equipment are stated at cost.
        Depreciation, for financial reporting purposes, is provided on the
        straight-line method over the estimated useful lives of the related
        assets, which are:


                Office Equipment          5 years
                Furniture and Fixtures    10 years
                Transportation Equipment  5 years
                Machinery and Equipment   5 to 10 years

        The Company uses accelerated methods and lives, as allowed by the
        Internal Revenue Code, to calculate depreciation for income tax
        purposes.

     d. Revenue Recognition - Revenue is recognized as services are provided to
        subscribers. The Company records subscriptions received in advance of
        the service being provided as deferred revenue.

                                      F-7
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997



     e. Income Taxes - Deferred tax assets and liabilities are recognized for
        the expected tax consequences of temporary differences between the
        financial statement carrying amount of existing assets and liabilities
        and their respective tax bases and operating loss and tax credit carry
        forwards.

        Deferred tax assets and liabilities are measured using enacted tax rates
        expected to apply to taxable income in the years in which those
        temporary differences are expected to be recovered or settled. The
        effect on deferred tax assets and liabilities of a change in tax rates
        is recognized in income in the period that the tax rate changes.

     f. Use of Estimates - Management of the Company has made a number of
        estimates and assumptions relating to the reporting of assets and
        liabilities and revenue and expenses and the disclosure of contingent
        assets and liabilities to prepare these consolidated financial
        statements in conformity with generally accepted accounting principles.
        Actual results could differ from these estimates.

     g. Fair Value of Financial Instruments - Statement of Financial Accounting
        Standards No. 107, "Disclosures about Fair Value of Financial
        Instruments" ("SFAS 107"), requires disclosure of fair value information
        about financial instruments, whether or not recognized in the balance
        sheet, for which it is practicable to estimate that value. In many
        cases, fair value estimates cannot be substantiated by comparison to
        independent market information and could not be realized in immediate
        settlement of the instrument. SFAS 107 excludes certain financial
        instruments and all nonfinancial instruments from its disclosure
        requirements.

        Accordingly, the aggregate fair value amounts presented may not
        represent the underlying value of the Company. In Management's opinion,
        cash, trade accounts receivables, shareholder loans receivable, notes
        receivable from customers, deposits, accounts payable, accrued expenses
        and deferred revenue equal or approximate fair market value due to their
        current nature. The long-term debt, term loans and line of credit are at
        market rates, which equal or approximate fair value. The fair value of
        the prepaid lease expense exceeds its carrying value.


                                      F-8

<PAGE>


                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997



     h. Impairment of Long-Lived Assets - The Company reviews long-lived assets
        and certain identifiable intangibles for impairment whenever events or
        changes in circumstances indicate that the carrying amount of an asset
        may not be recoverable. Recoverability of assets to be held and used is
        measured by a comparison of the carrying amount of an asset to future
        net cash flows expected to be generated by the asset. If such assets are
        considered to be impaired, the impairment to be recognized is measured
        by the amount by which the carrying amount of the assets exceeds the
        fair value of the assets. Assets to be disposed of are reported at the
        lower of the carrying amount or fair value less costs to sell.

     i. Prepaid Lease Expense - Prepaid lease expense represents the Company's
        deposit relating to the Channel Lease Agreement (see note 8). The amount
        is being amortized over the term of the lease agreement.

     j. Deferred Financing Costs - Deferred financing costs at December 31, 1997
        represented expenditures relating to the Access Capital, Inc. debt
        financing (see note 10). The amount was being amortized over the term of
        the loan and security agreement and was expensed as an extraordinary
        item in 1998.

     k. Earnings Per Share of Common Stock - Basic and diluted net loss per
        common share is presented in accordance with SFAS No. 128, "Earnings Per
        Share" ("SFAS 128"). Basic net loss per common share excludes dilution
        for common stock equivalents and is computed by dividing net loss
        available to common shareholders by the weighted average number of
        common shares outstanding for the period. Diluted net loss per common
        share reflects the potential dilution that would occur if securities or
        other contracts to issue common stock were exercised. Diluted net loss
        per common share is equal to basic net loss per common share since all
        common stock equivalents are anti-dilutive for each of the periods
        presented.

