As filed with the Securities and Exchange Commission on March 31, 2005.

                                                     Registration No. 333-107711
--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                 ______________


                        POST EFFECTIVE AMENDMENT NO. 1 TO
                                      FORM SB-2
                                REGISTRATION STATEMENT
                                        UNDER
                                THE SECURITIES ACT OF 1933
                                    ______________

                         ACCESS INTEGRATED TECHNOLOGIES, INC.
                      (Name of small business issuer in its charter)


      Delaware                      7389                           22-3720962

 (State or jurisdiction of      (Primary Standard Industrial    (I.R.S. Employer
incorporation or organization)   Classification Code      Identification Number)
                                  Number)

                          55 Madison Avenue, Suite 300
                              Morristown, NJ 07960
                                 (973) 290-0080


   (Address and telephone number of principal executive offices and principal
                               place of business)
--------------------------------------------------------------------------------

                                  A. DALE MAYO
                      Chief Executive Officer and President
                      Access Integrated Technologies, Inc.
                          55 Madison Avenue, Suite 300
                              Morristown, NJ 07960
                                 (973) 290-0080
            (Name, address and telephone number of agent for service)
--------------------------------------------------------------------------------

                   Copies of all communications to be sent to:



                           JONATHAN K. COOPERMAN, ESQ.
                            Kelley Drye & Warren LLP
                                 101 Park Avenue
                            New York, New York 10178
                                 (212) 808-7800


Approximate date of proposed sale to the public:
As soon as practicable after this post-effective admendment becomes effective.

     If this Form is filed to register  securities for an offering to be made on
a continuous or delayed basis, check the following box. |X|

     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,
check the following box. |_|

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




   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, as amended,  or until the  registration  statement
shall become  effective on such date as the Securities and Exchange  Commission,
acting pursuant to said Section 8(a), may determine.


==============================================================================




                  Subject to Completion. Dated March 31, 2005



PROSPECTUS



                                 120,000 Shares


                              Class A Common Stock


This  prospectus  relates  to 120,000  shares of Class A common  stock of Access
Integrated  Technologies,  Inc., all of which may be issued upon the exercise of
outstanding  warrants that were issued to the lead underwriter,  Joseph Gunnar &
Co., LLC, or nominees thereof, of our initial public offering that was completed
on  November  14,  2003.  The  purpose  of this  prospectus  is to  fulfill  our
obligation to maintain a current registration of such shares.

The warrants are exercisable anytime until November 10, 2007 at $6.25 per share,
subject to weighted average adjustments for issuance of additional shares of our
Class A common stock at a price less than the lesser of the exercise  price then
in  effect  or the  "market  price"  of our  Class A  common  stock  on the date
immediately  prior  to such  issuance,  pursuant  to the  Underwriter's  Warrant
Agreement, dated as of November 14, 2003 between us and the lead underwriter. As
of March 29, 2005, the exercise price has been adjusted to $6.03 per share.

We will receive proceeds from the exercise of the warrants.  We will not receive
any  proceeds  from  the  further  sale  of any of the  shares  underlying  such
warrants.  We will bear all of the expenses in connection with the  registration
of the shares of our Class A common stock offered  hereby,  including  legal and
accounting fees.

The shares of our Class A common  stock are listed for  trading on the  American
Stock Exchange under the symbol "AIX". On March 29, 2005, the last reported sale
price of our Class A common stock was $6.70.

See "Risk  factors"  beginning  on page 8 for a  discussion  of factors that you
should consider before buying shares of our Class A common stock.


Neither  the  Securities  and  Exchange  Commission  nor  any  state  securities
commission has approved or  disapproved  of these  securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.




                 The date of this prospectus is _________, 2005.



                                       1




                               PROSPECTUS SUMMARY

YOU  SHOULD  READ  THE  FOLLOWING   SUMMARY  TOGETHER  WITH  THE  MORE  DETAILED
INFORMATION REGARDING OUR COMPANY AND THE CLASS A COMMON STOCK BEING OFFERED AND
THE CONSOLIDATED  FINANCIAL  STATEMENTS AND NOTES TO THOSE STATEMENTS  APPEARING
ELSEWHERE IN THIS PROSPECTUS OR  INCORPORATED BY REFERENCE,  INCLUDING THE "RISK
FACTORS" BEGINNING ON PAGE 8.

In this  prospectus,  "AccessIT",  "we," "us," "our" and the "Company"  refer to
Access  Integrated  Technologies,  Inc. and its subsidiaries  unless the context
otherwise requires.

                                  OUR BUSINESS

AccessIT was organized on March 31, 2000 and we are in the business of providing
software services and technology  solutions to the motion picture industry,  and
operating  Internet data centers.  Recently,  we have actively expanded into new
and  interrelated  business  areas  relating to the delivery and  management  of
digital cinema content to  entertainment  venues  worldwide.  These  businesses,
supported  by our  Internet  data  center  business,  have  become  our  primary
strategic focus.

Our  business  focus is to create a secure,  managed  and  complete  system that
consists of software to book, track and perform accounting functions for digital
content in movie theatres,  deliver  digital  content to multiple  locations and
provide the content  management  software for managing all brands of  in-theatre
playback systems and projection systems for the digital cinema marketplace. This
system is designed to enable the motion picture industry to move from the analog
world to the digital world. The system is intended to use all of our businesses:

MEDIA SERVICES

     o    DIGITAL MEDIA DELIVERY - digital media managed  delivery  services and
          theatre  management  player  software for use in theatres  from access
          Digital Media,  Inc.  ("AccessDM")  our wholly owned  subsidiary,  and
          satellite  delivery  services  from  FiberSat  Global  Services,  Inc.
          ("FiberSat"),  our wholly  owned  subsidiary.  ADM Cinema  Corporation
          ("ADM  Cinema"),  our  wholly  owned  subsidiary  which  acquired  the
          Pavilion  Theatre/Entertainment  Complex  located  in the  Park  Slope
          section of Brooklyn,  New York (the "Pavilion Theatre"),  will utilize
          our digital media managed delivery  services and media player software
          products;  and

     o    MOVIE DISTRIBUTION AND EXHIBITOR SOFTWARE - Hollywood  Software,  Inc.
          ("Hollywood SW"), our wholly owned  subsidiary,  develops and licenses
          distribution and exhibitor software products and services.

DATA CENTER SERVICES

     o    DATA CENTERS - AccessIT's  10 Internet  data centers  ("IDCs" or "data
          centers"), including redundant sites in Los Angeles and New York City;
          and

     o    MANAGED  SERVICE  OFFERINGS-  managed  storage and network and systems
          management services by Core Technology  Services,  Inc. ("Core"),  our
          wholly owned subsidiary, and AccessIT.

Our system provides a digital content owner with the secure delivery of multiple
files to multiple locations throughout the world with proactive notification and
security management. Our system also provides the digital content exhibitor with
access to digital  content,  freedom to choose  what to play and when to play it
with proactive  notifications and management software.  We have created a system
whereby  digital content is delivered where it is supposed to go, is played when
it is supposed  to be played  along with the ability to act upon and report back
management and financial information.  We also have created software designed to


                                       2


enable a movie  exhibitor to run all projects in a multiple  auditorium  theatre
from one central server, regardless of the hardware type or manufacturer.

We have two reportable segments: Media Services, which represents the operations
of AccessDM (including Boeing Digital (as defined below)), ADM Cinema,  FiberSat
and  Hollywood  SW, and Data Center  Services,  which are  comprised  of our IDC
operations and Managed Service Offerings.

In  February  2003,  we  organized  AccessDM,  which  in May  2004,  became  our
wholly-owned  subsidiary.  AccessDM has developed proprietary software,  Digital
Express  e-Courier,  capable of worldwide  delivery of digital data -- including
movies,  advertisements and alternative  content such as concerts,  seminars and
sporting events -- to movie theaters and other venues having digital  projection
equipment.  We are also in the process of developing  media player  software for
use by digitally-equipped movie theaters called Theatre Command Center.

In November  2003,  we  acquired  all of the capital  stock of  Hollywood  SW, a
leading  provider of proprietary  transactional  support software and consulting
services for distributors  and exhibitors of filmed  entertainment in the United
States and Canada  (the  "Hollywood  SW  Acquisition").  Its  licensed  software
records and manages information  relating to the planning,  scheduling,  revenue
sharing, cash flow and reporting associated with the distribution and exhibition
of theatrical films. In addition,  Hollywood SW's software  complements,  and is
integrated  with,  AccessDM's  digital  content  delivery  software  by enabling
Hollywood  SW's  customers to seamlessly  plan and schedule  delivery of digital
content  to  entertainment  venue  operators  as well as to manage  the  related
financial transactions.

In an effort to increase the  competitive  advantage of the IDCs,  on January 9,
2004, we acquired Core, a managed service provider of information  technologies.
As an information  technology  outsourcing  organization,  Core manages clients'
networks and systems in over 35  countries  in Europe,  Asia and North and South
America  and more than 20 states in the  United  States.  Core  operates  a 24x7
Global  Network  Command  Center  ("GNCC"),  capable of running the networks and
systems of large corporate  clients.  The 4 largest  customers of Core accounted
for  approximately  77% of its revenues  for the year ended March 31, 2004.  The
managed services capabilities of Core have been integrated with our IDCs and now
operate under the name of AccessIT Managed Services.

In March 2004, we acquired  certain  assets of Boeing  Digital  Cinema  ("Boeing
Digital"),  a division  of The Boeing  Company  ("Boeing").  These  assets  were
purchased to further our strategy of becoming a leader in the delivery of movies
and other digital  content to movie  theaters.  The acquired  assets  consist of
digital projectors, satellite dishes and other equipment installed at 28 screens
within 21 theaters in the United States and at one location in London,  England,
and  satellite  transmission  equipment  which  we  installed  in  Los  Angeles,
California.

Also in March 2004, we refinanced approximately $4.2 million aggregate principal
amount (plus accrued and unpaid interest) of our promissory notes pursuant to an
exchange  offer.  In exchange  for these  promissory  notes,  we issued  707,477
unregistered  shares of our  Class A common  stock  and $1.7  million  aggregate
principal  amount  of new  convertible  notes  which as of March  1,  2005  were
convertible into a maximum of 310,857 shares of our Class A common stock.

In May 2004, we entered into an agreement  with the holder of 750,000  shares of
AccessDM's common stock, to exchange all of their shares for 31,300 unregistered
shares of AccessIT's Class A common stock. As a result of the transaction, which
was consummated as of May 31, 2004, AccessIT now holds 100% of AccessDM's common
stock.


In June 2004,  we  consummated a $4.87  million  private  placement of 1,217,500
unregistered  shares of our Class A common  stock with  institutional  and other
accredited investors.  Pursuant to the private placement,  we also issued to the
investors and the placement  agent warrants to purchase up to 243,500 and 60,875
shares of our Class A common stock, respectively,  at an exercise price of $4.80
per share, exercisable upon receipt.



                                       3


In November  2004, we  consummated a $1.1 million  private  placement of 282,776
unregistered  shares of our Class A common stock at $3.89 per share with certain
accredited investors. The net proceeds of approximately $1.023 million from such
private placement were used for the FiberSat  Acquisition (as defined below) and
for working capital.

Also in November 2004, we acquired  substantially  all of the assets and certain
liabilities of FiberSat Global  Services,  LLC ("FiberSat  Seller")  through our
subsidiary  FiberSat (the "FiberSat  Acquisition").  FiberSat,  headquartered in
Chatsworth,  California, provides services utilizing satellite ground facilities
and fiber-optic  connectivity to receive,  process,  store, encrypt and transmit
television and data signals globally.  FiberSat's  Chatsworth facility currently
houses the  infrastructure  operations of our digital cinema satellite  delivery
services. By completing the FiberSat Acquisition,  we gained extensive satellite
distribution   and  networking   capabilities   provided  by  FiberSat's   fully
operational data storage and uplink facility located in Los Angeles, California.
FiberSat  has  the  ability  to  provide  broadband  video,  data  and  Internet
transmission and encryption  services for the broadcast and cable television and
communications industries.

In February  2005, we  consummated a private  placement of $7.6 million,  4-year
convertible   debentures  (the   "Convertible   Debentures").   The  Convertible
Debentures  bear  interest at the rate of 7% per year and are  convertible  into
shares of our Class A common  stock at the price of $4.07 per share,  subject to
possible  adjustments  from time to time.  In  connection  with the  Convertible
Debenture offering, we issued the participating institutional investors warrants
(the "Convertible  Debentures Warrants") exercisable for up to 560,197 shares of
Class A common stock at an initial exercise price of $4.44 per share, subject to
adjustments  from  time to time.  The  Convertible  Debentures  Warrants  may be
exercised beginning on September 9, 2005 until five years thereafter.

Also in February 2005, we, through ADM Cinema,  consummated  the  acquisition of
substantially all of the assets of the Pavilion Theatre. The Pavilion Theatre is
an  eight-screen  movie  theatre and cafe and will be a  component  of the Media
Services  segment.  Continuing to operate as a fully functional  multiplex,  the
Pavilion  Theatre will also become our showplace to  demonstrate  our integrated
digital cinema solutions to the movie entertainment industry.

We offer  interrelated  services  that use each of our  business  units  for the
planning,  purchasing,  delivery and  management  of digital  content -- such as
movies,  advertising,  trailers and  alternative  content,  including  concerts,
seminars and sporting events -- to movie theater and other venue  operators.  We
believe that our ability to offer a wide range of fully  managed  services  will
differentiate us from other service providers,  including  distributors of other
types of digital media.

For the  three  months  ended  December  31,  2004,  we  received  47% and  53%,
respectively,  of our revenues from the Media Services and Data Center  Services
segments.  For the nine months ended December 31, 2004, we received 35% and 65%,
respectively,  of our revenue from the Media  Services and Data Center  Services
segments.  During the fiscal year ended March 31,  2004,  we received 81% of our
revenue  from the Data Center  Services  segment and 19% of our revenue from the
Media Services  segment.  For the fiscal year ended March 31, 2004, KMC Telecom,
AT&T and Metro Goldwyn Mayer ("MGM") comprised approximately 27%, 12% and 10% of
our revenues,  respectively. No other single customer accounted for greater than
10% of revenues  during the fiscal year ended March 31, 2004. From our inception
through  November 3, 2003,  all of our  revenues  have been derived from monthly
license fees and fees from other ancillary services provided by us at our IDCs.

