<PAGE>

                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, 2000

                                       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.)

              141 SOUTH AVE., OFFICE# 4, FANWOOD, NEW JERSEY 07023
              ----------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

Registrant's telephone number, including area code:  (908) 490-9910

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, 2001
was 1,185,792.

Documents Incorporated by Reference:  None.




                                       -1-
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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's future operations may constitute
forward-looking statements within the meaning of Section 21E 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 satisfy the various
conditions contained in the Agreement and Plan of Merger dated September 12,
2000 (the Merger Agreement) among the Company, Blue Acquisition Corp. and
IPWireless, the receipt of approvals necessary to deploy alternative uses of its
ITFS spectrum, the assumptions, risks and uncertainties set forth below in the
section captioned "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. There can be no
assurance that the transactions contemplated by the Agreement and Plan of Merger
will be consummated on a timely basis, if at all. Furthermore, there can be no
assurance that the financing obtained by Company's to date will enable it to
meet its future cash needs.

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 stockholders 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.

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



                                       -2-
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Exchange Agreement dated as of May 8, 1997 ("the 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 December 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 Stockholders 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 note and interest was paid in full March 30, 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, 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. 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
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.


                                       -3-

<PAGE>

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 matured
June 2000. 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.

During 2000, the Company sold its Private Cable assets to Lamont Television
Systems Inc. The transaction was effective as of February 29, 2000. The purchase
price of $7.5 million was decreased for documentation and system corrections and
other closing adjustments totaling $420,415. The Company also paid an investment
banker fee of $300,000 and established accruals for severance and retention of
$255,000, of which $118,000 was reversed at the end of the third quarter of 2000
as it was determined to be excess, and legal and other fees of $75,000. The
Private Cable Assets sold had a book value, net of depreciation, of $1,347,099.
The Company accrued State taxes of $700,000 related to the Private Cable sale,
of which $390,000 was reversed during 2000 as it was determined to be excess.

The Company also repaid its term loan of $1,794,000 plus accrued interest and
line of credit of $250,000 plus accrued interest to BSB Bank & Trust Co. The
Company also repaid the outstanding notes to stockholders totaling $105,468 plus
accrued interest from the proceeds of the sale. In addition, the May 8, 1997
Exchange Agreement and the Company's Certificate of Incorporation, as amended,
required the payment of 25% of the net proceeds of the Private Cable sale be
used to retire a portion of the Company's Series A Preferred Stock and related
accumulated preferred stock dividend. The Company redeemed 1,356,309 shares of
Series A Preferred Stock for $1,356,309 and also paid $314,663 of accumulated
dividends on the Series A Preferred Stock.

RECENT DEVELOPMENTS
-------------------

Announcement of Agreement to Merge
----------------------------------
On September 12, 2000 the Company and Blue Acquisition Corp., a wholly owned
subsidiary of IPWireless, Inc. based in San Bruno, CA, signed a definitive
agreement for Blue Acquisition Corp. to merge with and into the Company. All
outstanding common and preferred stock of the Company shall be exchanged in the
transaction for cash and/or securities as described below.

This agreement was approved by the majority stockholders of the Company and by
the Board of Directors of the Company, Blue Acquisition Corp. and IPWireless.
The agreement is contingent upon the Company meeting certain conditions at
closing, some of which are not with in the control of the Company. The Company
is attempting to satisfy these conditions. According to the agreement, each
share of the Company Class A and Class B Preferred Stock outstanding at the time
of closing will receive $1.00 plus any accumulated dividends then due. Each
share of the Company Common Stock outstanding will receive approximately $5.78
per share. Stockholders who hold less than 1% of the fully diluted shares of
common stock (36,507 or fewer shares) will receive their consideration entirely
in cash. Common stockholders holding more than 1% of the fully diluted shares
will receive approximately 80% of their consideration in cash and 20% of their
consideration in the form of notes. Warrant and option holders will receive
approximately $5.78 less an amount equal to the cost of exercising the warrant
or option. Warrant and option holders who hold in excess of 1% of the Company's

                                       -4-

<PAGE>

fully diluted common stock will receive approximately 20% of the share
consideration in the form of notes and the remainder in cash. In addition, the
agreement has provisions for holders of Common Stock, warrants and options to
receive additional consideration based upon the Company achieving certain
objectives. The Company expects the merger to be consummated before the
expiration of the Merger Agreement in September 2001.

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. 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 Channel
Lease Agreement.

Apart from development of its wireless television system, the Company had 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. During 2000, the Company sold its private
cable assets to Lamont Television Systems, Inc. The transaction was effective as
of February 29, 2000.

                                       -5-
<PAGE>


PRIVATE CABLE BUSINESS
----------------------

The Registrant and its wholly owned subsidiary, Magnavision Private Cable, Inc.,
("Private Cable") began service in February 1992 to various colleges and senior
living center facilities in the New York/New Jersey area utilizing direct
satellite technology. This involved the use of antennas, which were installed at
the facility and then separately wired on a room-by-room basis. The majority of
the facilities using the Company's private cable service were in New Jersey and
New York, but the Company's market area reaches from North Carolina to
Massachusetts and west to Wisconsin.

Each installation was comprised of a number of billing outlets. A billing outlet
represented a hookup for a television. The Company collected revenue from each
television online. For the most part, the colleges were on a nine-month billing
cycle starting in September and ending in June of the subsequent year. The
nursing homes and hospitals were on a 12-month billing cycle.

During 2000, the Company sold its Private Cable assets to Lamont Television
Systems Inc. The transaction was effective as of February 29, 2000. All of the
Company's current revenues were derived from its private cable operations that
were sold.

WIRELESS CABLE BUSINESS
-----------------------

The wireless channel capacity operations have not commenced; therefore, no
revenue has been derived from the wireless operation.

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 Distribution Service ("MDS") channels
(Channels 1, 2 or 2A, E1-E4, F1-F4 and H1-H3) and the excess capacity of up to
20 additional Instructional Television Fixed Service ("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, which may
include Internet access services. The remaining "excess air time" on an ITFS
Channel may be used for commercial purposes, including leasing this capacity to
wireless cable operators for their use for various purposes. In addition, the 13
MDS 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 MDS and ITFS.
The order makes provisions for protected service areas for existing licensed MDS
and ITFS main transmitters, for booster stations, response stations, and
response hubs within protected service areas, and new interference protection

                                       -6-

<PAGE>

requirements among stations with potential co-channel or adjacent channel
interfaces. The order also established procedures under which ITFS and MDS
licensees can apply for two-way authorization, and rules for complying with
interference protection of overlapping or abutting co-channel and adjacent
channel licensees. The FCC subsequently established an initial "filing window"
for two-way applications. This filing window was opened from August 14, 2000 to
August 18, 2000. At the request of the Company, the Department filed
applications for booster stations and response hubs in the filing window. These
applications have not yet been granted by the FCC.

Wireless Business Plan
----------------------

A typical wireless cable system consists of headend equipment at transmission
locations and reception equipment at each subscriber location. Headend equipment
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 has signed a definitive agreement for Blue Acquisition Corp. to
merge with and into MagnaVision Corporation. See RECENT DEVELOPMENTS above. If
the merger is not consummated, the Company intends to either sell its rights in
the ITFS lease or pursue the development a digital wireless cable system with
its ITFS leased spectrum with a potential joint venture partner as an
alternative use of this spectrum including data and Internet access. 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 companies are providing one-way Internet
over their spectrum using the phone lines for the less demanding return path.
This 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 its rights
that it can effect a sale.


                                       -7-
<PAGE>

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 licenses for the channels, of which there
can be no assurance.

The Company also paid a total of $221,088 in monthly royalties to the Department
during 2000 and will be required to pay additional monthly royalties during 2001
through the expiration of the Channel Lease Agreement, equal to the greater of
$19,092 plus five cents ($.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
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 transmitted 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

                                       -8-

<PAGE>

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 Verizon, there are at least three major CAPS of
telecommunications services that have proprietary fiber optic networks in the
New York Market: 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 can operate at speeds similar
to the speeds of wireless modems. 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
Systems, TCI Cable and Comcast Cablesystems. Some of these operators have been
upgrading their cable plant and deploying for digital video and data
transmissions.