     l. Stock Based Compensation - Stock based compensation is recognized using
        the intrinsic value method in accordance with the provisions of
        Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
        to Employees" ("APB 25"), and related interpretations. For disclosure
        purposes, net loss and net loss per share data included in note 5 are
        provided in accordance with Statement of Financial Accounting Standards
        No. 123, "Accounting for Stock-based Compensation" ("SFAS 123"), as if
        the fair value method had been applied.


                                      F-9
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


NOTE 2 - RELATED PARTY TRANSACTIONS-CONFLICTS OF INTEREST

The following transactions occurred between the Company and related parties:

     a. Shareholder loans receivable of $20,000 and $38,707 at December 31, 1999
        and 1998 are payable on demand and are interest free. During 1999, a
        shareholder repaid his outstanding loan of $12,909 by surrendering 1,613
        shares of the Company's common stock to the company.

     b. In May 1997, the Company's majority shareholder converted its payables
        of $131,889 to Series B Preferred Stock. Previously this was recorded as
        a current liability.

     c. The Company has been informed that Cacomm, Inc., the Company's majority
        shareholder, is a partner in a general partnership known as the Grand
        MMDS Alliance. The Grand MMDS Alliance claims to hold the licenses to
        certain MMDS channels as a designated selectee of the FCC. These
        channels cover similar broadcast areas as the Company and the
        possibility exists that the Grand MMDS Alliance could commence business
        in direct competition with the Company. The Company has no reliable
        information as to whether the Grand MMDS Alliance has commenced business
        operations as of the date of this report.

     d. During 1997, the prior lenders converted their accrued interest in the
        amount of $105,468 to one year notes at 10% interest, with interest and
        principal originally payable May 8, 1998. The preferred stockholders
        agreed to extend the maturity of the above-mentioned notes to May 8,
        2000.

NOTE 3 - STOCK OPTION PLAN

During the first quarter of 1999, Magnavision adopted a non-qualified stock
option plan ("the Plan"). Under this Plan, options may be granted at a price
equal to or less than the fair market value of the Company's stock at the date
of the grant. Options granted under the Plan are exercisable at various dates
specified in the underlying option. The options expire three months after
termination of employment with the Company. Under the Plan, options to purchase
an aggregate of not more than 349,986 shares of common stock may be granted from
time to time to key employees, including officers, advisors, and independent
consultants or to any other persons. Under the Exchange Agreement (a copy which
was filed with the Company's 10K for the year ending December 31, 1997) and when
the Plan was adopted, options were also to be granted to certain employees under
the Plan. Also under a letter agreement, the President and C.E.O. was to receive
150,000 options at an exercise price of $1.00. As of January 19, 1999, the
compensation committee awarded or caused to be issued 223,974 options including:
150,000 options to the President and CEO at an exercise price of $1.00, and
43,974 options issued pursuant to the Company's obligation under the Exchange
Agreement at an exercise price of $2.00 per share and awarded 30,000 options to
various employees at an exercise price of $2.00 per option.

                                      F-10
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


The Company accounts for stock options issued to employees under APB 25 as
permitted by SFAS 123 under which no compensation cost has been recognized for
the options granted as they were issued above fair market value.

Summary of stock option activity is as follows:
                                                                Weighted-average
                                      Shares under option        exercise price
--------------------------------------------------------------------------------
Granted                                      223,974                  $1.33
Terminated                                      -                         -
Exercised                                     16,154                  $2.00
                                             -------                  -----
Balance at December 31, 1999                 207,820                  $1.28


The following is a summary of options outstanding and exercisable at December
31, 1999.

