Form SB-2 for Seaview Video Technology, Inc.

SB-2 1 seaviewvideo.htm Form SB-2 for Seaview Video Technology, Inc.

As filed with the Securities and Exchange Commission on September 30, 2002
An Exhibit List can be found on page II-5.
Registration No. 333-

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

_____________________________

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________________

SEAVIEW VIDEO TECHNOLOGY, INC.
(Name of small business issuer in its charter)

Nevada 3651 87-0438640
(State or other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)

200 Madonna Blvd., 2nd Flr. N
Tierra Verde, FL 33715
(727) 866-7440
(727) 866-7480
(Address and telephone number of principal executive offices and principal place of business)

George S. Bernardich, III
SEAVIEW VIDEO TECHNOLOGY, INC.
200 Madonna Blvd., 2nd Flr. N
Tierra Verde, FL 33715
(727) 866-7440

(Name, address and telephone number of agent for service)

________________________________________
Copies to:
Gregory Sichenzia
Thomas A. Rose
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas, 21st Flr.
New York, New York 10018
(212) 930-9700
(212) 930-9725 (fax)
________________________________________

Approximate date of proposed sale to the public:
From time to time after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. _________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. _________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. _________

________________________

CALCULATION OF REGISTRATION FEE
======================================= ================ ================== ==================== =============
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities Amount to be Offering Price Per Aggregate Offering Registration
to be Registered Registered (1) Security(2) Price Fee
--------------------------------------- ---------------- ------------------ -------------------- -------------
Shares of common stock, $.001 par value 40,194,489(3) $0.13 $5,225,283.57 $ 480.73

Shares of common stock, $.001 par value 6,000,000(4) $0.13 $ 780,000.00 $ 71.76

Total $6,005,283.57 $ 552.49
======================================= ================ ================== ==================== =============

(1) Includes shares of our common stock, par value $0.001 per share, which may
be offered pursuant to this registration statement, which shares are
issuable upon conversion of secured convertible debentures and the exercise
of outstanding warrants held by the selling stockholders. We are also
registering such additional shares of common stock as may be issued as a
result of the anti-dilution provisions contained in such securities. The
number of shares of common stock registered hereunder represents a good
faith estimate by us of the number of shares of common stock issuable upon
conversion of the debentures and upon exercise of the warrants. For
purposes of estimating the number of shares of common stock to be included
in this registration statement, we calculated 200% of the number of shares
of our common stock issuable upon conversion of the debentures and upon
exercise of the warrants. Should the conversion ratio result in our having
insufficient shares, we will not rely upon Rule 416, but will file a new
registration statement to cover the resale of such additional shares should
that become necessary.

(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) and Rule 457(g) under the Securities Act of
1933, using the average of the high and low price as reported on the
Over-The-Counter Bulletin Board on September 24, 2002.

(3) Includes 200% of the shares underlying convertible debentures.

(4) Includes 200% of the shares underlying warrants exercisable at $.10 per
share.

_____________________________

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

________________________________________________________________________________

PRELIMINARY PROSPECTUS Subject To Completion, Dated September 30, 2002

The information in this prospectus is not complete and may be changed.

SeaView Video Technology, Inc.
46,194,489 Shares of
Common Stock

This prospectus relates to the resale by the selling stockholders of
46,194,489 shares of our common stock, based on current market prices. The
selling stockholders may sell common stock from time to time in the principal
market on which the stock is traded at the prevailing market price or in
negotiated transactions. The selling stockholders are deemed underwriters of the
shares of common stock, which they are offering.

We will pay the expenses of registering these shares.

Our common stock is registered under Section 12(g) of the Securities
Exchange Act of 1934 and is listed on the Over-The-Counter Bulletin Board under
the symbol "SEVU." The last reported sales price per share of our common stock
as reported by the Over-The-Counter Bulletin Board on September 20, 2002, was
$.13.

_____________________________

Investing in these securities involves significant risks.
See "Risk Factors" beginning on page 3.
_____________________________

The Securities and Exchange Commission and state securities regulators have
not approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.

The date of this prospectus is _______, 2002.

The information in this prospectus is not complete and may be changed. This
prospectus is included in the registration statement that was filed by SeaView
Video Technology Inc., with the Securities and Exchange Commission. The Selling
Stockholders may not sell these securities until the registration statement
becomes effective. This prospectus is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.

PROSPECTUS SUMMARY

The following summary highlights selected information contained in this
prospectus. This summary does not contain all the information you should
consider before investing in the securities. Before making an investment
decision, you should read the entire prospectus carefully, including the "Risk
Factors" section, the financial statements and the debentures to the financial
statements.

SeaView Video Technology, Inc.

We are engaged through our Marine Products Segment in the marketing and
sale of underwater video cameras, lighting and accessories principally to retail
sporting goods businesses throughout the United States. We are also engaged
through our Security Products Segment in the development, marketing and sale of
proprietary video security network devices and consumer electronic products,
that utilize patented technologies, licensed by us, to retailers, commercial
businesses and original equipment manufacturers throughout the United States.

Our principal offices are located at 200 Madonna Boulevard, Tierra
Verde, Florida 33715, and our telephone number is (727) 866-7440. We were
formed under the laws of the state of Utah, but subsequently changed our
domicile to Nevada.

The Offering

Common stock offered by selling stockholders...................... Up to 46,194,489 shares, based on current
(includes 200% of the shares underlying convertible debentures and market prices and assuming full conversion
warrants) of the convertible debentures, with interest for
one year and the full exercise of the
warrants. This number represents 55.61% of
our current outstanding stock
Common stock to be outstanding after the offering................. Up to 83,071,562 shares
Use of proceeds................................................... We will not receive any proceeds from the
sale of the common stock.
Over-The-Counter Bulletin Board Symbol............................ SEVU

The above information regarding common stock to be outstanding after
the offering is based on 36,877,073 shares of common stock outstanding as of
September 20, 2002 and assumes the subsequent conversion of our issued
convertible debentures, with interest, and exercise of warrants by our selling
stockholders.

RISK FACTORS

This investment has a high degree of risk. Before you invest you should
carefully consider the risks and uncertainties described below and the other
information in this prospectus. If any of the following risks actually occur,
our business, operating results and financial condition could be harmed and the
value of our stock could go down. This means you could lose all or a part of
your investment.

Risks Related To Our Business:

We have had losses since our inception. We expect losses to continue in the
future and there is a risk we may never become profitable.

We have incurred losses and experienced negative operating cash flow
since our formation. For our fiscal years ended December 31, 2001 and 2000, we
had a net loss of ($2,829,836) and ($3,643,783), respectively. For the six month
period ended June 30, 2002, we had a net loss of ($3,204,770). We expect to
continue to incur significant operating expenses as we maintain our current line
of power-line products and continue research and development toward new advance
power-line technologies. Our operating expenses have been and are expected to
continue to outpace revenues and result in significant losses in the near term.
We may never be able to reduce these losses, which will require us to seek
additional debt or equity financing. If such financing is available, of which
there can be no assurance, you may experience significant additional dilution.

Our failure to respond to rapid change in the market for induction radio
frequency systems could cause us to lose revenue and harm our competitive
position.

Our future success will depend significantly on our ability to develop
and market new products that keep pace with technological developments and
evolving industry standards for technology that enables video transmission over
AC and DC electrical conductors. Our delay or failure to develop or acquire
technological improvements, adapt our products to technological changes or
provide technology that appeals to our customers may cause us to lose customers
and may prevent us from generating revenue which could ultimately cause us to
cease operations.

If we are unable to obtain additional funding our business operations will be
harmed.

We believe that our available short-term assets and investment income
will be sufficient to meet our operating expenses and capital expenditures
through the end of fiscal year 2002. We do not know if additional financing will
be available when needed, or if it is available, if it will be available on
acceptable terms. Insufficient funds may prevent us from implementing our
business strategy or may require us to delay, scale back or eliminate certain
contracts for the provision of our technology and products.

Our operating results are likely to fluctuate significantly.

As a result of our limited operating history and the rapidly changing
nature of the markets in which we compete, our quarterly and annual revenues and
operating results are likely to fluctuate from period to period. These
fluctuations may be caused by a number of factors, many of which are beyond our
control. These factors include the following, as well as others discussed
elsewhere in this section:

-- how and when we introduce new products and services and enhance
our existing products and services;
-- our ability to attract and retain new customers and satisfy our
customers' demands;
-- the timing and success of our brand-building and marketing
campaigns;
-- our ability to establish and maintain strategic relationships;

-- our ability to attract, train and retain key personnel;
-- the emergence and success of new and existing competition;
-- varying operating costs and capital expenditures related to the
expansion of our business operations and infrastructure,
domestically and internationally, including the hiring of new
employees;
-- changes in the mix of products and services that we sell to our
customers;
-- costs and effects related to the acquisition of businesses or
technology and related integration; and
-- costs of litigation and intellectual property protection.

In addition, because the market for our products and services is
relatively new and rapidly changing, it is difficult to predict future financial
results.

For these reasons, you should not rely on period-to-period comparisons
of our financial results, if any, as indications of future results. Our future
operating results could fall below the expectations of public market analysts or
investors and significantly reduce the market price of our common stock.
Fluctuations in our operating results will likely increase the volatility of our
stock price.

There are risks associated with forward-looking statements made by us and actual
results may differ.

Some of the information in this Form SB-2 contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate" and "continue," or similar words. You should
read statements that contain these words carefully because they:

-- discuss our future expectations;
-- contain projections of our future results of operations or of our
financial condition; and
-- state other "forward-looking" information.

We believe it is important to communicate our expectations. However,
there may be events in the future that we are not able to accurately predict or
over which we have no control. The risk factors listed in this section, as well
as any cautionary language in this prospectus, provide examples of risks,
uncertainties and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking statements. You should
be aware that the occurrence of the events described in these risk factors could
have an adverse effect on our business, results of operations and financial
condition.

Our independent auditors have expressed doubt about our ability to continue as a
going concern, which may hinder our ability to obtain future financing.

In their report dated April 10, 2002, our independent auditors stated
that our financial statements for the year ended December 31, 2001 were prepared
assuming that we would continue as a going concern. Our ability to continue as a
going concern is an issue raised as a result of a loss for the year ended
December 31, 2001 in the amount of $2,829,836 and an accumulated deficit of
$6,484,289 as of December 31, 2001. We continue to experience net operating
losses. Our ability to continue as a going concern is subject to our ability to
generate a profit and/or obtain necessary funding from outside sources,
including obtaining additional funding from the sale of our securities,
increasing sales or obtaining loans and grants from various financial
institutions where possible. The going concern qualification in the auditor's
report increases the difficulty in meeting such goals and there can be no
assurances that such methods will prove successful.

We have a few proprietary rights, the lack of which may make it easier for our
competitors to compete against us.

We attempt to protect our limited proprietary property through
copyright, trademark, trade secret, nondisclosure and confidentiality measures.
Such protections, however, may not preclude competitors from developing similar
technologies. Any inability to adequately protect our proprietary technology
could harm our ability to compete.

Our future success and ability to compete depends in part upon our
proprietary technology and our trademarks, which we attempt to protect with a
combination of patent, copyright, trademark and trade secret laws, as well as
with our confidentiality procedures and contractual provisions. These legal
protections afford only limited protection and are time-consuming and expensive
to obtain and/or maintain. Further, despite our efforts, we may be unable to
prevent third parties from infringing upon or misappropriating our intellectual
property.

We are a defendant in a class action suit.

We are a defendant in a consolidated class action lawsuit pending in
the United States District Court for the Middle District of Florida against us
and Richard McBride, our former chief executive officer. The plaintiffs claimed
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder. In the complaints, the plaintiffs to
those actions alleged, among other things, that from March 30, 2000 to March 19,
2001:

o we and Mr. McBride misstated our sales and revenue figures;
o improperly recognized revenues;
o misrepresented the nature and extent of our dealer network;
o falsely touted purported sales contracts and agreements with large
retailers;
o misrepresented our ability to manufacture, or to have manufactured,
our products; and
o misrepresented our likelihood of achieving certain publicly
announced sales targets.

The consolidated complaint seeks compensatory and other damages, and costs and
expenses associated with the litigation and now also seeks relief against James
Cox, former director, on the same grounds as the claims against us and McBride.

On May 17, 2002, we reached an agreement in principle, in the form of a
Memorandum of Understanding, to settle the action. In the settlement, we would
tender 6,000,000 shares of our free trading common stock to the class
participants. In addition, we would pay, up to a maximum of $125,000, for costs
incurred by the plaintiffs in the litigation, plus the costs of settlement
notice and administration. In the Memorandum of Understanding, we and the
plaintiffs' counsel have agreed to prepare and execute a definitive Stipulation
of Settlement and jointly seek preliminary and final Court approval. The
Settlement is conditional upon receiving final judicial approval of the
Stipulation. However, there can be no assurances that the Settlement will be
accepted by the court and receive judicial approval.

We are being investigated by the Securities and Exchange Commission.

The Securities and Exchange Commission's Division of Enforcement began
an investigation in January 2001 relating to our financial results and common
stock performance during 2000. As a result Richard McBride, former chairman,
president and chief executive officer, resigned from all positions with us.
Further, all executives involved with the allegations were replaced during 2001
and Mr. McBride passed away in October 2001. We have cooperated fully with the
SEC, which included the testimony of former employees, Col. Larry Hoffman
(retired), and Christy Mutlu, Doug Bauer, CFO, and J. R. Cox, former director,
have also testified before the SEC. Although our legal counsel indicates that
this matter will be resolved with no adverse actions against us, we can give no
assurances that the SEC will not recommend an enforcement action against us.

Risks Relating To Our Current Financing Agreement:

There are a large number of shares underlying our convertible debentures, and
warrants that may be available for future sale and the sale of these shares may
depress the market price of our common stock.

As of September 20, 2002, we had 36,877,073 shares of common stock
issued and outstanding and convertible debentures outstanding that
may be converted into an estimated 20,097,245 shares of common stock at current
market prices, and outstanding options and warrants to purchase 4,396,9005
shares of common stock. Moreover, we have proposed a settlement to issue
6,000,000 shares to shareholders pursuant to a class action. In addition, the
number of shares of common stock issuable upon conversion of the outstanding
convertible debentures may increase if the market price of our stock declines.
All of the shares, including all of the shares issuable upon conversion of the
debentures and upon exercise of our warrants, may be sold without restriction.
The sale of these shares may adversely affect the market price of our common
stock.

The continuously adjustable conversion price feature of our convertible
debentures could require us to issue a substantially greater number of shares,
which will cause dilution to our existing stockholders.

Our obligation to issue shares upon conversion of our convertible
securities is essentially limitless.

The following is an example of the amount shares of our common stock
that is issuable, upon conversion of our convertible debentures, based on market
prices 25%, 50% and 75% below the market price, as of September 20, 2002 of
$0.13.

With Number of Shares Percentage of
% Below Market Price Per Share Discount of 50% Issuable Outstanding Stock

25% $.0975 .0488 25,409,836 41%
50% $.0650 .0325 38,153,846 51%
75% $.0325 .0163 76,073,619 67%

As illustrated, the number of shares of common stock issuable upon conversion of
our convertible debentures will increase if the market price of our stock
declines, which will cause dilution to our existing stockholders.

The issuance of shares upon conversion of the convertible debentures and
exercise of outstanding warrants may cause immediate and substantial dilution to
our existing stockholders.

The issuance of shares upon conversion of the convertible debentures
and exercise of warrants may result in substantial dilution to the interests of
other stockholders since the selling stockholders may ultimately convert and
sell the full amount issuable on conversion. Although the selling stockholders
may not convert their convertible debentures and/or exercise their warrants if such
conversion or exercise would cause them to own more than 4.99% of our
outstanding common stock, this restriction does not prevent the selling
stockholders from converting and/or exercising some of their holdings and then
converting the rest of their holdings. In this way, the selling stockholders
could sell more than this limit while never holding more than this limit. There
is no upper limit on the number of shares that may be issued which will have the
effect of further diluting the proportionate equity interest and voting power of
holders of our common stock, including investors in this offering.

If we are required for any reason to repay our outstanding convertible
debentures, we would be required to deplete our working capital, if available,
or raise additional funds. Our failure to repay the convertible debentures, if
required, could result in legal action against us, which could require the sale
of substantial assets.

In September 2002, we entered into a Securities Purchase Agreement for
the sale of an aggregate of $1,000,000 principal amount of convertible
debentures. The convertible debentures are due and payable, with 12% interest,
one year from the date of issuance, unless sooner converted into shares of our
common stock. Although we currently have $350,000 convertible debentures
outstanding, the investor is obligated to purchase additional convertible
debentures in the aggregate of $650,000. In addition, any event of default as
described in the convertible debentures could require the early repayment of the
convertible debentures, including a default interest rate of 15% on the
outstanding principal balance of the debentures if the default is not cured with the
specified grace period. We anticipate that the full amount of the convertible
debentures, together with accrued interest, will be converted into shares of our
common stock, in accordance with the terms of the convertible debentures. If we
are required to repay the convertible debentures, we would be required to use
our limited working capital and raise additional funds. If we were unable to
repay the debentures when required, the debenture holders could commence legal action
against us and foreclose on all of our assets to recover the amounts due. Any
such action would require us to curtail or cease operations.

Risks Relating To Our Common Stock:

Our directors and executive officers beneficially own approximately 22.70% of
our stock; their interests could conflict with yours; significant sales of stock
held by them could have a negative effect on our stock price; stockholders may
be unable to exercise control.

As of September 25, 2002, our executive officers, directors and
affiliated persons beneficially own approximately 22.70% of our common stock.
George S. Bernardich, III, our president, chief executive officer and chairman
of the board, beneficially owns approximately 11.72% of our common stock. As a
result, our executive officers, directors and affiliated persons will have
significant influence to:

-- elect or defeat the election of our directors;
-- amend or prevent amendment of our articles of incorporation or
bylaws;
-- effect or prevent a merger, sale of assets or other corporate
transaction; and
-- control the outcome of any other matter submitted to the
stockholders for vote.

As a result of their ownership and positions, our directors and
executive officers collectively are able to significantly influence all matters
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions. In addition, sales of significant amounts
of shares held by our directors and executive officers, or the prospect of these
sales, could adversely affect the market price of our common stock. Management's
stock ownership may discourage a potential acquirer from making a tender offer
or otherwise attempting to obtain control of us, which in turn could reduce our
stock price or prevent our stockholders from realizing a premium over our stock
price.

Our common stock is subject to "penny stock" rules.

The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to us,
as any equity security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require:

o that a broker or dealer approve a person's account for transactions
in penny stocks; and
o the broker or dealer receive from the investor a written agreement
to the transaction, setting forth the identity and quantity of the
penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:

o obtain financial information and investment experience objectives of
the person; and
o make a reasonable determination that the transactions in penny
stocks are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form:

o sets forth the basis on which the broker or dealer made the
suitability determination; and
o that the broker or dealer received a signed, written agreement from
the investor prior to the transaction.

Disclosure also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative, current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.

USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be
offered and sold from time to time by the selling stockholders. We will not
receive any proceeds from the sale of shares of common stock in this offering.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is quoted on the OTC Bulletin Board under the symbol
"SEVU." Our common stock has been quoted on the OTCBB since April of 1999.

For the periods indicated, the following table sets forth the high and
low bid prices per share of common stock. These prices represent inter-dealer
quotations without retail markup, markdown, or commission and may not
necessarily represent actual transactions.