Our principal executive offices are at 55 Madison Avenue, Suite 300, Morristown,
NJ 07960, and our telephone number at such offices is (973) 290-0080. Our e-mail
address is investor@accessitx.com and our web site address is www.accessitx.com.
Information  accessed on or through our web site does not  constitute  a part of
this prospectus.


                                       4



                                  THE OFFERING



Class A common stock offered
by us...............................120,000 shares (1)

Common stock equivalents
presently outstanding...............10,401,233 shares (2)

Common stock equivalents to be
outstanding immediately
after this offering.................10,521,233  shares
(1)(2)

Use of proceeds.....................We  anticipate  using  the  net  proceeds,
                                    consisting of the price paid upon the
                                    exercise of the warrants, of this offering
                                    for working capital for general business
                                    purposes.

American Stock Exchange symbol......AIX

     (1)  This  prospectus  covers our offering of 120,000 shares of our Class A
          common stock,  issuable  upon  exercise of the warrants  issued to the
          lead underwriter,  or nominees thereof, of our initial public offering
          that was completed on November 14, 2003, pursuant to the Underwriter's
          Warrant Agreement, dated as of November 14, 2003.

     (2)  Reflects  9,415,422  outstanding shares of our Class A common stock as
          of March 1, 2005, and 985,811 outstanding shares of our Class B common
          stock as of March 1, 2005,  which are convertible  into 985,811 shares
          of Class A common  stock;  excludes up to 3,897,661  shares of Class A
          common stock  issuable upon the exercise of  outstanding  warrants and
          options,  and shares issuable upon the conversion of convertible notes
          as of March 1, 2005.  Please see  "Description  of Securities" in this
          prospectus for a discussion of our capital stock.

This prospectus  contains our trademarks,  tradenames and  servicemarks and also
contains certain trademarks, tradenames and servicemarks of other parties.


                                       5


                          SUMMARY FINANCIAL INFORMATION

The following table summarizes  operating data of our Company and should be read
in  conjunction  with the  "Management's  Discussion  and  Analysis of Financial
Condition  and Results of  Operations"  section and our  consolidated  financial
statements  and the  notes  to  those  statements  appearing  elsewhere  in this
prospectus.  The data as of March 31, 2004 and for the fiscal  years ended March
31, 2002, 2003 and 2004 has been derived from our audited consolidated financial
statements.  The data as of  December  31,  2004 and for the nine  months  ended
December  31, 2004 has been derived from our  unaudited  consolidated  financial
statements.  The pro forma condensed combined financial data for the fiscal year
ended  March 31,  2004 and for the nine  months  ended  December  31, 2004 gives
effect to the  transactions  discussed  in the  overview  of the pro forma  data
beginning on page P-1 of this  prospectus.  For a discussion of the  adjustments
made in presenting such pro forma  financial data, see the "Selected  Historical
and Pro Forma  Financial  Data"  section  and the pro forma  condensed  combined
financial data appearing elsewhere in this prospectus.

Consolidated statements of
operations data (1):



                                                                                  For the         For the
                                                                                  Nine            Nine
                             For the Fiscal Years Ended March 31,                 Months          Months
                                                                                  Ended           Ended
                                                                                  December 31,    December 31,

                             (in thousands, except share and per share data)      (unaudited)    (unaudited)

                                                                                  
                             2002          2003          2004        2004            2004           2004
                             ----          ----          ----        ----            ----           ----
                                                                  (pro forma)(2)                  (pro forma)(2)

Revenues..............      $1,911       $4,228        $7,201       $11,581         $7,135          $9,702

Gross profit..........          78        1,127         3,534         6,503          3,121           4,948

Loss from operations..      (3,417)      (2,964)       (2,505)       (3,611)        (3,814)         (3,408)

Net loss..............      (3,610)      (3,404)       (4,805)       (6,171)        (3,988)         (3,647)

Net loss available to
common stockholders...     $(3,933)     $(4,261)      $(6,613)      $(7,979)       $(3,988)         (3,647)

Net loss available to
common stockholders
per common share
Basic and diluted......     $(1.21)      $(1.41)       $(1.37)       $(1.42)        $(0.42)         $(0.39)

Weighted average
number of common
shares outstanding
Basic and diluted......   3,238,084    3,027,865     4,826,776    5,610,492      9,432,380       9,432,380



(1)  We acquired one IDC from, and assumed certain  liabilities of,  BridgePoint
     International (USA) Inc. ("BridgePoint"), on December 21, 2001. We acquired
     six IDCs from, and assumed  certain  liabilities  of, R.E.  Stafford,  Inc.
     d/b/a/ ColoSolutions  ("ColoSolutions"),  on November 27, 2002. We acquired
     all of the capital  stock of Hollywood SW on November 3, 2003.  We acquired
     all of the outstanding common stock of Core on January 9, 2004. We acquired
     certain assets of Boeing Digital,  a division of Boeing, on March 29, 2004.
     We  acquired  substantially  all the  assets  and  certain  liabilities  of
     FiberSat  Seller on November 17, 2004. The above financial data are derived
     from our audited and unaudited financial statements and reflect the results
     of operations of the acquired  entities from the  respective  dates of such
     acquisitions.

(2)  See notes to our unaudited pro forma condensed  financial data beginning on
     page P-1 of this prospectus.



                                       6



The following table summarizes our consolidated  balance sheet data at March 31,
2003 and 2004,  and December 31, 2004,  respectively,  on an actual  basis.  The
information in this table is set forth in thousands.


                                                                December
                                                 March 31,         31,

CONSOLIDATED BALANCE SHEET DATA:               2003     2004       2004
                                               ----     ----       ----
                                                               (unaudited)
Cash and cash equivalents.........            $956    $2,330      $1,515
Working capital (deficit).........            (954)      212         224
Total current assets..............            1,327    3,143       3,496
Total assets......................            9,894   21,175      23,251
Total current liabilities.........            2,281    2,931       3,272
Total liabilities.................            5,355   11,357      10,860
Mandatorily redeemable convertible
preferred stock...................            2,911       --          --
Redeemable common stock...........               --      238         247
Total stockholders' equity........           $1,628   $9,580     $12,144




                                       7


                                  RISK FACTORS



AN  INVESTMENT  IN OUR CLASS A COMMON  STOCK  INVOLVES A HIGH DEGREE OF RISK AND
UNCERTAINTY.  YOU SHOULD  CAREFULLY  CONSIDER THE RISKS  DESCRIBED  BELOW BEFORE
DECIDING TO INVEST IN OUR CLASS A COMMON STOCK.  THE RISKS  DESCRIBED  BELOW ARE
NOT THE ONLY ONES FACING OUR COMPANY. ADDITIONAL RISKS NOT PRESENTLY KNOWN TO US
OR THAT WE PRESENTLY CONSIDER  IMMATERIAL MAY ALSO ADVERSELY AFFECT OUR COMPANY.
IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS,  FINANCIAL CONDITION, RESULTS
OF OPERATIONS  AND PROSPECTS  COULD BE MATERIALLY  ADVERSELY  AFFECTED.  IN THAT
CASE, THE TRADING PRICE OF OUR CLASS A COMMON STOCK COULD DECLINE, AND YOU COULD
LOSE ALL OR PART OR YOUR  INVESTMENT.  IN ASSESSING THESE RISKS, YOU SHOULD ALSO
REFER TO THE OTHER  INFORMATION  INCLUDED OR  INCORPORATED  BY REFERENCE IN THIS
PROSPECTUS, INCLUDING THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO OF
OUR COMPANY INCLUDED ELSEWHERE IN THIS PROSPECTUS.

WE HAVE INCURRED LOSSES SINCE OUR INCEPTION.


We have incurred  losses since our inception in March 2000 and have financed our
operations  principally  through equity investments and borrowings.  We incurred
net losses of $2.33  million and $4.0 million in the nine months ended  December
31, 2003 and 2004, respectively. As of December 31, 2004, we had working capital
of  $224,000  and  cash  and  cash  equivalents  of  $1.52  million;  we  had an
accumulated deficit of $18.7 million;  and, from inception through such date, we
had used $8.0  million  in cash for  operating  activities.  Our net  losses are
likely to continue for the foreseeable future.

Our profitability is dependent upon us achieving a sufficient volume of business
from our customers.  If we cannot  achieve a high enough volume,  we likely will
incur  additional  net and  operating  losses.  We may be unable to continue our
business  as  presently   conducted  unless  we  obtain  funds  from  additional
financings.

Our net losses and negative cash flows may increase as and to the extent that we
increase the size of our business  operations,  increase our sales and marketing
activities,  enlarge our customer support and professional  services and acquire
additional  businesses.  These  efforts may prove to be more  expensive  than we
currently  anticipate,   which  could  further  increase  our  losses.  We  must
significantly  increase  our revenues in order to become  profitable.  We cannot
reliably  predict  when,  or if, we will become  profitable.  Even if we achieve
profitability, we may not be able to sustain it. If we cannot generate operating
income  or  positive  cash  flows in the  future,  we will be unable to meet our
working capital requirements.

WE HAVE LIMITED  EXPERIENCE  IN OUR BUSINESS  OPERATIONS,  WHICH MAY  NEGATIVELY
AFFECT OUR ABILITY TO GENERATE SUFFICIENT REVENUES TO ACHIEVE PROFITABILITY.

We were  incorporated  on March 31, 2000. Our original  business was data center
operations. Our first IDC became operational in December 2000.

In addition  to our data  center  operations,  we have  expanded  into three new
business   areas:   (a)  providing  back  office   transactional   software  for
distributors  and  exhibitors  of  filmed  and  digital   entertainment  through
Hollywood  SW; (b)  providing  software  and systems for the delivery of digital
entertainment,  such as  movies,  to movie  theaters  and other  venues  through
AccessDM;  (c) providing information  technologies,  secure system monitoring of
telecommunications  and data network  outsourcing  through  Core,  (d) providing
satellite  delivery  services  through  FiberSat;  and (e)  operation of a movie
theatre,  restaurant and cafe through ADM Cinema.  Although we have retained the
senior management of Hollywood SW, Core, and FiberSat, we have little experience
in these new areas of  business  and  cannot  assure you that we will be able to
develop and market the services provided  thereby.  None of these new businesses
is directly related to our data center  operations and we cannot assure you that
any of them will complement our data center  operations,  or vice versa. We also
cannot assure you that we will be able successfully to operate these businesses.
Our efforts to expand into these three new  business  areas may prove costly and
time-consuming  and may divert a considerable  amount of resources from our data
center operations.

                                       8


Our lack of operating  experience in the digital  cinema  industry and providing
transactional software for movie distributors could result in:


     o    increased operating and capital costs;

     o    an inability to effect a viable growth strategy;

     o    service interruptions for our customers; and

     o    an inability to attract and retain customers.

We may not be able to  generate  sufficient  revenues  to achieve  profitability
through the operation of our data centers,  our digital  cinema  business or our
movie  distribution  software  business.  We cannot  assure  you that we will be
successful in marketing and operating  these new  businesses  or, even if we are
successful in doing so, that we will not experience additional losses.

ACCESSDM IS AN  EARLY-STAGE  COMPANY AND MAY NOT BE ABLE TO MARKET  SUCCESSFULLY
ITS DIGITAL CONTENT DELIVERY SERVICES.

AccessDM,  is an  early-stage  company.  It is expected to provide  software and
systems for the delivery of digital  content to movie theaters and other venues.
We recently  completed  development of a working version of this software,  with
final  testing  completed  in  September  2003.  We did not,  however,  have the
personnel to develop this type of software and we hired outside  consultants  to
assist us. In addition,  we may never be successful in developing  software that
is  commercially  saleable  or that our  customers  will  buy.  Moreover,  other
companies that are attempting to develop similar  software may be able to market
and sell their versions before or more cost-effectively than we can.

OUR RECENT  ACQUISITIONS  INVOLVE  RISKS,  INCLUDING  OUR INABILITY TO INTEGRATE
SUCCESSFULLY THE NEW BUSINESSES AND OUR ASSUMPTION OF CERTAIN LIABILITIES.

We have recently made meaningful acquisitions to expand into new business areas.
However,   we  may  experience  costs  and  hardships  in  integrating  the  new
acquisitions  into our  current  business  structure.  On  November  3,  2003 we
acquired  Hollywood  SW and on January 9, 2004 we  acquired  Core.  On March 29,
2004, we acquired  assets used in the operations of Boeing  Digital,  a business
unit of Boeing,  which we intend to integrate into the business of AccessDM.  On
November 17, 2004, we acquired  assets of FiberSat  Seller.  Most  recently,  on
February 11, 2005, we acquired the Pavilion  Theatre through ADM Cinema.  We may
not be able to integrate  successfully  the acquired  businesses and assets into
our existing business.  We cannot assure you that we will be able to effectively
market the services provided by Hollywood SW, AccessDM,  Core,  FiberSat and the
Pavilion Theatre along with our data centers.  Further, these new businesses and
assets may involve a significant  diversion of our management time and resources
and be costly.  Our acquisition of these businesses and assets also involves the
risks that the businesses and assets acquired may prove to be less valuable than
we expected and/or that we may assume unknown or unexpected  liabilities,  costs
and problems.  In addition,  we assumed  certain  liabilities in connection with
these  acquisitions  and we cannot assure you that we will be able to adequately
pay off such assumed  liabilities.  Other companies that offer similar  products
and  services may be able to market and sell their  products  and services  more
cost-effectively than we can.

BECAUSE THE USE OF ACCESSDM'S  SERVICES  LARGELY  DEPENDS ON THE EXPANDED USE OF
DIGITAL  PRESENTATIONS  REQUIRING ELECTRONIC DELIVERY, IF SUCH EXPANDED USE DOES
NOT OCCUR, NO VIABLE MARKET FOR ACCESSDM'S SERVICES MAY DEVELOP.