<TABLE>
<CAPTION>
                      Options Outstanding                                          Options Exercisable
-----------------------------------------------------------------    ------------------------------------------------
Range of          Number outstanding at       Weighted-average       Weighted-   Number exercisable at    Weighted-
exercise prices     December 31, 1999       remaining contractual      average      December 31, 1999       average
                                                    life              exercise                             exercise
                                                                        price                                price
------------------------------------------------------------------   ------------------------------------------------
<S>                    <C>                       <C>                  <C>                 <C>                <C>
   $1.00               150,000                   9 years              $ 1.00              150,000            $1.00
    2.00                57,820                   9 years                2.00               37,820             2.00
    ----               -------                   -------              ------              -------            -----
$1.00-$2.00            207,820                   9 years              $ 1.28              187,820            $1.20
</TABLE>

The Company applies APB 25 in accounting for its Plan and, accordingly,
compensation cost for stock options is measured as the excess, if any, of the
quoted market price at the date of the grant over the exercise price. Because
the Company grants options at a price equal to or greater than the fair market
value of the stock at the date of grant, no compensation is recorded. Had the
Company determined compensation cost based on the fair market value at the grant
date consistent with the provision of SFAS 123, the Company's net loss to common
shareholders would have been increased to the pro forma amounts indicated below:

                                                   1999
                                                   ----
Net loss
    As reported                                  $910,808
    Pro forma                                   1,011,057
Net loss per common share Basic:
    As reported                                      (.79)
    Pro forma                                        (.87)

                                      F-11
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


The pro forma amounts as noted above may not be representative of the effects on
reported earnings for future years. Pro forma net loss per common shareholder
reflects only options granted in 1999.

The weighted average fair value of the stock options granted during the year
ended 1999 was $.49 on the date of grant using the Black Scholes option pricing
model with the following assumptions: for 1999 - expected dividend yield 0.0%,
risk free interest rate of 4.5 %, expected volatility of 70% and expected life
of 5 years.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1999 and 1998 are summarized by major
classification as follows:

                                                    1999               1998
                                                    ----               ----
        Office Furniture and Equipment           $   74,445        $   73,683
        Transportation Equipment                     24,879            37,582
        Machinery and Equipment                   3,076,666         2,965,920
                                                -----------       -----------
                                                 $3,175,990        $3,077,185
        Less:  Accumulated Depreciation          (1,657,176)       (1,122,022)
                                                -----------       -----------
                                                 $1,518,814        $1,955,163
                                                ===========       ===========

Depreciation expense was $550,357 in 1999 and $382,289 in 1998.

Machinery and equipment relate principally to assets owned by the Company
located at the various colleges and nursing home sites serviced by the Company.

NOTE 5 - INCOME TAXES

Income tax expense attributable to loss before provision for income taxes and
extraordinary item:

        Current

        Year ended December 31,         1999            1998               1997
                                        ----            ----               ----
        Federal                        $    0          $    0             $    0
        State                           5,371           4,851              3,989
                                       ------          ------             ------

        TOTAL                          $5,371          $4,851             $3,989
                                       ======          ======             ======

                                      F-12
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


Income tax expense attributable to loss before provision for income taxes and
extraordinary item differed from the amounts computed by applying the U.S.
Federal income tax rate of 34% to pretax income from operations as a result of
the following:

<TABLE>
<CAPTION>

                                                         1999                 1998                 1997
                                                         ----                 ----                 ----
<S>                                                   <C>                  <C>                  <C>
Computed expected tax benefit                         $(142,193)           $(202,024)           $(485,647)

Increase (reduction) in income taxes resulting from:

Increase in valuation allowance for
federal & state deferred tax assets                     124,570              180,794              462,815

Book vs. tax depreciation                                 7,709               11,310               19,200

State and local income taxes, net of
federal income tax benefit                                3,545                3,202                2,633

Non-deductible portion of meals and
entertainment                                             3,734                1,867                2,775