Low($) High ($)
------ --------
2000
----
First Quarter 1.22 21.25
Second Quarter 8.13 14.75
Third Quarter 7.75 13.25
Fourth Quarter 1.88 11.56

2001
----
First Quarter .72 5.19
Second Quarter .20 1.84
Third Quarter .27 .75
Fourth Quarter .27 1.35

2002
----
First Quarter .17 .49
Second Quarter .14 .53
Third Quarter* .13 .21

*(as of September 24, 2002)

Holders

As of September 25, 2002 we had approximately 1,316 holders of our
common stock. The number of record holders was determined from the records of
our transfer agent and does not include beneficial owners of common stock whose
shares are held in the names of various security brokers, dealers, and
registered clearing agencies. The transfer agent of our common stock is
Signature Stock Transfer Inc., 14675 Midway Road, Suite 221, Addison, Texas
75001.

We have never declared or paid any cash dividends on our common stock.
We do not anticipate paying any cash dividends to stockholders in the
foreseeable future. In addition, any future determination to pay cash dividends
will be at the discretion of the Board of Directors and will be dependent upon
our financial condition, results of operations, capital requirements, and such
other factors as the Board of Directors deem relevant.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our plan of operation should
be read in conjunction with the financial statements and the related debentures.
This prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 which are based upon current expectations that involve
risks and uncertainties, such as our plans, objectives, expectations and
intentions. Our actual results and the timing of certain events could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth under "Risk Factors,"
"Business" and elsewhere in this prospectus. See "Risk Factors."

Overview
During the quarterly period ended June 30, 2002, management focused its
efforts in the following areas:

o Securing long-term financing
o Reducing overhead costs
o Continuation of research and development for D.C.
transportation and parking lot surveillance
o Solidifying overseas production capabilities
o Reorganizing its sales management team and sales strategy

As we reported in our Form 10QSB filed on May 14, 2002, we entered our
fiscal second quarter in an undercapitalized position. Although management
succeeded in raising additional short-term capital to fund operations, we were
unable to secure our anticipated long-term financing as of June 30, 2002.
Securing this funding remains the primary focus of our management. While the
lack of long-term capital admittedly hampered management's ability to fully
execute certain aspects of our business plan, we nevertheless were able to
achieve progress in several areas.

During the quarter ended June 30, 2002, management took action to
reduce overhead, both through a considerable reduction in staff and by
relocating the corporate headquarters to more affordable premises. Considerable
progress was made in the research and development area, particularly in
final-stage development of our D.C. Video boards for the transportation market.
Circuit-design improvements enhanced the product's quality and performance, in
accordance with existing transportation industry standards and requirements.
Performance and certification testing, both in the lab and in the field,
resulted in product acceptance by several potential customers in the trucking
industry.

Plans to manufacture several of our products overseas were solidified
during the quarter, with production to begin upon completion of the capital
funding process.

We hired a new Director of Sales and Marketing, to implement a more
structured sales strategy for both the Marine and Security Divisions. We added
several new customers during the quarter, and continued our pursuit of large
consumer retailers, presenting proposals for third- and fourth-quarter
deliveries. Our SecureView outdoor camera underwent in-store trials at a major
consumer retailer.

Revenues for the quarter were constrained by the level of financial
resources available, resulting in an order backlog in excess of $250,000 at June
30, 2002.

Results of Operations

Discussion of the six months ended June 30, 2002 compared with the six months
ended June 30, 2001.

Net revenue. Net revenue decreased 44% from $498,471 for the quarter
ended June 30, 2001 to $281,575 for the six months ended June 30, 2002. Marine
product segment sales were $162,266 or 58 % of total revenues for the six months
ended June 30, 2002. Security product segment sales were $119,309 or 42% of
total revenues for the six months ended June 30, 2002. Our security products
were first introduced for sale in May of 2001. Product segment data was not
available for the quarter ended June 30, 2001 to provide a comparative analysis.
The sluggish economy adversely affected sales in the marine products segment, as
well as our decision to reduce our advertising and attendance at marine trade
shows while concentrating on obtaining new mass-retailers for both segments. The
limited financial resources available to us also adversely affected revenues
during the reporting period.

Cost of Goods Sold. Cost of Goods sold decreased 32% from $251,049 for
the quarter ended June 30, 2001 to $171,571 for the quarter ended June 30, 2002.
As a percentage of net revenue, cost of goods sold increased to 60% for the six
months ended June 30, 2002 from 50% in the prior year . The June 2002 quarter
ended cost of goods sold percentages for the marine and security products
segments were 60% and 79% respectively. Segment information from the six months
ended June 30, 2001 was not available, however, the average cost of goods sold
for that quarter was 52%. The increase in the cost of goods sold as a percentage
of net revenues for the marine products segment was due primarily to
Managements' decision to restructure its sales strategy by driving its sales
through larger distributors rather than selling directly to the end user. The
increase in the cost of goods sold as a percentage of net revenues for the
security products division was due primarily to Management's decision to adjust
pricing closer to what future prices will be from products manufactured
overseas, despite the higher inventory carrying value.

Salaries and Wages. Salaries and Wages increased 195% from $319,046 for
the quarter ended June 30, 2001 to $940,533 for the six months ended June 30,
2002. The increase was attributable to additional executive level personnel as
we build our model. Salaries and wages for the six months ended June 30, 2002
included $659,6390 in non-cash stock based compensation, compared to $145,752
during the same period in the prior year.

Advertising and Promotion. Advertising and promotions decreased 4% from
$151,937 for the six months ended, June 30, 2001 to $157,913 for the six months
ended, June 30, 2002. The decrease was due primarily to management's decision to
eliminate most advertising for the quarter, except for security trade show
participation. This amount also includes portions of postage, printing, and
travel that are attributable to advertising and promotions.

Depreciation and Amortization Expense. Depreciation and amortization
increased 25 1% from $194,714 for the six months ended, June 30, 2001 to
$243,252 121,547 for the six months ended June 30, 2002. There were no
significant changes in capital equipment or licensing agreements that would have
had an effect on depreciation expense. On February 14, 2001, we entered into a
Licensing Agreement with our former chairman, Richard McBride that provided for
a license to exploit certain patented technologies owned by McBride. We
exchanged 1,000,000 shares of restricted common stock having a value of
$2,130,000 for the license and related consulting services. The shares were
valued upon quoted market prices on the date of the Agreement. The total value
of the arrangement was allocated between the license and consulting services in
the amounts of $2,066,100 and $63,900, respectively, based upon the relative
fair values of the consulting services and license. The licensing rights are
being amortized over their estimated useful lives of five years. Annualized
amortization of the license rights is approximately $413,000, of which $206,610
was amortized for the six months ended June 30, 2002 (none in 2001).

Research & Development. Research and development expense increased 310%
from $45,502 for the quarter ended June 30, 2002 to $186,602. Research and
development costs consist of all expenditures related to the improvement and
development of our current product line, new product development, and
engineering consulting fees associated with licensed technology. The increase is
directly related to our expenditures for current product improvement and new
product development, specifically for our security products segment. We expect
to continue to invest in the development of our security products into the
foreseeable future.

Professional fees. Professional and consulting fees increased 27% from
$281,607 for the six months ended June 30, 2001 to $357,003 for the six months
ended June 30, 2002. Professional and consulting fees include fees paid to
attorneys, accountants, and business consultants. The increase was due primarily
from accounting expenses incurred to perform our 2001 year end audit; and legal
expenses related to our defense of class action litigation and regulatory
matters.

Other Expenses. Other expenses increased 72% from $117,461 for the six
months ended June 30, 2001 to $202,187 for the six months ended June 30, 2002. A
portion of the increase is attributable to the reclassification of rent and
utility expenses, which include office rent, storage, telephone, and utilities.
The remaining increase is due to an increase in travel expenses. Other expenses
includes: travel, shipping, supplies, property taxes, insurance, bank charges,
and various other expenses that are classified as miscellaneous.

Litigation Settlement. We recorded a charge of $1,200,000 for the
quarter ended June 30, 2002 to account for the common stock to be issued under
the proposed settlement of a class action lawsuit. The proposed settlement
stipulates that we would tender 6,000,000 shares of our free trading stock to
the class participants. We used the closing market price of $.20 per share on
June 28, 2002, the last trading day of the quarter, to value the recording of
the expense. This amount will be adjusted to the actual trading price of our
shares on the date of distribution. See Subsequent Events, below.

Discussion of twelve months ended December 31, 2001 compared with the twelve
months ended December 31, 2000.

Net Revenue. Net revenue decreased 35% from $1,130,000 for the year
ended December 31, 2000 to $732,000 for the year ended December 31, 2001.
Overall, marine product sales decreased 63% from $1,130,000 for the year ended
December 31, 2000 to $412,000 for the year ended December 31, 2001. The sluggish
economy adversely affected sales in the marine products segment, as well as our
decision to reduce our advertising and attendance at marine trade shows and
concentrate on obtaining new mass-retailers. During 2001, we introduced the
SecureView product, a product of the Security Products Segment. While the launch
of our SecureView product line contributed $319,000 to net revenues, the overall
impact was not as expected due to several potential customers becoming concerned
given our pending legal proceedings. Management is aggressively addressing the
adverse conditions and believes security product sales will become a significant
portion of our total revenues.

Cost of Goods Sold. Cost of goods sold increased 1.5% from $373,000 for
the year ended December 31, 2000 to $378,300 for the year ended December 31,
2001. As a percentage of net revenue, cost of goods sold increased to 52% from
33% in the prior year. The 2001 percentage for the marine products segment was
44%, compared to 33% in 2000. The 2001 percent for the security products segment
was 61%. The increase in the cost of goods percentage of net revenues for the
marine products segment was due primarily to two factors. First, there was a
slight increase in the cost of components for the product line as we continued
to improve the product performance. Second, and most significantly, management
reduced the price of the SeaView product lines in an effort to improve sales in
a sluggish economy.

Salaries and Wages. Salaries and Wages decreased 17% from $969,000 for
the year ended December 31, 2000 to $808,000 for the year ended December 31,
2001. In addition, non-cash stock-based compensation comprised $368,000, or 46%,
of 2001 compensation expense compared to $137,000, or 14%, of 2000 compensation
expense. Salary and Wages comprises employee wages and stock compensations and
temporary labor. The decrease was due to us closing our manufacturing and
assembly operations in the first quarter of 2001 and simultaneously granting
those functions to a third party contractor.

Advertising and Promotions. Advertising and promotions decreased by 90%
from $2,056,000 during the year ended December 31, 2000 to $199,000 for the year
ended December 31, 2001. The decrease was due to shortages in capital available
for funding advertising programs. In addition, management has decided to shift
its promotional strategy away from direct selling, which previously had been
supported via advertising in several industry trade magazines, and through trade
show participation. This amount also includes portions of postage, printing, and
travel that are attributable to advertising and promotions.

Provision for doubtful accounts. The 2001 provision for doubtful
accounts of $54,000 increased $30,000 over provisions in 2000. The increase
relates to an increased allowance for uncollectible accounts placed on the aged
receivables for the year ended December 31, 2001 arising from weakened economy
sales. However, credit losses have been within management's overall
expectations.

Depreciation Expense. Depreciation and amortization increased by
$380,000 in 2001 to $434,000 due to capitalized license rights acquired during
the year. Depreciation and amortization was $53,000 in 2000. On February 14,
2001, we entered into a Licensing Agreement with our former Chairman, Richard
McBride that provided for a license to exploit certain patented technologies
owned by McBride. We exchanged 1,000,000 shares of restricted common stock
having a value of $2,130,000 for the license and related consulting services.
The shares were based upon quoted market prices on the date of the Agreement.
The total value of the arrangement was allocated between the consulting and
license in the amounts of $2,066,100 and $63,900, respectively, based upon the
relative fair values of the consulting services and license. The licensing
rights are being amortized over their estimated useful lives of five years.
Annualized amortization of the license rights is approximately $413,000.

Research and Development. Research and development expense increased
74% from $290,000 for the year ended December 31, 2000 to $506,000 for the year
ended December 31, 2000. In addition, non-cash stock-based research and
development, principally in the form of consulting services, comprised $414,000,
or 81%, of total 2001 expense, compared to $271,000, or 93%, of total 2000
expense. Research and development costs consist of all expenditures related to
the improvement and development of its current product line, new product
development, and royalties associated with licensed technology. The increase is
directly related to our expenditures for current product improvement and new
product development, specifically for our security products segment. We expect
to continue to invest in the development of our security products into the
foreseeable future.

Rent and Utilities. Rent and utilities decreased by $16,000, to $95,000
for the year ended December 31, 2001. Rent and utilities includes office rent,
storage, telephone, and utilities. The decrease was directly related to our move
to smaller office space in the 2nd quarter, and the closing of our manufacturing
and assembly operation in the 1st quarter.

Professional Fees. Professional and consulting fees increased 51% from
$445,000 for the year ended December 31, 2000 to $651,000 for the year ended
December 31, 2001. Professional and consulting fees include fees paid to
attorneys, accountants, and consultants. The increase was due primarily to an
increase in legal expenses related to our defense of litigation and regulatory
matters.

Other Expenses. Other expenses increased by $163,152 to $424,000 for
the year ended December 31, 2001. The category other expenses includes: travel,
shipping, supplies, property taxes, insurance, bank charges, and various other
expenses that are classified as miscellaneous.

Equity in loss from affiliate decreased to $8,000 during the year ended
December 31, 2001 compared to $137,000 during the year ended December 31, 2000.
These charges relate to our share of losses from an equity investment in Golden
Springs LLC, a start-up health spa in West Central Florida. Equity in losses in
2001 was limited to the remaining carrying value of our investment. We have no
obligations, or plans, to fund operations of the affiliate. No further losses
are anticipated on this investment.

Income Taxes. We have discontinued the recognition of income tax
benefits in 2001 and 2000 due to cumulative net losses in recent years, which
render the realization of those assets uncertain. The charge in 2000 was related
to the establishment of valuation allowances against deferred income tax assets
at the beginning of that year. Additional valuation allowances of $624,000 and
$1,439,000 were recorded during the years ended December 31, 2001 and 2000,
respectively. Net operating losses of $5,300,000 are available to carry forward
and offset income tax liabilities, if any, in future periods through 2020.

As a result of the aforementioned operating activities, we reported a
net loss of $2,829,000, or $0.13 per common share, compared to $3,643,000, or
$0.30 per common share.

Liquidity And Capital Resources

Our financial statements have been prepared assuming that we will
continue as a going concern. We incurred a net loss of $3,204,770 during the six
months ended June 30, 2002, used cash of $422,587 during the same period in
maintaining our operations, and had a working capital deficiency of $403,353 as
of June 30, 2002. These conditions raise substantial doubt about our ability to
continue as a going concern. Our losses have arisen as a result of weak Marine
Product Segment sales, driven largely by the economic downturn in the marine
industry. In addition, we have devoted significant efforts in the further
development and marketing of products in our Security Products Segment, which,
while now showing tangible results in the form of purchase orders received
cannot yet be classified as sufficient to totally fund operations for any period
of time.

Our ability to continue is dependent upon: raising additional capital
to fund operations and development; the further development of the Security
Products Segment; and, ultimately, its ability to achieve profitable operations.

During the six months ended June 30, 2002, we received $428,010 in debt
and equity financing and we are currently addressing several additional
financing sources. However, there can be no assurances that additional financing
can be obtained on conditions considered by management to be reasonable and
appropriate. The financial statements do not include any adjustments that might
arise as a result of this uncertainty.

During the quarter ended June 30, 2002, we funded our losses from
operations through two primary sources:

1. During the second quarter 2002, 1,387,333 shares of our restricted
common stock were sold through a private equity placement exempt
from registration under Section 4(2) of the Securities Act of 1933,
and Rule 506 of Regulation D, thereof. The placement was open to
select officers, employees, accredited investors, and
representatives of SeaView for the purchase of restricted common
stock. Proceeds from the offering amounted to $161,500.

2. During the second quarter 2002, we issued 500,000 shares of
restricted common stock to a supplier for a $79,010 reduction in
our liability. In addition, we issued 235,000 free trading shares
under an S-8 filed on June 12, 2002, to professional consultants
for a reduction of the our current liabilities and for future
services to be rendered.

We currently have no material commitments for capital expenditures.
However, there are two areas where the management expects significant resources
may be required:

1. Because we contract our manufacturing with third parties, and our
selling efforts are focused on large retailers, it is expected that
additional working capital will be needed to finance the
manufacturing of customer purchase orders, when received.

2. The discontinuance of two semiconductor parts used in the
manufacture of our security products may require us to make advance
purchase commitments to wholly satisfy 2002 production
requirements. At the time of this filing, management cannot
quantify the amount of these potential commitments for two reasons.
First, it is difficult to forecast customer orders in the various
new markets recently entered. Second, the supplier has not at this
time provided us with a final date for which production of these
components will cease. We currently own in inventory, or can access
through third party distributors, enough of these particular
components to support a significant increase in revenues over and
above the 2001 fiscal year results. It is unknown at this time
whether these components will be manufactured by another supplier
in the future.

Subsequent Events

In July, 2002, we entered into an agreement for accounts receivable
funding with a national funding source as one step in improving our current cash
flow. We are currently working with two additional firms to obtain purchase
order funding for our current and future purchase orders.

To obtain funding for our ongoing operations, we entered into a
Securities Purchase Agreement with three accredited investors on September 20,
2002 for the sale of (i) $1,000,000 in convertible debentures and (ii) warrants
to buy 3,000,000 shares of our common stock. The investors are obligated to
provide us with the funds as follows:

o $350,000 was disbursed on September 20, 2002

o $350,000 will be disbursed within ten days of filing this prospectus
with the Securities and Exchange Commission

o $300,000 will be disbursed within ten days of the effectiveness of
this prospectus.

The debentures bear interest at 12%, mature on one year from the date
of issuance, and are convertible into our common stock, at the investors'
option, at the lower of (i) $0.075 or (ii) 50% of the average of the three
lowest intraday trading prices for the common stock on a principal market for
the 20 trading days before but not including the conversion date. The full
principal amount of the convertible debentures are due upon default under the
terms of convertible debentures. The warrants are exercisable until three years
from the date of issuance at a purchase price of $0.10 per share.

In addition, we have granted the investors a security interest in
substantially all of our assets and registration rights.

On May 17, 2002, we reached an agreement in principle, in the form of a
Memorandum of Understanding, to settle the class action lawsuit dicussed in Note
10 to the Annual Financial Statements. In the settlement, we will tender
6,000,000 shares of its free trading common stock to the class participants. In
addition, we will pay, up to a maximum of $125,000, for costs incurred by the
plaintiffs in the litigation, plus the costs of settlement notice and
administration. We and the plaintiffs' counsel have agreed to prepare and
execute a definitive Stipulation of Settlement and jointly seek preliminary and
final Court approval. The Settlement is conditional upon receiving final
judicial approval of the Stipulation. However, in management's opinion such
approval became probable during its second fiscal quarter of 2002. Accordingly,
we have provided for the impending settlement in its second quarter 2002
financial statements by accruing a liability of $1,200,000, which is equal to
the current fair market value of the settlement shares, plus an estimated amount
for expenses.

Critical Accounting Policies and Estimates:

The preparation of our financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the consistent application of accounting principles and the use of
estimates and assumptions that affect certain reported amounts and disclosures.

In our view, the most significant and critical estimates are
management's estimate of sales returns and the carrying value of net deferred
tax assets. We make estimates of sales returns based upon our historical
experience of customer returns. Actual returns could differ from those
estimates, and such differences will be recorded in the period measurable.
Significant differences, if any, would be disclosed in our financial statements.
We estimate the carrying value of net deferred tax assets, consisting
principally of net operating loss carry forwards, based upon estimates of future
taxable income that will be necessary in order to utilize such assets. Net
deferred tax assets, amounting to $2,063,000 as of December 31, 2001 may result
in future tax savings. However, we believe that our ability to realize those
assets does not rise to the "more likely than not criteria" established in
Financial Accounting Standard No. 109, Accounting for Income Taxes, at times
when we have net historical cumulative net losses for operations. Accordingly,
we have provided a valuation allowance against the total balance as of December
31, 2001 and 2000.