Even if we are among the first to develop  software and systems for the delivery
of digital content to movie theaters and other venues,  the demand for them will
largely depend on a concurrent  expansion of digital  presentations at theaters,


                                       9


which may not occur for several years. There can be no assurance,  however, that
major movie studios that currently rely on traditional  distribution networks to
provide  physical  delivery  of digital  files will  adopt a  different  method,
particularly  electronic  delivery,  of  distributing  digital  content to movie
theaters.  If the  development of digital  presentations  and changes in the way
digital  files are delivered  does not occur,  there may be no viable market for
AccessDM's delivery systems and software.

IF WE DO NOT MANAGE OUR GROWTH, OUR BUSINESS WILL BE HARMED.

We may not be successful in managing our rapid growth.  Since  February 2003, we
acquired five  businesses and in connection with those  acquisitions,  we formed
three  additional  subsidiaries.  These  subsidiaries  operate in business areas
different from our data center operations business.  The number of our employees
has grown from 11 in March 2003 to 34 in March 2004 and to 58 by December  2004.
Past growth has placed,  and future growth will continue to place, a significant
challenge to our management and resources, related to the successful integration
of  the  newly  acquired  businesses.  To  manage  the  expected  growth  of our
operations,  we will need to improve our existing and implement new  operational
and financial systems,  procedures and controls.  We may also need to expand our
finance,  administrative,  client  services and  operations  staff and train and
manage our growing employee base effectively. Our current and planned personnel,
systems,  procedures  and  controls  may not be  adequate  to support our future
operations.  Our  business,  results of operations  and financial  position will
suffer if we do not effectively manage our growth.

WE MAY NOT BE ABLE TO  GENERATE  THE  AMOUNT OF CASH  NEEDED TO FUND OUR  FUTURE
OPERATIONS.

Our ability either to make payments on or to refinance our  indebtedness,  or to
fund planned  capital  expenditures  and research and development  efforts,  may
depend on our  ability to generate  cash in the future.  Our ability to generate
cash is in part subject to general economic, financial, competitive,  regulatory
and other factors that are beyond our control.

Based on our  current  level of  operations,  we  believe  our  cash  flow  from
operations and available cash financed  through the issuance of common stock and
promissory  notes will be  adequate  to meet our future  liquidity  needs for at
least  one  year  from  the  date of this  prospectus.  Significant  assumptions
underlie  this  belief,  including,  among other  things,  that there will be no
material   adverse   developments   in  our   business,   liquidity  or  capital
requirements. If we are unable to service our indebtedness, we will be forced to
adopt an alternative strategy that may include actions such as:

     o    reducing capital expenditures;

     o    reducing research and development efforts;

     o    selling assets;

     o    restructuring or refinancing our remaining indebtedness; and

     o    seeking additional funding.

We cannot assure you, however,  that our business will generate  sufficient cash
flow  from  operations,  or that we will be able to make  future  borrowings  in
amounts sufficient to enable us to pay the principal and interest on our current
indebtedness or to fund our other liquidity  needs. We may need to refinance all
or a portion of our  indebtedness  on or before  maturity.  We cannot assure you
that  we  will be able to  refinance  any of our  indebtedness  on  commercially
reasonable terms or at all.

WE MAY CONTINUE TO HAVE CUSTOMER  CONCENTRATION IN OUR BUSINESS, AND THE LOSS OF
ONE OR MORE OF OUR LARGEST CUSTOMERS COULD HAVE A MATERIAL ADVERSE EFFECT ON US.

We expect that we will rely, at least in the near future,  upon a limited number
of customers  for a  substantial  percentage of our revenues and may continue to
have customer  concentration  company-wide.  For fiscal years 2003 and 2004, our
four  largest  IDC  customers  accounted  for  approximately  60% and 54% of our


                                       10


revenues,  respectively  (our  largest  customer,  KMC  Telecom,  accounted  for
approximately  17% and 27%,  respectively of our revenues for such fiscal years,
and our second largest customer,  AT&T, accounted for approximately 21% and 12%,
respectively,  of our revenues for such fiscal years). For the nine months ended
December 31, 2004 our four largest IDC customers accounted for approximately 39%
of our revenues (our largest customer, KMC Telecom,  accounted for approximately
20% of our  revenues,  and our second  largest  customer,  AT&T,  accounted  for
approximately 9% of our revenues.  The revenues  generated from our IDC business
constituted  approximately  57% of our total  revenue for the nine months  ended
December 31, 2004.

To date,  AccessDM has  generated  revenues of $173,000 and we  anticipate  that
AccessDM will not generate any significant  revenues through March 31, 2005. For
the five months  ended March 31, 2004 (the  approximate  period of  ownership of
Hollywood SW by AccessIT),  the five largest customers of Hollywood SW accounted
for approximately 87% of its revenues (its largest customer,  MGM, accounted for
approximately  54% of its revenues for such  period).  For the nine months ended
December 31,  2004,  the five  largest  customers of Hollywood SW accounted  for
approximately 81% of its revenues (its largest customer,  Twentieth Century Fox,
accounted  for  approximately  30% of  its  revenues,  and  its  second  largest
customer, MGM, accounted for approximately 25% of its revenue, for such period).
For the three months ended March 31, 2004 (the  approximate  period of ownership
of  Core by  AccessIT  during  the  period),  the 4  largest  customers  of Core
accounted  for  approximately  77% of its  revenues.  For the nine months  ended
December 31, 2004, the 4 largest  customers of Core accounted for  approximately
73% of its  revenues.  A loss of or decrease in business from one or more of our
largest  customers  for any reason could have a material  adverse  effect on our
business, financial position and results of operations.

OUR  SUBSTANTIAL  DEBT  AND  LEASE   OBLIGATIONS   COULD  IMPAIR  OUR  FINANCIAL
FLEXIBILITY AND OUR COMPETITIVE POSITION.

We now  have,  and will  continue  to have,  significant  debt  obligations.  We
currently have notes payable to third parties with principal amounts aggregating
$15.5 million as of March 1, 2005. We also have capital lease  obligations  with
principal amounts aggregating $435,000 as of March 1, 2005.

These obligations could have important consequences for us, including:

     o    limiting our ability to obtain  necessary  financing in the future and
          make  it  more  difficult  for  us  to  satisfy  our  lease  and  debt
          obligations;

     o    requiring  us to  dedicate a  substantial  portion of our cash flow to
          payments  on our  lease and debt  obligations,  thereby  reducing  the
          availability  of our  cash  flow  to  fund  working  capital,  capital
          expenditures and other corporate requirements;

     o    making us more  vulnerable to a downturn in our business and limit our
          flexibility to plan for, or react to, changes in our business; and

     o    placing us at a competitive  disadvantage compared to competitors that
          might have stronger balance sheets or better access to capital by, for
          example, limiting our ability to enter into new markets.

If we are unable to meet our lease and debt  obligations,  we could be forced to
restructure or refinance our obligations, to seek additional equity financing or
to sell assets,  which we may not be able to do on satisfactory terms or at all.
As a result, we could default on those obligations.

AN INABILITY TO OBTAIN NECESSARY FINANCING MAY HAVE A MATERIAL ADVERSE EFFECT ON
OUR FINANCIAL POSITION,  OPERATIONS AND PROSPECTS IF UNANTICIPATED CAPITAL NEEDS
ARISE.

Our capital  requirements may vary  significantly from what we currently project
and be affected by unforeseen delays and expenses.  We may experience  problems,


                                       11


delays,  expenses and difficulties  frequently encountered by similarly-situated
companies,  as  well  as  difficulties  as a  result  of  changes  in  economic,
regulatory or competitive  conditions.  If we encounter any of these problems or
difficulties   or  have   underestimated   our   operating   losses  or  capital
requirements,  we may require  significantly  more  financing  than we currently
anticipate.  We cannot  assure you that we will be able to obtain  any  required
additional financing on terms acceptable to us, if at all. We will be restricted
on the type and amount of additional  indebtedness that we may incur as a result
of our  acquisition  of  Hollywood  SW.  In  connection  with the  Hollywood  SW
Acquisition,  we issued  secured  promissory  notes to the sellers  that will be
senior to all  indebtedness  during the term of those  notes other than any debt
provided  by a bank or  institutional  lender,  which is less than $1 million in
aggregate  principal amount,  unsecured or secured by the assets of Hollywood SW
and its  subsidiaries.  We will  also be  restricted  on the type of  additional
indebtedness  that we may incur as a result of our  Convertible  Debentures.  An
inability to obtain necessary  financing could have a material adverse effect on
our financial position, operations and prospects.



OUR  PLAN  TO  ACQUIRE  ADDITIONAL  BUSINESSES  INVOLVES  RISKS,  INCLUDING  OUR
INABILITY   SUCCESSFULLY   TO  COMPLETE  AN   ACQUISITION,   OUR  ASSUMPTION  OF
LIABILITIES, DILUTION OF YOUR INVESTMENT AND SIGNIFICANT COSTS.


We intend to make further acquisitions of similar or complementary businesses or
assets,  although there are no acquisitions identified by us as probable at this
time. Even if we identify appropriate acquisition  candidates,  we may be unable
to negotiate successfully the terms of the acquisitions, finance them, integrate
the acquired  business into our then existing business and/or attract and retain
customers.  Completing an  acquisition  and  integrating  an acquired  business,
including our recently acquired businesses,  may require a significant diversion
of  management  time and resources and involves  assuming new  liabilities.  Any
acquisition  also  involves  the risks that the assets  acquired  may prove less
valuable  than  expected  and/or  that  we  may  assume  unknown  or  unexpected
liabilities, costs and problems. If we make one or more significant acquisitions
in which the  consideration  consists of our capital stock, your equity interest
in our company could be diluted,  perhaps  significantly.  If we were to proceed
with one or more significant  acquisitions in which the  consideration  included
cash, we could be required to use a substantial  portion of our available  cash,
or obtain additional financing to consummate them.

WE EXPECT COMPETITION TO BE INTENSE:  IF WE ARE UNABLE TO COMPETE  SUCCESSFULLY,
OUR BUSINESS AND RESULTS OF OPERATIONS WILL BE SERIOUSLY HARMED.

The market for the IDC facilities  and managed  services  business,  the digital
cinema  business  and  the  movie  distribution   software  business,   although
relatively new, are competitive, evolving and subject to rapid technological and
other changes.  We expect the intensity of competition in each of these areas to
increase in the future.  Companies  willing to expend the  necessary  capital to
create facilities and/or software similar to ours may compete with our business.
Increased  competition may result in reduced revenues and/or margins and loss of
market  share,  any of which  could  seriously  harm our  business.  In order to
compete  effectively in each of these fields,  we must  differentiate  ourselves
from competitors.

Many of our current and potential  competitors have longer  operating  histories
and greater financial,  technical,  marketing and other resources than us, which
may permit them to adopt aggressive pricing policies. As a result, we may suffer
from  pricing  pressures  that could  adversely  affect our  ability to generate
revenues  and our  results  of  operations.  Many of our  competitors  also have
significantly greater name and brand recognition and a larger customer base than
us. We may not be able to compete  successfully with our competitors.  If we are
unable to compete  successfully,  our business and results of operations will be
seriously harmed.


WE FACE THE RISKS OF AN EARLY-STAGE COMPANY IN A NEW AND RAPIDLY EVOLVING MARKET
AND MAY NOT BE ABLE SUCCESSFULLY TO ADDRESS SUCH RISKS AND EVER BE SUCCESSFUL OR
PROFITABLE.


We have encountered and will continue to encounter the challenges, uncertainties
and  difficulties  frequently  experienced by  early-stage  companies in new and
rapidly evolving markets, including:



                                       12


     o    lack of operating experience;

     o    net losses;

     o    lack of sufficient customers;

     o    insufficient revenues and cash flow to be self-sustaining;

     o    necessary capital expenditures;

     o    an unproven business model;

     o    a changing business focus; and

     o    difficulties in managing potentially rapid growth.

This is particularly the case with respect to our newly acquired businesses.  We
cannot assure you that we will ever be successful or profitable.


MANY OF OUR CORPORATE  ACTIONS MAY BE CONTROLLED BY OUR OFFICERS,  DIRECTORS AND
PRINCIPAL  STOCKHOLDERS;  THESE ACTIONS MAY BENEFIT THESE PRINCIPAL STOCKHOLDERS
MORE THAN OUR OTHER STOCKHOLDERS.


As  of  March  1,  2005,  our  directors,   executive   officers  and  principal
stockholders  beneficially  own,  directly  or  indirectly,  in  the  aggregate,
approximately 41% of our outstanding common stock. In particular,  A. Dale Mayo,
our President and Chief Executive Officer,  beneficially holds 985,811 shares of
Class B common stock,  9,601 shares of Class A common stock, and notes which are
convertible  into  45,412  shares of Class A common  stock,  which  collectively
represent  approximately  10% of our  outstanding  common stock,  but due to the
supervoting  Class B common  stock,  represent  approximately  51% of the voting
power. These stockholders, and Mr. Mayo himself, will have significant influence
over our  business  affairs,  with the  ability  to  control  matters  requiring
approval by our security holders, including elections of directors and approvals
of mergers or other business combinations. Our Class B common stock entitles the
holder to ten votes per share.  The shares of Class A common stock have one vote
per share.  Also,  certain  corporate  actions  directed by our officers may not
necessarily  inure to the  proportional  benefit  of other  stockholders  of our
company;  under his employment  agreement,  for example, Mr. Mayo is entitled to
receive cash bonuses based on our revenues, regardless of our earnings, if any.

OUR  SUCCESS  WILL  SIGNIFICANTLY  DEPEND ON OUR  ABILITY TO HIRE AND RETAIN KEY
PERSONNEL.