Direct Broadcast Satellite
--------------------------

Direct Broadcast Satellite ("DBS") service providers now offer Internet service
to customers. Hughes Corporation's DirecPC service and others offer this
Internet service. Subscribers must purchase and install a small satellite dish
and a special computer modem adapter.

Other Wireless Multichannel Multipoint Distribution
---------------------------------------------------

Worldcom, Inc. is the only other MDS/ITFS provider operating in the New York
Market and is believed to be offering high speed Internet access to customers.

Metricom Corporation offers its Ricochet(TM) service throughout the greater New
York City area using licensed spectrum in the 2.1 GHz range. Worldcom is an
investor in Metricom and has a marketing agreement to sell Ricochet service in
the New York City market. Cellular Vision, WinStar and Teligent are also
offering wireless data services in the New York market but are using a higher
frequency of at least 24 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


                                       -9-
<PAGE>

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, local noncommercial television or qualified low power television
signals.

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 main transmission site.

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 MMDS and ITFS frequencies. Such technologies may be
utilized by a wireless cable operator or an MMDS or ITFS licensee, after
applying for, and being granted, such an authorization by the FCC. At present,
the interim provisions are regular provisions. 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 MMDS and ITFS frequencies. The petition proposed rule changes,
which would allow the FCC to routinely grant such licensees the right to
implement two-way wireless services. In 1998, the FCC issued a report and order
allowing the authorization of two-way services on MMDS and ITFS channels. To
allow for the liberal construction of a multitude of system architectures, the
report and order makes provision for protected service areas for booster


                                      -10-
<PAGE>

stations and response hubs and provides for the authorization of multiple
response stations (return path) within applicant-defined geographic areas. The
order also established procedures under which ITFS and MMDS licensees could
apply for two-way authorization, and rules for complying with interference
protection of overlapping or abutting co-channel and adjacent channel licensees.
The FCC subsequently established an initial "filing window" for two-way
applications. This filing window was opened from August 14, 2000 to August 18,
2000. As stated above, the Department filed two-way applications in that window.
Those applications remain pending, and there is no assurance that they will be
granted. Further, there is no assurance that, even with the grant of those
applications and assuming the cooperation of the Department, that the Company
will be able to develop commercially successful products using two-way
transmissions.

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 affects 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
and data delivery industries 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 to
distribute video and afford relief to DBS and wireless cable providers by
exempting them from certain local restrictions on antenna placement.

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.

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.

Executive Order. In October 2000, the Executive branch of the Federal Government
issued an executive order instructing the National Telecommunications and
Information Agency ("NTIA") and FCC to examine alternatives for reassignment of
certain spectrum for use for third generation ("3G") mobile data services. The
2500 MHz to 2690 MHZ band, which includes all ITFS spectrum, is designated as a
3G band throughout Europe, and among several other bands, is a candidate for
reassignment. The FCC has completed an interim report dated November 15, 2000 of



                                      -11-

<PAGE>

the impact of reassignment and has issued a Notice of Proposed Rulemaking on the
subject ("FCC 00-455"), adopted December 29, 2000. A final report of the FCC is
expected this summer. We cannot predict what the FCC will do. If the FCC
recommends reallocating the ITFS spectrum, or any portion of it containing the
A-Group ITFS channels, such a recommendation could have a material adverse
effect on the Company's prospects. While the Company would expect any
reallocation order to involve replacement spectrum, the Company cannot predict
the wavelength and usefulness of such spectrum. Indeed, the replacement spectrum
could be relatively valueless or could be incompatible with any business plans
the Company may be considering.

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.

Health Hazards. The FCC imposes restrictions on the location of transmission
devices in order to better shield the public from the effects of electromagnetic
radiation. These restrictions may impair the ability of the Company to install
one or more transmission antennas.

Common Carrier Regulation. The use of the Department's ITFS channels to provide
two-way services may subject the Company to common carrier or public utility
regulation at either the State or the Federal level.

If the Company's two-way services are deemed public utility services under the
law of any State where the Company operates, then the Company would be required
to obtain any certificate of public convenience and necessity as may be
prescribed by the utility commission of that state. While the Company would not
expect to be precluded from obtaining such a certificate, the delay in obtaining
it inherent in the regulatory process could have a material adverse effect on
the Company's business prospects. It is probable that any state that would
require such a certificate also would require the Company to offer services
under tariff. Tariff regulation involves the posting of public tariffs
describing the terms and conditions of services and the requirement to offer the
services in exact accordance with such tariffs. Such regulation is designed to
protect the consumer of tariffed services. While a requirement to offer service
under tariff does not, per se, impair the Company's ability to compete, it might
in some circumstances impair the Company's ability to fashion its products to
suit the particular needs of individual customers.

Common carrier regulation at the Federal level tends to be far more lenient and
protective of the new competing carrier than State public utility regulation.

                                      -12-

<PAGE>

Federal regulation is designed to promote the ability of the newcomer to obtain
transmission capacity and services from incumbent local telephone companies.
Conversely, it also requires the newcomer to offer interconnection to other
carriers; a requirement that might impose restrictions on the Company. Federal
regulation also includes the requirement that providers of telecommunications
services on an interstate basis pay into a "Universal Service Fund" that is used
to finance the purchase of telecommunications services and equipment by rural
schools and libraries. Contributors must pay a portion of their gross revenues
into the fund. The percentage, while not large, varies as the requirements of
the schools and libraries program vary. Providers of interstate
telecommunications services are also required to contribute to government
mandated funds supporting numbering administration, telecommunications services
for the deaf and hearing impaired, and local number portability.

There is no tariff regulation of any significance to the Company at the Federal
level.

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, 2000, the Company had a staff of 2 full time employees 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 STOCKHOLDER
--------------------

At December 31, 2000, Cacomm, Inc., a New Jersey corporation ("Cacomm"), was the
majority stockholder of the Registrant. The Company believes, but could not
confirm, that Cacomm owned approximately 70% at the end of 2000 and 73% at the
end of 1999 of the Company's outstanding common stock.

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.


                                      -13-
<PAGE>

ITEM 2.           PROPERTIES

The Registrant's principal offices are located at 141 South Ave., Office # 4,
Fanwood, NJ 07023, where it occupies approximately 500 square feet under a
month-by-month agreement.

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

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. On March 18, 2001, the Superior Court of New Jersey
Legal Division ruled in favor of Mr. Mastrorilli and ordered the two parties to
agree to final damages pursuant to the terms of the contracts and current
renewals placed by Mr. Mastrorilli. The Company has accrued for an estimate of
such damages as of December 31, 2000.

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

                  Not applicable.


                                      -14-
<PAGE>



                                   P A R T  II

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, 1999 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, markdown
                           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
                                                           -----------
            2000                                    HIGH                 LOW
            ----                                    ----                 ---
January 3rd through March 31st                      7.750               2.000
April 3rd through June 30th                         3.500               1.500
July 3rd through September 29th                     4.750               2.125
October 2st through December 31st                   4.500               2.375

            1999
            ----
January 4th through March 31st                     0.6875              0.4375
April 1st through June 30th                       14.0000              0.6250
July 1st through September 30th                   16.2500              6.0000
October 1st through December 31st                  9.7500              6.2500

                  (b)      As of December 31, 2000, according to the
                           Registrant's transfer agent, the approximate number
                           of holders of record of the Registrant's common stock
                           was 454.

                  (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, the Company is prohibited,
                           without their consent, from declaring or paying any
                           dividends on its Common Stock until the preferred
                           stock is redeemed, in full. As of December 31, 2000,
                           the Company had accumulated dividends of $1,061,737
                           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.


                                      -15-
<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."