Restatements:

The 2000 financial statements have been restated to provide valuation
allowances of $1,439,322 against deferred tax assets principally related to net
tax operating loss carry forwards. The restatement is necessary because, in the
opinion of management, evidence as to the recovery of the deferred tax asset,
principally projections of future taxable income, does not rise to the "more
likely than not" criteria set forth in Financial Accounting Standards No. 109,
Accounting for Income Taxes.

The 2000 financial statements have also been restated to reduce the
original valuation afforded the contribution of the Golden Springs LLC equity
investment from $1,027,500 to $146,200. The original valuation was based upon a
discounted value of our common stock that the former Chief Executive Officer
personally committed to Golden in exchange for the equity investment. Using the
context of Accounting Principles Opinion No. 29, Nonmonetary Transactions, as it
relates to nonreciprocal transfers from owners, management has made its best
estimate of the value of the investment received, based upon all available
evidence. Since, at the time of the contribution of the investment to us by the
Officer, Golden was in its development stage, with uncertain prospects, and its
assets, which consisted primarily of fully debt-encumbered real estate, the
revised fair value estimate was based upon our ownership in the net equity
contributions of Golden. That is, based upon what others were investing in
Golden at that time. The Golden restatement had no effect on our 2000 results of
operations.

Recent Accounting Pronouncements:

In April 2002, the Financial Accounting Standards Board issued
Financial Accounting Standard No. 145, Rescission of FASB Statements No. 4, 44,
and 64, Amendment of FASB Statement 13, and Technical Corrections. Under FAS
Statement 4, Reporting Gains and Losses from Extinguishments of Debt, all gains
and losses from debt extinguishments were required to be aggregated and, if
material, classified as an extraordinary item in the statement of operations. By
rescinding FAS Statement 4, FAS Statement 145 eliminates the requirement for
treatment of extinguishments as extraordinary items. This Statement is effective
for the Company on January 1, 2003. However, management does not believe that
the Statement will have a material effect on its financial statements.

In June 2002, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 146, Accounting for Costs Associated with Exit or
Disposal Activities. Statement 146 addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies Emerging
Issues Task Force Issue 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity. Statement 146,
generally requires that a liability for a costs associated with an exit or
disposal activity be recognized when the liability is incurred. Under Issue
94-3, a liability for an exit activity was recognized at the date of an entity's
commitment to the exit plan. This Statement is effective for the Company on
January 1, 2003. However management does not believe that the Statement will
have a material effect on its financial statements.

BUSINESS

General Development of Business

We were originally incorporated as Gopher, Inc. in the State of Utah on
April 16, 1986. In order to change our domicile, we were reorganized under the
laws of Nevada on December 30, 1993. On March 24, 1999, we entered into a
reorganization agreement with SeaView Underwater Research, Inc., a privately
held Florida corporation. At the time of the reorganization, we were a
non-operating company whose common stock was not publicly traded. We were,
however, subject to the reporting requirements of the Securities Exchange Act of
1934. In connection with the reorganization, we issued 5,000,000 shares of our
common stock to SeaView Underwater Research, Inc.'s shareholders in exchange for
100% of SeaView Underwater Research, Inc.'s outstanding shares of common stock
and $250,000 cash. For accounting purposes, the reorganization was treated as a
recapitalization.

As a result of the reorganization:
o We were the surviving entity;
o SeaView Underwater Research, Inc. ceased to exist;
o SeaView Underwater Research, Inc.'s shareholders gained
control of us;
o Our Board of Directors resigned and were replaced by a Board
of Directors selected by Underwater Research, Inc.'s
shareholders; and
o We changed our name to SeaView Underwater Research Inc. to
reflect our continuance of Underwater Research, Inc.'s
business plan.

On February 2, 2000, we changed our name to SeaView Video Technology,
Inc.

Our Business, Segments and Products

Marine Products Segment

The original SeaView camera (designated "Offshore Series") was
conceived as a lower-price alternative to expensive "scientific" submersible
cameras. This innovative design was introduced into the national marketplace in
1998. The flagship product was quickly followed by smaller and lighter
variations ("Mini SeaView," "SuperMini") and is produced in both standard
black-and-white and optional color versions throughout the model range. Complete
ready-to-go systems also include a proprietary viewing hood, a TV monitor,
proprietary brackets, a kit of connectors, adapters, and power supply
components, and a carrying case.

SeaView cameras differ from other underwater video devices due to our
patented design, and our exclusive (patent pending) infrared-enhanced video
system. In October of 2001, we introduced new technology under the brand name
"SeaMaster," which extends the advantages of infrared to a dual-mode video
chipset, capable of seamless color-to-black-and-white performance within a
single camera housing. The new technology also incorporates a built-in zoom
function, and offers superior low-light and low-noise response. The SeaMaster
product family is positioned as a premium line and priced above the original
SeaView product family.

We also offer accessory products to enhance the performance and
functionality of our underwater cameras. "SeaLite" is a high-output DC-powered
lighting device for attracting baitfish, night fishing, and general underwater
illumination. "Trak-View" is a video accessory, which reproduces global
positioning system, or GPS, data on-screen in conjunction with an external GPS
receiver, and a SeaView camera or other video device.

Principal Markets for Marine Products

Underwater cameras appeal to:

o recreational boaters, anglers, and divers;
o treasure hunters;
o professional divers in law enforcement, rescue, and recovery;
o marine trades, such as commercial fishing, surveyors, contractors,
and boatyards; and
o marine education and research, including environmental and
conservation groups.

Governmental entities at the local, state, and national levels also utilize
underwater cameras in primarily the same applications as the third and fourth
bullet point.

The primary market geography encompasses all of North America and
Canada, plus areas of Central and South America, Caribbean, and Pacific Islands
utilizing the National Television System Committee, or NSCT, television format.
Special-order products for the Committee Consultatif International des
Radiocommunique Phase Alternate Line, or the CCIR (PAL), television format are
available in small quantities for customers in other parts of the world.

Methods of Distribution for Marine Products

We began marketing through direct response in 1998. In 2000, we
intensified our efforts to build a network of independent dealers and retailers
while continuing to sell direct-to-consumer at boat shows, through magazine
advertising, and on the Internet. During the year ending December 31, 2001, we
developed new relationships with chain retail, specialty catalog, and e-commerce
merchants to broaden and strengthen our selling base. Further expansion in this
area is directed toward mass-market retailers in the marine, sporting goods, and
discount store categories.

We consider 2001 to be transitional, as we migrated from a direct to
customer and small-retail model to a more conventional wholesale-distribution
model. Channel building, branding, infrastructure implementation, cost
reduction, and volume pricing are the major components of this strategy.

Marine Products Segment Status

The Marine Products Segment is the more mature segment of our
operation. While technological improvements such as SeaMaster are adopted as
they occur, video technology has remained relatively stable in the last several
years. Ongoing research and development of new marine products continues, but we
believe the capital needed for these efforts will not require a materially
significant commitment of our assets.

Our strategy with the new SeaMaster product family is two-fold: The
premium product and exclusive advanced technology are a comfortable fit with the
upscale sport and catalog retailers, which in turn allows our mature original
products to appear at lower price points in high-volume and discount-store
venues. The SeaView brand has been well positioned for several years, and we
believe that we can capitalize on that awareness through extensive placement
with volume retailers.

Sources and Availability of Material and Production

We own the molds and tools for the production of our proprietary
housings and components. Our camera technology is based on specifications
derived in-house and produced by third-party vendors. Sources for plastic raw
material, the camera technology, and various component parts and system contents
all are well-developed. We have at least one alternate source of supply for each
key non-proprietary item. Competitive pricing amongst similar suppliers aids
cost control and preserves margin. Additional initiatives are already in place
for the high-volume production required for mass-market time sensitive delivery.
Key vendors are encouraged to play a partnership role in assuring both high
quality and rapid response to changes in production volume.

Intellectual Property--Marine Products

We hold the exclusive rights to the following items relevant to the
Marine Products Segment:

SeaView (trademark, Florida registration) 12-17-98
Underwater Camera (design patent granted) 06-22-99
SeaView Brochure (U.S. copyright filed) 01-11-99
Submersible Video Camera (utility patent granted) 06-10-99
Underwater Camera (design patent granted) 12-28-99
Video Monitor Hood (design patent granted) 04-11-00
SeaLite (trademark, registered or filed with the U.S. P.T.O) 06-30-99
Camera Housing (design patent granted) 07-25-00
SeaView (trademark, registered or filed with the U.S. P.T.O) 01-16-01

We were granted an exclusive unlimited license, extending through the
year 2014, under an agreement in February of 2001 with Rich McBride, our founder
and the inventor of the technology. The McBride estate became the licensor upon
the death of Rich McBride in October of 2001. At December 31, 2001, the license
was fully paid and in good standing. We have no ongoing maintenance obligations
attached to this license.

Marine Products Seasonality, Industry Practice

The geographic distribution of favorable fishing and boating weather
minimizes the seasonal impact of our marine products business. As we move
further into the wholesale-distribution model, volume shipments to retailers'
distribution centers are creating steady flow patterns, rather than peak-and-dip
cycles. We offer a two-year warranty (one year replacement, one year parts) on
our marine camera products. We also offer refurbishment services on a time and
material basis, for products out of warranty.

At the present time, no single customer accounts for more than 10% of
our revenue. Orders are shipped promptly upon receipt, with minor fluctuations
typical of ordinary business conditions.

Our marine products have been available to purchasers with U.S.
Governmental Services Administration, or GSA, authority since mid-year of 2000.
These listed products, brokered by a minority-owned government contractor also
known as our 8-a certified teaming partner, do not generate volume of a material
nature at this time. Other governmental entities without GSA authority purchase
direct from us via purchase order. The Marine Products Segment has no large
volume or long-term contracts of a material nature with any government entity.

Competition

Underwater video is a niche market that has become increasingly
competitive in the last two years. Few barriers to entry exist for new
competitors in the direct-response market. Further, many of the newer designs
are similar to one another. We remain confident in the strength of our patents
and the validity of our designs, especially our proprietary infrared advantage.
We believe that we continue to be the leader in the saltwater video market. Our
major competitor in the freshwater video market presently enjoys a geographic
advantage in the upper Midwest and a good position in marine specialty stores
and catalogs, which minimize discounting and price erosion.

Security Products Segment

Through our Security Products Segment, we develop, market and sell
proprietary video security network devices and consumer electronic products that
utilize patented technologies, licensed by us, to retailers, commercial
businesses and original equipment manufacturers throughout the United States.
The trademarked name, "SecureView," is the key brand identifier for a range of
our security products incorporating the Induction Radio-Frequency System, or
IRFS, a technology which enables video transmission over AC and DC electrical
conductors. IRFS is categorized within a larger industry segment commonly
referred to as Power Line Communications.

The Powerline Concept

Electrical wiring is nearly universal, present in practically every
building constructed in the past century. The reach and ubiquity of the power
grid stretches from major metropolitan centers to rural areas.

Within the walls of a single structure, the topology of an electrical
distribution system is a network of wiring which branches into every room within
the structure.

The concept of Powerline Communication, or PLC, was born early in the
history of electrification. Scientists and engineers recognized the potential
value of "the grid" as a channel for more than just electricity. Until the
arrival of transistorized circuitry, their concepts were unreachable. Once
thought to be valuable only to utility companies, PLC technologies began to
emerge on the open market, and formed the core of several consumer and
industrial initiatives.

In 1999, our founder, Rich McBride, conceived a surveillance camera
utilizing the form of a common flood lamp. The combination of PLC technology and
video surveillance proved to be a perfect fit in the emerging home-security
marketplace. SecureView, the "powerline camera in a light bulb," was introduced
in 2000 and began shipping in quantity in the spring of 2001.

Unlike previous PLC applications, SecureView communicates on the power
line in a way that ignores the sinusoidal line frequency and line voltage on the
wire. The video signal is modulated, then coupled to the electrical wire via a
proprietary device. At the receiving end--basically anywhere within the
home--the same component couples to a demodulator circuit. The video signal
output is standard line-level format, compatible with any TV or VCR. No
additional components are needed; installation is as simple as screwing in the
light-bulb camera and plugging in the receiver.

The power line, while ubiquitous, is not uniform in its
characteristics--and in fact is a "moving target" whose characteristics vary
over time. We can offer compelling arguments, based on fundamentals of physics,
that our IRFS technology is the only wideband-capable PLC technique that
produces consistent results in the shape-shifting environment of the power line.
Further, the technology is eminently portable, performing equally well on AC
voltages, DC voltages, or unpowered conductors.

Principal Security Products

Principal products in this Segment fall into two subcategories:
Consumer Security Products and Commercial Security Products.

Consumer Security Products--Description and Status

The light-bulb camera is currently retailing in two forms, one for
indoor use and one for outdoor use. The outdoor model is weatherproof. A "box
set" adaptation enables the end-user to connect an external video camera to the
IRFS transmitting device, with the receiver-decoder "back end" unit identical to
that of the light-bulb-camera system. The "box set" adaptation and "raw-board"
IRFS circuitry are available to qualified OEMs and VARs within the trade, for
inclusion in their own customized offerings. Additional products are in the
development pipeline now. Applications include security surveillance for home
and small business; baby monitor; nanny-cam; and "look-in" remote viewing via
dial-up or Internet (utilizing PC accessory kits now available through the
aftermarket).

Principal Markets--Consumer Security Products

For the past several years, analysts in the security-products industry
have targeted closed circuit television video surveillance, also known as CCTV,
as the fastest-growing segment of the market. Traditionally, CCTV surveillance
has been included in the security plans of businesses large and small. Most
businesses purchase CCTV equipment either from a specialized CCTV contractor or
as a part of a broader alarm and security package from an integrated-systems
vendor.

The technology has been slow to trickle down to the small business and
consumer sectors, in part due to the relative complexity of installation. This
is especially true in retrofit installations. While new home construction can
include the cabling for CCTV as a part of the homebuilding schedule, existing
construction requires substantial drilling and labor to achieve the same result.

Further, once the wiring is in place, moving a camera involves the
relocation of the associated wiring.

Our SecureView consumer product, the "powerline camera in a light bulb,
" overcomes these issues by using the bulding's electrical wiring to deliver
live video from the camera to any TV or VCR. The "plug and play" simplicity of
installation and the ubiquity of the power line give our consumer products a
unique advantage.

Retailers and mass merchandisers have realized that products with
complex installation procedures may not "stay sold," since many do-it-yourselfers
lack the technical skill necessary to successfully install the product. Thus
there is a general lack of security and CCTV products in the mass retail channel.

The SecureView light bulb camera and its future sister products supply
a unique opportunity to these retailers, enabling them to sell high technology,
simplicity, and convenience in a single package.

In 2001, we were able to accomplish product placement with several
significant specialty-catalog retailers, most notably SuperCircuits and
SmartHome. While these venues did not produce high sales volumes, they provided
valuable feedback for subsequent efforts to place and price our products. We
then developed additional markets through online e-tailers, including SkyMall,
Costco.com (an affiliate of Costco Wholesale), and several others.

We received excellent exposure in 2001 from Popular Science Magazine,
Popular Mechanics Magazine, and ABC News Good Morning America, who publicized
our light-bulb camera in new-product feature stories.

We have made early contact with large retail chains, home-improvement
chains, electronic-specialty chains, and discount-store chains. Current efforts
focus on completing our pricing structure so that we can move forward with these
customers.

Commercial Security Products -- Description

Our commercial products segment comprises three categories:
Alternating-current PLC video products incorporating our IRFS core technology;
direct-current PLC products incorporating our IRFS technology; and conventional
video surveillance products for specific applications in government and law
enforcement.

Principal Markets--Commercial Security Products

Potential customers for our commercial products include multi-unit
housing and lodging complexes to warehouses and distribution centers, to malls
and stand-alone mass retailers, and many others. Within each segment, specific
needs arise. IRFS technology is quickly adaptable to engineered solutions within
these segments. Perhaps the most exciting presently is the problem of
retrofitting video surveillance in retail store parking lots. Conventional
cabling requires significant expense, cutting through pavement to bury the
cables. Worse, the perforation of the pavement creates a never-ending
maintenance nightmare with the paving itself. A powerline-based solution, in
contrast, requires none of these expenses.

The concept of a "camera without wires" is also of great interest to
retailers whose shrinkage and theft "hot zones" move frequently within a store.

Schools and other public agencies have a need for additional video
security, but limited budgets. A further constraint in retrofitting conventional
cabled systems is the expense and interruption of pulling wire. IRFS-based video
systems are a cost-effective means of adding video security, and allow more
flexible deployment based on changing needs.

Risk management and operator safety are two of the top concerns in the
transportation industry. Our DC-operated IRFS solutions allow tractor-trailer
operators and RV drivers to operate safely with expanded rear views.
Opportunities are great in both original equipment manufacturers and aftermarket.

A heightened awareness of security issues in the aftermath of September
11th has generated increased interest in our VIC Vehicle Inspection Camera. A
military agency purchased samples following extensive testing in 2001. We have
received subsequent requests for additional evaluation units from other
government agencies. The VIC design was upgraded to include new dual-mode video
chipset technology and improvements to the mechanical design. VIC is GSA listed
through our teaming partner, New Technology Management Inc., an 8-a certified
contractor.

Methods of Distribution--Commercial Security Products

We sell parking-lot and in-store systems and components as engineered
solutions, directly to end-users. The VIC camera is available direct and through
government purchasing channels. We believe that direct distribution will remain
the preferred method for most of our commercial products in the near term.

Commercial Security Products--Status

SecureView Parking Lot Surveillance System or SPLSS beta sites are
currently operating locally, as field laboratory sites under open work orders
from Wal-Mart Stores Inc. and Target Inc. Site surveys requested by other
national merchants are being conducted or scheduled. At present, products are
engineered solutions, with a high level of site-specific integration. Field
laboratory data provides the basis for improvements and revisions geared toward
a line of modular products which can be universally deployed in a number of
similar environments.

In-store loss-prevention testing is underway for two large retail
chains, each incorporating different system requirements.

Proof-of-concept units using DC IRFS technology are in the hands of
several original-equipment and aftermarket companies with direct connections to
the trucking industry. These prospective customers will require specific
features (such as integration with their own proprietary camera modules). These
customers each service thousands of vehicles per year.

Our PLC data initiative has been ongoing since early 2000. While others
seem content to take the "whatever we can get" approach, we understand that true
data connectivity must require a minimum 100-megabit capacity, and we are
focusing our energies to that end.

Ongoing research and development efforts are directed toward developing
modular components and on-site measuring equipment, with a goal of minimizing
the amount of technical expertise required to perform a successful commercial
installation. The benefits are obvious: Electricians and customer personnel can
easily deploy our products without the on-site presence of our field engineer.
This comprehensive effort, combined with the need for extensive development in
the PLC data space, require expenditures which could be significant. We expect
some development funds to flow into R&D from large customers with specific
requirements. A flexible scheduling program can respond quickly to additional
opportunities. As we progress, more modular components will become available and
the demand for specifically-engineered solutions will decrease.

The VIC Vehicle Inspection Camera is a production unit, shipping from
stock.

Competition

Because we are the only manufacturer of our patented IRFS technology,
we effectively have no direct competition. Our technology has competitive
advantages over other application alternatives in the marketplace such as
permanently installed ("hard-wired") CCTV systems, which are burdened by high
installation costs and limited flexibility of usage.

Competition in the consumer marketplace exists primarily in the
over-the-air "wireless video" category. Most competitors in this "wireless"
space are small companies, and product performance is typically poor.

In commercial and high-end applications, more robust over-the-air
products are available; but they cost much more and typically involve a
contractor or value added reseller with sufficient technical skill. Ultimately,
they cannot offer the advantages inherent in IRFS technology.