Our success will depend in significant  part upon the continued  services of our
key technical,  sales and senior management personnel. If we lose one or more of
our key employees,  we may not be able to find a suitable replacement(s) and our
business and results of operations could be adversely  affected.  In particular,
our  performance  depends  significantly  upon the continued  service of A. Dale
Mayo,  our  President  and  Chief  Executive   Officer,   whose  experience  and
relationships  in the movie  theater  industry  are  integral  to our  business,
particularly  in the business  areas of Hollywood SW and  AccessDM.  Although we
have obtained two $5 million  key-man life insurance  policies in respect of Mr.
Mayo,  the loss of his services  would have a material and adverse effect on our
business,  operations and  prospects.  Each policy carries a death benefit of $5
million,  and  while we are the  beneficiary  of each  policy,  under one of the
policies the proceeds will be used to  repurchase,  after  reimbursement  of all
premiums paid by us some, or all, of the shares of our capital stock held by Mr.
Mayo's  estate at the  then-determined  fair market  value.  We also rely on the
experience and expertise of Russell J. Wintner,  AccessDM's  President and Chief
Operating  Officer,  the two co-founders of Hollywood SW, David Gajda and Robert
Jackovich,  who manage  Hollywood SW's  day-to-day  operations,  and Ravi Patel,
FiberSat's  President  and Chief  Operating  Officer.  In  addition,  our future


                                       13


success  will  depend  upon our  ability to hire,  train,  integrate  and retain
qualified new employees.

IF WE ARE NOT SUCCESSFUL IN PROTECTING OUR INTELLECTUAL  PROPERTY,  OUR BUSINESS
WILL SUFFER.

We depend heavily on technology to operate our business.  Our success depends on
protecting our intellectual property, which is one of our most important assets.
Although  we do  not  currently  hold  any  copyrights,  patents  or  registered
trademarks, we do have intellectual property consisting of:

     o    licensable software products;

     o    rights to certain domain names;

     o    registered service marks on certain names and phrases;

     o    various unregistered trademarks and service marks;

     o    know-how; and

     o    rights to certain logos.

If we do  not  adequately  protect  our  intellectual  property,  our  business,
financial  position  and  results of  operations  would be harmed.  Our means of
protecting our intellectual  property may not be adequate.  Unauthorized parties
may attempt to copy  aspects of our  intellectual  property or to obtain and use
information that we regard as proprietary. In addition,  competitors may be able
to devise  methods of competing  with our  business  that are not covered by our
intellectual   property.  Our  competitors  may  independently  develop  similar
technology,  duplicate our technology or design around any intellectual property
that we may obtain.

The success of some of our business operations depends on the proprietary nature
of certain software.  We do not, however,  have any patents with respect to such
software.  Because  there is no patent  protection  in respect of our  software,
other  companies  are  not  prevented  from  developing  and  marketing  similar
software.  We  cannot  assure  you,  therefore,  that  we  will  not  face  more
competitors  or that we can  compete  effectively  against  any  companies  that
develop  similar  software.  We also  cannot  assure  you  that  we can  compete
effectively or not suffer from pricing pressure with respect to our existing and
developing  products  that  could  adversely  affect  our  ability  to  generate
revenues.

Although we hold rights to various web domain  names,  regulatory  bodies in the
United States and abroad could establish additional  top-level domains,  appoint
additional  domain name registrars or modify the requirements for holding domain
names.  The  relationship  between  regulations  governing domain names and laws
protecting  trademarks  and similar  proprietary  rights is  unclear.  We may be
unable to prevent third parties from acquiring  domain names that are similar to
or diminish the value of our proprietary rights.

SERVICE AND OTHER  INTERRUPTIONS  COULD POTENTIALLY REDUCE OUR REVENUES AND HARM
OUR REPUTATION AND FINANCIAL RESULTS.

Our facilities and our customers'  equipment are vulnerable to damage from human
error,  physical or electronic  security  breaches,  power loss,  other facility
failures,  fire,  earthquake,  water  damage,  sabotage,  vandalism  and similar
events. In addition, our customers would be adversely affected by the failure of
carriers to provide network access to our facilities as a result of any of these
events. Any of these events or other unanticipated  problems could interrupt our
customers'  ability to provide  services from our facilities.  This could damage


                                       14


our reputation,  make it difficult to attract new and retain customers and cause
our customers to terminate their  contracts with us and to seek damages.  Any of
these events could have a material  adverse  effect on our  business,  financial
position and prospects.

WE DEPEND ON  RELATIONSHIPS  WITH THIRD PARTIES,  WHICH, IF NOT MAINTAINED,  MAY
ADVERSELY AFFECT OUR ABILITY TO PROVIDE SERVICES TO OUR CUSTOMERS.


We are not a communications  carrier and,  therefore,  we rely  substantially on
third parties to provide our customers  with access to voice,  data and Internet
networks.  We must maintain  relationships with third-party network providers in
order to offer our data center  customers  access to a choice of networks.  Many
carriers have their own data center  facilities  and may be reluctant to provide
network services at our data centers.  As a result, some carriers may choose not
to connect their  services to our data centers.  We do not own any real property
and depend on our ability to negotiate  favorable lease terms with the owners of
our data center facilities. The use of our IDCs is limited to the extent that we
do not  extend  or  renew  our  leases,  in which  case we might  not be able to
accommodate our customers,  particularly if we were unable to relocate timely to
a comparable facility.



The   availability   of  an  adequate   supply  of  electrical   power  and  the
infrastructure  to deliver  that power is critical to our ability to attract and
retain customers and achieve profitability.  We rely on third parties to provide
electrical  power to our data centers,  and cannot be certain that these parties
will  provide  adequate  electrical  power or that we will  have  the  necessary
infrastructure  to deliver such power to our customers.  If the electrical power
delivered to our facilities is inadequate to support our customers' requirements
or if delivery is not timely,  our results of operations and financial  position
may be materially and adversely affected.



WE MAY HAVE DIFFICULTY  COLLECTING PAYMENTS FROM SOME OF OUR CUSTOMERS AND INCUR
COSTS AS A RESULT.


A number of our customers are early stage  companies.  In addition,  many of our
customers  are  telecommunications   companies,   and  many   telecommunications
companies have been experiencing significant financial difficulties.  There is a
risk that these companies will experience  difficulty paying amounts owed to us,
and we might not be able to collect on a timely  basis all monies  owed to us by
some of them.  Although  we intend to remove  customers  that do not pay us in a
timely manner,  we may experience  difficulties  and costs in collecting from or
removing these customers.

IF WE DO NOT RESPOND TO FUTURE  ADVANCES IN  TECHNOLOGY  AND CHANGES IN CUSTOMER
DEMANDS,  OUR FINANCIAL  POSITION,  PROSPECTS  AND RESULTS OF OPERATIONS  MAY BE
ADVERSELY AFFECTED.

The demand for our digital cinema business, movie distribution software and data
centers will be affected,  in large part, by future  advances in technology  and
changes in  customer  demands.  Our  success  will also depend on our ability to
address the  increasingly  sophisticated  and varied  needs of our  existing and
prospective customers.

We cannot assure you that there will be a demand for the digital cinema software
and delivery services  provided by AccessDM.  AccessDM's  profitability  depends
largely upon the general expansion of digital  presentations at theaters,  which
may not occur for  several  years.  There can be no  assurance  that major movie
studios  relying  on  traditional  distribution  networks  to  provide  physical
delivery of digital files will adopt a different method, particularly electronic
delivery,  of distributing digital content to movie theaters. If the development
of digital presentations and changes in the way digital files are delivered does
not occur, there may be no viable market for AccessDM's software and systems.


WE MAY BE SUBJECT TO  ENVIRONMENTAL  RISKS  RELATING TO THE  ON-SITE  STORAGE OF
DIESEL FUEL AND BATTERIES.


Our data centers contain tanks for the storage of diesel fuel for our generators
and significant  quantities of lead acid batteries used to provide back-up power
generation for uninterrupted  operation of our customers'  equipment.  We cannot
assure you that our  systems  will be free from leaks or that use of our systems
will not result in spills.  Any leak or spill,  depending on such factors as the
nature and quantity of the  materials  involved and the  environmental  setting,


                                       15


could  result  in   interruptions  to  our  operations  and  the  incurrence  of
significant  costs,   particularly  to  the  extent  we  incur  liability  under
applicable  environmental laws. This could have a material adverse effect on our
business, financial position and results of operations.


                   RISKS RELATING TO OUR CLASS A COMMON STOCK

THE  LIQUIDITY OF OUR CLASS A COMMON  STOCK IS  UNCERTAIN;  THE LIMITED  TRADING
VOLUME OF OUR CLASS A COMMON  STOCK MAY DEPRESS THE PRICE OF SUCH STOCK OR CAUSE
IT TO FLUCTUATE SIGNIFICANTLY.


Although  shares of our Class A common  stock are listed on the  American  Stock
Exchange  (the "AMEX"),  there has been a limited  public market for our Class A
common stock and there can be no assurance that an active trading market for our
common stock will develop.  As a result, you may not be able to sell your shares
of Class A common stock in short time  periods,  or possibly at all. The absence
of an active  trading market may cause the price per share of our Class A common
stock to fluctuate significantly.

SUBSTANTIAL RESALES OF OUR CLASS A COMMON STOCK COULD DEPRESS OUR STOCK PRICE.

The  market  price  for  our  Class  A  common  stock  could  decline,   perhaps
significantly,  as a result of  resales  of a large  number of shares of Class A
common stock in the public market or even the perception that such resales could
occur,  including resales of the shares being registered  hereunder  pursuant to
the registration  statement of which this prospectus is a part. In addition,  we
have a substantial number of options,  warrants and other securities convertible
into shares of our Class A common stock outstanding that may be exercised in the
future. Certain holders of these warrants and convertible securities, as well as
holders  of our  outstanding  shares of Class A common  stock,  have  piggy-back
registration rights and the holder of shares of Class A common stock issuable in
exchange for its shares of preferred  stock and certain  warrants has demand and
piggy-back  registration rights. These factors could also make it more difficult
for us to raise funds through future offerings of our equity securities.


YOU WILL  INCUR  SUBSTANTIAL  DILUTION  AS A RESULT  OF  CERTAIN  FUTURE  EQUITY
ISSUANCES.

We have a substantial number of options, warrants and other securities
currently  outstanding  which may be  immediately  converted  into shares of our
Class A common  stock.  To the extent  that these  options,  warrants or similar
securities are exercised or converted, as the case may be, there will be further
dilution to holders of shares of our Class A common stock.


PROVISIONS OF OUR  CERTIFICATE OF  INCORPORATION  AND DELAWARE LAW COULD MAKE IT
MORE DIFFICULT FOR A THIRD PARTY TO ACQUIRE US.


Provisions of our certificate of incorporation, as well as of Section 203 of the
Delaware General Corporation Law (the "DGCL") could make it more difficult for a
third  party  to  acquire  us,  even if doing  so  might  be  beneficial  to our
stockholders.

Our certificate of incorporation authorizes the issuance of 15,000,000 shares of
preferred  stock. The terms of our preferred stock may be fixed by the company's
board  of  directors  without  further  stockholder  action.  The  terms  of any
outstanding  series or class of preferred  stock may include  priority claims to
assets and dividends and special voting rights, which could adversely affect the
rights of  holders  of our  Class A common  stock.  Any  future  issuance(s)  of
preferred  stock  could  make  the  takeover  of  the  company  more  difficult,
discourage unsolicited bids for control of the company in which our stockholders
could receive  premiums for their shares,  dilute or  subordinate  the rights of
holders of Class A common stock and  adversely  affect the trading  price of our
Class A common stock.

Under Section 203 of the DGCL, Delaware corporations whose securities are listed
on a national  securities  exchange,  like the AMEX,  may not engage in business


                                       16


combinations such as mergers or acquisitions  with any interested  stockholders,
defined  as an  entity  or  person  beneficially  owning  15%  or  more  of  our
outstanding common stock without obtaining certain prior approvals.  As a result
of the  application  of Section 203,  potential  acquirers of the company may be
discouraged  from  attempting  to effect  an  acquisition  transaction  with the
company,  thereby depriving holders of the company's securities of opportunities
to sell or otherwise dispose of the securities at prices above prevailing market
prices.


WE MAY NOT BE ABLE TO MAINTAIN  LISTING ON THE AMEX,  WHICH MAY ADVERSELY AFFECT
THE ABILITY OF  PURCHASERS  IN THIS  OFFERING TO RESELL THEIR  SECURITIES IN THE
SECONDARY MARKET.


Our Class A common stock is  presently  listed on the AMEX.  However,  we cannot
assure you that the company will meet the criteria for continued  listing on the
AMEX.  If the company is unable to meet the  continued  listing  criteria of the
AMEX and became  delisted,  trading of the Class A common stock could thereafter
be conducted in the  over-the-counter  market in the so-called "pink sheets" or,
if available,  the NASD's  Electronic  Bulletin Board. In such case, an investor
would likely find it more difficult to dispose of, or to obtain  accurate market
quotations for, the company's securities.

If the shares of Class A common  stock  were  delisted  from the AMEX,  they may
become  subject  to Rule 15g-9  under the  Exchange  Act,  which  imposes  sales
practice  requirements  on  broker-dealers  that sell such securities to persons
other than established customers and "accredited investors." Application of this
Rule could adversely affect the ability and/or  willingness of broker-dealers to
sell the company's securities and may adversely affect the ability of purchasers
in this offering to resell their securities in the secondary market.




                                       17


                           FORWARD-LOOKING STATEMENTS


Various  statements  contained in this  prospectus or  incorporated by reference
into this prospectus constitute "forward-looking  statements" within the meaning
of  the  Private  Securities  Litigation  Reform  Act of  1995.  Forward-looking
statements  are based on  current  expectations  and are  indicated  by words or
phrases such as "believe,"  "expect," "may," "will,"  "should,"  "seek," "plan,"
"intend" or "anticipate" or the negative thereof or comparable  terminology,  or
by discussion of strategy. Forward-looking statements are primarily contained in
the sections of this prospectus entitled  "Prospectus  Summary," "Risk Factors,"
"Selected Historical and Pro Forma Financial Data," "Management's Discussion and
Analysis of  Financial  Condition  and Results of  Operations"  and  "Business."
Forward-looking  statements  represent  as of the  date of this  prospectus  our
judgment relating to, among other things,  future results of operations,  growth
plans, sales,  capital requirements and general industry and business conditions
applicable  to us.  Such  forward-looking  statements  are based  largely on our
current expectations and are inherently subject to risks and uncertainties.  Our
actual  results  could  differ  materially  from those that are  anticipated  or
projected as a result of certain  risks and  uncertainties,  including,  but not
limited to, a number of factors, such as:

     o    successful integration of acquired businesses;

     o    the  effect  of  our  indebtedness  on  our  financial  condition  and
          financial flexibility,  including,  but not limited to, the ability to
          obtain necessary financing for our business;

     o    economic and market conditions;

     o    the performance of our targeted markets;

     o    changes in business relationships with our major customers;

     o    competitive product and pricing pressures; and

     o    the  other  risks  and  uncertainties   that  are  described  in  this
          prospectus and from time to time in our filings with the SEC.