Income Statement Data
<TABLE>
<CAPTION>
                                                                      Years Ended December 31,
                                                 2000           1999             1998             1997            1996
                                                 ----           ----             ----             ----            ----
<S>                                           <C>             <C>             <C>             <C>              <C>
Revenues                                      $  678,157      $2,962,016      $ 3,652,389     $ 1,607,049      $ 1,285,442
                                              ==========      ==========      ===========     ===========      ===========

Income (Loss) Before Extraordinary Item       $3,793,379      $ (418,216)     $  (428,409)    $(1,152,529)     $(1,411,509)
                                              ==========      ==========      ===========     ===========      ===========

Extraordinary Item-Loss From
Extinguishment of Debt                        $   -           $    -          $   165,779     $   275,844      $     -
                                              ==========      ==========      ===========     ===========      ===========

Net Income (Loss)                             $3,793,379      $ (418,216)       ($594,188)    $(1,428,373)     $(1,411,509)
                                              ==========      ==========      ===========     ===========      ===========

Redeemable Preferred Stock Dividend
Requirement                                   $  318,623      $  400,000      $   400,000     $   257,778      $    -
                                              ==========      ==========      ===========     ===========      ===========

Accretion of Preferred Stock                  $  153,291      $   92,593      $    92,593     $    54,012      $    -
                                              ==========       =========      ===========     ===========      ===========

Net Income (Loss) Applicable to Common
Stockholders                                  $3,321,465      $ (910,809)     $(1,086,781)    $(1,740,163)     $(1,411,509)
                                              ==========      ==========      ============    ===========      ===========

Basic Net Income (Loss) to Common
Stockholders per Share                        $     2.82      $     (.79)     $      (.94)    $     (1.51)     $     (1.23)
                                              ==========      ==========      ===========     ===========      ===========
Diluted Net Income (Loss) to Common
Stockholders per Share                        $     1.46      $     (.79)     $      (.94)    $     (1.51)     $     (1.23)
                                              ==========      ==========      ===========     ===========      ===========
Basic Weighted Average Common Shares
Outstanding                                    1,179,257       1,157,005        1,154,354       1,152,504        1,147,030
                                              ==========      ==========      ===========     ===========      ===========

Diluted Weighted Average Common Shares
Outstanding                                    2,267,763       1,157,005        1,154,354       1,152,504        1,147,030
                                              ==========      ==========      ===========     ===========      ===========
</TABLE>



                                      -16-
<PAGE>



Balance Sheet Data
------------------
<TABLE>
<CAPTION>
                                                                            At December 31,

                                                 2000           1999             1998             1997            1996
                                                 ----           ----             ----             ----            ----
<S>                                           <C>             <C>             <C>             <C>              <C>
Working Capital (Deficit)                     $1,949,158      $(1,674,984)    $ (366,026)     $ (682,031)      $(4,338,083)
                                              ==========      ============    ==========      ==========       ===========

Total Assets                                  $2,838,480      $ 3,064,313     $3,953,476      $2,427,163       $ 2,196,994
                                              ==========      ===========     ==========      ==========       ===========

Long Term Debt                                $   -           $   -           $1,899,468      $  111,509       $    10,563
                                              ==========      ===========     ==========      ==========       ===========

Redeemable Preferred Stock                    $3,480,624      $ 4,683,642     $4,591,049      $4,498,456       $    -
                                              ==========      ===========     ==========      ==========       ===========

Stockholders' Deficit                         $2,260,357      $ 5,635,544     $4,086,356      $3,403,335       $ 2,608,645
                                              ==========      ===========     ==========      ==========       ===========
</TABLE>


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

RESULTS OF OPERATIONS

All of the Company's current revenues were derived from its private cable
operations, which were sold effective as of February 29, 2000. 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, Magnavision Private Cable, Inc.,
began service in February 1992 to various colleges and senior living center
facilities in the New York/New Jersey area utilizing direct satellite
technology. This involved the use of antennas, which were installed at the
facility and then separately wired on a room-by-room basis. The majority of the
facilities using the Company's private cable service were in New Jersey and New
York, but the Company's market area reaches from North Carolina to Massachusetts
and west to Wisconsin.

Each installation was comprised of a number of billing outlets. A billing outlet
represented a hookup for a television. The Company collected revenue from each
television online. For the most part, the colleges were on a nine-month billing
cycle starting in September and ending in June of the subsequent year. The
nursing homes and hospitals were on a twelve-month billing cycle.

2000 Compared to 1999
---------------------

During 2000, the Company sold its Private Cable assets to Lamont Television
Systems Inc. The transaction was effective as of February 29, 2000.

Gross profits decreased $1,710,513 from 1999 compared to 2000. The decrease in
gross profit was primarily the result of reflecting two months of operations in
2000 due to the sale of the Private Cable assets as of February 29, 2000, verses
a full year of operations in 1999 and an accrual for the settlement of the
lawsuit between Patrick Mastrorilli vs. Magnavision Corp.

Total operating expenses decreased $736,216 in 2000 when compared to 1999.
Salaries accounted for $351,484 of the decrease representing a savings for staff
expenses due to a reduction of the work force after the Private Cable sale in

                                      -17-

<PAGE>

the first quarter of 2000. Depreciation in 2000 was $454,340 less than
depreciation for 1999 as only two months of deprecation was expensed during 2000
due to the effective date of the Private Cable assets sold as of February 29,
2000, as compared to a full year of deprecation in 1999. General and
administrative expenses increased $69,608 during 2000 when compared to 1999 due
to the costs related to the merger agreement, the loss incurred on the sale of
wireless cable and office equipment no longer required for the operation of the
business, and the buyout of the Company's leased car and increased professional
fees in 2000.

For the year 2000, other income, net increased $5,494,385 over 1999. The gain on
the sale of the Private Cable assets represented $5,217,443 of the increase and
was based on the Asset Purchase Agreement between Lamont Television System Inc.
and the Company dated as of February 29, 2000 to purchase the service contracts
and related fixed assets of the Company. The purchase price of $7.5 million was
decreased for documentation and system corrections and other closing adjustments
totaling $420,415. The Company also paid an investment banker fee of $300,000
and established accruals for severance and retention of $255,000, of which
$118,000 was reversed at the end of the third quarter of 2000 as it was
determined to be excess, and legal and other fees of $75,000. The Private Cable
assets sold had a book value, net of depreciation, of $1,347,099. The Company
accrued State taxes of $700,000 related to the Private Cable sale, of which
$390,000 was reversed during 2000 as it was determined to be excess.

Interest expense decreased $187,206 in 2000 when compared to 1999 due to lower
loan balances and the payoff of the Company's debt in 2000 after the Private
Cable assets sale. Interest income increased $89,736 in 2000 compared to 1999
because of increased investment of the proceeds from the Private Cable sale in
the 2000.

1999 Compared to 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-year
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
that 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 depreciation 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.


                                      -18-
<PAGE>

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.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Cash Flow
---------

For 2000, total cash and cash equivalents increased $2,032,505 as compared to
1999. At December 31, 2000, the Company had investments in Commercial Paper and
held a Business Money Market Account. The increase in cash was substantially due
to the proceeds received from the sale of the Private Cable system.

The cash used in operating activities was $576,551 and included an accrual for
State taxes relating to the Private Cable sale in the amount of $310,000. There
were also decreases in the amount of deferred revenues of $369,765, trade
accounts and other receivables of $379,270, and security deposit payable of
$176,692 related to the Private Cable sale. The Company also received payment on
a customer's note receivable of $441,271 during the third quarter of 2000.

The cash provided by investing activities of $6,395,774 and was primarily due to
the sale of the Private Cable assets, which totaled $6,564,541 in 2000. This was
offset by the establishment of an escrow account for unforeseen contingences of
$222,418 as part of the Private Cable sale.

Cash used in the financing activities was $3,786,718. The Company repaid its
term loan of $1,794,000 plus accrued interest and line of credit of $250,000
plus accrued interest to BSB Bank & Trust Co. The Company also repaid the
outstanding notes to stockholders totaling $105,468 plus accrued interest from
the proceeds of the sale. In addition, the May 8, 1997 Exchange Agreement and
the Company's Certificate of Incorporation, as amended, required the payment of
25% of the net proceeds of the Private Cable sale be used to retire a portion of
the Company's Series A Preferred Stock and related accumulated preferred stock
dividend. The Company redeemed 1,356,309 shares of Series A Preferred Stock for
$1,356,309 and also paid $314,663 of accumulated dividends on the Series A
Preferred Stock. Also, during the second quarter of 2000 option holders
exercised options to purchase 16,861 shares of common stock for $33,722 at $2.00
per share.