Sources and Availability of Material and Production

Certain low-cost stampings and parts are purchased in bulk from
suppliers who run the part once per year. We anticipate our current supply of
these parts to be sufficient for the next 12 month period.

We received notice in December 2001 that two integrated-circuit
semiconductor parts used in our security products were to be discontinued in
2002. We entered into negotiations to ensure an adequate supply of these parts
based on our forecasts for 2002 production. The uncertainties of actual
material-in-process at the chip manufacturer, the actual closing date of chip
production, and the availability of wafers and dies which could be finished by a
third party, were not fully defined as of the filing date. Our ability to
manufacture once the supply of these materials has ceased, is subsequently
dependent on our ability to identify alternate parts or acquire the means to
transfer production of the current parts to a different manufacturer. We are
reasonably confident that the discontinuation will not materially affect our
ability to produce finished goods; however, there may be significant changes in
the amount of capital required to secure the chip inventory.

Intellectual Property--Security Products

We hold exclusive rights to the following patents and trademarks
relevant to the Security Products Segment:

SecureView (trademark, registered or filed with the U.S. P.T.O) 02-28-00

Video Camera Utilizing Power Line Modulation (utility patent granted) 05-15-00

Video Camera Housing (design patent granted) 12-26-00

Infrared Illumination Device Housing (design patent granted) 12-19-00

Video Camera Housing (design patent granted) 12-26-00

Vehicle Inspection Camera (utility patent granted) 01-22-01

Eight other patents, and additional patents pending, are secured
through third party licensing agreements. At December 31, 2001 the licenses
remained in good standing.

Seasonality, Industry Practice

Security is for the most part a non-seasonal industry. For
manufacturers, certain times of the year may generate increased order flow. At
this stage of market development, we are confident in our ability to meet
anticipated demand.

The ability to meet demand could be affected by other mitigating
factors, such as component availability and working capital.

We have initiated an expansion of our electronic data interchange, or
EDI, capability, to ensure the quickest possible response to large retail
customers. In planning for volume production, we have structured delivery of
finished goods as a direct point-to-point transfer between the final assembly
point and the customer's warehouse. In some instances at the early stages of the
order cycle, we may utilize a fulfillment service to expedite part of the
distribution process. We do not anticipate a significant long-term impact on
product cost as a result of this activity.

At the present time, no single customer, or group of customers under
common control, represents sales equal to 10 percent or more of our consolidated
revenues.

Employees

We lease our 16 employees from an unrelated employee-leasing company.
We also have commissioned-sale arrangements with ten Manufacturer's Sales
Representatives, each operating as an independent contractor, servicing all
channels of distribution.

DESCRIPTION OF PROPERTIES

Our corporate facility is located in Tierra Verde, Florida and consists
of approximately 3,200 square feet of executive office space. We lease this
facility for a monthly base rent of $2,675. The lease expires in June 30, 2003.
In addition, we lease approximately 1,500 square feet of warehouse space in
Clearwater, Florida. We lease this facility for a monthly base rent of $542 on a
month to month basis. We believe that our facilities are adequate for our needs
for the foreseeable future.

LEGAL PROCEEDINGS

We are a defendant in a consolidated class action lawsuit pending in
the United States District Court for the Middle District of Florida against us
and Richard McBride, our former chief executive officer. Commencing in May 2001,
five nearly identical class action lawsuits were filed against us and McBride,
and, on July 24, 2001, those lawsuits were consolidated. In the five initial
complaints, the plaintiffs thereto claimed violations of Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder. In the five initial complaints, the plaintiffs to those actions
alleged, among other things, that from March 30, 2000 to March 19, 2001, we and
McBride misstated our sales and revenue figures; improperly recognized revenues;
misrepresented the nature and extent of our dealer network; falsely touted
purported sales contracts and agreements with large retailers; misrepresented
our ability to manufacture, or to have manufactured, its products; and
misrepresented our likelihood of achieving certain publicly announced sales
targets. The consolidated amended class action complaint was filed in December
2001. As amended, the consolidated complaint seeks compensatory and other
damages, and costs and expenses associated with the litigation and now also
seeks relief against James Cox on the same grounds as the claims against us and
McBride.

In February 2002, we filed our motion to dismiss. The plaintiffs
responded to the motion to dismiss in early April 2002. On May 17, 2002, we
reached an agreement in principle, in the form of a Memorandum of Understanding,
to settle the action. In the settlement, we would tender 6,000,000 shares of our
free trading common stock to the class participants. In addition, we would pay,
up to a maximum of $125,000, for costs incurred by the plaintiffs in the
litigation, plus the costs of settlement notice and administration. In the
aforementioned Memorandum of Understanding, we and the plaintiffs' counsel have
agreed to prepare and execute a definitive Stipulation of Settlement and jointly
seek preliminary and final Court approval. The Settlement is conditional upon
receiving final judicial approval of the Stipulation. However, in management's
opinion such approval is probable. Accordingly, we have provided for the
impending settlement in the accompanying financial statements by accruing a
liability of $1,200,000, which is equal to the current fair market value of the
settlement shares, plus an estimated amount for expenses.

The Securities and Exchange Commission's Division of Enforcement began
an investigation in January 2001 relating to our financial results and common
stock performance during 2000. As a result Richard McBride, former Chairman,
President and CEO, resigned from all positions with us. Further, all executives
involved with the allegations were replaced during 2001 and Mr. McBride passed
away in October 2001. We have cooperated fully with the SEC, which included the
testimony of former employees, Col. Larry Hoffman (retired) and Christy Mutlu.
Doug Bauer, CFO and J. R. Cox, former director, have also testified before the
SEC. Although our legal counsel indicates that this matter will be resolved with
no adverse actions against us, we can give no assurances that the SEC will not
recommend an enforcement action against us.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Name Age Position
George S. Bernadich, III 45 Chairman of the Board, President,
and Chief Executive Officer
Michael A. Ambler 48 Chief Operating Officer
Douglas Bauer 40 Chief Financial Officer and Secretary
Myles J. Gould* 59 Director
Dr. Bradford M. Gould* 32 Director

* Dr. Brad M. Gould is the son of Myles J. Gould.

Directors serve until the next annual meeting and until their
successors are elected and qualified. Officers are appointed to serve for one
year until the meeting of the board of directors following the annual meeting of
stockholders and until their successors have been elected and qualified.

George S. Bernardich, III

Mr. Bernardich joined us in November 2000 following a 28-year career
with the J.C. Penney Co., Inc. While at J.C. Penney Co., Inc., Mr. Bernardich's
employment included increasing levels of responsibility in store, district, and
corporate level management. His most recent positions were Catalog Media Manager
/ Buyer and Director of Merchandise Synergies for the Eckerd Drug Division. Mr.
Bernardich initially served as our Chief Operating Officer until February 2001,
when he became our President and Chief Executive Officer. His current term as a
Director will continue until the annual meeting of 2002.

Michael A. Ambler

Mr. Ambler joined us in February 2001, following a 28-year career with
the J.C. Penney Co., Inc. During his career with J.C. Penney Co., Inc., Mr.
Ambler served in many areas at increasing levels of responsibility. His most
recent responsibilities were Divisional Communications Manager, Senior Buyer,
Divisional Merchandise Manager, and a director within the catalog organization.

Douglas A. Bauer

Mr. Bauer joined us in March of 2001. He received a bachelors degree in
Accounting from Miami University, Ohio in 1985, and spent an additional year at
Miami's European Center in Luxembourg studying international economics and
political science. He spent three years with Price Waterhouse in the audit
division of its Atlanta office before moving on to Guardian Industries, a
worldwide glass manufacturer and fabricator, where he took the position of
operations manager for two newly acquired fabrication businesses. Prior to
joining SeaView, Mr. Bauer was a partner in Flowers Direct and eFlowers.com, and
served three years as its COO and CFO.

Myles J. Gould

Mr. Gould has been a Director of us since April 1999, and his current
term as a Director will continue until the annual meeting of 2002. Mr. Gould has
been involved in the development of real estate projects for more than 30 years.
His firm, Gould & Company, is based in Atlanta, Georgia. Mr. Gould has developed
over 2000 acres for diverse applications including shopping centers, office
complexes, and multiple- and single-occupancy residential developments. He has
spoken on many occasions on the subject of apartment-to-condominium conversions.
Mr. Gould formerly served as a Director for Modular Systems, Inc., a
factory-assembled housing company.

Dr. Bradford M. Gould

Dr. Gould has been a Director of us since April 1999, and his current
term as a Director will continue until annual meeting of 2002. Dr. Gould
received a Bachelor's Degree in Marine Science and Biology from the University
of Miami in 1992. He earned his Master's Degree from the University of Hawaii
from 1992 through 1995, identifying pollutants and their sources in Manmala Bay,
Honolulu. After attending the Medical College of Georgia from 1995 to 1999, he
entered the residency program at St. Vincent's Hospital, Jacksonville, Florida.
Dr. Gould is currently in the Residency Family Practice Program at Greenville
Memorial Hospital in South Carolina.

EXECUTIVE COMPENSATION

The following tables set forth certain information regarding our CEO
and each of our most highly-compensated executive officers whose total annual
salary and bonus for the fiscal year ending December 31, 2001, 2000 and 1999
exceeded $100,000:

SUMMARY COMPENSATION TABLE

Annual Compensation

Other
Annual Restricted Options LTIP
Name & Principal Salary Bonus Compen- Stock SARs Payouts All Other
Position Year ($) ($) sation ($) Awards (1) (#)(1) ($) Compensation
------------------------ ------- ------------ ------------ ------------ ------------- ----------- ------------ --------------
George Bernadich III 2001 65,625 0 0 136,500 0 0 0
(2) 2000 6,250 0 0 0 0 0 0
Chairman, President 1999 - - - - - - -
and CEO
Richard L. McBride (3) 2001 - 0 0 133,274 0 0 0
CEO and President 2000 40,420 0 0 33,332 0 0 0
1999 - 0 0 25,694 0 0 0
Michael Ambler (4) 2001 6,250 0 0 63,000 0 0 109,083
Chief Operating Officer 2000 - - - - - - -
1999 - - - - - - -

DEBENTURES:
Calculations exclude standard group-insurance benefits applied equally
to all salaried employees, pursuant to Item 402 of Regulation S-K.

1. Stock compensation was issued to executive officers in lieu of
salary. All stock compensation was issued in the form of
restricted shares and, for accounting purposes, were valued at the
prevailing closing market price on the day of issuance.
2. Mr. George Bernardich joined us as COO in November of 2000. He was
promoted to Chairman and CEO on February 21, 2001. Refer to note 1
above for reference to restricted stock awards.
3. Mr. Richard L. McBride served as our President & CEO until his
resignation on February 21, 2001. Mr. McBride's stock compensation
was related to the amortization of unearned compensation from a
1999 consulting agreement in the amount of $43,474 and compensation
from a February 14, 2001 consulting and licensing agreement in the
amount of $69,300. Mr. McBride passed away on October 7, 2001.
4. Mr. Michael Ambler joined us in late February of 2001 as COO, but
did not begin salary compensation until December of 2001. In
September of 2000, prior to joining us, Mr. Ambler received shares
of restricted common stock for a 2 year consulting agreement, of
which $109,083 was amortized in fiscal year 2001. Refer to note 1
above for reference to restricted stock awards.

No options were granted or exercised during our fiscal year ended
December 31, 2001.

Directors and Committee Members did not receive, and were not eligible
for, compensation from us during the fiscal year ending December 31, 2001.

During the fiscal year ending December 31, 2001, the Board of Directors
served as the Compensation Committee with regard to executive compensation, in
the absence of a formal committee.

Other than base salaries, there were no additional compensation plans
or policies in place for any executive officer as of December 31, 2001. No cash
bonuses were granted during fiscal year 2001. Restricted stock compensation to
officers was issued in lieu of salary and approved by the Board of Directors.
All stock compensation was issued in the form of restricted shares and, for
accounting purposes, were valued at the prevailing closing market price on the
day of issuance.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended December 31, 2000, we loaned an aggrgegate of
$512,757 to our former president and CEO, Richard McBride. The debentures were
collateralized by 6.5 million shares of our common stock. The loan was repaid
during the second quarter of 2001 with $235,000 cash and 353,575 shares of
common stock, which were recorded, at the cost of $277,757.

On July 12, 2000, we loaned Richard McBride, former president and CEO,
150,000 shares of our common stock to purchase a 20% interest in Golden Springs,
LLC. Golden Springs LLC is a development stage enterprise that is developing a
private health spa in West Central Florida. Mr. McBride was to replace the
shares shortly after the transaction, however, in addition to replacing the
150,000 shares, Mr. McBride donated the 20% interest in Golden Springs to us. We
accounted for the Golden Springs LLC transaction as a capital contribution at
its estimated fair value of $146,000. Our share of losses in the equity
investment amounted to approximately $8,000 and $138,000 during the years ended
December 31, 2001 and 2000, respectively. The investment is currently estimated
to have no value.

On February 14, 2001, we entered into a Consulting and Licensing
Agreement with Richard L. McBride. Mr. McBride, who was our President and
Director, developed and filed in his name individually, certain patents, patent
applications and provisional patent applications. We as licensee and Mr. McBride
as licensor, set forth the terms and conditions with respect to the granting of
the licensing rights. Further, Mr. McBride had provided us with consulting
services since our inception. As consideration for Mr. McBride's consulting
services, and obtaining the licensing rights from Mr. McBride regarding the
aforementioned patents, patent applications and provisional patent applications,
we issued to Mr. McBride 1,000,000 restricted shares of our common stock. The
term of the consulting portion of the Agreement is until March 31, 2003. The
initial term of the licensing rights is for fourteen (14) contiguous years from
February 14, 2001. The Agreement supercedes any and all other agreements between
us and Mr. McBride regarding these specific patents, patent applications and
provisional patent applications. Mr. McBride died in October 2001 and the death
of Mr. McBride has not and will not affect the above-described licensing
arrangement.

As of December 31, 2001, we held a series of debentures receivable from
the Estate of Richard L. McBride, former CEO, totaling $93,900 for various
expenses paid on behalf of the estate. The debentures are currently due and bear
interest at a rate of 8%.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding
beneficial ownership of our common stock as of September 25, 2002 (i) by each
person who is known by us to beneficially own more than 5% of our common stock;
(ii) by each of our officers and directors; and (iii) by all of our officers and
directors as a group. Each person's address is c/o SeaView Video Technology,
Inc., 200 Madonna Drive Boulevard, Tierra Verde, FL 33715.

Shares Beneficially Owned(1)
-------------------------
Percent Before Percent After
Name and Address of Beneficial Owner Number the Offering the Offering
----------------------------------------------------------- ----------------- ------------------ ------------------
George Bernardich, III 4,302,400 11.67% 5.2%
Estate of Richard L. McBride (1) 2,070,709 6.64% 2.5%
Michael Amber 1,629,500 4.42% 2.0%
Douglas Bauer 1,630,967 4.42% 2.0%
James R. Cox 111,000 * *
Myles J. Gould 767,500 2.46% *
Bradford M. Gould 38,000 * *
Total securities held by officers 8,368,367 22.70% 10.1%
and directors as a group (5 people):

* Less than 1%

(1) Beneficial Ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock subject
to options or warrants currently exercisable or convertible, or exercisable
or convertible within 60 days of September 25, 2002 are deemed outstanding
for computing the percentage of the person holding such option or warrant
but are not deemed outstanding for computing the percentage of any other
person.

DESCRIPTION OF SECURITIES

The following description of our capital stock is a summary and is
qualified in its entirety by the provisions of our Articles of Incorporation,
with amendments, all of which have been filed as exhibits to our registration
statement of which this prospectus is a part.

Our Amended Articles of Incorporation authorize the issuance of
100,000,000 shares of common stock, $.001 par value per share. Holders of shares
of common stock are entitled to one vote for each share on all matters to be
voted on by the stockholders. Holders of common stock have cumulative voting
rights. Holders of shares of common stock are entitled to share ratably in
dividends, if any, as may be declared, from time to time by the Board of
Directors in its discretion, from funds legally available therefor. In the event
of a liquidation, dissolution, or winding up of the SeaView, the holders of
shares of common stock are entitled to share pro rata all assets remaining after
payment in full of all liabilities. Holders of common stock have no preemptive
or other subscription rights, and there are no conversion rights or redemption
or sinking fund provisions with respect to such shares.

INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Our Articles of Incorporation, as amended, provide to the fullest
extent permitted by Florida law, a director or officer of SeaView shall not be
personally liable to SeaView or its shareholders for damages for breach of such
director's or officer's fiduciary duty. The effect of this provision of our
Articles of Incorporation, as amended, is to eliminate the rights of SeaView and
its shareholders (through shareholders' derivative suits on behalf of SeaView)
to recover damages against a director or officer for breach of the fiduciary
duty of care as a director or officer (including breaches resulting from
negligent or grossly negligent behavior), except under certain situations
defined by statute. SeaView believes that the indemnification provisions in its
Articles of Incorporation, as amended, are necessary to attract and retain
qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act" or "Securities Act") may be permitted to directors,
officers or persons controlling SeaView pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

PLAN OF DISTRIBUTION

The selling stockholders and any of their respective pledgees, donees,
assignees and other successors-in-interest may, from time to time, sell any or
all of their shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales
may be at fixed or negotiated prices. The selling stockholders may use any one
or more of the following methods when selling shares:

-- ordinary brokerage transactions and transactions in which the
broker-dealer solicits the purchaser;
-- block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
-- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
-- an exchange distribution in accordance with the rules of the
applicable exchange;
-- privately-negotiated transactions;
-- short sales;
-- broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
-- through the writing of options on the shares
-- a combination of any such methods of sale; and
-- any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus. The selling
stockholders shall have the sole and absolute discretion not to accept any
purchase offer or make any sale of shares if they deem the purchase price to be
unsatisfactory at any particular time.

The selling stockholders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a selling stockholders defaults
on a margin loan, the broker may, from time to time, offer and sell the pledged
shares.

The selling stockholders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.

The selling stockholders or their respective pledgees, donees,
transferees or other successors in interest, may also sell the shares directly
to market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers. Such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the selling stockholders
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling stockholder will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then market price. The
selling stockholders cannot assure that all or any of the shares offered in this
prospectus will be issued to, or sold by, the selling stockholders. The selling
stockholders and any brokers, dealers or agents, upon effecting the sale of any
of the shares offered in this prospectus, may be deemed "underwriters" as that
term is defined under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or the rules and regulations under such acts.
In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.

We are required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to the
selling stockholders, but excluding brokerage commissions or underwriter
discounts.

The selling stockholders, alternatively, may sell all or any part of
the shares offered in this prospectus through an underwriter. No selling
stockholder has entered into any agreement with a prospective underwriter and
there is no assurance that any such agreement will be entered into.

The selling stockholders and any other persons participating in the
sale or distribution of the shares will be subject to applicable provisions of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
under such act, including, without limitation, Regulation M. These provisions
may restrict certain activities of, and limit the timing of purchases and sales
of any of the shares by, the selling stockholders or any other such person.
Furthermore, under Regulation M, persons engaged in a distribution of securities
are prohibited form simultaneously engaging in market making and certain other
activities with respect to such securities for a specified period of time prior
to the commencement of such distributions, subject to specified exceptions or
exemptions. All of these limitations may affect the marketability of the shares.

We have agreed to indemnify the selling stockholders, or their
transferees or assignees, against certain liabilities, including liabilities
under the Securities Act of 1933, as amended, or to contribute to payments the
selling stockholders or their respective pledgees, donees, transferees or other
successors in interest, may be required to make in respect of such liabilities.
The selling stockholders have agreed to indemnify us against certain losses,
claims, damages and liabilities, including liabilities under the Securities Act.