Other, net                                                8,006                9,702                2,213
                                                      ---------            ---------            ---------
                                                      $   5,371            $   4,851            $   3,989
                                                      =========            =========            =========
</TABLE>


                                      F-13
<PAGE>
                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997

The temporary differences and carry forwards which give rise to significant
portions of the deferred tax assets and liabilities at December 31, 1999 and
1998 are presented below:

<TABLE>
<CAPTION>

                                                                 1999                    1998
                                                                 ----                    ----
<S>                                                          <C>                     <C>
Deferred tax assets:
Net operating loss carry forwards                             $3,741,697              $3,359,823
Compensation paid with Company stock                              28,123                  28,123
Organization and construction costs capitalized for tax
purposes                                                         207,521                 256,359
Less valuation allowance                                      (3,955,681)             (3,622,645)
                                                              ----------              ----------
                                 Net deferred tax assets          21,660                  21,660
                                                              ----------              ----------

Deferred tax liabilities:
Property and equipment, principally due to differences
in depreciation                                                  (21,660)                (21,660)
                                                              ----------              ----------
Net deferred income taxes                                     $        -              $        -
                                                              ==========              ==========
</TABLE>

At December 31, 1999, the Company has net operating loss carry forwards for
federal income tax purposes of approximately $7,932,000 which are available to
offset future taxable income which expire in varying amounts through 2019.

The Company's ability to use such net operating losses is limited by change of
control provisions under the Internal Revenue Code section 382.

NOTE 6 - NOTES RECEIVABLE  FROM CUSTOMER

As part of the purchase of equipment by Fordham University for its data system
during 1998, Fordham issued non-interest bearing notes for $467,000 and $441,271
due May 15, 1999 and May 15, 2000, respectively. The $467,000 note was repaid
during 1999. These notes are secured by a security interest in the equipment at
the University for the data system.

NOTE 7 - LONG-TERM DEBT

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

Senior Debt                                          1999              1998
-----------                                          ----              ----
10% Term loan  (a)                                $1,794,000        $2,428,000
 BSB line of credit (a)                              250,000                 -
12.25% Term note due April 2000  (c)                       -             6,642
10% Note related to conversion  (b)                  105,468           105,468
                                                  ----------         ---------
                                                   2,149,468         2,540,110

Less current portion                              $2,149,468           640,642
                                                  ==========         ---------
Long-term debt                                             -        $1,899,468
                                                  ----------        ==========

                                      F-14

<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


     a. 10% Term BSB Bank & Trust Company Loan - On July 3, 1998, the Company
        and BSB Bank and Trust Company ("BSB") entered into an agreement to
        refinance the Company's existing credit line and supply working capital.
        Pursuant thereto, Magnavision borrowed the sum of $2.5 million dollars
        which bears interest at a fixed rate of 10% per annum and has a 5 year
        term. The loan requires monthly installments of interest, plus 9 monthly
        payments of principal, payable in arrears, in accordance with the agreed
        upon schedule starting October 1998. The loan was utilized to refinance
        existing debt (see Note 10) and the remaining approximate $1.9 million
        was used to finance the completion of outstanding contracts for private
        cable television service at various locations and to complete the
        Fordham University data distribution system and for working capital.

        BSB also granted the Company a $500,000 line of credit to be used for
        future installations of private cable systems and general corporate
        purposes. This line of credit has an interest rate of prime plus 1.5%,
        payable monthly, and matures in June 2000. The weighted average prime
        rate as of December 31, 1999 was 8%. Amounts outstanding on the line of
        credit at December 31, 1999 were $250,000. No amounts were outstanding
        on the line-of-credit as of December 31, 1998.

        In connection with the above transactions, BSB received 146,176 warrants
        to purchase approximately 4% of Magnavision's issued and outstanding
        capital stock on a fully diluted basis at an exercise price of $2.00 per
        share.