Liquidity and Capital
---------------------

Since the inception of service in 1992, the Company experienced operating
losses. At December 31, 2000, the Company had a stockholders' deficit.

The Company's capital commitments at December 31, 2000 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 and the payment of the preferred stockholders 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.


                                      -19-
<PAGE>

The Company plans to meet short-term liquidity requirements by using the cash
received from the sale of the Private Cable system. The Company has entered into
an agreement to merge with Blue Acquisition Corporation that will allow the
Company to meet it long-term commitments. There is no assurance that the Company
will be able to complete the terms of the merger as agreed, if at all, before
the expiration date.

If the merger is not effected, the Company plans to sell the ITFS spectrum
rights 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 of the wireless
cable asset or the Company securing a strategic partner(s) for the capital
resources and the expertise required to run the Wireless business. There is no
assurance that the Company will be able to secure a strategic relationships or a
sale on terms or conditions satisfactory to the Company, or at all.

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

The report of our independent auditors on our financial statements includes an
explanatory paragraph, which states that our recurring losses from operations
and limited liquid resources raise substantial doubt about our ability to
continue as a going concern. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

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 expired 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.

During 2000, the Company paid off both the BSB Term Loan and line of credit with
the proceeds from the sale of the Private Cable assets. The Company did not
extend the line of credit.


                                      -20-

<PAGE>

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.

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, 2000.

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, which has expired. 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 per share.

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 C.E.O. at
an exercise price of $1.00 per share, 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 share.


                                      -21-

<PAGE>

During the year, employees exercised 16,861 options at $2.00 per share 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 Employees," as permitted by SFAS No. 123
"Accounting for Stock-base Compensation" under which no compensation cost has
been recognized for the options granted as they were issued at or above market
value.

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 policy expired January 1, 2001 and as of December 31,
2000, the Company does not have any non-officer employees.

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 twelve months base pay for each eligible
employee and immediate vesting of all issued and outstanding stock options,
subject to certain limitations. The Company has extended the policy for
corporate officers until September 30, 2001.

The change-of-control agreement for the President and C.E.O. provides for
severance pay in an amount equal to twelve months of base pay upon a
change-of-control prior to June 1, 2001.

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.





                                      -22-
<PAGE>



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.
















                                      -23-



<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, 2000 and 1999, 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, 2000. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

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, 2000 and 1999, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America.

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
March 15, 2001
<PAGE>


MAGNAVISION CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER  31, 2000 and 1999
<TABLE>
<CAPTION>
                                                                                                     2000         1999
                                                                                               -------------------------------
<S>                                                                                             <C>                 <C>
ASSETS
------

CURRENT ASSETS
  Cash and cash equivalents                                                                       $2,262,522       $  230,017
  Trade accounts and other receivables                                                                 2,775          382,045
  Notes receivable from customer                                                                       --             441,271
  Escrow account                                                                                     222,418            --
  Stockholder loans receivable                                                                         --              20,000
  Prepaid expenses and other current assets                                                           17,919           33,428
                                                                                                  ---------------------------
     Total current assets                                                                          2,505,634        1,106,761
                                                                                                  ---------------------------

PROPERTY AND EQUIPMENT
  Property and equipment, at cost                                                                      3,528        3,175,990
  Less: accumulated depreciation                                                                      (1,212)      (1,657,176)
                                                                                                  ---------------------------
    Net property and equipment                                                                         2,316        1,518,814

OTHER ASSETS
  Prepaid lease expense                                                                              329,780          436,748
  Deposits                                                                                               750            1,990
                                                                                                  ---------------------------

TOTAL ASSETS                                                                                      $2,838,480       $3,064,313
                                                                                                  ===========================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable                                                                                $   13,373       $   97,127
  Accrued expenses                                                                                   233,103          165,385
  State income taxes payable                                                                         310,000            --
  Deferred revenues                                                                                    --             369,765
  Current portion of long-term debt                                                                    --           1,794,000
  Line of credit                                                                                       --             250,000
  Term loans due to stockholders                                                                       --             105,468
                                                                                                  ---------------------------
     Total current liabilities                                                                       556,476        2,781,745

Security deposits payable                                                                              --             176,692

Commitments and contingencies

Series A Preferred Stock, $1 par value, 9,850,000
       shares authorized; issued and outstanding, 3,643,392 shares at December 31, 2000
       5,000,000 shares at December 31,1999, net of
       unamortized discount and including accumulated dividend                                     3,480,624        4,683,642
  Series A Preferred Stock accumulated dividend                                                    1,061,737        1,057,778

STOCKHOLDERS' 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, 1,185,792 shares at December 31, 2000 and
    1,168,931 shares at December 31,1999                                                              94,862           93,513
  Additional paid-in capital                                                                       3,963,990        3,911,617
  Accumulated deficit                                                                             (6,451,098)      (9,772,563)
                                                                                                  ---------------------------------
Total shareholders' deficiency                                                                    (2,260,357)      (5,635,544)
                                                                                                  ---------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                    $2,838,480       $3,064,313
                                                                                                  =================================
</TABLE>
See accompanying notes to consolidated financial statements.                 F-2
<PAGE>

MAGNAVISION CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
<TABLE>
<CAPTION>
                                                                                    2000             1999             1998
                                                                                    ----             ----             ----
<S>                                                                            <C>                  <C>              <C>
REVENUES
  Gross revenues                                                                 $  678,157       $2,962,016       $ 3,652,389
  Cost of sales                                                                     421,145          994,491         1,817,546
                                                                                ----------------------------------------------
  GROSS PROFIT                                                                      257,012        1,967,525         1,834,843

  Salaries                                                                          413,557          765,041           715,064
  Depreciation                                                                       96,017          550,357           382,289
  General and administrative expenses                                               927,887          858,279         1,001,655
                                                                                ----------------------------------------------

TOTAL OPERATING EXPENSES                                                          1,437,461        2,173,677         2,099,008

OPERATING LOSS                                                                   (1,180,449)        (206,152)         (264,165)

OTHER INCOME (EXPENSE)
  Gain on the sale of the Private Cable assets,
    net of related expenses                                                       5,217,443             --               --
  Interest expense                                                                  (50,441)        (237,647)         (184,425)
  Interest income                                                                   120,690           30,954            25,032
                                                                                ----------------------------------------------
       Total other income (expense)                                               5,287,692         (206,693)         (159,393)

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
  AND EXTRAORDINARY ITEM                                                          4,107,243         (412,845)         (423,558)

PROVISION FOR INCOME TAXES                                                          313,864            5,371             4,851
                                                                                ----------------------------------------------

INCOME (LOSS) BEFORE EXTRAORDINARY ITEM                                           3,793,379         (418,216)         (428,409)

EXTRAORDINARY ITEM -LOSS ON EXTINGUISHMENT OF DEBT                                     --               --             165,779
                                                                                ----------------------------------------------

NET INCOME (LOSS)                                                                 3,793,379         (418,216)         (594,188)

Preferred Stockholders dividend requirement                                         318,623          400,000           400,000
Accretion of Preferred Stock                                                        153,291           92,593            92,593
                                                                                ----------------------------------------------

NET INCOME (LOSS) TO COMMON STOCKHOLDERS                                         $3,321,465        ($910,809)      $(1,086,781)
                                                                                ==============================================

NET INCOME (LOSS) PER COMMON SHARE

Basic:

Income (loss) to Common Stockholders before
   extraordinary item                                                                 $2.82           ($0.79)          $ (0.80)
Extraordinary item - loss on extinguishment of debt                                      --             --             $ (0.14)
Net income (loss) to Common Stockholders                                              $2.82           ($0.79)          $ (0.94)

Diluted:

Income (loss) to Common Stockholders before extraordinary item                        $1.46           ($0.79)          $ (0.80)
Extraordinary item - loss on extinguishment of debt                                      --             --             $ (0.14)
Net income (loss) to Common Stockholders                                              $1.46           ($0.79)          $ (0.94)

Weighted average common shares:
Basic                                                                             1,179,257        1,157,005         1,154,354
Diluted                                                                           2,267,763        1,157,005         1,154,354
</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, 2000, 1999 AND 1998
<TABLE>
<CAPTION>
                                                     Series B                                Additional                    Total
                                                  Preferred Stock         Common Stock        Paid in     Accumulated  Stockholders'
                                                 Shares     Amount      Shares     Amount     Capital       Deficit      Deficiency
<S>                                             <C>        <C>         <C>        <C>       <C>           <C>              <C>
Balance, December 31, 1997                      131,889    $131,889    1,152,510  $92,200   $3,876,991   $ (7,504,415) $ (3,403,335)

Common Stock issued upon the exercise
  of warrants                                                              1,880      150        3,610                        3,760

Net loss                                                                                                     (594,188)     (594,188)

Accretion of Preferred Stock                                                                                  (92,593)      (92,593)

                                                ------------------------------------------------------------------------------------
Balance, December 31, 1998                      131,889     131,889    1,154,390   92,350    3,880,601     (8,191,196)   (4,086,356)

Common Stock issued upon the exercise
  of stock options                                                        16,154    1,292       31,016                       32,308

Repurchase and retirement of Common Stock                                 (1,613)    (129)                    (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                      131,889     131,889    1,168,931   93,513    3,911,617     (9,772,563)   (5,635,544)

Common Stock issued upon the exercise
   of stock options                                                       16,861    1,349       32,373                       33,722

Series A Preferred Stock dividend                                                                            (318,623)     (318,623)

Non-cash compensation                                                                           20,000             --        20,000

Net income                                                                                                  3,793,379     3,793,379

Accretion of Preferred Stock                                                                                 (153,291)     (153,291)

                                                ------------------------------------------------------------------------------------
Balance, December 31, 2000                      131,889    $131,889    1,185,792  $94,862   $3,963,990   $ (6,451,098) $ (2,260,357)
                                                ====================================================================================
</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, 2000, 1999 AND 1998
<TABLE>
<CAPTION>
                                                                                            2000             1999           1998
                                                                                            ----             ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                         <C>              <C>            <C>
  Net loss                                                                              $ 3,793,379       $ (418,216)    $ (594,188)
  Adjustments to reconcile net income (loss) to net cash used in
   operating activities:
     Extraordinary item                                                                          --               --        165,779
     Gain on sale of private cable assets                                                (5,217,443)              --             --
     Loss on disposal of equipment                                                           39,731
     Depreciation and amortization                                                           96,017          550,357        382,289
     Amortization of deferred financing costs                                                    --               --         31,123
     Non-cash compensation                                                                   20,000               --             --
     Amortization of channel lease prepayments                                              106,968          106,968        106,968
     Changes in assets and liabilities:
        (Increase) decrease in trade accounts and other receivables                         379,270         (105,842)       (39,828)
        Decrease (increase) in note receivable from customer                                441,271          467,000       (908,271)
        (Increase) decrease in prepaid expenses and other current assets                     15,509          (31,442)         6,530
        Decrease in other assets and deposits                                                 1,240              349          2,214
        Increase (decrease) in accounts payable                                             (83,754)        (115,263)        22,291
        (Decrease) increase in accrued expenses                                              67,718           (3,999)        32,768
        Increase in state income taxes payable                                              310,000
        Increase (decrease) in deferred revenues                                           (369,765)          15,169        140,106
        Decrease in accrued severance payment                                                    --               --       (117,000)
        Increase (decrease)  in security deposits payable                                  (176,692)           4,389         20,238
        Decrease in income taxes payable                                                         --               --           (741)
                                                                                        --------------------------------------------
               Net cash provided by (used in) operating activities                         (576,551)         469,470       (749,722)

CASH FLOWS FROM INVESTING ACTIVITIES
  Repayment of stockholders loan receivable                                                  20,000            5,798          5,103
  Property and equipment purchases                                                               --         (114,008)    (1,141,276)
  Proceeds from the private cable sale, net of related expenses                           6,564,541               --             --
  Establishment of an  escrow account                                                      (222,418)              --             --
  Proceeds from the sale of equipment                                                        33,651               --             --
                                                                                        --------------------------------------------
               Net cash provided by (used in) investing activities                        6,395,774         (108,210)    (1,136,173)

CASH FLOW FROM FINANCING ACTIVITIES
  Issuance (payment) of line of credit                                                     (250,000)         250,000             --
  Payments of Access Capital line of credit, including penalty                                   --               --       (456,696)
  Issuance (payment) of long-term debt                                                   (1,794,000)        (640,642)     2,424,376
  Payment of loans due to stockholders                                                     (105,468)              --             --
  Proceeds from issuance of common stock                                                     33,722           32,308          3,760
  Redemption of Series A Preferred Stock                                                 (1,356,309)              --             --
  Payment of accumulated dividends                                                         (314,663)              --             --
                                                                                        --------------------------------------------
               Net cash provided by (used in) financing activities                       (3,786,718)        (358,334)     1,971,440

                    Net increase in cash                                                  2,032,505            2,926         85,545
  Cash beginning of year                                                                    230,017          227,091        141,546
                                                                                        --------------------------------------------
  Cash end of year                                                                      $ 2,262,522       $  230,017     $  227,091
                                                                                        ============================================

Supplemental schedule of cash paid during year for :
Interest                                                                                $    50,441       $  230,093     $   91,129
Income tax                                                                              $     3,864           $5,371        $ 4,851


NON CASH ITEMS:
Series A Preferred Stock accumulated dividend                                           $     3,959       $1,057,778             --
Repayment of stockholder loan receivable with common stock                                       --          $12,909             --
</TABLE>
See accompanying notes to consolidated financial statements.                 F-5
<PAGE>

                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

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.  Sale of Private Cable Assets - On March 30, 2000, the Company completed
         an Asset Purchase Agreement between Lamont Television System Inc. and
         the Company effective February 29, 2000 to purchase the Private Cable
         service contracts and related fixed assets of the Company. The purchase
         price was $7.5 million and was decreased for documentation and system
         corrections and other closing adjustments totaling $420,415. The
         Company also paid the investment banker fee of $300,000, and
         established accruals for severance and retention of $255,000, of which
         $118,000 was reversed at the end of the third quarter of 2000 as it was
         determined to be excess, and, legal and other fees of $75,000. The
         Company accrued Federal and State taxes of $700,000 related to the
         Private Cable sale, of which $390,000 was reversed during 2000 as it
         was determined to be excess. The Private Cable Assets sold had a book
         value, net of depreciation, of $1,347,099. As part of the sale the
         Company established an escrow account for $222,418 to cover certain
         contingencies pursuant to the agreement for a period of nine months.
         The gain on the sale to the Company before taxes and any effect of the
         escrow account was $5,217,443.

         Also the May 8, 1997 Exchange Agreement and the Company's Certificate
         of Incorporation, as amended, required the payment of 25% of the net
         proceeds of the Private Cable sale be used to retire a portion of the
         Company's Series A Preferred Stock and related accumulated preferred
         stock dividend. The Company redeemed 1,356,309 shares of Series A
         Preferred Stock for $1,356,309 and also paid $314,663 of accumulated
         dividends. The Company also accelerated the accretion of $79,536
         related to the redeemed Series A Preferred Stock.

                                       F-6
<PAGE>

                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

                  As part of the Private Cable sale, the Company vested 5,000
                  unvested options relating to the retention of an officer who
                  was terminated as a result of the sale, with the appropriate
                  expense being recorded.

     c.           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, 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 stockholders' deficiency at December 31,
                  2000. As of March 2000, the Company sold its Private Cable
                  business. The funds received from the sale of the assets of
                  the Private Cable business are not sufficient to redeem its
                  Redeemable Preferred Stock due December 31, 2002 or execute
                  its Wireless business plan if the Company does not complete a
                  pending merger (see Note18). The Company will require
                  additional funding in order to execute its Wireless business
                  plan. These factors raise substantial doubt about its ability
                  to continue as a going concern. The financial statements do
                  not include any adjustments relating to the recoverability and
                  classification of reported asset amounts or the amounts or
                  classification of liabilities which might result from the
                  outcome of this uncertainty.