If the selling stockholders notifies us that they have a material
arrangement with a broker-dealer for the resale of the common stock, then we
would be required to amend the registration statement of which this prospectus
is a part, and file a prospectus supplement to describe the agreements between
the selling stockholder and the broker-dealer.

Penny Stock

In order to approve a person's account for transactions in penny stocks, the
broker or dealer must

The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form:

SELLING STOCKHOLDERS

The table below sets forth information concerning the resale of the
shares of common stock by the selling stockholders. We will not receive any
proceeds from the resale of the common stock by the selling stockholders. We
will receive proceeds from the exercise of the warrants. Assuming all the shares
registered below are sold by the selling stockholders, none of the selling
stockholders will continue to own any shares of our common stock.

The following table also sets forth the name of each person who is
offering the resale of shares of common stock by this prospectus, the number of
shares of common stock beneficially owned by each person, the number of shares
of common stock that may be sold in this offering and the number of shares of
common stock each person will own after the offering, assuming they sell all of
the shares offered.

------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
Total
Total Shares of Percentage Percentage
Common Stock of Common Shares of Beneficial of Common
Issuable Upon Stock, Common Stock Beneficial Percentage of Ownership Stock Owned
Conversion of Assuming Included in Ownership Common Stock After the After
Name Debentures Full Prospectus Before the Owned Before Offering Offering
and/or Warrants Conversion (1) Offering Offering (6) (6)
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
AJW Offshore, Ltd. 6,929,173 (3) 15.82% Up to 1,936,813 4.99% -- --
(2) 13,858,346
shares of
common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
AJW Qualified 6,929,173 (4) 15.82% Up to
Partners, LLC (2) 13,858,346
shares of 1,936,813 4.99% -- --
common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
AJW Partners, LLC 9,238,897 (5) 20.03 Up to 1,936,813 4.99% -- --
(2) 18,477,797
shares of
common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------

The number and percentage of shares beneficially owned is determined
in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rule, beneficial ownership includes any shares as to which
the selling stockholders has sole or shared voting power or investment power and
also any shares, which the selling stockholders has the right to acquire within
60 days. The actual number of shares of common stock issuable upon the
conversion of the convertible debentures is subject to adjustment depending
on, among other factors, the future market price of the common stock, and could
be materially less or more than the number estimated in the table.

(1) Includes 200% of the shares issuable upon conversion of the
convertible debentures and exercise of warrants, based on current
market prices. Because the number of shares of common stock
issuable upon conversion of the convertible debenture is dependent in
part upon the market price of the common stock prior to a
conversion, the actual number of shares of common stock that will
be issued upon conversion will fluctuate daily and cannot be
determined at this time. However the selling stockholders have
contractually agreed to restrict their ability to convert or
exercise their warrants and receive shares of our common stock
such that the number of shares of common stock held by them and
their affiliates after such conversion or exercise does not exceed
4.99% of the then issued and outstanding shares of common stock.

(2) The selling stockholders are under common control. In accordance
with rule 13d-3 under the securities exchange act of 1934, Corey S.
Ribotsky may be deemed a control person of the shares owned by
such entities.

(3) Includes 900,000 shares of common stock underlying warrants
exercisable at $.10 per share.

(4) Includes 900,000 shares of common stock underlying warrants
exercisable at $.10 per share.

(5) Includes 1,200,000 shares of common stock underlying warrants
exercisable at $.10 per share.

(6) Assumes that all securities registered will be sold.

Terms of Convertible Debentures

To obtain funding for our ongoing operations, we entered into a
Securities Purchase Agreement with the selling stockholders on September 20,
2002 for the sale of (i) $1,000,000 in convertible debentures and (ii) a
warrants to buy 3,000,000 shares of our common stock. The investors are
obligated to provide us with the funds as follows:

o $350,000 was disbursed on September 20, 2002

o $350,000 will be disbursed within ten days of filing this prospectus
with the Securities and Exchange Commission

o $300,000 will be disbursed within ten days of the effectiveness of
this prospectus.

The debentures bear interest at 12%, mature on one year from the date
of issuance, and are convertible into our common stock, at the selling
stockholders' option, at the lower of (i) $0.075 or (ii) 50% of the average of
the three lowest intraday trading prices for the common stock on a principal
market for the 20 trading days before but not including the conversion date. The
full principal amount of the convertible debentures are due upon default under
the terms of convertible debentures. The warrants are exercisable until three
years from the date of issuance at a purchase price of $0.10 per share.

The conversion price of the debentures and the exercise price of the
warrants may be adjusted in certain circumstances such as if we pay a stock
dividend, subdivide or combine outstanding shares of common stock into a greater
or lesser number of shares, or take such other actions as would otherwise result
in dilution of the selling stockholder's position.

The selling stockholders have contractually agreed to restrict their
ability to convert or exercise their warrants and receive shares of our common
stock such that the number of shares of common stock held by them and their
affiliates after such conversion or exercise does not exceed 4.99% of the then
issued and outstanding shares of common stock.

We have granted the selling stockholders a security interest in all of
our assets against the convertible debentures.

A complete copy of the Securities Purchase Agreement and related
documents was filed with the SEC as exhibits to our Form SB-2 relating to this
prospectus.

Sample Conversion Calculation

The number of shares of common stock issuable upon conversion of the
debentures is determined by dividing that portion of the principal of the
debenture to be converted and interest, if any, by the conversion price. For
example, assuming conversion of $1,000,000 of debentures on September 23, 2002,
a conversion price of $0.0617 per share, and the payment of accrued interest in
the approximate amount of $2,152 in additional shares rather than in cash, the
number of shares issuable upon conversion would be:

$1,000,000 + $2,152 = 16,242,333 shares
$0.0617

LEGAL MATTERS

The validity of the shares of common stock being offered hereby will be
passed upon for us by Sichenzia Ross Friedman Ference LLP, New York, New York.

EXPERTS

Our financial statements at December 31, 2001 and for the year then
ended, appearing in this prospectus and registration statement have been audited
by Aidman, Piser & Company, P.A., independent auditors, as set forth on their
report thereon appearing elsewhere in this prospectus, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

Our financial statements at December 31, 2000 and for the year then
ended appearing in this prospectus and registration statement have been audited
byCarol McAtee, C.P.A, independent auditor, as set forth on her report thereon
appearing elsewhere in this prospectus, and are included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT
ON ACCOUNTING AND FINANCIAL DISCLOSURE

On March 21, 2002, with the approval of the Board of Directors, SeaView
Video Technology, Inc. engaged Aidman, Piser & Company P.A. as its principal
accountant to audit the financial statements. We dismissed Carol McAtee, CPA on
March 21, 2002 as its principal accountant. Prior to the engagement of Aidman,
Piser & Company P.A., Carol McAtee, CPA had served as the principal accountant
to audit our financial statements since the month of January 2000. Our Board of
Directors is responsible for the selection of our independent auditors.

Carol McAtee, CPA audited our financial statements for the years ended
December 31, 2000, and 1999, and issued audit reports dated April 9, 2001 for
fiscal year 2000, and March 21, 2000 for fiscal year 1999. During the two most
recent fiscal years and the subsequent interim period preceding March 21, 2002
(date of dismissal), no report of Carol McAtee, CPA on our financial statements
contained an adverse opinion or a disclaimer of opinion, nor was one qualified
as to uncertainty, audit scope, or accounting principles.

During the two most recent fiscal years and the subsequent interim
period preceding March 21, 2002 (date of dismissal), there were no disagreements
with Carol McAtee, CPA on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Carol McAtee, CPA, would
have caused disagreements in connection with its report on our financial
statements for any such periods.

On April 30, 2001, Carol McAtee, CPA sent a letter to the Audit
Committee and our management stating that certain deficiencies existed with the
internal control design of SeaView, which in the opinion of Carol McAtee, CPA
could affect our ability to record, process, summarize, and report financial
data consistent with the assertions of management in the financial statements.
As a result of these internal control deficiencies, several audit adjustments
were proposed and recorded to our financial statements for the fiscal year ended
December 31, 2000. Our Audit Committee and Board of Directors discussed the
matter with Carol McAtee, CPA, and we have authorized Carol McAtee, CPA to
respond fully to any inquiries of Aidman Piser & Company P.A. concerning the
matter. There was no disagreement regarding the foregoing, and we believe we
have remedied the internal control deficiencies.

Other than as described in the preceding paragraph, Carol McAtee, CPA
did not advise the Registrant at any time during the two most recent fiscal
years and the subsequent interim period preceding March 21, 2002 (date of
dismissal):

(a) that the internal controls necessary for the Registrant to develop
reliable consolidated financial statements did not exist;

(b) that information had come to its attention that had led it to no
longer be able to rely on management's representations, or that
had made it unwilling to be associated with the consolidated
financial statements prepared by management;
(c) of the need to expand significantly the scope of its audit, or
that information had come to its attention during the two most
recent fiscal years and the subsequent interim period preceding
March 21, 2002 (date of dismissal) that if further investigated
may (i) materially have impacted the fairness or reliability of
either: a previously issued audit report or the underlying
consolidated financial statements, or the consolidated financial
statements issued or to be issued covering the fiscal periods
subsequent to the date of the most recent consolidated financial
statements covered by an audit report or (ii) have caused it to be
unwilling to rely on management's representations or be associated
with the Registrant's consolidated financial statements; or
(d) that information had come to its attention that it concluded
materially impacts the fairness or reliability of either (i) a
previously issued audit report or the underlying consolidated
financial statements issued or to be issued covering the fiscal
periods subsequent to the date of the most recent consolidated
financial statements covered by an audit report.

During the two most recent fiscal years and the subsequent interim
period preceding March 21, 2002 (date of engagement), neither us nor anyone on
our behalf has consulted with Aidman, Piser & Company P.A. regarding either: (a)
the application of accounting principles to a specified transaction, either
completed or proposed; or the type of audit opinion that might be rendered on
our financial statements, and neither a written report nor oral advice was
provided to us that Aidman, Piser & Company P.A. concluded was an important
factor considered by the us in reaching a decision as to an accounting, auditing
or financial reporting issue; or (b) any matter that was the subject of either a
disagreement or any other event described above.

AVAILABLE INFORMATION

We have filed a registration statement on Form SB-2 under the
Securities Act of 1933, as amended, relating to the shares of common stock being
offered by this prospectus, and reference is made to such registration
statement. This prospectus constitutes the prospectus of SeaView Video
Technology, Inc., filed as part of the registration statement, and it does not
contain all information in the registration statement, as certain portions have
been omitted in accordance with the rules and regulations of the Securities and
Exchange Commission.

We are subject to the informational requirements of the Securities
Exchange Act of 1934 which requires us to file reports, proxy statements and
other information with the Securities and Exchange Commission. Such reports,
proxy statements and other information may be inspected at public reference
facilities of the SEC at Judiciary Plaza, 450 Fifth Street N.W., Washington D.C.
20549; Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and 5670 Wilshire Boulevard, Los Angeles, California 90036.
Copies of such material can be obtained from the Public Reference Section of the
SEC at Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549 at
prescribed rates. Because we file documents electronically with the SEC, you may
also obtain this information by visiting the SEC's Internet website at
HTTP://WWW.SEC.GOV.

We furnish our stockholders with annual reports containing audited
financial statements.

INDEX TO FINANCIAL STATEMENTS

SEAVIEW VIDEO TECHNOLOGY, INC.

FINANCIAL STATEMENTS

REPORT OF AIDMAN, PISER & COMPANY, P.A.--INDPENDENT AUDITORS.................F-1
REPORT OF CAROL MCATEE, CPA--INDEPENDENT AUDITOR.............................F-2

FINANCIAL STATEMENTS:
BALANCE SHEETS AS OF DECEMBER 31, 2001 AND 2000........................F-3
STATEMENTS OF OPERATIONS, YEARS ENDED DECEMBER 31, 2001 AND 2000.......F-4
STATEMENTS OF STOCKHOLDERS' EQUITY, YEARS ENDED DECEMBER 31, 2001
AND 2000.........................................................F-5 - F-6
STATEMENTS OF CASH FLOWS, YEARS ENDED DECEMBER 31, 2001 AND 2000.F-6 - F-8
NOTES TO FINANCIAL STATEMENTS..................................F-9 to F-27

CONDENSED QUARTERLY FINANCIAL STATEMENTS:
BALANCE SHEETS AS OF JUNE 30, 2002 AND DECEMBER 31, 2001..............F-28
STATEMENTS OF OPERATIONS, THREE MONTHS ENDED JUNE 30, 2002 AND 2001...F-29
STATEMENTS OF OPERATIONS, SIX MONTHS ENDED JUNE 30, 2002 AND 2001.....F-30
STATEMENTS OF CASH FLOWS, SIX MONTHS ENDED JUNE 30, 2002
AND 2001............................................................F-31
NOTES TO CONDENSED QUARTERLY FINANCIAL STATEMENTS.............F-32 to F-34

Independent Auditors' Report

The Board of Directors
SeaView Video Technology, Inc.

We have audited the accompanying balance sheet of SeaView Video Technology, Inc.
as of December 31, 2001, and the related statement of operations, stockholders'
equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with 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 audit provides a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of SeaView Video Technology, Inc. as of
December 31, 2001 and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.

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

/s/ Aidman, Piser & Company, P.A.

Tampa, Florida
April 10, 2002

F-1

Independent Auditors' Report

The Board of Directors
SeaView Video Technology, Inc.

We have audited the accompanying balance sheet of SeaView Video Technology, Inc.
as of December 31, 2000, and the related statements of operations, stockholders'
equity, and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. These 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, such financial statements present fairly, in all material
respects, the financial position of SeaView Video Technology, Inc. as of
December 31, 2000 and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles
generally accepted in the United States of America.

As more fully described in Note 12 to the financial statements, certain amounts
related to the valuations of deferred tax assets and Company investments have
been restated in the 2000 financial statemens.

April 9, 2001
Carol McAtee, C.P.A.
St. Petersburg, Florida

F-2

SEAVIEW VIDEO TECHNOLOGY, INC.
BALANCE SHEETS
DECEMBER 31, 2001 AND 2000

ASSETS
2001 2000
-------------- --------------
(Restated)
Current assets:
Cash and cash equivalents $ 5,233 $ 41,264
Accounts receivable, net of allowance
for doubtful accounts
($10,861, 2001; $24,389, 2000) 79,014 60,793
Accounts receivable, officer - 512,757
Accounts receivable, employees 50,000 40,000
Accounts receivable, other 45,000 -
Inventories 742,690 293,355
Prepaid expenses 35,797 60,000
-------------- --------------
Total current assets 957,734 1,008,169

Licensing rights, net of accumulated
amortization of $361,568 1,704,532 -
Property and equipment, net 379,565 504,535
Due from related party 93,861 -
Investment - 8,618
-------------- --------------
Total assets $ 3,135,692 $ 1,521,322
============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 764,959 $ 343,606
Accrued liabilities 167,784 36,277
Convertible debentures - 100,000
Deferred revenue 48,226 -
-------------- --------------
Total current liabilities 980,969 479,883
-------------- --------------

Stockholders' equity:
Common stock, $.001 par value,
authorized 100,000,000 shares;
issued and outstanding 28,571,809
shares in 2001 and 17,132,684
shares in 2000 28,572 17,133
Additional paid-in capital 9,018,699 4,719,733
Treasury stock, at cost, 353,575 shares ( 277,757) -
Unearned restricted stock compensation ( 130,502) ( 40,974)
Accumulated deficit ( 6,484,289) ( 3,654,453)
-------------- --------------
Total stockholders' equity 2,154,723 1,041,439
-------------- --------------

Total liabilities and stockholders' equity $ 3,135,692 $ 1,521,322
============== ==============

See notes to financial statements.

F-3

SEAVIEW VIDEO TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2001 2000
------------ ------------
(Restated)

Net revenue $ 732,401 $ 1,130,563
Cost of goods sold 378,332 372,975
------------ ------------
Gross profit 354,069 757,588
------------ ------------

Operating expenses:
Salaries and wages, including stock-based
compensation of $368,550 and $137,459 in
2001 and 2000, respectively 808,699 969,902
Advertising and promotions 199,484 2,056,403
Provision for doubtful accounts 54,443 24,389
Depreciation and amortization 434,417 53,916
Research and development, including
stock-based compensation of $414,647 and
$271,255 in 2001 and 2000, respectively 506,468 290,023
Rent and utilities 95,318 111,460
Professional and consulting fees 651,749 445,527
Other expenses 424,709 261,557
------------ ------------

Total operating expenses 3,175,287 4,213,177
------------ ------------

Loss from operations ( 2,821,218) ( 3,455,589)
Interest income - 3,206
Equity in loss of affiliate ( 8,618) ( 137,582)
------------ ------------

Loss before income taxes ( 2,829,836) ( 3,589,965)
Income tax expense - ( 53,818)
------------ ------------
Net loss ($ 2,829,836) ($ 3,643,783)
============ ============

Basic net loss per common share $ (.13) $ (.30)
Diluted net loss per common share $ (.13) $ (.30)

Basic weighted average common shares
outstanding 21,193,616 12,051,616
Diluted weighted average of common shares
outstanding 21,193,616 12,051,616

See notes to financial statements.

F-4

SEAVIEW VIDEO TECHNOLOGY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 2000 (Restated)

Unearned
Common Additional Restricted
Common Stock Paid-In Accumulated Stock
Stock ($.001 par) Capital Deficit Compensation Total
---------- ---------- ----------- ----------- ------------ ------------

Balances, January 1, 2000 10,380,000 $ 10,380 $ 334,571 ($ 10,670) ($ 74,306) $ 259,975

Net loss for year ended December 31,
2000 (Restated) - - - ( 3,643,783) - ( 3,643,783)

Conversion of subordinated debentures 5,373,584 5,374 3,182,626 - - 3,188,000

Exercise of stock warrants 649,000 649 648,351 - - 649,000

Issuance of stock to employees 182,500 182 137,278 - - 137,460

Issuance of shares for services 397,600 398 270,857 - - 271,255

Issuance of stock for acquisition of
Golden Springs Investment 150,000 150 146,050 - - 146,200

Amortization of unearned restricted
stock compensation - - - - 33,332 33,332
---------- ---------- ----------- ----------- ------------ ------------

Balances, December 31, 2000 17,132,684 $ 17,133 $ 4,719,733 ($3,654,453) ($ 40,974) $ 1,041,439
(Restated) ========== ========== =========== ========== ========== ============

See notes to financial statements.

F-5

SEAVIEW VIDEO TECHNOLOGY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 2001
Unearned
Common Additional Restricted
Common Stock Paid-In Treasury Stock Accumulated
Stock ($.001 par) Capital Stock Compensation Deficit Total
---------- ---------- ----------- --------- ------------ ------------ -----------
Balances, January 1, 2001 (Restated) 17,132,684 $ 17,133 $ 4,719,733 $ - $ (40,974) $ (3,654,453) $ 1,041,439

Net loss for year ended
December 31, 2001 - - - - - (2,829,836) (2,829,836)

Conversion of subordinated
debentures 200,000 200 99,800 - - - 100,000

Treasury stock acquired for
repayment of stockholder note - - - (277,757 ) - - (277,757)

Issuance of stock to employees 765,000 765 367,785 - - - 368,550

Issuance of stock for services 676,500 677 799,378 - (427,985) - 372,070

Issuance of stock for licensing
rights 997,000 997 2,065,103 - - - 2,066,100

Private placement of common stock 8,937,000 8,937 966,763 - - - 975,700

Stock contribution, repayment and
retirement by stockholder (136,375) (137) 137 - - - -

Amortization of unearned restricted
stock compensation - - - - 338,457 - 338,457
---------- ---------- ----------- --------- ---------- ------------ -----------

Balances, December 31, 2001 28,571,809 $ 28,572 $9,018,699 $(277,757) $(130,502) $ (6,484,289) $2,154,723
========== ========== =========== ========= ========== ============ ===========

See notes to financial statements.