        Both the Term Loan and line of credit were paid off with the proceeds of
        the sale of the assets of the Private Cable system (see Note 17).

     b. 10% Note Related to Conversion - In 1997, the prior lenders converted
        their accrued interest in the amount of $105,468 to one year notes at
        10% interest, with interest and principal originally payable May 8,1998.
        The preferred stockholders agreed to extend the maturity of the
        above-mentioned notes to May 8, 2000. These notes were paid off with the
        proceeds of the sale of the assets of the Private Cable system. (see
        Note 17)

     c. 12.25% Term note due April 2000 - Note payable to financing company,
        payable in monthly installments of $436, including interest at 12.25%
        collaterilized by the vehicle. This note was paid in full during 1999.

                                      F-15
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997



NOTE 8 - COMMITMENTS & CONTINGENCIES

Operating Leases

The Company leases office space, equipment and automobiles for use in continuing
operations for terms of 2 years. Minimum lease payments over the remaining lease
terms are as follows:

                           2000                 $11,829
                           2001                     420
                                                -------
                                                $12,249
                                                =======

Rent expense under operating leases amounted to $28,464, $38,998 and $47,464 for
the years ended December 31, 1999, 1998 and 1997, respectively.

Change-of-Control Policies

During the third quarter of 1999, the Company adopted policies for the purpose
of retaining the services of its employees during a change-of-control of the
Company and paying severance to employees who are terminated as a result of a
change-of-control. The policies are limited in scope and duration, and are
effective only if there is a change-of-control prior to January 1, 2001. A
change-of-control is defined in the policies as any event that would be
reportable in Item 1(a) of SEC Form 8-K, including, without limitation, any
event that causes any person, directly or indirectly, to become the beneficial
owner of 50% or more of the securities ordinarily having the right to vote at
the election of directors of the Company or the sale of all or substantially all
of the Company's assets or the assets of a wholly owned subsidiary.

The change-of-control policy for non-officer employees calls for both retention
pay and severance pay. The amount of retention incentive pay is up to three
months base pay for each eligible employee. The amount of severance pay is up to
nine months base pay for each eligible employee with three or more years of
service and up to six months base pay for each eligible employee with more than
one year of service.

The change-of control policy for employees who are corporate officers, with the
exception of the President and C.E.O. who has a separate plan, provides for
severance pay in an amount up to 12 months base pay for each eligible employee
and immediate vesting of all issued and outstanding stock options, subject to
certain limitations.

The change-of-control agreement for the President and C.E.O. provides for
severance pay in an amount equal to 12 months of base pay upon a
change-of-control prior to June 1, 2000.

NOTE 9 - LICENSE AGREEMENT

On August 20, 1990, the Company entered into an agreement with the Department of
Education, Archdiocese of New York ("the Archdiocese") which would permit the
Company to use the transmission capacity of the Archdiocese. The agreement,
which was amended in January 1994, grants the Company a lease through January
2004 with a right to extend for an additional five years and a right of first
refusal for subsequent renewals.

Pursuant to the agreement, the Company must also pay to the Archdiocese a
royalty fee for the use of the Transmission Capacity, in accordance with the
terms and amounts described in the amended agreement. In connection with the
amended agreement the Company had a contingent obligation to fund the
reconstruction of the Archdiocese's system and deposited $900,277 in an escrow
account for the purpose of system reconstruction upgrades. The Company recorded
the deposit as prepaid lease expense and is amortizing the amount over the life
of the agreement through January 2004.

                                      F-16
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997



At December 31, 1999, the minimum royalty payments over the remaining license
term are as follows:
                               For the Year Ended

                             2000            221,568
                             2001            221,568
                             2002            221,568
                             2003            221,568
                             2004             18,464
                                           ---------
                                           $ 904,736
                                           =========

                                      F-17

<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


NOTE 10 - NET LOSS PER SHARE

The Company computes basic and diluted earnings per share in accordance with
SFAS 128 "earnings per share" The table reconciles the numerator and denominator
of the basic earnings per share computations shown on the consolidated
statements of operations.