                  If the Company cannot 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, the Company has signed an
                  agreement to merge (see Note 18). If the merger is not
                  consummated, the Company's plan is to seek long-term
                  arrangements with a strategic partner(s) for financing or a
                  sale or the lease of the Wireless assets. This business plan
                  is dependent upon the Company securing the necessary long-term
                  arrangements with a strategic partner(s), 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 a strategic relationship or
                  partnership or sale on terms and conditions satisfactory to
                  the Company, if at all.

                                       F-7
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

                  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.

                  There can be no assurance that the Company will effect the
                  merger or failing the merger that it will be able to develop
                  its' wireless plan. Even with a partner and receipt of
                  necessary regulatory authorizations, there can be no assurance
                  that the Company will be able to launch this wireless
                  alternative service or that it will be commercially
                  successful.

     d.           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

     e.           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.           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.

     g.           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.

                                       F-8
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

     h.           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 and cash equivalents, trade
                  accounts receivables, stockholder 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.

     i.           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.

     j.           Prepaid Lease Expense - Prepaid lease expense represents the
                  Company's deposit relating to the Channel Lease Agreement (see
                  Note 9). The amount is being amortized over the term of the
                  lease agreement.

     k.           Earnings Per Share of Common Stock - Basic and diluted net
                  income (loss) per common share is presented in accordance with
                  SFAS No. 128, "Earnings Per Share" ("SFAS 128"). Basic net
                  income (loss) per common share excludes dilution for common
                  stock equivalents and is computed by dividing net income
                  (loss) available to common stockholders by the weighted
                  average number of common shares outstanding for the period.
                  For the year ended December 31, 2000, diluted net income per
                  common share reflects the potential dilution that would occur
                  if securities or other contracts to issue common stock were
                  exercised. For the year ended December 31, 1998 and 1999,
                  diluted net loss per common share is equal to basic net loss
                  per common share since all common stock equivalents were
                  anti-dilutive.

                                       F-9
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

     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, including FASB Interpretation No. 44,
                  "Accounting for Certain Transactions involving Stock
                  Compensation". For disclosure purposes, net income (loss) and
                  net income (loss) per share data included in Note 3 are
                  provided in accordance with SFAS No. 123, "Accounting for
                  Stock-based Compensation" ("SFAS 123"), as if the fair value
                  method had been applied.

NOTE 2 - RELATED PARTY TRANSACTIONS-CONFLICTS OF INTEREST
---------------------------------------------------------

The following transactions occurred between the Company and related parties:

     a.           Stockholder loans receivable of $20,000 at December 31, 1999
                  were payable on demand and are interest free. During 2000, the
                  stockholder repaid the outstanding loan.

     b.           The Company has been informed that Cacomm, Inc., the Company's
                  majority stockholder, 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 December 31, 2000.

     c.           In 2000, the Series A Preferred Stockholders purchased the
                  Series B Preferred Stock for $131,889 from the majority Common
                  Stockholder Cacomm, Inc.

     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. During
                  2000 this note was paid in full with the proceeds of the
                  Private Cable sale.

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 of

                                      F-10
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

which was filed with the Company's 10K for the year ended 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, 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 share.

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

Exercised                                    16,861                  $2.00
Cancellations                                 5,000                  $2.00
                                            -------                  -----
Balance at December 31, 2000                185,959                  $1.19

The following is a summary of options outstanding and exercisable at December
31, 2000.
<TABLE>
<CAPTION>
                           Options Outstanding                                            Options Exercisable
-------------------------------------------------------------------------------   ----------------------------------
                          Number               Weighted-average       Weighted-             Number          Weighted-
Range of              outstanding at              remaining           average           exercisable at      average
exercise               December 31,              contractual         exercise            December 31,       exercise
 prices                    2000                      life               price                2000            price
---------------- ------------------------ -------------------------- ------------ ----------------------- ------------
<S>                       <C>                        <C>                 <C>                <C>                <C>
     $1.00               150,000                    8 years             $1.00              150,000            $1.00
      2.00                35,959                  4.9 years              2.00               30,959             2.00
  -----------            -------                  ---------             -----              -------            -----
  $1.00-$2.00            185,959                  7.4 years             $1.19              180,959            $1.17
</TABLE>
                                      F-11
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

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 income(loss )
to common stockholders would have been increased to the pro forma amounts
indicated below:

                                                        2000            1999
                                                        ----            ----

Net income (loss)
    As reported                                      $3,321,465     $  (910,808)
    Pro forma                                        $3,317,773     $(1,011,057)

Net income (loss) per common share Basic:
    As reported                                      $     2.82     $     (0.79)
    Pro forma                                        $     2.81     $     (0.87)
Diluted:
    As reported                                      $     1.46     $     (0.79)
    Pro forma                                        $     1.46     $     (0.87)

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 share reflects
only options granted in 1999.

The weighted average fair value of the stock options granted during the years
ended 1999 and 2000 was $0.49 on the date of grant using the Black Scholes
option pricing model with the following assumptions: for 1999 and 2000 -
expected dividend yield 0.0%, risk free interest rate of 4.5%, expected
volatility of 70% and expected life of 5 years.

                                      F-12
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 4 - PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment at December 31, 2000 and 1999 are summarized by major
classification as follows:

                                                2000                   1999
                                                ----                   ----
Office Furniture and Equipment                 $3,528              $    74,445
Transportation Equipment                            -                   24,879
Machinery and Equipment                             -                3,076,666
                                              -------              -----------
                                                3,528                3,175,990

Less:  Accumulated Depreciation                (1,212)              (1,657,176)
                                              -------              -----------
                                              $ 2,316              $ 1,518,814
                                              -------              -----------

Depreciation expense was $96,017, $550,357 and $382,289 in 2000, 1999 and 1998,
respectively. Most of the property and equipment was sold as part of the Private
Cable sale in 2000. Private Cable assets sold during 2000 had a net book value
of $1,347,099. In addition, Wireless Cable assets with a net book value of
$73,382 were sold during 2000 for a loss of $39,731.

                                      F-13
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 5 - INCOME TAXES
---------------------

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

        Current
        -------

        Year ended December 31,            2000              1999         1998
                                           ----              ----         ----
        Federal                         $      -            $    -       $    -
        State                            313,864             5,371        4,851
                                        --------            -----        -----

        TOTAL                           $313,864            $5,371       $4,851
                                        ========            ======       ======

Income tax expense attributable to income (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>
                                                                  2000               1999               1998
                                                                  ----               ----               ----
<S>                                                               <C>                <C>               <C>
Computed expected tax (benefit)                               $ 1,396,463        $ (142,193)       $ (202,024)

Increase (reduction) in income taxes resulting from:

Increase (decrease) in valuation allowance for federal &
state deferred tax assets                                      (1,298,622)          124,570           180,794

Book vs. tax depreciation                                               0             7,709            11,310


State and local income taxes, net of federal income tax
benefit                                                           207,291             3,545             3,202

Non-deductible portion of meals and entertainment                     284             3,734             1,867

Other, net                                                          8,448             8,006             9,702
                                                              -----------        ----------        ----------
                                                              $   313,864        $    5,371        $    4,851
                                                              ===========        ==========        ==========
</TABLE>
                                      F-14
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

The temporary differences and carry forwards which give rise to significant
portions of the deferred tax assets and liabilities at December 31, 2000 and
1999 are presented below:

                                                   2000                1999
                                                   ----                ----
Deferred tax assets:

Net operating loss carry forwards               $ 2,358,428         $ 3,741,697

Compensation paid with Company stock
                                                          -              28,123

Organization and construction costs
capitalized for tax purposes                        298,631             207,521

Less valuation allowance                         (2,657,059)         (3,955,681)
                                                -----------         -----------

Net deferred tax assets                                   -              21,660
                                                -----------         -----------

Deferred tax liabilities:

Property and equipment, principally due to
differences in depreciation                               -             (21,660)
                                                -----------         -----------

Net deferred income taxes                                 -                   -
                                                -----------         -----------

At December 31, 2000, the Company has net operating loss carry forwards for
federal and state and local income tax purposes of approximately $4,150,000 and
$9,787,000, respectively, 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 and the $441,271 note was repaid during 2000.