Except as otherwise  required to be disclosed in periodic reports required to be
filed by public  companies with the SEC pursuant to the SEC's rules,  we have no
duty to update these  statements,  and we undertake  no  obligation  to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information,   future  events  or  otherwise.   In  light  of  these  risks  and
uncertainties,  we  cannot  assure  you  that  the  forward-looking  information
contained in this prospectus will in fact transpire.




                                 USE OF PROCEEDS


We may receive an amount of up to  approximately  $723,600  upon the exercise of
the warrants, if exercised, as to which we are offering the underlying shares of
Class A common stock  covered by this  prospectus.  Any proceeds that we receive
from the exercise of outstanding warrants will be used by us for general working
capital.  The actual  allocation of proceeds realized from the exercise of these
securities  will  depend  upon the  amount  and  timing of such  exercises,  our
operating  revenues  and cash  position  at such  time and our  working  capital
requirements.  There can be no assurances that any of the  outstanding  warrants
will be exercised.






                                       18



                                 CAPITALIZATION



The first  column in the  following  table sets forth our  capitalization  as of
March  31,  2004  on  an  actual  basis.   The  second  column  sets  forth  our
capitalization as of December 31, 2004 on an actual basis.  Except share and per
share data, the information in this table is set forth in thousands.  You should
read this  information  together with the financial  statements and the notes to
those statements appearing elsewhere in this prospectus.



                                                         March 31,  December 31,
                                                           2004         2004
                                                         ---------  ------------
                                                                     (unaudited)
Notes payable, including current portion                   $6,239       $5,946
Capital leases, including current portion                     150          515
                                                              ---          ---
Redeemable Class A common stock, par value $0.001,
53,534 shares issued and outstanding...................       238          247


Stockholders' equity:

Common stock, par value $.001; 80,000,000 shares
authorized; 8,287,541, 9,505,041 and 10,359,139 shares
issued and outstanding, respectively....................        8            11
Treasury Stock, at cost; 9140 shares                           --           (32)
Additional paid-in capital..............................   24,271        30,853
Accumulated deficit.....................................  (14,699)      (18,688)
                                                          --------      --------
Total stockholders' equity..............................    9,580        12,144

Total capitalization....................................  $16,207       $18,852
                                                          =======       ========

The table above  assumes  that no stock  options or warrants  outstanding  as of
March 31, 2004 and December 31, 2004 or granted  thereafter  are  exercised.  In
addition to the shares of capital stock outstanding,  we may issue shares of our
common stock under the following plans and arrangements:

     o    520,564 and 598,897  shares of Class A common  stock  subject to stock
          options  granted  under our 2000 Stock  Option  Plan (the  "Plan") and
          79,436 and 251,103  shares  available for future  issuance  under such
          Plan as of March 31, 2004 and December 31, 2004, respectively;

     o    120,000  shares of Class A common stock  reserved  for  issuance  upon
          exercise  of warrants  issued in  connection  with our initial  public
          offering in November  2003 (the  "IPO"),  which  shares are covered by
          this  prospectus  and the  proceeds of which are to be used as working
          capital for general corporate purposes; and

     o    304,375  shares of Class A common stock  reserved  for  issuance  upon
          exercise of warrants  issued in connection  with our June 2004 private
          placement, the proceeds of which are to be used as working capital for
          general corporate purposes; and

     o    308,225  and  307,871  shares of Class A common  stock as of March 31,
          2004 and December 31, 2004,  respectively,  reserved for issuance upon
          conversion  of notes  payable  issued in  connection  with  March 2004
          exchange of 8% notes payable for 6% convertible notes payable.


                                       19


                           PRICE RANGE OF COMMON STOCK


We consummated  our IPO at a price of $5.00 per share.  Our Class A common stock
trades  publicly on the AMEX under the trading symbol "AIX." The following table
shows the high and low  sales  prices  per share of our Class A common  stock as
reported by the AMEX for the periods indicated:




                                              HIGH        LOW



FISCAL YEAR ENDED MARCH 31, 2004
    Third Quarter (from November 10, 2003)   $ 6.95      $ 5.00
    Fourth Quarter........................   $ 5.30      $ 4.09


FISCAL YEAR ENDED MARCH 31, 2005
    First Quarter ........................   $ 5.20      $ 4.10
    Second Quarter .......................   $ 5.15      $ 3.20
    Third Quarter ........................   $ 4.17      $ 3.75
    Fourth Quarter (through March 29, 2005)  $ 7.15      $ 3.25


The last  reported  sale price of our Class A common  stock on the AMEX on March
29, 2005 was $ 6.70 per share. As of March 1, 2005, there were approximately 171
beneficial holders of record of our Class A common stock.


                                 DIVIDEND POLICY


We have never paid any cash dividends on our common stock or preferred stock and
do not anticipate paying any on our common stock in the foreseeable  future. Any
future  payment of dividends on our common stock will be in the sole  discretion
of our board of directors.




                                       20



                SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA

The summary below sets forth certain  selected  historical  financial  data. The
financial data below should be read in conjunction with the historical financial
statements and the notes thereto of our Company and of Hollywood SW and FiberSat
Seller appearing elsewhere in this prospectus.

THE COMPANY.  The following tables set forth selected historical  financial data
of our Company at and for each of the fiscal  years ended March 31,  2002,  2003
and 2004 and the nine months ended  December 31, 2004.  The data for each of the
fiscal  years  ended March 31,  2002,  2003 and 2004 has been  derived  from our
audited consolidated financial statements.  The data as of December 31, 2004 and
for the nine months ended  December 31, 2004 has been derived from our unaudited
consolidated  financial  statements.  When you read the selected  financial data
below,  it is important  that you also read our audited  consolidated  financial
statements  and the  notes  to  those  statements  appearing  elsewhere  in this
prospectus,  as well as the section of this  prospectus  entitled  "Management's
Discussion and Analysis of Financial Condition and Results of Operations."



                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)




                                                           FISCAL YEAR ENDED               NINE MONTHS
                                                               MARCH 31,                      ENDED
                                                                                           DECEMBER 31,


                                                   2002           2003          2004           2004
                                                 ----------------------------------------------------
                                                                                     (unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA (1):

                                                                                
Revenues.........................                $1,911         $4,228       $ 7,201        $ 7,135
Costs of revenues................                 1,833          3,101         3,667          4,014
                                                 ------         ------        ------         ------
Gross profit.....................                    78          1,127         3,534          3,121


Selling, general and
 administrative expenses(2)......                 2,267          2,305         3,277          3,588
Provision for doubtful accounts..                    --             --            --            598
Research and development
                                                     --             --            55            288
Non-cash stock-based
 compensation....................                   235             99            15              4
Depreciation and amortization....                   993          1,687         2,692          2,457
                                                -------        -------       -------        -------
Loss from operations.............               $(3,417)       $(2,964)      $(2,505)       $(3,814)
Interest income..................                    30             13             6             --
Interest expense(3)..............                   (83)          (364)         (542)          (279)
Loss on early extinguishment of debt                 --             --            --           (126)

Non-cash interest expense........                  (140)          (282)       (1,823)          (155)
Minority interest in subsidiary..                    --             --            25             10
Other income.....................                    --              8           (52)            17
                                                -------        -------       -------        -------
Net loss before income taxes                    $(3,610)       $(3,589)      $(5,017)       $(4,221)
Income tax benefit...............                    --            185           212            233
                                                -------        -------       -------        -------
Net loss.........................               $(3,610)       $(3,404)      $(4,805)       $(3,988)
Preferred stock accretion(4)                       (323)          (857)       (1,808)            --
                                                -------        -------       -------        -------
Net loss available to common
   stockholders..................               $(3,933)       $(4,261)       (6,613)        (3,988)
                                                =======        =======       =======        =======

Net loss available to common
   stockholders per share -
   basic and diluted..............               $(1.21)        $(1.41)       $(1.37)        $(0.42)
                                                =======        =======       =======        =======




                                       21





                                                                          
Weighted average number of
    common shares outstanding -
    basic and diluted(5)..........       3,238,084      3,027,865      4,826,776      9,432,380


(1)  We acquired one IDC from, and assumed certain liabilities of BridgePoint on
     December  21,  2001.  We  acquired  six  IDCs  from,  and  assumed  certain
     liabilities of  ColoSolutions  on November 27, 2002. We acquired all of the
     capital  stock of Hollywood SW on November 3, 2003.  We acquired all of the
     outstanding  common stock of Core on January 9, 2004.  We acquired  certain
     assets of Boeing  Digital,  a division  of Boeing,  on March 29,  2004.  We
     acquired  substantially  all of  the  assets  and  certain  liabilities  of
     Fibersat  Seller on November 17, 2004. The above financial data are derived
     from our audited and unaudited financial statements and reflect the results
     of operations of the acquired  entities from the  respective  dates of such
     acquisitions.

(2)  Excludes non-cash,  stock-based  compensation expense of $235,000,  $99,000
     $15,000 and $4,000 for the years ended March 31, 2002,  2003 and 2004,  and
     nine months ended December 31, 2004, respectively.

(3)  Excludes non-cash interest expense related to the accretion of the value of
     warrants  attached to our one- and five-year  promissory notes of $140,000,
     $282,000,  $1,823,000 and $155,000 for the years ended March 31, 2002, 2003
     and 2004, and nine months ended December 31, 2004, respectively.

(4)  Reflects the accretion of dividends,  expenses and warrants on our Series A
     and Series B preferred  stock and a  beneficial  conversion  feature of our
     Series A preferred stock.

(5)  The  information  regarding net loss per common share and weighted  average
     number of common  shares for the fiscal years ended March 31, 2002 and 2003
     gives effect to the  one-for-five  reverse  stock split of our common stock
     effected in September 2003.

                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                                                     AT DECEMBER
                                         AT MARCH 31,                     31,
                                   ---------------------------------------------

                                     2002        2003        2004        2004
                                   ---------------------------------------------
                                                                     (unaudited)
CONSOLIDATED BALANCE SHEET DATA:
 Cash and cash equivalents.......  $1,001       $ 956       $2,330     $ 1,515
 Working capital (deficit).......     378        (954)         212         244
 Total assets....................   8,616       9,894       21,175      23,251
 Current portion of notes payable     333       1,152          650       1,009
 Capital lease obligations.......     440         513          150         515
 Long-term debt, net of
  current portion................     921       1,730        5,589       4,937
 Total liabilities...............   3,652       5,355       11,357      10,860
 Mandatorily redeemable,
  convertible preferred stock....     251       2,911           --          --
 Redeemable common stock               --          --          238         247
 Total stockholders' equity......  $4,713      $1,628       $9,580     $12,144




                                       22




HOLLYWOOD SOFTWARE. The following table sets forth selected historical financial
data of Hollywood SW for the fiscal year ended March 31, 2003.


                            HOLLYWOOD SOFTWARE, INC.
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                                     FISCAL YEAR
                                                        ENDED
                                                    MARCH 31, 2003
                                                    ---------------

STATEMENT OF OPERATIONS DATA:
  Revenues................................             $1,908
  Cost of revenues........................                319
  Gross profit............................              1,589
  Research and development................                289
  Selling, general and administrative
   expenses...............................              1,131
                                                       -------
  Income from operations..................                169
  Other expense...........................                 (2)
  Net income..............................             $  118
                                                       =======
  Net income per share - basic and diluted             $  .01
                                                       ------
  Weighted average number of common shares
    outstanding
            - basic........................         10,000,000
            - diluted......................         10,293,167


FIBERSAT SELLER.  The following table sets forth selected  historical  financial
data of FiberSat  Seller for the year ended December 31, 2003 and the nine month
period ended September 30, 2004.





                          FIBERSAT GLOBAL SERVICES, LLC
                                 (IN THOUSANDS)


                                                                       NINE MONTHS
                                               YEAR ENDED                  ENDED
                                            DECEMBER 31, 2003      SEPTEMBER 30, 2004
                                            -----------------------------------------
                                                                       (unaudited)

STATEMENT OF OPERATIONS DATA:
                                                               
  Revenues................................           $3,408          $2,567
  Cost of revenues........................            1,093             740
                                                     ------          ------
  Gross profit............................            2,315           1,827
  Selling, general and administrative expenses        1,833             981
  Depreciation and amortization...........              884             548
  Impairment loss.........................               --             358
                                                     ------          ------
  Loss from operations....................             (402)            (60)
  Interest income.........................               51               2
  Interest expense........................             (245)           (120)
                                                     ------          -------
  Net loss before income taxes............             (596)           (178)
  Income tax expense......................               (3)             (5)
                                                     ------          -------
  Net loss................................           $ (599)         $ (183)
                                                     ======          =======



                                       23


SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA


The following tables set forth selected  unaudited pro forma condensed  combined
statement of operations  data of our Company for the fiscal year ended March 31,
2004 and for the nine months ended December 31, 2004, after giving effect to the
transactions  discussed in the overview of the pro forma data  beginning on page
P-1  of  this  prospectus.   The  Hollywood  SW  Acquisition  and  the  FiberSat
Acquisition  were  accounted for using the purchase  method of  accounting  and,
accordingly,  the assets,  liabilities and results of operations of Hollywood SW
and FiberSat Seller have been included in our Company's  consolidated  financial
statements subsequent to their acquisition date.

The following  selected  unaudited  financial data should be read in conjunction
with the  historical  financial  statements  of our Company,  Hollywood  SW, and
FiberSat  Seller,  and the unaudited pro forma condensed  combined  consolidated
financial information,  including the notes thereto, appearing elsewhere in this
prospectus.  The unaudited pro forma condensed combined information is presented
for illustrative purposes only and is not necessarily  indicative of the results
of operations that would have occurred if the transactions had been completed at
the dates  indicated,  nor is it  necessarily  indicative  of future  results of
operations of the combined company.