<TABLE>
<CAPTION>

For the years ended December 31,            1999            1998             1997
                                            ----            ----             ----
<S>                                     <C>              <C>             <C>
Basic and diluted EPS
      Numerator:
      Extraordinary loss from early
         extinguishment of debt          $       0       $  165,779      $   275,844
      Net loss                            (418,216)        (594,188)      (1,428,373)
Redeemable preferred
      stockholders dividend                400,000          400,000          257,778
Accretion of preferred stock                92,593           92,593           54,012
                                         ---------       ----------      -----------
      Net loss to common stockholders     (910,809)      (1,086,781)      (1,740,163)
                                         =========       ==========      ===========

Denominator:
      Weighted average
      Common shares outstanding          1,157,005        1,154,354        1,152,504

      Basic and diluted EPS                  ($.79)           ($.94)          ($1.51)

</TABLE>

      Warrants and stock options to purchase 2,486,860, 2,279,040 and 2,134,774
      of common stock outstanding as of December 31, 1999, 1998 and 1997,
      respectively, were excluded from the calculation of diluted net loss per
      share as the effect of their inclusion would have been anti-dilutive.

NOTE 11 - ACCESS CAPITAL, INC. LINE OF CREDIT

In September 1997, the Company and Access Capital, Inc. agreed to a $1,250,000
three-year revolving line of credit to be used to expand the Company's private
cable business. Interest was payable at prime rate plus five and one-half
percent and all outstanding amounts were payable in September 2000. The line was
secured with the lender by a pledge of private cable contracts and all other
Company assets. In addition, the lender received 138,536 warrants at an exercise
price of $2.00 per share to purchase approximately 4% of the Company's stock on
a fully diluted basis. The warrants contain a put and call option in the event
that the Company sells a significant asset. The put option requires the Company
to purchase a percentage of the lender's warrants as required by a formula
outlined in the amended agreement.

This option can only be exercised upon the sale of a significant asset of the
Company or change of control. Conversely, the call option allows the Company to
purchase all the outstanding warrants at a price set by the formula stated
above. The cost of either the put or call option can not be determined at this
time since it is based upon the value of a sale of a significant asset which
cannot be assured.

The Company paid off this loan with the proceeds of the BSB Bank & Trust loan on
July 3, 1998 as discussed in note 6. The Company incurred a penalty in
connection with this termination. The penalty, together with the write-off of
the unamortized deferred financing costs, has been classified as an
extra-ordinary item in the accompanying 1998 consolidated statement of
operations. The Warrant remains outstanding and expires May 8, 2008.

                                      F-18
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


NOTE 12 - EXCHANGE OF DEBT TO REDEEMABLE PREFERRED STOCK

In August 1995, the Company obtained a $5,000,000 senior subordinated lending
facility from IBJ Schroder Bank & Trust Co., IBJS Whitehall Capital Corporation
(collectively "IBJS") and KOCO Capital Company, L.P. ("KOCO").

On May 8, 1997, the Company agreed with its lenders to exchange its senior
subordinated notes into redeemable preferred stock. Under the terms thereof, the
Company's outstanding subordinated notes, aggregating approximately $4.1 million
and the balance under the line together with accrued interest and detachable
warrants, were exchanged for $5 million of 8% redeemable preferred stock due
December 31, 2002.

In addition, the note holders received 1,826,932 warrants to purchase up to 58%
of the common stock on a fully diluted basis at an exercise price of $2.00 per
share after the Company effected a 1-for-20 reverse stock split, and have the
right, which they have exercised, to elect the majority of the Board of
Directors. This resulted in a change in control of the Company. The agreement
also requires the warrant holders to surrender up to 10% of their stock on a
fully diluted basis, if, as and when certain liquidity events occur.