                                      F-15
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 7 - LONG-TERM DEBT
-----------------------

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

Senior Debt                            2000                  1999
-----------                            ----                  ----
10% Term loan  (a)                     $ -                $1,794,000
BSB line of credit (a)                   -                   250,000
10% Note related to conversion (b)       -                   105,468
                                       ----               ----------
Current long-term debt                   $                $2,149,468
                                -------------------    ---------------------

       a.         10% Term BSB Bank & Trust Company loan and line of credit - 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 11) 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. On December 31,1999 the balance was $250,000.

                  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. As of December 31, 2000 the warrants remain
                  outstanding and expire on July 3, 2008.

       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. During 2000, these notes were paid off with the
                  proceeds of the sale of the assets of the Private Cable
                  system.

                                      F-16

<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 8 - COMMITMENTS & CONTINGENCIES
------------------------------------

Operating Leases
----------------

The Company's lease in Wall, N.J. expired in May 2000 and the Company located
less expensive space effective June 1, 2000.

The Company leases office space and equipment for use in continuing operations.
The leases are on a month by month basis with minimum lease payments of $846.

Rent expense under operating leases amounted to $18,735, $28,464 and $38,998 for
the years ended December 31, 2000, 1999, and 1998, 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 policy expired January 1, 2001 and as of December 31,
2000, the Company does not have any non-officer employees.

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 twelve months base pay for each eligible
employee and immediate vesting of all issued and outstanding stock options,
subject to certain limitations. The Company has extended the policy for
Corporate officers until September 30, 2001.

The change-of-control agreement for the President and C.E.O. provides for
severance pay in an amount equal to twelve months of base pay upon a
change-of-control prior to June 1, 2001.

Legal Proceedings
-----------------

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. On March 18, 2001, the Superior Court of New Jersey

                                      F-17
<PAGE>

                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

Legal Division ruled in favor of Mr. Mastrorilli and ordered the two parties to
agree to final damages pursuant to the terms of the contracts and current
renewals placed by Mr. Mastrorilli. The Company has accrued for an estimate of
such damages as of December 31, 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.

At December 31, 2000, the minimum royalty payments over the remaining license
term are as follows:
                                    For the Year Ended

                                 2001               $228,476
                                 2002                229,104
                                 2003                229,104
                                 2004                 19,092
                                                    --------
                                                    $705,776

                                      F-18
<PAGE>

                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 10 - NET INCOME (LOSS) PER SHARE
-------------------------------------

The Company computes basic and diluted earnings per share in accordance with
Statement of Financial Accounting Standards No. 128 "Earnings Per Share SFAS
128" (SFAS 128).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,                                         2000          1999           1998
                                                                         ----          ----           ----
Basic and diluted EPS
<S>                                                                      <C>           <C>              <C>
     Numerator:
        Extraordinary loss from early extinguishment of debt         $         -    $       -       $165,779
        Net income (loss)                                              3,793,379     (418,216)      (594,188)
        Redeemable Preferred Stockholders dividend                       318,623      400,000        400,000
        Accretion of Preferred Stock                                     153,291       92,593         92,593
                                                                     -----------------------------------------
        Net income (loss) to Common Stockholders                      $3,321,465    $(910,809)   $(1,086,781)

     Denominator:
        Weighted average:
          Common shares outstanding for basic                         1,179,257    1,157,005       1,154,354
          Common shares outstanding for diluted                       2,267,763    1,157,005       1,154,354

     Basic                                                           $     2.82    $   (0.79)    $     (0.94)
     Diluted EPS                                                     $     1.46    $   (0.79)    $     (0.94)
</TABLE>
      Warrants and stock options to purchase 30,050, 2,486,860 and 2,279,040 of
      common stock outstanding as of December 31, 2000, 1999 and 1998,
      respectively, were excluded from the calculation of diluted net loss per
      share as the effect of their inclusion would have been anti-dilutive.

                                      F-19
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

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.

The Company paid off this loan with the proceeds of the BSB Bank & Trust loan on
July 3, 1998 as discussed in Note 7. 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 expire on May 8, 2008.

This put 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 the 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.

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.

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 and
when certain liquidity events occur.

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 a
significant 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 and is being amortized over the life of the preferred
stock. The cost of the put cannot be determined at this time since it is based
upon the value of a sale of a significant asset, which cannot be assured.

                                      F-20
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

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).
This note was paid during 2000 with part of the proceeds of the Private Cable
sale.

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.

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 and $1,061,737 at December 31, 2000. Currently, the Company
does not have positive equity and, therefore, is prohibited from paying
dividends. However, if there is an event which causes a liquidation of Preferred
Stock, a provision in the Exchange Agreement requires the Company to liquidate a
portion of the dividends which have accumulated.

The sale of the Private Cable system in March 2000 caused a $1.7 million
liquidation of the Series A Preferred Stock and the payment of related unpaid
dividends in the amount of $314,663. The remaining Series A Preferred Stock is
3,963,990 shares at $1 per share and accumulated dividend of $1,061,737.

NOTE 14 - STOCKHOLDERS EQUITY TRANSACTION
-----------------------------------------

During 2000, option holders exercised options to purchase 16,861 shares of
common stock at $2.00 per share.

During 1999, option holders exercised options to purchase 16,154 shares of
common stock at $2.00 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.

                                      F-21
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 15 - SIGNIFICANT CUSTOMERS
-------------------------------

In March 2000, the Company completed a sale of its Private Cable systems,
therefore, it had no significant customers at December 31, 2000. For the years
ending December 31, 1999 and 1998, revenue from the Company's three largest
customers represented 39% and 33%, respectively, of total revenues.

NOTE 16 - CONCENTRATION OF CREDIT RISK
--------------------------------------

The Company maintains its cash and cash equivalents in financial institutions.
The Federal Deposit Insurance Corporation only insures up to $100,000 at any one
financial institution. The Company believes that it has made prudent choices in
the selection of the Financial Institutions that it has deposits in.

                                      F-22
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 17- QUARTERLY RESULTS (UNAUDITED)
--------------------------------------

The following tables contain selected quarterly financial data for each quarter
of 1999 and 2000. The Company believes that the following information reflects
all normal recurring adjustments necessary for a fair presentation of the
information for the periods presented. The operating results for any quarter are
not necessarily indicative of results for any future periods.
<TABLE>
<CAPTION>
                                                    Year Ended December 31, 2000
                             1st Quarter     2nd Quarter    3rd Quarter     4th Quarter        Year
                            --------------------------------------------------------------------------
<S>                             <C>              <C>            <C>             <C>            <C>
Gross revenue                $  597,165       $  80,630      $    362        $       -      $  678,157

Gross profit                    360,775          37,291        (1,432)        (139,622)        257,012
Net income (loss) to
common stockholders           4,078,169        (352,069)      134,188         (538,823)      3,321,465
Net income (loss)
per common share:
    Basic                    $     3.49       $   (0.30)     $   0.11        $   (0.48)     $     2.82
    Diluted                  $     1.49       $   (0.30)     $   0.06        $   (0.48)     $     1.46


                                                    Year Ended December 31, 1999
                             1st Quarter     2nd Quarter    3rd Quarter     4th Quarter        Year
                            --------------------------------------------------------------------------
Gross revenue                $  875,955       $ 669,308      $537,951        $ 878,802      $2,962,016
Gross profit                    590,237         463,075       336,679          577,534       1,967,525
Net income (loss) to
common stockholders            (106,259)       (267,270)     (378,868)        (158,412)       (910,809)
Net income (loss)
per common share:
    Basic                    $    (0.09)      $   (0.23)     $  (0.33)       $   (0.14)     $    (0.79)
    Diluted                  $    (0.09)      $   (0.23)     $  (0.33)       $   (0.14)     $    (0.79)
</TABLE>


NOTE 18 - ANNOUNCEMENT OF AGREEMENT TO MERGE
--------------------------------------------

On September 12, 2000, MagnaVision Corporation. and Blue Acquisition Corp., a
wholly owned subsidiary of IPWireless, Inc. based in San Bruno, CA, signed a
definitive agreement for Blue Acquisition Corp. to merge with and into
MagnaVision Corporation. All outstanding common and preferred stock of
MagnaVision shall be exchanged in the transaction for cash and/or securities as
described below.