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                                         FISCAL YEAR ENDED
                                                           MARCH 31, 2004
                                                         -----------------

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS DATA:

 Revenues....................................               $ 11,581
 Cost of revenues............................                  5,078
                                                               -----
 Gross profit................................                  6,503
 Selling, general and administrative expenses                  5,793
 Research and development....................                    273
 Non-cash stock-based compensation...........                    470
 Depreciation and amortization...............                  3,578
                                                             -------
 Loss from operations........................                (3,611)
 Interest income.............................                     57
 Interest expense............................                  (802)
 Loss on early extinguishment of debt........                  (126)
 Non-cash interest expense...................                (1,823)
 Minority interest in subsidiary.............                     25
 Other expense, net..........................                   (52)
                                                              ------
 Net loss before income taxes................                (6,332)
 Income tax benefit..........................                    161
                                                              ------
 Net loss....................................                (6,171)
 Accretion related to redeemable convertible
  Preferred stock............................                (1,588)
 Accretion of preferred dividends............                  (220)
                                                               -----
 Net loss available to common stockholders...               $(7,979)
                                                            ========
  Net loss per share - basic
    and diluted .............................                $(1.42)
                                                             =======
 Weighted average number of common
    shares for net loss per share
    computations - basic and diluted.........              5,610,492
                                                           =========


                                       24



                                                               NINE MONTHS ENDED
                                                               DECEMBER 31, 2004
                                                               -----------------

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS DATA:
 Revenues....................................                       $ 9,702
 Cost of revenues............................                         4,754
                                                                    -------
 Gross profit................................                         4,948
  Selling, general and administrative expenses                        4,569
  Provisions for doubtful accounts...........                           598
  Research and Development...................                           288
  Non-Cash Stock-Based Compensation..........                             4
  Depreciation and Amortization..............                         2,897
 Loss From Operations........................                        (3,408)
 Interest Income.............................                             2
 Interest Expense............................                          (341)
 Non-Cash Interest Expense...................                          (155)
 Other Expense, Net .........................                            17
 Income Tax Benefit (Expense)................                           228
 Minority Interest in Subsidiary                                         10
                                                                   ---------
 Net Loss....................................                        (3,647)
 Net Loss Available to Common Stockholders...                      $ (3,647)
                                                                   =========
  Net Loss Available to Common Stockholders
  Per Common Share
      Basic and Diluted......................                      $  (0.39)
                                                                   =========
 Weighted Average Number of Common
  Shares Outstanding
    Basic and Diluted .......................                     9,432,380
                                                                  ---------




                                       25



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

The  following  discussion  should  be read in  conjunction  with the  financial
statements  and related  notes  appearing  elsewhere  in this  prospectus.  This
discussion   contains   forward-looking   statements   that  involve  risks  and
uncertainties. Our actual results could differ materially from those anticipated
in those forward-looking statements as a result of factors described within this
prospectus   and  other  factors.   We  refer  you  to  the  section   captioned
"Forward-Looking Statements" in this prospectus.


OVERVIEW


AccessIT was organized on March 31, 2000 and we are in the business of providing
software services and technology  solutions to the motion picture industry,  and
operating IDCs.  Recently,  we have actively  expanded into new and interrelated
business areas relating to the delivery and management of digital cinema content
to  entertainment  venues  worldwide.  These  businesses,  supported  by our IDC
business,  have become our primary  strategic  focus.

Our  business  focus is to create a secure,  managed  and  complete  system that
consists of software to book, track and perform accounting functions for digital
content in movie theatres,  deliver  digital  content to multiple  locations and
provide the content  management  software for managing all brands of  in-theatre
playback systems and projection systems for the digital cinema marketplace. This
system is designed to enable the motion picture industry to move from the analog
world to the digital world. The system is intended to use all of our businesses:

MEDIA  SERVICES

     o    DIGITAL MEDIA DELIVERY - digital media managed  delivery  services and
          theater  management  player software for use in theatres from AccessDM
          and satellite  delivery  services  from  FiberSat.  ADM Cinema,  which
          acquired the Pavilion Theatre,  will utilize our digital media managed
          delivery  services and media  player  software  products;  and

     o    MOVIE  DISTRIBUTION AND EXHIBITOR SOFTWARE - Hollywood SW develops and
          licenses  distribution and exhibitor  software  products and services.

DATA  CENTER  SERVICES

     o    DATA  CENTERS -  AccessIT's  IDCs,  including  redundant  sites in Los
          Angeles and New York City; and

     o    MANAGED  SERVICE  OFFERINGS - managed  storage and network and systems
          management services by Core and AccessIT.

Our system provides a digital content owner with the secure delivery of multiple
files to multiple locations throughout the world with proactive notification and
security management. Our system also provides the digital content exhibitor with
access to digital  content,  freedom to choose  what to play and when to play it
with proactive  notifications and management software.  We have created a system
whereby  digital content is delivered where it is supposed to go, is played when
it is supposed  to be played  along with the ability to act upon and report back
management and financial information.  We also have created software designed to
enable a movie exhibitor to run all projectors in a multiple  auditorium theatre
from one central server, regardless of the hardware type or manufacturer.

In  February  2003,  we  organized  AccessDM,  which  in May  2004,  became  our
wholly-owned  subsidiary.  AccessDM has developed proprietary software,  Digital
Express  e-Courier,  capable of worldwide  delivery of digital data -- including
movies,  advertisements and alternative  content such as concerts,  seminars and
sporting events -- to movie theaters and other venues having digital  projection


                                       26


equipment.  We are also in the process of developing  media player  software for
use by digitally-equipped movie theaters called Theatre Command Center.

In November  2003,  we  acquired  all of the capital  stock of  Hollywood  SW, a
leading  provider of proprietary  transactional  support software and consulting
services for distributors  and exhibitors of filmed  entertainment in the United
States and  Canada.  Its  licensed  software  records  and  manages  information
relating to the planning,  scheduling,  revenue sharing, cash flow and reporting
associated  with  the  distribution  and  exhibition  of  theatrical  films.  In
addition,   Hollywood  SW's  software  complements,   and  is  integrated  with,
AccessDM's   digital  content  delivery  software  by  enabling  Hollywood  SW's
customers  to  seamlessly  plan and  schedule  delivery  of  digital  content to
entertainment  venue  operators  as  well as to  manage  the  related  financial
transactions.

In an effort to increase the  competitive  advantage of the IDCs,  on January 9,
2004, we acquired Core, a managed service provider of information  technologies.
As an information  technology  outsourcing  organization,  Core manages clients'
networks and systems in over 35  countries  in Europe,  Asia and North and South
America and more than 20 states in the United States. Core operates a 24x7 GNCC,
capable of running the networks and systems of large  corporate  clients.  The 4
largest  customers of Core accounted for  approximately  77% of its revenues for
the year ended March 31, 2004. The managed  services  capabilities  of Core have
been integrated with our IDCs and now operate under the name of AccessIT Managed
Services.

In March  2004,  we acquired  certain  assets of Boeing  Digital,  a division of
Boeing. These assets were purchased to further our strategy of becoming a leader
in the  delivery  of movies and other  digital  content to movie  theaters.  The
acquired  assets  consist  of  digital  projectors,  satellite  dishes and other
equipment installed at 28 screens within 21 theaters in the United States and at
one location in London,  England, and satellite  transmission equipment which we
installed in Los Angeles, California.

Also in March 2004, we refinanced  approximately $4.2 aggregate principal amount
(plus  accrued  and unpaid  interest)  of our  promissory  notes  pursuant to an
exchange  offer.  In exchange  for these  promissory  notes,  we issued  707,477
unregistered  shares of our  Class A common  stock  and $1.7  million  aggregate
principal  amount  of new  convertible  notes  which as of March  1,  2005  were
convertible into a maximum of 310,857 shares of our Class A common stock.

In June 2004,  we  consummated a $4.87  million  private  placement of 1,217,500
unregistered  shares of our Class A common  stock with  institutional  and other
accredited investors.  Pursuant to the private placement,  we also issued to the
investors and the placement  agent warrants to purchase up to 243,500 and 60,875
shares of our Class A common stock, respectively,  at an exercise price of $4.80
per share, exercisable upon receipt.

In November  2004, we  consummated a $1.1 million  private  placement of 282,776
unregistered  shares of our Class A common stock at $3.89 per share with certain
accredited  investors.  The net  proceeds of $1.023  million  from such  private
placement were used for the FiberSat Acquisition and for working capital.

Also in November 2004, we acquired  substantially  all of the assets of FiberSat
Seller through  FiberSat.  FiberSat,  headquartered  in Chatsworth,  California,
provides  services   utilizing   satellite  ground  facilities  and  fiber-optic
connectivity to receive,  process,  store,  encrypt and transmit  television and
data signals  globally.  FiberSat's  Chatsworth  facility  currently  houses the
infrastructure  operations of our digital cinema satellite delivery services. By
completing the FiberSat Acquisition,  we gained extensive satellite distribution
and  networking  capabilities  provided by  FiberSat's  fully  operational  data
storage and uplink facility  located in Los Angeles,  California.  FiberSat has,
and will continue to, provide  broadband video,  data and Internet  transmission
and  encryption  services for  multiple  customers  in the  broadcast  and cable
television and communications industries.



                                       27


In February  2005,  we  consummated  a private  placement of $7.6 million of the
Convertible Debentures.  The Convertible Debentures bear interest at the rate of
7% per year and are  convertible  into shares of our Class A common stock at the
price of $4.07 per share,  subject to possible adjustments from time to time. In
connection with the Convertible  Debenture offering, we issued the participating
institutional investors the Convertible Debentures Warrants,  exercisable for up
to 560,197 shares of Class A common stock at an initial  exercise price of $4.44
per share, subject to adjustments from time to time. The Convertible  Debentures
Warrants  may be  exercised  beginning  on  September  9, 2005  until five years
thereafter.

Also in February 2005, we consummated  the acquisition of  substantially  all of
the assets of the  Pavilion  Theatre.  The Pavilion  Theatre is an  eight-screen
movie  theatre and cafe and will be a component of the Media  Services  segment.
Continuing to operate as a fully functional multiplex, the Pavilion Theatre will
also become our showplace to demonstrate our integrated digital cinema solutions
to the movie entertainment industry

We offer  interrelated  services  that use each of our  business  units  for the
planning,  purchasing,  delivery and  management  of digital  content -- such as
movies,  advertising,  trailers and  alternative  content,  including  concerts,
seminars and sporting events -- to movie theater and other venue  operators.  We
believe that our ability to offer a wide range of fully  managed  services  will
differentiate us from other service providers,  including  distributors of other
types of digital media.

We have two reportable  segments:  Data Center Services,  which comprise our IDC
operations and the operations of Core; and Media Services,  which represents the
operations of Hollywood SW, AccessDM  (including  Boeing Digital),  FiberSat and
ADM Cinema.  For the three months ended  December 31, 2004,  we received 47% and
53%,  respectively,  of our  revenue  from the Media  Services  and Data  Center
Services segments.  For the nine months ended December 31, 2004, we received 35%
and 65%, respectively,  of our revenue from the Media Services and Data Services
segments.

From our  inception  through  November 3, 2003,  all of our  revenues  have been
derived  from  monthly  license  fees and fees  from  other  ancillary  services
provided  by us at our IDCs.  We do not  intend to build  any  additional  IDCs.
Instead,  we may continue  expanding our IDC footprint by acquiring  additional,
operational  IDCs from third  parties.  Hollywood  SW  generates  revenues  from
software license fees, ASP fees, enhancements,  consulting and maintenance fees.
Core  generates  revenues  primarily  from managed  network  services.  AccessDM
generates  revenues  from the  delivery of movies and other  content  into movie
theaters.  We incurred net losses of $2.33  million and $4.0 million in the nine
months  ended  December  31,  2003  and  2004,  respectively,  and  we  have  an
accumulated  deficit of $18.7  million as of December  31, 2004.  We  anticipate
that,  with the  acquisitions  of  Hollywood  SW, Core,  FiberSat,  the Pavilion
Theatre and substantially all of the assets of Boeing Digital, and the operation
of AccessDM,  our results of operations will improve.  As we grow, we expect our
operating costs and general and  administrative  expenses will also increase for
the  foreseeable  future,  but as a lower  percentage  of  revenue.  In order to
achieve  and  sustain  profitable  operations,  we will  need to  generate  more
revenues, and we may need to obtain additional financing,  than we have in prior
years.


CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES


Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  which have been prepared
in accordance with accounting principles generally accepted in the United States
of America.  The preparation of consolidated  financial statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires  our  management  to make  estimates  and  assumptions  that affect the
reported  amounts of assets and  liabilities  and the  disclosure  of contingent
assets and liabilities at the date of the consolidated  financial statements and
the reported amounts of revenues and expenses during the reporting  period.  Our
most significant  estimates relate to software revenue recognition,  capitalized
software,  depreciation of fixed assets and  amortization of intangible  assets.
Actual  results  could differ from these  estimates.  On an on-going  basis,  we
evaluate our estimates,  including  those related to the carrying  values of our
fixed  assets  and  intangible  assets.  We base  our  estimates  on  historical
experience  and on various  other  assumptions  that we believe to be reasonable


                                       28


under the  circumstances  made,  the  results of which form the basis for making
judgments  about the  carrying  values of assets  and  liabilities  that are not
readily  apparent  from other  sources.  Actual  results could differ from these
estimates under different assumptions or conditions.




We believe that the following critical  accounting policies and estimates affect
our more  significant  estimates and judgments  used in the  preparation  of our
consolidated financial statements.


REVENUE RECOGNITION

Through  December  31,  2004,  our Media  Services  segment  revenues  have been
primarily  generated by Hollywood SW, and are  accounted for in accordance  with
Statement of Position 97-2  "Software  Revenue  Recognition"  ("SOP 97-2"),  and
Staff Accounting Bulletin No. 104, "Revenue  Recognition." Our software revenues
are generated from the following primary sources:

     o    software  licensing,   including  customer  licenses  and  Application
          Service Provider ("ASP") agreements;

     o    software maintenance contracts; and

     o    professional    consulting    services,    which   includes    systems
          implementation,  training,  custom software  development  services and
          other professional services.