In addition, warrant holders have the right to require the Company to repurchase
the warrants under certain conditions. This option can only be exercised upon
the sale of an asset of the Company. The value of these warrants was determined
to have a fair value of $555,556 and represents a discount to the face value of
the redeemable preferred stock. The cost of the put can not be determined at
this time since it is based upon the value of a sale of a significant asset
which cannot be assured. Also, one of the warrant holders has entered into a
management service agreement with the Company.

In connection with the exchange, the lenders agreed to issue one year unsecured
notes totaling $105,468 with interest at 10% payable at maturity (see Note 7).

During 1997, the Company wrote off the unamortized deferred financing costs
related to the subordinated notes, which has been classified as an extraordinary
item in the accompanying 1997 consolidated statement of operations.

NOTE 13 - REDEEMABLE PREFERRED STOCK

During 1997, the Company authorized 10,000,000 shares of Preferred Stock. The
Company also designated 5,000,000 shares of the authorized amount as Series A
Preferred Stock and 150,000 shares as Series B Preferred Stock concurrent with
the designation of the Preferred Stock. The Series A Preferred Stock has a
mandatory redemption due December 31, 2002 and an optional redemption at face
value at the Company's option. Also, if the Company has a sale of an asset or
other equity transaction in excess of $5,000,000, the Series A Preferred
Stockholders are to receive a liquidation pay off of Series A Preferred Stock
plus all unpaid dividends due on the preferred stock being liquidated in the
amount of 25% of net proceeds of the transaction.

                                      F-19
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997


During 1997 The senior subordinated notes along with the remaining balance of
the credit line was exchanged for 5,000,000 shares of 8% cumulative redeemable
Series A Preferred Stock, (see Note 12). At closing, the Company received cash
of approximately $800,000 after expenses.

Holders of Series A Preferred Stock are entitled to receive, when and as
declared by the Company's Board of Directors, cash dividends cumulative at the
rate of 8% per share. Cumulative and unpaid dividends amounted to $1,057,778 at
December 31, 1999. Currently the Company does not have positive equity and,
therefore, is prohibited from paying dividends. However, if there is an event,
that causes a liquidation of Preferred Stock, then there is a provision in the
Exchange Agreement to liquidate a portion of the dividends which have
accumulated.

Subsequent to year end, the sale of the Private Cable system caused a $1.7
million liquidation of the Series A Preferred Stock and the related unpaid
dividends due. The remaining Series A Preferred Stock is 3,643,692 shares at $1
per share and accumulated dividend of $743,314. (see Note 17)

NOTE 14 - STOCKHOLDERS EQUITY TRANSACTION

During 1999, option holders exercised options to purchase 16,154 shares of
common stock at $2.00 per stock and in 1997 a warrant holder exercised warrants
to purchase 354 shares of common stock at $2 per share.

During 1999, a former officer of the Company repaid his outstanding loan of
$12,909 with 1,613 shares of his stock. The Company retired these shares.

During 1998, warrant holders exercised warrants to purchase 1,880 shares of
common stock at $2.00 per share.

On May 8,1997, the Company effected a 1-for-20 reverse split of its common stock
such that each outstanding share of common stock was, effective May 9, 1997,
converted into .05 shares of post split common stock and the par value of common
stock was changed from $.004 to $.08 per share.

During 1997, the Company converted a shareholder loan into shares of Series B
Preferred Stock.

NOTE 15 - SIGNIFICANT CUSTOMERS

For the years ending December 31, 1999, 1998 and 1997, revenue from the
Company's three largest customers represented 39%, 33% and 40%, respectively, of
total revenues.

NOTE 16 - CONCENTRATION OF CREDIT RISK

The Company has a note receivable due from Fordham University. The note is
secured by equipment at the University.

Also, the Company maintains its cash at a financial institution. The Federal
Deposit Insurance Corporation only insures up to $100,000 at any one financial
institution. The Company rarely maintains cash of more than $100,000 in any one
institution.