This agreement has been approved by the majority stockholders of MagnaVision and
by the Board of Directors of MagnaVision, Blue Acquisition Corp. and IPWireless.
The agreement is contingent upon MagnaVision meeting certain conditions at
closing, some of which are not within the control of the Company. The

                                      F-23
<PAGE>
                    MAGNAVISION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

Company is attempting to satisfy these conditions. According to the agreement,
each share of MagnaVision Class A and Class B Preferred Stock outstanding at the
time of closing will receive $1.00 plus any accumulated dividends then due. Each
share of MagnaVision Common Stock outstanding will receive approximately $5.78
per share. Stockholders who hold less than 1% of the fully diluted shares of
MagnaVision common stock (36,507 or fewer shares) will receive their
consideration entirely in cash. Common stockholders holding more than 1% of the
fully diluted shares will receive approximately 80% of their consideration in
cash and 20% of their consideration in the form of notes. Warrant and option
holders will receive approximately $5.78 less an amount equal to the cost of
exercising the warrant or option. Warrant and option holders who hold in excess
of 1% of the Company's fully diluted common stock will receive approximately 20%
of the share consideration in the form of notes and the remainder in cash. In
addition, the agreement has provisions for holders of MagnaVision Common Stock,
warrants and options to receive additional consideration based upon the Company
achieving certain objectives.

The merger agreement expires on September 12, 2001.

                                      F-24
<PAGE>


                                  P A R T  III

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                                            Officer Since
----                                   ---       --------                                            -------------
<S>                                    <C>      <C>                                                  <C>
Robert E. Hoffman                      56        Director, Chairman, President(1)(2)                  1998

Jeffrey Haertlein                      53        Chief Financial Officer                              1996

Evan Wildstein                         30        Director(1)(2)(4)                                    1997

Geoffrey Thompson                      60        Director(4)(3)                                       1997

George Zombek                          37        Director(4) (resigned January 15,2001)               1997

Kevin Falvey                           44        Director(1)(2)(3)(4)                                 1997
</TABLE>

Pursuant to the Exchange Agreement and the related Stockholders Agreement of
such date, Cacomm, Inc. 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.

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.

                                      -24-

<PAGE>

(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 Mr. Falvey are representatives of
         KOCO Capital Company, LP ("KOCO") and IBJ Capital Company, Inc.
         ("IBJ"), 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, IBJ, 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 IBJ 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 IBJ. 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 IBJ 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 stockholders 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.

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.

                                      -25-
<PAGE>

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 the 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.

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.

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, (resigned January 15,2001) was a Director of the Registrant since
June 1997 as a representative of IBJ, 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 IBJ 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.

                                      -26-
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

Set forth below is the aggregate remuneration paid or accrued by the Company
during the years ended December 31, 2000, 1999 and 1998 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
<TABLE>
<CAPTION>

Name and Principal Position        Year         Salary          Bonus        Options
---------------------------        ----         ------          -----        -------
<S>                                <C>          <C>             <C>          <C>
Robert E. Hoffman                  2000         $175,000        $43,750         -
Robert E. Hoffman                  1999         $175,000        $62,500      150,000
Robert E. Hoffman                  1998(1)      $ 74,038        $15,000         -
</TABLE>

(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.

         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.


                                      -27-

<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, 2000 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.                                            831,889                          70.1
P.O. Box 163
Sea Girt, NJ  08750

KOCO Capital Company, LP                                730,773(1)                       38.1
111 Radio Circle
Mt. Kisco, NY  10549

IBJS Whitehall Capital Corporation                    1,096,159(2)                       48.0
One State Street
New York, NY  10004

Robert E. Hoffman
521 Susan Constant Drive                                159,000(3)                       11.9
Virginia Beach, VA  23451

Access Capital, Inc.
405 Park Avenue                                         138,536(4)                       10.5
New York, NY  10022

BSB Bank & Trust Company
58-68 Exchange Street                                   146,176(5)                       11.0
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. 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.

                                      -28-

<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>                         <C>
Robert E. Hoffman                                             159,000(1)                         11.9
Jeffrey Haertlein                                              15,382(2)                          1.3
All officers and directors as a group                         174,382(3)                         12.9
(2 persons)
</TABLE>

(1)      Constitutes options currently exercisable and shares of Common Stock
         held by Mr. Hoffman.
(2)      Includes shares subject to currently exercisable options held by Mr.
         Haertlein.
(3)      Includes 165,382 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 Mr. Falvey and by
         Messrs. Wildstein and Thompson, respectively, on behalf of IBJS Capital
         Company, Inc. and KOCO Capital Company, L.P.

                                      -29-

<PAGE>



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 ("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 Lending 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 Lending Facility and failed to make its quarterly interest payment of
$122,095. In May 1997, pursuant to the 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 stockholders 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 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.


                                      -30-


<PAGE>


                                   P A R T  IV

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:
                                                                            Page
                                                                            ----
Independent Auditors' Report ............................................    F-1

Consolidated Balance Sheets as of December 31, 2000 and 1999 ............    F-2

Consolidated Statements of Operations for years ended
December 31, 2000, 1999 and 1998 ........................................    F-3

Consolidated Statements of Stockholders' Deficiency for years ended
December 31, 2000, 1999 and 1998 ........................................    F-4

Consolidated Statements of Cash Flows for years ended
December 31, 2000, 1999 and 1998 ........................................    F-5

Notes to Consolidated Financial Statements ..............................    F-6


(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
</TABLE>

                                      -31-

<PAGE>

<TABLE>
<CAPTION>

<S>                       <C>                                                                  <C>
       (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

       (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
</TABLE>

                                      -32-

<PAGE>

<TABLE>
<CAPTION>

<S>                       <C>                                                                    <C>
       (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.

       (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.
</TABLE>

                                      -33-

<PAGE>


<TABLE>
<CAPTION>

<S>                      <C>                                                                <C>
       (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.

       (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.
</TABLE>

                                      -34-

<PAGE>

<TABLE>
<CAPTION>

<S>                                   <C>                                                   <C>
       (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

       (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 July 3,                      Form 10-K
              1998 & Trust Company                                                            dated 4/6/99

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

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

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

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

       (uu)   Form of Non-Qualified Stock Option Plan of 1999                                 Form 10-K
              as of January 19, 1999                                                          dated 4/14/00

       (vv)   Form of Asset Purchase Agreement between Lamont                                 Form 10K
              Television Systems, Inc., and Magnavision Corporation                           dated 4/14/00
              dated as of February 29, 2000

       (ww)   Agreement and Plan of Merger between MagnaVision                                Form 8-K
              Corporation and Blue Acquisition Corp., a wholly owned                          dated 9/12/00
              subsidiary of IPWireless, Inc., dated September 12, 2000

(21)   Subsidiaries of Registrant

</TABLE>
                                      -35-

<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 11, 2001                        By: ______/s/________________
                                                   ROBERT E. HOFFMAN
                                                   Principal Executive Officer


                                              By: _____/s/___________
                                                   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/______________         CEO, President, Director           April 11, 2001
Robert E. Hoffman

_____/s/______________         Director                           April 11, 2001
Evan Wildstein

_____/s/______________         Director                           April 11, 2001
Kevin Falvey

 ____/s/______________         Director                           April 11, 2001
Geoffrey Thompson


                                      -36-

<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).


                                      -37-