Software licensing revenue is recognized when the following criteria are met:

     o    persuasive evidence of an arrangement exists;

     o    delivery has occurred and no significant obligations remain;

     o    the fee is fixed or determinable; and

     o    collection is determined to be probable.

Significant  upfront  fees are  received in addition  to periodic  amounts  upon
achievement  of contractual  events for licensing of our products.  Such amounts
are  deferred  until  the  revenue  recognition  criteria  has been  met,  which
typically occurs after delivery and acceptance.

For  arrangements  with  multiple  elements  (e.g.,  delivered  and  undelivered
products,  maintenance and other services), we separately negotiate each element
of the arrangement based on the fair value of the elements.  The fair values for
ongoing  maintenance  and support  obligations  are based upon separate sales of
renewals  to  customers  or  upon  substantive   renewal  rates  quoted  in  the
agreements.  The fair values for services,  such as training or consulting,  are
based upon hourly billing rates of these services when sold  separately to other
customers.  In instances  where we are not able to determine  fair value of each
element and the services are essential to the functionality of the software,  we
follow percentage-of-completion accounting to recognize revenue.

Customers not wishing to license and operate our software themselves may use the
software  through  an ASP  arrangement,  in which we host  the  application  and
provide  customer  access via the internet.  Annual minimum ASP service fees are
recognized  ratably over the contract term. Overage revenues for usage in excess
of stated minimums are recognized monthly.

Maintenance  services and website  subscription fees are recognized ratably over
the  contract  term.  Professional  consulting  services,  sales of third  party
products and resale  hardware  revenues are recognized as services are provided.
Software  development  revenues are recognized when delivery has occurred and no
significant obligations remain.



                                       29


Deferred revenue is recorded in cases of:

     o    a portion  or the  entire  contract  amount  cannot be  recognized  as
          revenue due to  non-delivery  or  acceptance  of licensed  software or
          custom programming;

     o    incomplete implementation of ASP service arrangements; or

     o    unexpired pro-rata periods of maintenance, minimum ASP service fees or
          website subscription fees.

As  license  fees,  maintenance  fees,  minimum  ASP  service  fees and  website
subscription  fees are often  paid in  advance,  a portion  of this  revenue  is
deferred  until the  contract  ends.  Such  amounts are  classified  as deferred
revenue  in the  consolidated  balance  sheet and are  recognized  as revenue in
accordance with our revenue recognition policies described above.

In addition,  revenues in the Media Services  segment  include  digital cinema -
related revenues generated by AccessDM.  These revenues consist of (1) satellite
delivery revenues, (2) encryption and preparation fee revenues, (3) landing fees
for  delivery  to  each  movie  theatre.  These  revenues  are  recognized  upon
completion of the related services.


Our Data Center Services segment revenues consist of license fees for colocation
space, riser access charges,  electric and cross-connect fees, and non-recurring
equipment  installation  fees.  Revenues  from our IDCs,  riser access  charges,
electric and cross-connect fees are billed monthly and, in accordance with Staff
Accounting Bulletin No. 104, "Revenue  Recognition," are recognized ratably over
the  terms of the  contracts,  generally  two to nine  years.  Certain  customer
contracts  contain periodic  increases in the amount of license fees to be paid,
and those  amounts are  recognized  as license fee  revenues on a  straight-line
basis over the term of the contracts. Installation fees are recognized on a time
and  materials  basis in the  period in which the  services  were  provided  and
represent the culmination of the earnings process as no significant  obligations
remain.  Amounts  such as  prepaid  license  fees and other  amounts,  which are
collected  prior to  satisfying  the above  revenue  recognition  criteria,  are
classified  as  deferred   revenues.   Amounts   satisfying  the  above  revenue
recognition  criteria prior to billing are classified as unbilled  revenues.  In
addition,  within our Data Center  Services  segment,  Core revenues  consist of
network monitoring and maintenance fees. These fees consist of monthly recurring
billings  pursuant to contracts,  which are  recognized as revenues in the month
earned, and other billings which are recognized on a time and materials basis in
the period in which the services were provided.

The adoption of Staff Accounting  Bulletin No. 104,  "Revenue  Recognition," did
not affect our revenue recognition policies.

CAPITALIZED SOFTWARE COSTS

We account for software costs under Statement of Financial  Accounting Standards
("SFAS")  No. 86,  "Accounting  for the Costs of  Computer  Software to Be Sold,
Leased,  or Otherwise  Marketed."  Software  development costs that are incurred
subsequent to establishing technological  feasibility,  and until the product is
commercially  released,   are  capitalized.   Amounts  capitalized  as  software
development costs are generally amortized  periodically using a formula based on
the greater of the units sold during the period or on a straight-line basis over
five years.  We review  capitalized  software  costs for impairment on an annual
basis.  To the  extent  that the  carrying  amount  exceeds  the  estimated  net
realizable  value of the  capitalized  software  cost, an  impairment  charge is
recorded.  No  impairment  was recorded for the fiscal year ended March 31, 2004
and the nine  months  ended  December  31,  2004.  Amortization  of  capitalized
software development costs,  included in costs of revenues,  for the fiscal year
ended March 31, 2004  amounted  to  $118,000,  and for the three and nine months
ended December 31, 2004 amounted to $92,000 and $220,000, respectively.


                                       30


BUSINESS COMBINATIONS AND INTANGIBLE ASSETS


We have  adopted  SFAS No.  141,  "Business  Combinations"  and  SFAS  No.  142,
"Goodwill  and other  Intangible  Assets."  SFAS No. 141  requires  all business
combinations  to be accounted for using the purchase  method of  accounting  and
that  certain  intangible  assets  acquired  in a business  combination  must be
recognized  as  assets  separate  from  goodwill.  SFAS No.  142  addresses  the
recognition and measurement of goodwill and other intangible  assets  subsequent
to their  acquisition.  SFAS No. 142 also addresses the initial  recognition and
measurement of intangible  assets  acquired  outside of a business  combination,
whether  acquired  individually or with a group of other assets.  This statement
provides that intangible  assets with indefinite  lives and goodwill will not be
amortized but will be tested at least annually for impairment.  If an impairment
is indicated,  then the asset will be written down to its fair value,  typically
based upon its future expected  discounted cash flows.  Intangible assets of the
Company as of March 31, 2003  consisted  of  customer  contracts.  In  addition,
during the fiscal year ended March 31,  2004,  the Company  acquired  intangible
assets related to customer contracts,  trade names, trademarks and covenants not
to compete,  which are  estimated  to have useful  lives of ranging from 2 to 10
years. As of December 31, 2004, our finite-lived  intangible assets consisted of
customer agreements, covenants not to compete, Federal Communications Commission
licenses for satellite transmission services, trade names and trademarks,  which
are  estimated to have useful lives of ranging from 2 to 10 years.  In addition,
the Company  has  recorded  goodwill  in  connection  with the  acquisitions  of
Hollywood SW, Core and FiberSat.


PROPERTY AND EQUIPMENT


Property  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Depreciation  is recorded  using the  straight-line  method  over the  estimated
useful  lives  of  the  respective  assets.  Leasehold  improvements  are  being
amortized over the shorter of the lease term or the estimated useful life of the
improvement.  Maintenance  and repair  costs are charged to expense as incurred.
Major renewals, improvements and additions are capitalized.


IMPAIRMENT OF LONG-LIVED ASSETS


We review the  recoverability  of our  long-lived  assets on a periodic basis in
order to identify business conditions, which may indicate a possible impairment.
The  assessment  for potential  impairment is based  primarily on our ability to
recover  the  carrying  value of our  long-lived  assets  from  expected  future
undiscounted cash flows. If the total of expected future undiscounted cash flows
is less than the total  carrying  value of the assets,  a loss is recognized for
the difference  between the fair value  (computed based upon the expected future
discounted cash flows) and the carrying value of the assets.


DESCRIPTION OF LINE ITEMS

The  following is a  description  of certain line items from our  statements  of
operations:


     o    Media Services revenues include charges for software license fees, ASP
          service fees,  consulting,  development and maintenance fees,  digital
          delivery and digital  media  software  license  fees.  Media  Services
          revenue are those  generated by Hollywood  SW,  AccessDM and FiberSat.
          Our Data Center Services  revenues include charges for monthly license
          fees  for  IDC  space,   electric  fees,   riser  access  charges  and
          installation fees, and managed network monitoring fees.

     o    Cost of revenues  consists of facility  operating  costs such as rent,
          utilities,  real estate taxes, repairs and maintenance,  insurance and
          other related  expenses,  direct  personnel costs and  amortization of
          capitalized software development costs.



                                       31


     o    Selling,  general and  administrative  expenses  consist  primarily of
          salaries  and  related   personnel  costs  for  management  and  other
          headquarters  office  employees,  professional  fees,  advertising and
          marketing  costs,  and  our  corporate  and  divisional   headquarters
          facility costs.

     o    Provision for doubtful accounts represents amounts deemed not probable
          of collection from customers.

     o    Non-cash,  stock-based  compensation  represents the value of employee
          and non-employee stock options and restricted stock grants,  amortized
          over the vesting periods (if any).

     o    Non-cash  interest  expense  represents  the accretion of the value of
          warrants attached to our five-year  promissory notes, and the imputing
          of interest on a non-interest bearing note payable.

INITIAL PUBLIC OFFERING

On November  10,  2003,  our  registration  statement  on Form SB-2 was declared
effective  by the SEC.  In  connection  with the  completion  of IPO,  we issued
1,380,000 shares of Class A common stock, 180,000 of which shares were issued in
connection with the lead underwriter's exercise of its over-allotment option, at
$5.00 per share.  The net  proceeds  from the IPO after  deducting  all offering
expenses,  including underwriting discounts and commissions, the cash portion of
the purchase  price of Hollywood SW, and the  repayment of a note  payable,  was
approximately $1,067,000. We are listed on the AMEX under the symbol "AIX".

PRIVATE PLACEMENTS

On June 4, 2004,  we concluded  the private  placement  with  several  investors
whereby we issued 1,217,500 unregistered shares of our Class A common stock at a
sale  price of $4.00  per  share.  The total net  proceeds,  including  fees and
expenses to register the securities were  approximately  $4.0 million,  which is
being used for  capital  investments  and  working  capital.  We also  issued to
investors  and to the  investment  firm  in our  June  2004  private  placement,
warrants to purchase a total of 304,375 shares of our Class A common stock at an
exercise price of $4.80 per share,  which became  exercisable  upon receipt.  We
agreed to file a  registration  statement for the resale of these shares and the
shares  underlying  the warrants with the SEC by filing a Form SB-2 on or before
July 5,  2004.  We filed  the Form SB-2 on July 2,  2004,  and the Form SB-2 was
declared effective on July 20, 2004.

In November  2004, we  consummated a $1.1 million  private  placement of 282,776
unregistered  shares of our Class A common stock at $3.89 per share with certain
accredited  investors.  These shares  carry  piggyback  and demand  registration
rights, at the sole expense of the investors. The net proceeds of $1.023 million
from such  private  placement  were used for the  FiberSat  Acquisition  and for
working capital.

In February  2005,  we  consummated  a private  placement of $7.6 million of the
Convertible Debentures.  The Convertible Debentures bear interest at the rate of
7% per year and are  convertible  into shares of our Class A common stock at the
price of $4.07 per share,  subject to possible adjustments from time to time. In
connection with the Convertible  Debenture offering, we issued the participating
institutional investors the Convertible Debentures Warrants,  exercisable for up
to 560,197 shares of Class A common stock at an initial  exercise price of $4.44
per share, subject to adjustments from time to time. The Convertible  Debentures
Warrants  may be  exercised  beginning  on  September  9, 2005  until five years
thereafter.


ACCESS DIGITAL MEDIA

AccessDM  was  formed in  February  2003 by  AccessIT.  AccessDM  has  completed
development of its proprietary software enabling the delivery of digital content
-- such  as  movies,  advertising,  trailers  and  alternative  content  such as


                                       32


concerts,  seminars  and sporting  events -- to movie  theaters and other venues
equipped with digital projection equipment.

AccessDM has been, and will continue in the  foreseeable  future to be, financed
principally  by AccessIT.  In March 2003,  we engaged The Casey  Group,  Inc., a
software  consulting  company,  to help develop software  designed to enable the
delivery of digital content. As compensation for assisting us in the development
of the software,  the cost of which was agreed to be $174,000,  we issued to The
Casey Group 750,000 shares of AccessDM  common stock in September 2003 and 8,700
shares of AccessIT Class A common stock in November  2003.  The AccessDM  shares
issued to The Casey Group  represented  20% of  AccessDM's  outstanding  capital
stock after giving effect to such issuance.  On May 26, 2004,  AccessIT  entered
into an agreement  with The Casey Group to issue 31,300  unregistered  shares of
our Class A common stock in exchange for the 750,000 shares of AccessDM's common
stock held by The Casey  Group.  Following  such  exchange,  as of May 26, 2004,
AccessIT owns 100% of AccessDM's outstanding common stock.

The  operations of AccessDM are controlled by AccessIT,  and certain  members of
the senior  management of AccessIT are also members of the senior  management of
AccessDM.  All  intercompany  transactions  between  AccessIT  and  AccessDM are
conducted as  transactions  on  competitive  terms,  including  the terms of any
future  investments  by AccessIT in AccessDM  and the terms of any  intercompany
sales. For the nine months ended December 31, 2004,  AccessDM generated $173,000
of revenues.

ACQUISITIONS

On July 17, 2003, we signed a stock purchase agreement with Hollywood SW and its
two selling  stockholders.  On November 3, 2003, we acquired Hollywood SW, after
amending  the  agreement to complete the  acquisition  on that date,  by issuing
secured promissory notes (the "Initial Notes"),  each in the principal amount of
$3.6  million,  to the two  selling  stockholders.  On  November  10,  2003,  we
completed the IPO and (1) the Initial Notes were exchanged for the consideration
described  in clauses  (2) and (3) below and  cancelled  and  returned  to us by
Hollywood  SW's  selling  stockholders,  (2)  the  lead  underwriter  in the IPO
transmitted, in the aggregate, $2.45 million to the selling stockholders and (3)
we issued to such selling  stockholders  $3 million in 8%  promissory  notes and
400,000 unregistered shares of our Class A common stock.