F-6

(Continued)

SEAVIEW VIDEO TECHNOLOGY, INC
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2001 2000
------------ ------------
(Restated)
Cash flows from operating activities:
Net loss ($ 2,829,836) ($ 3,643,783)
Adjustments to reconcile net (loss) to
net cash flows from operating activities:
Depreciation and amortization 434,417 53,916
Loss on disposal of asset 6,420 -
Amortization of unearned stock compensation 338,457 33,332
Equity in loss of affiliate 8,618 137,582
Compensation expense of stock issuance
to employees 368,550 137,459
Compensation expense of stock issuance
to consultants 372,070 271,255
Deferred income taxes - 28,023
Changes in operating assets and liabilities:
Accounts receivable ( 63,221) ( 60,793)
Inventories ( 453,634) ( 172,751)
Employee receivables 10,000 ( 40,000)
Prepaid assets 24,203 ( 50,803)
Due to bank - ( 10,412)
Accounts payable, trade 421,353 343,606
Accrued liabilities 131,507 ( 17,285)
Deferred revenue 48,226 -
Income taxes payable - 25,795
------------ ------------
Net cash flows from operating activities ( 1,182,870) ( 2,964,859)
------------ ------------
Cash flows from investing activities:
Additions to property and equipment - ( 418,120)
Proceeds from disposal of asset 50,000 -
Advance to related party ( 93,861) -
------------ ------------
Net cash flows from investing activities ( 43,861) ( 418,120)
------------ ------------
Cash flows from financing activities:
Proceeds from stock offering 975,700 -
(Loan to) proceeds from officer 215,000 ( 512,757)
Proceeds from exercise of stock warrants - 649,000
Proceeds from subordinated debentures - 3,288,000
------------ ------------
Net cash flows from financing activities 1,190,700 3,424,243
------------ ------------
Net change in cash and cash equivalents ( 36,031) 41,264

Cash and cash equivalents at beginning of year 41,264 -
------------ ------------
Cash and cash equivalents at end of year $ 5,233 $ 41,264
============ ============

See notes to financial statements.

F-7

SEAVIEW VIDEO TECHNOLOGY, INC
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 2001 AND 2000

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

2001 2000
------------ ------------
(Restated)
Conversion of convertible
debentures to common stock $ 100,000 $ 3,188,000
============ ============
Exchange of treasury stock
for note receivable, officer $ 277,757 $ -
============ ============
Nonreciprocal transfer of
equity investment from stockholder $ - $ 146,200
============ ============
Issuance of stock for
licensing rights $ 2,066,100 $ -
============ ============
Cash paid for taxes $ - $ -
============ ============
Cash paid for interest $ - $ -
============ ============

See notes to financial statements.

F-8

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

1. Operations and organization:

SeaView Video Technology, Inc. ("SeaView" or the "Company") is engaged
through its Marine Products Segment in the marketing and sales of
underwater video cameras, lighting and accessories principally to retail
sporting goods businesses throughout the United States. The Company is also
engaged through its Security Products Segment in the development, marketing
and sales of proprietary video security network devices and consumer
electronic products, that utilize patented technologies, licensed by the
Company, to retailers, commercial businesses and original equipment
manufacturers, throughout the United States.

The Company was incorporated in the State of Utah on April 16, 1986 as
Gopher, Inc. On March 24, 1999, the Company entered into a reorganization
agreement with SeaView Underwater Research, Inc. (SeaView Florida), a
privately held Corporation that was incorporated in the State of Florida on
April 2, 1998. At the time of the reorganization the Company was a
nonoperating Company. In connection with the reorganization, the Company
issued 5,000,000 shares of common stock to the SeaView Florida's
shareholders in exchange for 100% of SeaView Florida's outstanding shares
of common stock and $250,000 cash. For accounting purposes the
reorganization was treated as a recapitalization.

As a result of the reorganization:

o The Company was the surviving entity;
o SeaView Florida ceased to exist;
o SeaView Florida's Shareholders gained control of the Company;
o The Board of Directors resigned and were replaced by a Board of
Directors selected by SeaView Underwater Research Inc to reflect the
continuance of SeaView Florida's business plan
o The Company later changed its name to SeaView Video Technology, Inc.

F-9

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2. Basis of presentation and significant accounting policies:

Basis of Presentation:

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, the Company has incurred
operating losses in recent years and has a significant net working capital
deficiency at December 31, 2001. The Company's losses have arisen as a
result of weak Marine Product Segment sales, driven largely by the economic
downturn in the marine industry. In addition, the Company has devoted
significant efforts in the further development and marketing of products in
its Security Products Segment. The Company's ability to continue as a going
concern is dependent upon raising additional capital to fund operations and
the further development of the Security Products Segment products and,
ultimately achieve profitable operations. Management has raised $170,000 in
additional capital since December 31, 2001 and is currently addressing
several additional financing sources. However, there can be no assurance
that additional financing can be obtained on conditions considered by
management to be reasonable and appropriate. The financial statements do
not include any adjustments that might arise as a result of this
uncertainty.

Significant Accounting Policies:

Revenue recognition:
Revenue is recognized when the earnings process is complete and the risks
and rewards of ownership have been transferred to the customer, which is
generally considered to have occurred upon shipment of the product. Returns
are provided for as reductions of revenue recorded based upon the Company's
historical return experience. Deferred revenue represents sales
transactions where all of the conditions of revenue recognition have not
been met.

Cash and cash equivalents:

The Company considers all highly liquid instruments with original
maturities of three months or less to be cash equivalents for financial
statement purposes.

Investments:

Investments in 20%-50% owned affiliates are accounted for on the equity
method, and, accordingly, the Company's proportionate share of the
affiliates' losses are included in the Company's operations. Recognition
of affiliate losses has been suspended beyond the original carrying value
of the investment because the Company has no obligation to fund affiliate
operations.

F-10

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2. Basis of presentation and significant accounting policies (continued):

Inventories:

Inventories consist principally of component parts and finished goods held
for resale and are stated at the lower of cost or market. Inventory costs
are determined using the first-in, first-out (FIFO) method.

Property and equipment:

Property and equipment are stated at cost. Depreciation on property and
equipment is calculated on the straight-line method over the estimated
useful lives of the assets ranging from five to ten years. Maintenance and
repairs are charged to expense as incurred.

Licensing rights:

Licensing rights are stated at cost, and consist of purchased technology
licenses and incremental costs to acquire patents on internally developed
technologies (also see research and development, below). Amortization is
calculated on the straight-line method over estimated useful lives of the
technologies, not to exceed legal or contractual provisions. Licensing
rights at December 31, 2001 are being amortized over their estimated useful
lives of five years.

Impairments:

Long-lived assets to be held and used, consisting principally of property,
equipment and intangible assets, are reviewed whenever events or changes in
circumstances indicate that the asset may be impaired. In the event that
impairment indicators are identified, the Company determines whether
impairments are present by comparing the carrying value of assets to
projected cash flows derived from those assets on an undiscounted basis. In
the event that undiscounted future cash flows are insufficient to recover
the net carrying value of assets, impairment charges would be measured
using a fair value model, if available, or discounted cash flows.

Financial instruments:

Financial instruments consist of cash and cash equivalents, accounts
receivable and accounts payable. As of December 31, 2001 and 2000, the fair
values of these instruments approximated their respective carrying values.

F-11

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2. Basis of presentation and significant accounting policies (continued):

Concentrations:

Although accounts receivable are concentrated in the marine supply
industry, which is currently experiencing an economic downturn, credit
losses have been within management's expectations. The Company's product
assembly is dependent upon the operations of a primary labor supplier. At
December 31, 2001 and 2000, approximately $36,000 and $30,000,
respectively, of the Company's inventory was held off-site at this
location. If the Company should lose this supplier of assembly servicing
there could be a disruption in the operations of the Company. The Company
is in the process of securing alternative sources of these services.

Stock based compensation:

Compensation expense related to the grant of equity instruments and
stock-based awards to employees are accounted for using the intrinsic
method in accordance with Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees and related interpretations. Stock
based compensation arrangements involving non-employees are accounted for
using the fair value methodology under Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation.

Research and development:

Expenditures related to the development of new products and processes,
including significant improvements to existing products, are expensed as
incurred.

Advertising and promotions:

Advertising is generally expensed as incurred. Costs associated with public
displays, billboards and other advertising mediums that have an extended
period of value to the Company are amortized over the term or duration of
the related advertisement.

F-12

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2. Basis of presentation and significant accounting policies (continued):

Income taxes:

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. 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 the tax rate is
recognized in income in the period that includes the enactment date of the
rate change. A valuation allowance is established when it is more likely
than not that some or all of the deferred tax assets will not be realized.

Segment information:

The Company accounts for its two reportable segments using the management
approach, which focuses on disclosing financial information that the
Company's management uses to make decisions about the Company's operating
matters. The two reportable segments utilize the Company's operating assets
equally. Therefore, information about assets and depreciation is excluded
from the segment information used by management.

Earnings per share:

Net loss per share is computed using the weighted-average number of common
shares and dilutive common equivalent shares outstanding during the related
period. Common equivalent shares consist of unearned shares, warrants, and
subordinated convertible debentures, using the treasury stock method. See
Note 14.

F-13

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2. Basis of presentation and significant accounting policies (continued):

Comprehensive income:

Comprehensive income equals the Company's net income for all periods
presented.

Use of estimates:

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect certain reported
amounts and disclosures. The most significant and critical estimates are
management's estimate of sales returns, which are based upon historical
return experience, and the carrying value of net deferred tax assets, which
are fully reserved in light of cumulative recent losses. Actual results
could ultimately differ from those estimates.

Recent accounting pronouncements:

In July 2001, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 141, Business Combinations and Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets. SFAS
No. 141 requires the use of the purchase method of accounting and prohibits
the use of the pooling-of-interests method of accounting for business
combinations initiated after June 30, 2001 and for purchase business
combinations completed on or after July 1, 2001. It also requires, upon
adoption of SFAS No. 142 that the Company reclassify the carrying amounts
of intangible assets and goodwill based on the criteria in SFAS No. 141.
SFAS No. 142 requires, among other things, that companies no longer
amortize goodwill, but instead test goodwill for impairment at least
annually. In addition, SFAS No. 142 requires that the Company identify
reporting units for the purposes of assessing potential future impairments
of goodwill, reassess the useful lives of other existing recognized
intangible assets, and cease amortization of intangible assets with an
indefinite useful life. An intangible asset with an indefinite useful life
should be tested for impairment in accordance with the guidance in SFAS No.
142. SFAS No. 142 is effective for the 2002 fiscal year but is not expected
to have a significant impact on the Company's financial position or results
of operations.

F-14

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

2. Basis of presentation and significant accounting policies (continued):

Recent accounting pronouncements (continued):

In August 2001 the Financial Accounting Standards Board issued Financial
Accounting Standard No. 144, Accounting for the Impairment or Disposal of
Long-lived Assets. SFAS 144 replaces SFAS 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed
of. SFAS 144 retains the fundamental provisions of SFAS 121 for the
recognition and measurements of the impairment of long-lived assets to be
held and used and the measurement of long-lived assets to be disposed of by
sale. Under SFAS 144, long-lived assets are measured at the lower of
carrying amount or fair value, less cost to sell. This statement is
effective January 1, 2002. Company is currently assessing the impact of
this new pronouncement on its results of operations, financial position and
cash flows.

Reclassifications:

Certain amounts as previously presented in the 2000 financial statements
have been reclassified to conform to the current year presentation.

3. Inventories:

Inventories consist of the following as of December 31:

2001 2000
---------- ----------
Component parts $ 491,531 $ 258,552
Finished goods 251,159 34,803
---------- ----------
$ 742,690 $ 293,355
========== ==========

4. Property and equipment:

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

2001 2000
---------- ----------
Automobiles $ 92,607 $ 92,607
Boat - 63,114
Furniture and fixtures 147,841 147,841
Computer equipment 276,258 271,959
---------- ----------
516,706 575,521
Less accumulated depreciation ( 137,141) ( 70,986)
---------- ----------
$ 379,565 $ 504,535
========== ==========

F-15

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

5. Convertible debentures:

During the year ended December 31, 2000, the Company issued 8% convertible
debentures for proceeds of $ 3,288,000. The debentures were for a term of
twelve months and were non-interest bearing for an initial period, after
which, interest was payable quarterly. No interest was paid on the
debentures. The debentures were convertible at the option of the holders
into shares of the Company's restricted common stock at conversion rates
ranging from $0.50 to $8.00 per share, based upon the market prices of the
common stock on the date of issuance of debentures. During the year ended
December 31, 2000, the Company exchanged $3,188,000 of the notes for an
aggregate of 5,373,584 shares of the Company's common stock. Debentures of
$100,000 that remained outstanding at December 31, 2000 were exchanged for
200,000 shares of the Company's common stock during 2001 based upon the
original terms.

6. Income taxes:

No provision for income taxes was required during the years ended December
31, 2001 and 2000 because the tax effects of operating losses during those
periods, amounting to $624,000 and $1,439,000 were offset by valuation
allowances in these same amounts.

F-16

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

6. Income taxes (continued):

A reconciliation of statutory federal income tax rate with the Company's
effective income tax rate for the year ended as of December 31, 2001, 2000
and 1999 is as follows:
2001 2000
------------ ------------
( Restated )
U.S. federal taxes statutory rate (34.00)% (34.00)%
Increase (decrease):
State taxes (3.5)% (4.6)%
Non-deductible compensation 9.9 % -
Valuation allowances 27.6 % 38.6 %
------------ ------------
Effective tax rate 0.0 % 0.0 %
============ ============

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets are as follows:

2001 2000
------------- -------------
( Restated )
Deferred tax asset:
Stock based compensation $ - $ 23,020
Net operating loss 1,956,000 1,416,302
Other 107,000 -
Valuation allowance ( 2,063,000) ( 1,439,322)
------------- -------------
Total deferred tax asset $ - $ -
============= =============

As of December 31, 2001, the Company has net operating loss carryforwards
of approximately $5,100,000 expiring in 2019 and 2020.

7. Stockholders' equity:

2001 Transactions:

During the year ended December 31, 2001, 8,937,000 shares of the Company's
restricted common stock were sold through a private equity placement exempt
from registration under Section 4(2) of the Securities Act of 1933, and
Rule 506 of Regulation D, thereof. The placement was open to select
officers, employees, and representatives of the Company for the purchase of
restricted common stock. Proceeds from the offering amounted to $975,700.

During the year ended December 31, 2001, the Company issued 765,000 shares
of restricted common stock to employees as compensation for services. The
restricted common stock, which was fully vested upon issuance, was valued
based upon the trading market prices on the dates of issuance, or $368,550
in the aggregate.

F-17

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

7. Stockholders' equity (continued):

During the year ended December 31, 2001, the Company issued 676,500 shares
of restricted common stock to consultants as compensation for consulting
services, which contained various vesting terms and conditions. The
restricted common stock was valued based upon the trading market prices on
the dates of issuance, or $800,055 in the aggregate. Compensation expense
of $372,070 was immediately recorded upon issuance and an additional
$297,483 was amortized during the period from issuance through year-end.

2000 Transactions:

During the year ended December 31, 2000, warrants were exercised for
649,000 shares of common stock at $1.00 per share from a previous
resolution dating from the reverse merger into Gopher, Inc. No warrants
remain outstanding as of December 31, 2000.

During the year ended December 31, 2000, the Company issued 182,500 shares
of restricted common stock to employees under an employee bonus
arrangement. Compensation expense of $137,460 was recognized in connection
with the issuance.

During the year ended December 31, 2000, the Company issued 397,600 shares
of common stock with a fair value of $271,255 as payment for services.

8. Recapitalization:

On March 24, 1999, Gopher, Inc. ("Gopher") acquired all of the outstanding
common stock of SeaView Video Technology, Inc. in exchange for 5,000,000
shares of Gopher's restricted stock and $250,000 cash. Gopher was as a
non-operating public shell company, and, therefore, for accounting
purposes, the combination has been treated as a recapitalization of SeaView
Video Technology, Inc. and the issuance of stock by the company for the net
monetary assets of Gopher.

The historical financial statements prior to March 24, 1999 are those of
SeaView Video Technology, Inc., and reflect the restatement of the equity
accounts based on the ratio of the exchange of 5,000,000 shares of Gopher
for 100 shares of SeaView Video Technology, Inc.

F-18

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

9. Related party transactions:

Related party notes and accounts receivable:

During the year ended December 31, 2000, the Company accepted several notes
from an officer, with a balance of $512,757 at December 31, 2000. The notes
were collateralized by 6.5 million shares of common stock. The loan was
repaid during the second quarter of 2001 with $235,000 cash and 353,575
shares of common stock, which were recorded, at the cost of $277,757.

Nonreciprocal transfer from shareholder:

Investment represents a 20% interest in Golden Springs, LLC that was, in
substance, contributed to the Company by Richard McBride, a principal
stockholder and the Company's then President and Chief Executive Officer
("McBride") on July 12, 2000. Golden Springs LLC is a development stage
enterprise that is developing a private health spa in West Central Florida.
As a matter of convenience, the transaction was facilitated by the issuance
by the Company of 150,000 shares of common stock with the agreement that
the former Chief Executive Officer would promptly replace the shares. Upon
replacement by the former officer, the common shares were immediately
cancelled. The Company accounted for the Golden Springs LLC transaction as
a capital contribution at its estimated fair value of $146,000. The
Company's share of losses in the equity investment amounted to
approximately $8,000 and $138,000 during the years ended December 31, 2001
and 2000, respectively. The investment is currently estimated to have no
value.

Other related party transactions:

Under a Professional Services Agreement (the "1999 Agreement") effective
March 25, 1999, 2,700,000 shares of restricted common stock were issued to
Richard McBride, the Company's then President and Chief Executive Officer
("McBride") for services and responsibilities generally associated with the
positions held. Upon issuance of stock under the plan, unearned
compensation equivalent to the market value of the stock at the date of
grant is charged to stockholders' equity and subsequently amortized over
the three-year agreement. Expense associated with this agreement was
$40,974 and $33,332 for the years ended December 31, 2001 and 2000
respectively.

F-19

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

9. Related party transactions (continued):

Other related party transactions (continued):

On February 14, 2001, the Company entered into a Consulting and Licensing
Agreement (the "2001 Agreement") with McBride that provided for a license
to exploit certain patented technologies owned by McBride and for
consulting services from McBride that were considered necessary to develop
the technologies into salable products. The term of the consulting
arrangement was 3 years; the term of the license is 14 years. The Company
exchanged 1,000,000 shares of restricted common stock for the 2001
Agreement, having a value of $2,130,000, based upon quoted market prices on
the date of the 2001 Agreement. The total value of the arrangement was
allocated between the consulting and license in the amounts of $2,066,100
and $63,900, respectively, based upon the relative fair values of the
consulting services and license.

McBride died on October 7, 2001. All restricted and unrestricted shares
became immediately vested and are held by his estate. The due from related
party balance of $93,861 at December 31, 2001 represents amounts due to the
Company from the estate for various expenses paid on behalf of McBride and
the estate.

Related party expenses:

During the year ending December 31, 2000, the Company contracted with R. L.
McBride and Associates, Inc., a Florida Corporation, for professional
services in advertising and public relations. Richard L. McBride, the
Company's CEO, was the sole owner of R. L. McBride and Associates, Inc. The
total amount paid to R. L. McBride and Associates, Inc. through December
31, 2000 was $80,000.

F-20

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

10. Commitments and contingencies:

Securities and Exchange Commissions Investigation:

The Division of Enforcement of the Securities and Exchange Commission
("Division") has commenced an investigation of certain matters related to
the Company's financial results and common stock performance during 2000.
The Division has not made any claim or assessment against the Company, nor
have they threatened the Company with litigation. However, the Division is
empowered with the ability to recommend some type of enforcement action
against the Company as a result of their investigation. Management of the
Company, with the advise of counsel, is unable to predict the outcome of
the investigation at this time.