                                      F-20
<PAGE>

                   MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         DECEMBER 31,1999, 1998 AND 1997



NOTE 17 - SUBSEQUENT EVENT: SALE OF PRIVATE CABLE ASSETS

On March 30, 2000, the majority shareholders of Magnavision voted to accept the
following sale of the private cable assets to Lamont Television Systems, Inc.

On March 15, 2000, Magnavision Corporation and Lamont Television Systems, Inc.
entered into an Asset Purchase Agreement dated as of February 29, 2000, to
purchase the service contracts and related fixed assets of Magnavision
Corporation's Private Cable Operation for $7.5 million. The transaction closed
on March 30, 2000, with the Company receiving approximately $6.7 million of the
proceeds in cash after the establishment of an escrow account of approximately
$200,000 and other closing adjustments. The Company used part of the proceeds to
pay off its loan to BSB Bank & Trust Company in the amount of $1,954,000 and its
notes to both IBJS Whitehall and KOCO Capital totaling $105,468 in the
aggregate, plus the accrued interest. Other portions of the net proceeds were to
be used to pay commissions of $300,000 to the company's investment banker due
under this transaction and to establish accruals for severance of $255,000 and
retention payments and legal and other fees totaling $75,000. The Company also
will accrue approximately $1.2 million for State and Federal taxes. In addition,
the May 1997 Exchange Agreement and the Company's Certificate of Incorporation,
as amended, requires a payment of 25% of the net proceeds of the sale, or
approximately $1.7 million to be used to retire a portion of the Company's
Series A Preferred Stock and the related accumulated preferred stock dividend
outstanding. The number of shares of Series A Preferred Stock remaining after
the 25% payoff is 3,643,692 shares at $1 per share and the accumulated preferred
stock dividend has been reduced by $314,664 to $743,314 before the accumulation
for the 1st Quarter of 2000.

Magnavision continues to hold long-term rights to use fixed wireless spectrum at
seven existing transmission sites in New York and additional sites in New
Jersey. The Company intends to use its best efforts to either develop or sell,
the wireless spectrum although, no assurances can be made that it will either be
developed or sold.



                                      F-21



<PAGE>



                                   SIGNATURES

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

                                                MAGNAVISION CORPORATION


DATE:   April 14, 2000                          By:  /s/ Robert E. Hoffman
                                                     ---------------------------
                                                     ROBERT E. HOFFMAN
                                                     Principal Executive Officer


                                                By:  /s/ Jeffrey Haertlein
                                                     ---------------------------
                                                     JEFFREY HAERTLEIN
                                                     Principal Financial and
                                                       Accounting Officer

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

Signature                   Title                             Date
---------                   -----                             ----

/s/ Robert E. Hoffman       CEO, President, Director          April 14, 2000
----------------------
Robert E. Hoffman

/s/ George Zombek           Director                          April 14, 2000
----------------------
George Zombek

/s/ Evan Wildstein          Director                          April 14, 2000
----------------------
Evan Wildstein

/s/ Kevin Falvey            Director                          April 14, 2000
----------------------
Kevin Falvey

/s/ Geoffrey Thompson       Director                          April 14, 2000
----------------------
Geoffrey Thompson



<PAGE>


                                    EXHIBITS


Supplemental Information to be furnished with reports filed pursuant to Section
15(d) of the Act by Registrants which have not registered securities pursuant to
Section 12 of the Act.

As of the date hereof, the Registrant has never sent any annual report or proxy
material to its security holders. If and when such annual report or proxy
material is furnished to its stockholders, the Registrant shall furnish to the
Commission for its information copies of such material. Such material, when
furnished, shall not be deemed to be "filed" with the Commission or otherwise
subject to liabilities of Section 18 of the Act (except to the extent that the
Registrant specifically incorporates such material by reference in its Form
10-K).