Litigation, claims and assessment:

The Company is a defendant in a consolidated class action lawsuit pending
in the United States District Court for the Middle District of Florida
against the Company and McBride, the Company's former chief executive
officer. Commencing in May 2001, five nearly identical class action
lawsuits were filed against the Company and McBride, and, on July 24, 2001,
those lawsuits were consolidated. In the five initial complaints, the
plaintiffs thereto claimed violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In
the five initial complaints, the plaintiffs to those actions alleged, among
other things, that from March 30, 2000 to March 19, 2001, the Company and
McBride misstated the Company's sales and revenue figures; improperly
recognized revenues; misrepresented the nature and extent of the Company's
dealer network; falsely touted purported sales contracts and agreements
with large retailers; misrepresented the Company's ability to manufacture,
or to have manufactured, its products; and misrepresented the Company's
likelihood of achieving certain publicly announced sales targets. The
consolidated amended class action complaint was filed in December 2001. As
amended, the consolidated complaint seeks compensatory and other damages,
and costs and expenses associated with the litigation and now seeks relief
against James Cox also on the same grounds as the claims against Seaview
and McBride. In February 2002, the Company filed its motion to dismiss. The
plaintiffs responded to the motion to dismiss in early April 2002. The case
is in the beginning stages and it is too early to assess the likely outcome
or the impact this class action lawsuit will have on the Company.
Accordingly, no liability, if any that could result has been recorded in
the accompanying financial statements.

The Company is involved in various other claims and legal actions in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on
the Company's financial position, results of operations or liquidity.

F-21

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

10. Commitments and contingencies (continued):

License agreements and royalties:

o License of Video Security System Technology: In October 1999, the
Company entered into a licensing agreement with VideoCom, Inc. for its
powerline products, including the SecureView product line. The
agreement is effective through the expiration of the patents licensed
in the agreement (through October 2012). The agreement obligates the
Company to pay royalties equal to between $5 and $10 per unit of
licensed products sold, with minimum annual royalties of between
$120,000 and $200,000. The Company issued 325,000 shares of common
stock as payment for the royalties for 2001. The Company has
recognized the estimated fair value of these shares ($236,600) as a
charge to 2001 operations.

o License of Underwater Camera Technology: In February 2001, the Company
entered into a consulting and licensing agreement with Richard McBride
(see Note 9) for a license to exploit certain patented technologies
for its SeaView product line. The agreement is effective through the
expiration of patents licensed in the agreement (through July 2014).
The Company paid 997,000 shares of the Company's common stock in 2001
for the license and recorded an intangible asset for the estimated
fair value of the shares ($2,066,100), which is being amortized over 5
years. Amortization charged to operations in relation to these
licensing rights was $361,568 in 2001.

F-22

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

11. Segment information:

The Company operates in two identifiable industry segments. The Company's
Marine Products Segment is engaged in the sale of underwater video cameras,
lights and accessories, principally to retail sporting goods businesses
throughout the United States. The Company's Security Products Segment is
engaged in the development and sale of video security systems to retail,
commercial and governmental entities throughout the United States. There
are no significant concentrations of revenue with any one customer. The
Company's facilities and other assets are, generally, not distinguished
among the identifiable segments. Other financial information about the
Company's segments is as follows:

2001
---------------------------------------
Security Marine
Products Products Total
---------- ----------- ------------
Net revenue $ 319,566 $ 412,835 $ 732,401
Cost of sales 196,733 181,599 $ 378,332
---------- ----------- ------------
Gross profit $ 122,833 $ 231,236 $ 354,069
========== =========== ============
Research and development:
Stock-based $ 414,647 $ - $ 414,647
Other $ - $ 91,821 $ 91,821

2000
---------------------------------------
Security Marine
Products Products Total
---------- ----------- ------------
Net revenue $ - $ 1,130,563 $ 1,130,563
Cost of sales - 372,975 $ 372,975
---------- ----------- ------------
Gross profit $ - $ 757,588 $ 757,588
========== =========== ============
Research and development:
Stock-based $ - $ 271,255 $ 271,255
Other $ - $ 18,768 $ 18,768

F-23

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

12. Restatement of 2000 financial statements:

The 2000 financial statements have been restated to provide valuation
allowances of $1,439,322 against deferred tax assets principally related to
net tax operating loss carry forwards. The restatement is necessary
because, in the opinion of management, evidence as to the recovery of the
deferred tax asset, principally projections of future taxable income, does
not rise to the "more likely than not" criteria set forth in Financial
Accounting Standards No. 109, Accounting for Income Taxes.

The 2000 financial statements have also been restated to reduce the
original valuation afforded the contribution of the Golden Springs LLC
("Golden") equity investment from $1,027,500 to $146,200. The original
valuation was based upon a discounted value of the Company's common stock
that the former Chief Executive Officer personally committed to Golden in
exchange for the equity investment. Using the context of Accounting
Principles Opinion No. 29, Nonmonetary Transactions, as it relates to
nonreciprocal transfers from owners, management has made its best estimate
of the value of the investment received, based upon all available evidence.
Since, at the time of the contribution of the investment to the Company by
the Officer, Golden was in its development stage, with uncertain prospects,
and its assets, which consisted primarily of fully debt-encumbered real
estate, the revised fair value estimate was based upon the Company's
ownership in the net equity contributions of Golden. That is, the fair
value estimate was based upon what others were investing in Golden at that
time. The Golden restatement had no effect on the Company's 2000 results of
operations.

The following table sets forth certain financial categories as originally
reported in the Company's 2000 Annual Report on Form 10-K and the restated
categories reflected in this Annual Report. Also see Note 13 for the 2000
quarterly effects of these restatements:

Originally
Category Reported Restated
------------------------------------- -------------- --------------
Total assets $ 3,841,944 $ 1,521,322
============== ==============
Stockholders' equity $ 3,362,061 $ 1,041,439
============== ==============
Net loss $ 2,204,461 $ 3,643,783
============== ==============
Net loss per share, basic and diluted $ (0.18) $ (0.30)
============== ==============

F-24

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

13. Quarterly Financial Results (unaudited):

Quarterly financial results for the years ended December 31, 2001 and 2000
as originally reported and as restated are as follows:

Three months ended
----------------------------------------- -------------
March 31, June 30, September 30, December 31,
2001 2001 2001 2001
------------- ------------- ------------- -------------

Revenues, as originally reported $ 197,182 $ 509,289 $ 184,745 $ 49,185
=============
Sales adjustment - (208,000) -
------------- ------------- -------------
Revenues, as restated $ 197,182 $ 301,289 $ 184,745
============= ============= =============

Net loss, originally reported $ (264,129) $ (91,703) $ (332,730) $ (1,240,154)
=============
Adjustment for:
Equity losses in invested 125,565 (63,156) 33,868
Margin on sales adjustment - (108,000) -
Stock-based compensation (45,954) (52,548) (7,046)
Licensing rights amortization (51,653) (103,305) (103,305)
Deferred income taxes (157,951) (58,629) (212,729)
------------- ------------- -------------
Net loss, as restated $ (394,122) $ (477,341) $ (621,942)
============= ============= =============

Net loss per share,
originally reported: $ (0.01) $ (0.01) $ (0.02) $ (0.05)
============= ============= ============= =============
Net loss per share,
as restated: $ (0.03) $ (0.02) $ (0.03)
============= ============= =============

Three months ended
----------------------------------------- -------------
March 31, June 30, September 30, December 31,
2000 2000 2000 2000
------------- ------------- ------------- -------------

Revenues $ 421,068 $ 335,120 $ 212,592 $ 161,783
============= ============= ============= =============

Net loss, originally reported $ (237,801) $ (790,160) $ (655,507) $ (520,993)
Adjustment for:
Deferred income taxes (126,794) (496,101) (424,420) (212,729)
------------- ------------- ------------- -------------
Net loss, as restated $ (364,595) $(1,286,261) $(1,079,927) $ (733,722)
============= ============= ============= =============

Net loss per share,
originally reported: $ (0.03) $ (0.07) $ (0.05) $ (0.03)
============= ============= ============= =============
Net loss per share, as restated $ (0.05) $ (0.11) $ (0.08) $ (0.06)
============= ============= ============= =============

F-25

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

13. Quarterly Financial Results (unaudited):

Restatements:

The unaudited quarterly financial information for the second quarter of
2001, as originally reported, has been restated for one sales transaction
for which the sales documentation did not support the transfer of risks and
rewards of ownership of the product to the customer. The unaudited
quarterly financial information in 2001, as originally reported, has also
been restated to change the valuation of stock-based compensation.
Stock-based compensation is measured at the fair value the securities
issued or, in the case of options to employees, using an intrinsic
approach. Prior to 2001, the Company appropriately utilized an amount equal
to the discounted trading market prices of the Company's common stock for
measuring stock-based compensation, due to among other reasons the highly
volatile market. The Company continued this practice during the first three
quarters of 2001, but determined that a significant discount against the
trading market price was not warranted. The restatement reflects the value
of stock based compensation using the closing market price on the date of
the transaction. In addition, using the closing market prices on the date
of the transactions increased the value assigned to the 2001 License
Agreement with McBride discussed in Note 9. The restated quarterly amounts
reflect increased amortization expense for this change.

The unaudited quarterly financial information in 2001 and 2000, as
originally reported, has been restated to provide valuation allowances
against deferred tax assets principally related to net tax operating
carryforwards. The restatements are necessary because, in the opinion of
management, evidence as to the recovery of the deferred tax assets,
principally projections of future taxable income, does not rise to the
"more likely than not" criteria set forth in Financial Accounting Standards
No. 109, Accounting for Income Taxes.

Fourth Quarter Activity

The net loss and net loss per share in the fourth quarter of 2001 were
higher than amounts experienced in the preceding three quarters because of
certain fourth quarter transactions including (i) charges of $310,800 for
employee stock-based compensation, (ii) charges of $262,570 for
non-employee stock-based compensation and (iii) significant legal expenses
of $228,000.

F-26

SEAVIEW VIDEO TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 AND 2000

14. Earnings per share computations:

Year Ended December 31,
2001 2000
------------- -------------
( Restated )
Net (loss) income $ (2,829,836) $ (3,643,783)
============= =============
Pro forma net income (unaudited)

Weighted average common shares:
Basic 21,193,616 12,051,616
Dilutive options -- --
------------- -------------
Diluted shares 21,193,616 12,051,616
============= =============
Basic net income (loss) per share:
Historical $ (0.13) $ (0.30)
============= =============
Diluted net income (loss) per share:
Historical $ (0.13) $ (0.30)
============= =============

F-27

SEAVIEW VIDEO TECHNOLOGY, INC.
CONDENSED BALANCE SHEETS

Assets

June 30, December 31,
2002 2001
(Unaudited)
--------------- -------------
Current Assets:
Cash and cash equivalents $ 2,133 $ 5,233
Accounts receivable trade, net of allowance for
doubtful accounts of $50,654 in 2002 and $24,389
in 2001 155,540 79,014
Inventories 580,708 742,690
Prepaid expense and other current assets 92,181 130,797
Note receivable--officers 43,000 -
Note receivable 34,439 -
--------------- ---------------
Total current assets 908,001 957,734

Licensing rights, net of accumulated amortization of $568,178
in 2002 and $361,568 in 2001 1,497,922 1,704,532
Property and equipment, net 298,493 379,565
Due from related party 93,861 93,861
---------------- ---------------
Total assets $ 2,798,277 $ 3,135,692
================ ===============

Liabilities and Stockholders' Equity

Current Liabilities:
Accounts Payable 929,837 764,959
Accrued liabilities 317,092 167,784
Deferred revenue 64,425 48,226
--------------- ------------
Total current liabilities 1,311,354 980,969
--------------- ------------
Long Term Liabilites
Litigation settlement 1,200,000 -
--------------- ------------
Total liabilites 2,511,354 980,969
--------------- ------------
Stockholders' equity:
Common stock, $.001 par value, 100,000,000 shares authorized;
issued and outstanding (36,051,644 - 2002; 28,571,809 - 2001) 36,051 28,572
Additional paid-in capital 10,498,506 9,018,699
Treasury stock, at cost, 353,575 shares (277,757) (277,757)
Unearned restricted stock compensation (275,819) (130,502)
Stock subscription (5,000) -
Accumulated deficit (9,689,058) (6,484,289)
--------------- ------------
Total stockholders' equity 286,923 2,154,723
--------------- ------------
Total liabilities and stockholders' equity $ 2,798,277 $ 3,135,692
=============== ==============

The accompanying notes are an integral part of these condensed financial statements

F-28

SEAVIEW VIDEO TECHNOLOGY, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended June 30,
---------------------------
2002 2001
--------------- --------------
( Restated )

Net Revenue $ 154,959 $ 301,289
Cost of goods sold 106,710 155,235
--------------- --------------
Gross Profit 48,249 146,054
Operating expenses:
Salaries and wages 540,070 122,756
Advertising and promotions 51,319 109,386
Depreciation and amortization 121,547 123,183
Research and development 73,544 45,502
Professional and consulting fees 213,676 163,402
Other expenses 103,602 59,166
Litigation settlement 1,200,000 -
--------------- --------------
Total operating expenses 2,303,758 623,395
--------------- --------------
Net loss from operations ( 2,255,509) ( 477,341)

Other income (expense) (27,284) -
---------------- --------------
Loss before taxes ( 2,282,793) ( 477,341)

Income tax expense - -
---------------- --------------
Net loss ($ 2,282,793) ($ 477,341)
================ ==============

Basic and diluted net loss per common share (.07) (.03)
=============== ==============
Basic and diluted weighted average shares outstanding 33,343,876 18,507,291
=============== =============

The accompanying notes are an integral part of these condensed financial statements

F-29

SEAVIEW VIDEO TECHNOLOGY, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

Six Months Ended June 30,
---------------------------
2002 2001
--------------- --------------
( Restated )

Net Revenue $ 281,575 $ 498,471
Cost of goods sold 171,571 251,049
--------------- --------------
Gross Profit 110,004 247,422
Operating expenses:
Salaries and wages 940,533 319,046
Advertising and promotions 157,913 151,937
Depreciation and amortization 243,252 194,714
Research and development 186,602 45,502
Professional and consulting fees 357,003 281,607
Other expenses 202,187 117,461
Litigation settlement 1,200,000 -
--------------- --------------
Total operating expenses 3,287,490 1,110,267
--------------- --------------
Net loss from operations ( 3,177,486) ( 862,845)

Other income (expense) (27,284) (8,618)
---------------- --------------
Loss before taxes ( 3,204,770) ( 871,463)

Income tax expense - -
---------------- --------------
Net loss ($ 3,204,770) ($ 871,463)
================ ==============

Basic and diluted net loss per common share (.10) (.05)
============== ==============
Basic and diluted weighted average shares outstanding 31,546,697 18,314,787
============== ==============

The accompanying notes are an integral part of these condensed financial statements.

F-30

SEAVIEW VIDEO TECHNOLOGY, INC
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended
-----------------
June 30, June 30,
2002 2001
--------- -----------
( Restated )
Cash flows from Operating activities:
Net Loss ($3,204,770) ($ 871,463)
Adjustments to reconcile net loss to net cash flows
from operating activities:
Litigation settlement 1,200 000 -
Depreciation 36,642 39,756
Bad debts expense 26,266 -
Loss on sales of fixed assets 25,514 -
Amortization of licensing rights 206,610 -
Amortization of unearned compensation 93,070 316,157
Equity in loss of affiliate - 8,618
Stock-based compensation expenses 659,639 145,752
Changes in operating assets and liabilities:
Accounts receivable trade (102,792) (55,754)
Inventories 161,982 (247,298)
Prepaid expenses (11,384) (18,533)
Accounts payable trade 321,129 235,518
Accrued liabilities 149,308 (19,062)
Deferred revenue 16,199 -
----------- ------------
Net cash flows from operating activities (422,587) (466,309)

Cash flows from investing activities:
Issuances of notes receivable ( 74,439) -
Repayments on notes receivable 40,000 -
Repayments on notes receivable - officers 7,000 235,000
Proceeds from sales of property and equipment 25,000 -
Purchase of property and equipment ( 6,084) -
----------- ------------
Net cash flows from investing activities ( 8,523) 235,000

Cash flows from financing activities:
Proceeds from sales of common stock 331,500 318,750
Proceeds from convertible debentures 96,510 -
----------- ------------
Net cash flows from financing activities 428,010 318,750

Net change ( 3,100) 87,441
Cash at the beginning of the year 5,233 41,264
----------- -------------
Cash at the end of the year 2,133 128,705
=========== =============

Supplemental Disclosures of Cash Flow Information:

Non-cash financing activities:
Conversion of accounts payable into 735,000 common shares $156,250 -
=========== ===========
Conversion of convertible debentures into 301,595
and 400,000 shares, respectively of common stock $ 96,510 $200,000
=========== ===========

Other cash flows information:

Cash paid for taxes - -
=========== ===========
Cash paid for interest - -
=========== ===========

The accompanying notes are an integral part of these condensed financial statements.

F-31

SEAVIEW VIDEO TECHNOLOGY, INC.
Notes to Condensed Financial Statements
June 30, 2002 and 2001
( Unaudited )

1. BASIS OF PRESENTATION

The Company's interim financial statements included herein are
unaudited and have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the six month period ended June 30,
2002, are not necessarily indicative of the results that can be expected for a
full fiscal year.

The Company's financial statements have been prepared assuming that the Company
will continue as a going concern. The Company has incurred a net loss of
$3,204,770 during the six months ended June 30, 2002, has used cash of $422,587
during the same period in maintaining its operations, and has a working capital
deficiency of $403,353 as of June 30, 2002. These conditions raise substantial
doubt about the Company's ability to continue as a going concern. The Company's
losses have arisen as a result of weak Marine Product Segment sales, driven
largely by the economic downturn in the marine industry. In addition, the
Company has devoted significant efforts in the further development and marketing
of products in its Security Products Segment, which, while now showing tangible
results in the form of purchase orders both received and forthcoming, cannot yet
be classified as sufficient to totally fund operations for any period of time.

The Company's ability to continue is dependent upon: raising additional capital
to fund operations and development; the further development of the Security
Products Segment; and, ultimately, its ability to achieve profitable operations.
During the six months ended June 30, 2002, the Company received $428,010 in debt
and equity financing and is currently addressing several additional financing
sources. However, there can be no assurances that additional financing can be
obtained on conditions considered by management to be reasonable and
appropriate. The financial statements do not include any adjustments that might
arise as a result of this uncertainty.

Certain amounts as previously presented in the 2001 financial statements have
been reclassified to conform to the current year presentation.

2. NOTE RECEIVABLE

During February 2002, the Company issued a note receivable with a face value of
$75,000 to a consultant for legal fees paid on the consultant's behalf. The
legal fees were for the filing of international patent rights related to the
patents that the Company has licensed from the borrower. This note is unsecured,
non-interest bearing and payable in full within 180 days. During the three
months ended June 30, 2002, the Company applied approximately $40,000 of
royalties due to the consultant against the note, and plans to liquidate the
balance in a similar matter.

3. CONVERTIBLE DEBENTURES

During January 2002, the Company received $96,510 in borrowings under a 10%
convertible debenture. At the option of the lender, the principal portion of the
note can be converted into 301,595 shares of the Company's restricted common
stock at a conversion price of $.32 per share through December 31, 2002. The
stated conversion price was equal to the market price of the common stock on the
commitment date. The holder exercised the conversion feature on June 5, 2002.

4. STOCKHOLDERS' EQUITY

During the six months ended June 30, 2002, 2,818,583 shares of the Company's
restricted common stock were sold through a private equity placement exempt from
registration under Section 4(2) of the Securities Act of 1933, and Rule 506 of
Regulation D, thereof. The placement was open to select officers, employees,
representatives of the Company, and accredited investors for the purchase of
restricted common stock. Proceeds from the offering amounted to $331,500.

During the six months ended June 30, 2002, the Company issued 2,222,600 shares
of restricted common stock to employees and directors as compensation for
services. The restricted common stock, which was fully vested upon issuance, was
valued based upon the trading market prices on the dates of issuance, or
$574,261 in the aggregate.

During the six months ended June 30, 2002, the Company issued 1,402,057 shares
of restricted common stock to consultants as compensation for consulting
services, which contained various vesting terms and conditions. The restricted
common stock issued was valued based upon the trading market prices on the dates
of issuance, or $323,765 in the aggregate. As of June 30, 2002, unearned
consulting expense amounted to $275,819. Consulting expense amortized into
earnings during the six month period ending June 30, 2002 amounted to $93,070.

During the six months ended June 30, 2002, the Company issued 735,000 shares of
restricted common stock to trade creditors to relieve $156,250 in trade accounts
payable. The common stock issued was valued based upon the trading market prices
on the dates of issuance, and resulted in no gain or loss from extinguishments
of these liabilities.

F-32

SEAVIEW VIDEO TECHNOLOGY, INC.
Notes to Condensed Financial Statements
June 30, 2002 and 2001
( Unaudited )

5. COMMITMENTS AND CONTINGENCIES

Litigation, claims and assessment:

The Company is a defendant in a consolidated class action lawsuit pending in the
United States District Court for the Middle District of Florida against the
Company and McBride, the Company's former chief executive officer. Commencing in
May 2001, five nearly identical class action lawsuits were filed against the
Company and McBride, and, on July 24, 2001, those lawsuits were consolidated. In
the five initial complaints, the plaintiffs thereto claimed violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. In the five initial complaints, the plaintiffs to those
actions alleged, among other things, that from March 30, 2000 to March 19, 2001,
the Company and McBride misstated the Company's sales and revenue figures;
improperly recognized revenues; misrepresented the nature and extent of the
Company's dealer network; falsely touted purported sales contracts and
agreements with large retailers; misrepresented the Company's ability to
manufacture, or to have manufactured, its products; and misrepresented the
Company's likelihood of achieving certain publicly announced sales targets. The
consolidated amended class action complaint was filed in December 2001. As
amended, the consolidated complaint seeks compensatory and other damages, and
costs and expenses associated with the litigation and now also seeks relief
against James Cox, the Company's Secretary and Treasurer, on the same grounds as
the claims against Seaview and McBride. In February 2002, the Company filed its
motion to dismiss. The plaintiffs responded to the motion to dismiss in early
April 2002. On May 17, 2002, the Company reached an agreement in principle, in
the form of a Memorandum of Understanding, to settle the action. In the
settlement, the Company would tender 6,000,000 shares of its free trading common
stock to the class participants. In addition, the Company would pay, up to a
maximum of $125,000, for costs incurred by the plaintiffs in the litigation,
plus the costs of settlement notice and administration. The Company and the
plaintiffs' counsel have agreed to prepare and execute a definitive Stipulation
of Settlement and jointly seek preliminary and final Court approval. The
Settlement is conditional upon receiving final judicial approval of the
Stipulation. However, in management's opinion such approval is probable.
Accordingly, the Company has provided for the impending settlement in the
accompanying financial statements by accruing a liability of $1,200,000, which
is equal to the current fair market value of the settlement shares, plus an
estimated amount for expenses.

License agreements and royalties:

o License of Video Security System Technology: In October 1999, the
Company entered into a licensing agreement with VideoCom, Inc. for
its powerline technologies, which are utilized in the SecureView
product line. The agreement is effective through the expiration of
the patents licensed in the agreement (through October 2012). The
agreement obligates the Company to pay royalties equal to between $5
and $10 per unit of licensed products sold, with minimum annual
royalties of between $120,000 and $200,000. $40,000 of expense
related to this agreement was incurred during the six months ended
June 30, 2002.

o License of Underwater Camera Technology: In February 2001, the
Company entered into a consulting and licensing agreement with
Richard McBride for a license to exploit certain patented
technologies for its SeaView product line. The agreement is
effective through the expiration of patents licensed in the
agreement (through July 2014). The Company paid 997,000 shares of
the Company's common stock in 2001 for the license and recorded an
intangible asset for the estimated fair value of the shares
($2,066,100), which is being amortized over 5 years.

6. SEGMENT INFORMATION

The Company operates in two identifiable industry segments. The Company's Marine
Products Segment is engaged in the sale of underwater video cameras, lights and
accessories, principally to retail sporting goods businesses throughout the
United States. The Company's Security Products Segment is engaged in the
development and sale of video security systems to retail, commercial and
governmental entities throughout the United States. There are no significant
concentrations of revenue with any one customer. The Company's facilities and
other assets are, generally, not distinguished between the identifiable
segments. Other financial information about the Company's segments is as
follows:

F-33

SEAVIEW VIDEO TECHNOLOGY, INC.
Notes to Condensed Financial Statements
June 30, 2002 and 2001
( Unaudited )

Six Months Ended June 30, 2002
---------------------------------

Security Marine
Products Products Total
--------- --------- -----

Net revenue $ 119,309 $ 162,266 $ 281,575
Cost of sales 79,973 91,598 171,571
--------- --------- ---------
Gross profit $ 39,336 $ 70,668 $ 110,004
========= ========= =========

Six Months Ended June 30, 2001
---------------------------------

Security Marine
Products Products Total
--------- --------- -----

Net revenue $ - $ 498,471 $ 498,471
Cost of sales - 251,049 251,049
----------- ---------- ---------
Gross profit $ - $ 247,422 $ 247,422
=========== ========== =========
Research and development:
Stock-based $ - $ - $ -
Other $ - $ - $ -

7. RESTATEMENTS

The unaudited quarterly financial information for the quarterly and six month
periods ending June 30, 2001, as originally reported, have been restated for the
following matters:

Sales adjustment--The unaudited financial statements have been restated to
reverse a sales transaction with a $200,000 value and $108,000 margin. The
restatement is necessary because title to this product did not transfer to the
customer.

Equity in losses of investee--The unaudited financial statements have been
restated to reduce the original valuation afforded the contribution of Golden
Springs LLC ("Golden") equity investment from $1,027,500 to $146,200. This
restatement is necessary because the original valuation was incorrectly based
upon a discounted value of the Company's common stock that the former Chief
Executive Officer personally committed to Golden in exchange for the equity
investment. Using the appropriate context in Accounting Principles Board Opinion
No. 29 Nonmonetary Transactions, as it relates to nonreciprocal transfers from
owners, management has made its best estimate of the value of the investment
received, based upon all available evidence. The lower valuation has resulted in
restatements to the equity in losses of the investee.

Stock-based compensation--Stock-based compensation is measured at the fair value
of the securities issued. Prior to 2001, the Company appropriately utilized an
amount equal to the discounted trading market prices of the Company's common
stock for measuring stock-based compensation, due to among other reasons the
highly volatile market. The Company continued this practice during the first
three quarters of 2001, but determined that a significant discount against the
trading market price was not warranted. The restatement reflects the value of
stock based compensation using the closing market price on the date of the
transaction. In addition, using the closing market prices on the date of the
transactions increased the value assigned to the 2001 "license" Agreement with
McBride discussed in Note 5. The restated quarterly amounts reflect increased
amortization expense for this change.

Deferred Income Taxes--The unaudited financial statements have been restated to
provide valuation allowances against deferred tax assets principally related to
net tax operating loss carryforwards. The restatements are necessary because, in
the opinion of management, evidence as to the recovery of the deferred tax
assets, principally projections of future taxable income, did not rise to the
"more likely than not" criteria set forth in Financial Accounting Standards No.
109, Accounting for Income Taxes.

Quarterly financial results for the three and six months ended June 30, 2001 as
originally reported and as restated are as follows:

Three Months Ended Six Months Ended
June 30, 2001 June 30, 2001
----------------- ---------------
Revenues, as originally reported $ 509,289 $ 706,471
Sales adjustment (208,000) (208,000)
---------- ------------
Revenues, as restated $ 301,289 $ 498,471
========== ============

Net loss, originally reported $ (91,703) $ (355,831)
adjustment for:
Margin on sales adjustment (108,000) (108,000)
Equity in losses of investee (63,156) 62,409
Stock-based compensation (52,548) (98,502)
Licensing rights amortization (103,305) (154,958)
Deferred income taxes (58,629) (216,581)
---------- -----------
Net loss, as restated $ (477,341) $ (871,463)
========== ===========

Net loss per share, originally
reported: $ (0.01) $ (0.02)
========== ===========
Net loss per share, as restated $ (0.03) $ (0.05)
========== ===========

F-34

_______________________________________ ______________________________________________

You should rely only on the information
contained in this prospectus. We have not
authorized anyone to provide you with
information different from the
information contained in this prospectus.
This document may only be used where it
is legal to sell the securities. The
information in this document may only
be accurate on the date of this document. UP TO 46,194,489 SHARES
OF OUR
OF COMMON STOCK

TABLE OF CONTENTS
Page
----

Prospectus Summary...........................2
Risk Factors.................................3
Use Of Proceeds..............................8 SeaView Video Technology, Inc.
Market For Common Equity And Related
Stockholder Matters..................9 200 Madonna Boulevard
Management's Discussion And Analysis Tierra Verde, FL 33715
Or Plan Of Operation................10
Business....................................17 (727) 866-7440
Management..................................24
Certain Relationships And Related
Transactions........................30
Security Ownership Of Certain Beneficial
Owners And Management...............31
Description Of Securities...................32
Plan Of Distribution........................33
Selling stockholders........................33
Legal Matters...............................36
Experts.....................................37
Available Information.......................38
Index To Financial Statements...............39
________________

PROSPECTUS

________________

September __, 2002
_______________________________________ ______________________________________________

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

SeaView's Articles of Incorporation, as amended, provide to the fullest
extent permitted by Florida law, a director or officer of SeaView shall not be
personally liable to SeaView or its shareholders for damages for breach of such
director's or officer's fiduciary duty. The effect of this provision of SeaView'
Articles of Incorporation, as amended, is to eliminate the right of SeaView and
its shareholders (through shareholders' derivative suits on behalf of SeaView)
to recover damages against a director or officer for breach of the fiduciary
duty of care as a director or officer (including breaches resulting from
negligent or grossly negligent behavior), except under certain situations
defined by statute. SeaView believes that the indemnification provisions in its
Articles of Incorporation, as amended, are necessary to attract and retain
qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

Item 25. Other Expenses of Issuance and Distribution.

The following table sets forth an itemization of all estimated expenses,
all of which we will pay, in connection with the issuance and distribution of
the securities being registered:

Nature of Expense Amount

SEC Registration fee $552.49
Accounting fees and expenses 10,000.00*
Legal fees and expenses 35,000.00*
Printing and related expenses
TOTAL $45,552.49*
===========

* Estimated.

II-1

Item 26. Recent Sales of Unregistered Securities.

2000 and 1999 Transactions

During the year ended December 31, 2000, the Company issued 8%
convertible debentures for proceeds of $ 3,288,000. The debentures were for a
term of twelve months and were non-interest bearing for an initial period, after
which, interest was payable quarterly. No interest was paid on the debentures.
The debentures were convertible at the option of the holders into shares of the
Company's restricted common stock at conversion rates ranging from $0.50 to
$8.00 per share, based upon the market prices of the common stock on the date of
issuance of debentures. During the year ended December 31, 2000, the Company
exchanged $3,188,000 of the debentures for an aggregate of 5,373,584 shares of
the Company's common stock. Debentures of $100,000 that remained outstanding at
December 31, 2000 were exchanged for 200,000 shares of the Company's common
stock during 2001 based upon the original terms.

During the year ended December 31, 2000, warrants were exercised for
649,000 shares of common stock at $1.00 per share from a previous resolution
dating from the reverse merger into Gopher, Inc. No warrants remain outstanding
as of December 31, 2000.

During the year ended December 31, 2000, the Company issued 182,500
shares of restricted common stock to employees under an employee bonus
arrangement. Compensation expense of $137,460 was recognized in connection with
the issuance.

During the year ended December 31, 2000, the Company issued 397,600
shares of common stock with a fair value of $271,255 as payment for services.

2001 Transactions:

8,937,000 shares of the Company's restricted common stock were sold
through a private equity placement exempt from registration under Section 4(2)
of the Securities Act of 1933, and Rule 506 of Regulation D, thereof. The
placement was open to select officers, employees, and representatives of the
Company for the purchase of restricted common stock. Proceeds from the offering
amounted to $975,700.

The Company issued 676,500 shares of restricted common stock to
consultants as compensation for consulting services, which contained various
vesting terms and conditions. The restricted common stock was valued based upon
the trading market prices on the dates of issuance, or $800,055 in the
aggregate. Compensation expense of $372,070 was immediately recorded upon
issuance and an additional $297,483 was amortized during the period from
issuance through year-end.

The Company issued 765,000 shares of restricted common stock to
employees as compensation for services. The restricted common stock, which was
fully vested upon issuance, was valued based upon the trading market prices on
the dates of issuance, or $368,550 in the aggregate.

On February 14, 2001, issued 1,000,000 shares to Richard L. McBride
pursuant to a Consulting and Licensing Agreement. Mr. McBride, our former CEO,
developed and filed in his name individually, certain patents, patent
applications and provisional patent applications. Us as licensee and Mr. McBride
as licensor, have set forth the terms and conditions with respect to the
granting of the licensing rights.

II-2

2002 Transactions:

During the second quarter 2002, 1,387,333 shares of the Company's
restricted common stock were sold through a private equity placement exempt from
registration under Section 4(2) of the Securities Act of 1933, and Rule 506 of
Regulation D, thereof. The placement was open to select officers, employees,
accredited investors, and representatives of the Company for the purchase of
restricted common stock. Proceeds from the offering amounted to $161,500.

During the second quarter 2002, the Company issued 1,259,100 shares of
restricted common stock to employees as compensation for services. The
restricted common stock, which was fully vested upon issuance, was valued based
upon the trading market prices on the dates of issuance, or $321,848 in the
aggregate.

During the second quarter 2002, the Company issued 730,845 shares of
restricted common stock to consultants as compensation for consulting services,
which contained various vesting terms and conditions. The restricted common
stock was valued based upon the trading market prices on the dates of issuance,
or $169,387 in the aggregate. Compensation expense of $20,485 was recorded for
these issuances through the end of the quarter, and the balance of $148,902 was
recorded as unearned restricted stock compensation. Additionally, $38,375 of
compensation expense was recognized in relation to amortization of unearned
restricted stock compensation relating to common shares issued to consultant as
compensation in previous years.

During the second quarter 2002, the Company issued 301,595 shares of
restricted common stock for the retirement of a $96,510 convertible debenture
that was converted at the option of the lender. The conversion price was $.32
per share, equal to the market price of the common stock on the date of the
initial borrowing.

During the second quarter 2002, the Company issued 500,000 shares of
restricted common stock to a supplier for a $79,010 reduction in the Company's
liability. In addition, the Company issued 235,000 free trading shares under an
S-8 filed on June 12, 2002, to professional consultants for a reduction of the
Company's current liabilities and for future services to be rendered.

o $350,000 was disbursed on September 20, 2002

o $350,000 will be disbursed within ten days of filing this prospectus
with the Securities and Exchange Commission

o $300,000 will be disbursed within ten days of the effectiveness of
this prospectus.

The debentures bear interest at 12%, mature on three years from the date of
issuance, and are convertible into our common stock, at the selling
stockholders' option, at the lower of (i) $0.075 or (ii) 50% of the average of
the three lowest intraday trading prices for the common stock on a principal
market for the 20 trading days before but not including the conversion date. The
full principal amount of the convertible debentures are due upon default under
the terms of convertible debentures. The warrants are exercisable until three
years from the date of issuance at a purchase price of $0.10 per share.

All of the above offerings and sales were deemed to be exempt under
Rule 506 of Regulation D and Section 4(2) of the Securities Act. No advertising
or general solicitation was employed in offering the securities. The offerings
and sales were made to a limited number of persons, all of whom were accredited
investors, business associates of SeaView or executive officers of SeaView, and
transfer was restricted by SeaView in accordance with the requirements of the
Securities Act of 1933. In addition to representations by the above-referenced
persons, we have made independent determinations that all of the
above-referenced persons were accredited or sophisticated investors, and that
they were capable of analyzing the merits and risks of their investment, and
that they understood the speculative nature of their investment. Furthermore,
all of the above-referenced persons were provided with access to our Securities
and Exchange Commission filings.

Except as expressly set forth above, the individuals and entities to
whom we issued securities as indicated in this section of the registration
statement are unaffiliated with us.

II-4

Item 27. Exhibits.

The following exhibits are included as part of this Form SB-2.
References to "the Company" in this Exhibit List mean SeaView Video Technology,
Inc., a Nevada corporation.

Exhibit No. Description

ARTICLES OF INCORPORATION AND BYLAWS

3.1 Articles of Incorporation*

3.2 Certificate of Amendment of Articles of Incorporation*

3.4 Certificate of Amendment of Articles of Incorporation*

3.5 Bylaws*

INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS

4.1 Common Stock Purchase Warrant with AJW Offshore, Ltd.

4.2 Common Stock Purchase Warrant with AJW Partners, LLC.

4.3 Common Stock Purchase Warrant with AJW Qualified
Partners, LLC.

4.4 Convertible Debenture with AJW Offshore, Ltd.

4.5 Convertible Debenture with AJW Partners, LLC.

4.6 Convertible Debenture with AJW Qualified Partners, LLC.

4.7 Securities Purchase Agreement for the $1,000,000
financing.

4.8 Security Agreement

4.9 Registration Rights Agreement

OPINION REGARDING LEGALITY

5.1 Sichenzia Ross Friedman Ference LLP Opinion and Consent
(filed herewith).

MATERIAL CONTRACTS

10.1 Consulting and Licensing Agreement (incorporated by
reference to our Form 8-K filed February 14, 2001.

10.2 Consultant Services Plan (incorporated by reference to
our Form S-8, filed September 18, 2001).

10.3 Amended Consultant Services Plan (incorporated by
reference to our Form S-8, filed February 25, 2002).

II-5

Exhibit No. Description

CONSENTS OF EXPERTS AND COUNSEL

23.1 Consent of Aidman, Piser & Company, P.A. (filed herewith).

23.2 Consent of Carol McAtee, C.P.A. (filed herewith).

23.3 Consent of legal counsel (see Exhibit 5).

* To be filed by amendment.

Item 28. Undertakings.

The undersigned registrant hereby undertakes to:

(1) File, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of the
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement, and

(iii) Include any additional or changed material information on
the plan of distribution.

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.

(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.

(4) For purposes of determining any liability under the Securities
Act, treat the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act as part of this registration statement as of the
time it was declared effective.

(5) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.

II-6

In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

II-7

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorizes this registration
statement to be signed on its behalf by the undersigned, in the City of Tierra
Verde, State of Florida, on September 30, 2002.

SEAVIEW VIDEO TECHNOLOGY, INC.

By: /s/ George S. Bernardich, III
------------------------------
George S. Bernardich, President and CEO

In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.

Signature Title Date

/s/ George S. Bernardich, III President, Chief Executive Officer and September 30, 2002
-------------------------------- Chairman
George S. Bernardich, III

/s/ Douglas Bauer. Chief Financial Officer and Secretary September 30, 2002
--------------------------------
Douglas Bauer

/s/ Myles Gould Director September 30, 2002
--------------------------------
Myles Gould

/s/ Dr. Bradford Gould Director September 30, 2002
--------------------------------
Dr. Bradford Gould