We may pay an additional purchase price in each of the three years following the
closing of the Hollywood SW acquisition if certain annual  earnings  targets are
achieved.  We also have agreed to issue  additional  unregistered  shares of our
Class A common stock if,  during the 90 days  following the  applicable  lock-up
period,  the  average  value of our  Class A common  stock  during  such 90 days
declines below an average of $3.60 per share.

On December 22, 2003, we signed an agreement to purchase all of the  outstanding
common  stock of Core,  and on  January  9, 2004,  the  acquisition  of Core was
completed. Core is a managed service provider of information  technologies;  its
primary product is managed network  services  through its global network command
center.  We  believe  that the  acquisition  of Core will  expand  the  existing
capabilities  and services of our IDCs. The initial  purchase price consisted of
$250,000 in cash and 100,000 unregistered shares of our Class A common stock. In
addition,  we may be required to pay a contingent  purchase price for any of the
three  years  following  the  closing  in which  certain  earnings  targets  are
achieved;  any  additional  payment  is to be  made  in the  same  proportionate
combination of cash and  unregistered  shares of our Class A common stock as the
purchase price payable at closing. We have also agreed to a one time issuance of
additional unregistered shares of our Class A common stock to the seller up to a
maximum of 20,000  shares if, in  accordance  with an agreed upon  formula,  the
market value of our Class A common stock is less than an average of $4.00 during
the final 90 days of the lock up period.

On March 29, 2004, we  consummated  an  acquisition  of certain assets of Boeing
Digital,  a division of Boeing,  pursuant to an asset purchase agreement of same
date. The acquired assets consist of digital  projectors,  satellite  dishes and
other equipment  installed at 28 screens within 21 theatres in the United States


                                       33


and one location in London,  England, and satellite transmission equipment which
we installed in Los Angeles,  California.  The initial  purchase price consisted
of: $250,000 in cash;  53,534  unregistered  shares of our Class A common stock;
and a non-interest  bearing  promissory note payable for $1.8 million payable in
equal  installments  over 4 years.  In  addition,  we  agreed  to make  payments
totaling a maximum of $1 million over 4 years,  which  payments are comprised of
20% of the gross  receipts  generated by the acquired  assets  during the 4 year
period  after the  closing.  Additionally,  at any time during the 90 day period
immediately following the first 12 months after the closing, Boeing may sell its
53,534  unregistered  shares of our Class A common stock to AccessIT in exchange
for $250,000 in cash.  In  connection  with the  acquisition,  Boeing  agreed to
purchase from AccessIT a minimum of $450,000  managed storage  services per year
for four years from the date of the agreement.

On October 19, 2004, we entered into an agreement to purchase  substantially all
of the assets and certain specified  liabilities of FiberSat Seller. On November
17, 2004, the FiberSat  Acquisition was completed.  FiberSat,  headquartered  in
Chatsworth,  California, provides services utilizing satellite ground facilities
and fiber-optic  connectivity to receive,  process,  store, encrypt and transmit
television and data signals globally.  FiberSat's  Chatsworth facility currently
houses the  infrastructure  operations of the Company's digital cinema satellite
delivery services.  The initial purchase price for FiberSat consisted of 500,000
unregistered  shares of our Class A common stock, and we agreed to repay certain
liabilities of FiberSat on or before the closing of the acquisition,  with up to
$500,000 in cash and 100,000 unregistered shares of our Class A common stock. We
had the option to exchange up to 50,000 of such 100,000  unregistered  shares of
Class A common  stock to increase  the cash,  and thereby  decrease  the Class A
common stock portion of such repayment  based on the ratio of one Class A common
stock for each $5.00 of additional  cash. We repaid these  liabilities by paying
approximately $381,000 and issuing 40,000 shares of our Class A common stock. In
addition,  we may be required to pay a contingent  purchase price for any of the
three years  following the  acquisition  in which certain  earnings  targets are
achieved. We have also agreed to a one-time issuance of additional  unregistered
shares to the  sellers  in  accordance  with a formula  if,  during  the 90 days
following the applicable lock-up period, the average value of our Class A common
stock during such 90 days declines below an average of $3.17 per share.

In February  2005,  we,  through  ADM Cinema,  consummated  the  acquisition  of
substantially all of the assets of the Pavilion Theatre. The Pavilion Theatre is
an  eight-screen  movie  theatre and cafe and will be a  component  of the Media
Services  segment.  Continuing to operate as a fully functional  multiplex,  the
Pavilion  Theatre will also become our showplace to  demonstrate  our integrated
digital cinema solutions to the movie entertainment industry.


RESULTS OF OPERATIONS

FOR THE NINE MONTHS ENDED  DECEMBER 31, 2003 AND THE NINE MONTHS ENDED  DECEMBER
31, 2004

REVENUES.  Our total  revenues were $4.87 million and $7.13 million for the nine
months ended December 31, 2003 and 2004,  respectively,  an increase of 46%. The
increase  was  primarily  attributable  to  Hollywood  SW, which was acquired in
November 2003,  and  contributed  $1.35 mil1ion of increased  revenues and Core,
which was acquired in January 2004, generated $570,000 of revenues. In addition,
FiberSat, which we acquired in November 2004, generated $348,000 of revenues and
our AccessDM  division  contributed  $173,000 of revenues.  These increases were
partially offset by our IDC operations  which  experienced a revenue decrease of
$177,000 primarily due to the loss of one customer.


COST OF REVENUES.  Our cost of revenues was $2.64  million and $4.01 million for
the nine months ended December 31, 2003 and 2004,  respectively,  an increase of
52%. This increase was primarily  attributable  to the  acquisition of Hollywood
SW, Core and FiberSat.  Hollywood SW expenses  increased by $574,000,  primarily
due to personnel costs and  amortization of capitalized  software costs.  Core's
operating expenses were $417,000,  primarily  representing personnel and utility
costs. In addition,  AccessDM incurred digital cinema-related  delivery costs of
$150,000. Additionally,  FiberSat expenses were $145,000, primarily representing
personnel  costs.  Also,  cost of  revenues  increased  at our IDC's by $85,000,
primarily due to utility cost increases.


                                       34


GROSS  PROFIT.  Gross  profit was $2.23  million and $3.12  million for the nine
months  ended  December,  31,  2003 and 2004,  respectively.  The  increase  was
primarily due to $772,000 of increased  gross profit  generated by Hollywood SW,
and FiberSat,  which we acquired in November 2004,  which generated  $203,000 in
gross profit.  In addition,  Core,  which we acquired in January 2004  generated
$153,000  in  gross  profit.   Additionally,  a  gross  profit  of  $23,000  was
attributable  to AccessDM's  operations  and we  experienced a decrease in gross
profit at our IDC's of $259,000, which was primarily attributable to the loss of
a customer and higher utility expenses.

SELLING,   GENERAL  AND  ADMINISTRATIVE   EXPENSES.  Our  selling,  general  and
administrative expenses were $2.02 million and $3.59 million for the nine months
ended December 31, 2003 and 2004, respectively,  an increase of 78%. Incremental
costs  associated with Hollywood SW, Core,  AccessDM,  and FiberSat for the nine
months ended December 31, 2004, were $623,000,  $274,000, $148,000, and $108,000
respectively,  due primarily to personnel and office expenses.  The remainder of
the  increase is  primarily  due to  increases  in  corporate  personnel  costs,
advertising expenses and, professional fees. As of December 31, 2003 and 2004 we
had 23 and 58 employees,  respectively,  and one and five of whom, are part-time
employees, respectively.

PROVISION FOR DOUBTFUL ACCOUNTS. Our provision for doubtful accounts was $55,000
and $598,000 for the nine months ended December 31, 2003 and 2004, respectively.
The  increase is  primarily  due to the  recording of a provision of $499,000 in
September 2004 related to the bankruptcy of a data center customer in July 2004.
The  remainder  of the  increase  is due to the  increase  in  overall  business
activity.

RESEARCH AND  DEVELOPMENT.  We recorded  expenses of $8,000 and $288,000 for the
nine months  ended  December  31, 2003 and 2004,  respectively.  The increase is
attributable to research and development efforts at Hollywood SW.

NON-CASH,   STOCK-BASED   COMPENSATION.   We  recorded   non-cash,   stock-based
compensation  of $10,000 and $4,000 for the nine months ended  December 31, 2003
and 2004, respectively.  These amounts represent the fair value of stock options
granted to non-employees in exchange for goods and services,  amortized over the
vesting period, which ranges from immediate vesting to three years. The types of
services  performed  by  non-employees  in exchange for stock  options  included
advisory  services on real estate matters,  and  advertising and marketing.  The
fair value of these stock options was determined using the Black-Scholes  option
pricing  model.  The  decrease  was  due  to  lower  amortization  expense  from
non-employee options, due to the vesting of certain grants made in prior years.

DEPRECIATION AND  AMORTIZATION.  Depreciation and amortization was $1.91 million
and  $2.46  million  for the nine  months  ended  December  31,  2003 and  2004,
respectively,  an increase of 24%. The  acquisition of Hollywood SW and Core and
the  addition  of  AccessDM   resulted  in  $268,000   $587,000  and   $117,000,
respectively,  of  depreciation  and  amortization  for the  nine  months  ended
December 31, 2004.  Partially offsetting these increases was certain data center
and corporate  computer  equipment  reaching the end of their  estimated  useful
lives, and becoming fully depreciated.

INTEREST EXPENSE. Interest expense was $389,000 and $279,000 for the nine months
ended December 31, 2003 and 2004,  respectively.  The decrease was primarily due
to the March 2004 exchange of $2.5 million for aggregate principal amount of our
5-year 8% subordinated  promissory  notes (the "5-Year Notes") for shares of our
Class A common stock and $1.7 million  aggregate  principal amount of the 5-Year
Notes for our 6% subordinated  convertible  promissory  notes (the  "Convertible
Notes").  In addition,  in November 2003, we repaid a 1-year 9% note payable for
$1.0 million  incurred in connection  with the November 2002  acquisition of six
IDC's.

NON-CASH INTEREST  EXPENSE.  Non-cash interest expense was $302,000 and $155,000
for the nine months  ended  December 31, 2003 and 2004,  respectively.  Non-cash
interest  expense results from the imputing of interest on the $1.8 million note
payable to Boeing,  incurred in the March 2004,  and from the  accretion  of the
value of warrants to purchase  shares of our Class A common  stock (the  "5-Year


                                       35


Notes  Warrants")  attached to the 5-Year Notes  (which bear  interest at 8% per
year).  The  decrease is  primarily  due to one-time  accretion  of $1.4 million
recorded in connection  with the March 2004  exchange of 5-Year Notes  described
above.

INCOME TAX BENEFIT. Income tax benefit was $127,000 and $233,000 for the nine
months  ended  December  31, 2003 and 2004,  respectively.  The current  year
amount is related to the amortization of a deferred tax liability  related to
our acquisition of Hollywood SW and Managed Services.

NET LOSS. As a result of the  foregoing,  we had net losses of $2.33 million and
$4.0 million for the nine months ended December 31, 2003 and 2004, respectively.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2003 AND THE THREE MONTHS ENDED DECEMBER
31, 2004

REVENUES.  Our total revenues were $2.04 million and $2.74 million for the three
months ended December 31, 2003 and 2004,  respectively,  an increase of 34%. The
increase  was  primarily  attributable  to  Hollywood  SW, which was acquired in
November 2003, and contributed $216,000 of increased revenues, Managed Services,
which was acquired in January 2004,  which  generated  $188,000 of revenues.  In
addition,   FiberSat,  which  acquired  substantially  all  of  the  assets  and
liabilities of FiberSat Seller in November 2004,  generated $348,000 of revenues
and our AccessDM division contributed $105,000 of revenues. These increases were
partially offset by our IDC operations  which  experienced a revenue decrease of
$162,000 primarily due to the loss of one customer.

COST OF  REVENUES.  Our cost of revenues  was  $894,000 and $1.6 million for the
three months ended December 31, 2003 and 2004, respectively, an increase of 83%.
This increase was primarily  attributable  to the  acquisition  of Hollywood SW,
Managed  Services and  FiberSat.  Hollywood  SW expenses  increased by $327,000,
primarily due to personnel costs and amortization of capitalized software costs.
Managed  Service's  operating  expenses were  $154,000,  primarily  representing
personnel  and  utility   costs.   In  addition,   AccessDM   incurred   digital
cinema-related delivery costs of $51,000.  Additionally,  FiberSat expenses were
$145,000,  primarily  representing  personnel  costs.  Also,  cost  of  revenues
increased at our IDC's by $63,000, primarily due to utility cost increases.

GROSS  PROFIT.  Gross  profit was $1.15  million and $1.1  million for the three
months  ended  December,  31,  2003 and 2004,  respectively.  The  increase  was
primarily due to FiberSat,  which acquired  substantially  all of the assets and
liabilities of FiberSat  Seller in November 2004,  which  generated  $203,000 in
gross  profit and Managed  Services,  which we  acquired  in January  2004 which
generated  $34,000 in gross profit.  In addition,  a gross profit of $51,000 was
attributable to AccessDM's operations.  Additionally,  we experienced a decrease
in gross profit at Hollywood SW of $109,000 and our IDC's of $221,000, which was
primarily attributable to the loss of a customer and higher utility expenses.

SELLING,   GENERAL  AND  ADMINISTRATIVE   EXPENSES.  Our  selling,  general  and
administrative  expenses  were  $872,000  and $1.3  million for the three months
ended December 31, 2003 and 2004, respectively,  an increase of 49%. Incremental
costs associated with FiberSat, Managed Services, AccessDM and Hollywood SW, for
the nine months ended  December 31, 2004,  were $108,000,  $44,000,  $89,000 and
$51,000,  respectively,  due  primarily to personnel  and office  expenses.  The
remainder of the increase is primarily  due to increases in corporate  personnel
costs,  advertising expenses and, professional fees. As of December 31, 2003 and
2004 we had 23 and 58  employees,  respectively,  and one and five of whom,  are
part-time employees, respectively.

PROVISION FOR DOUBTFUL ACCOUNTS. Our provision for doubtful accounts was $42,000
and $23,000 for the three months ended December 31, 2003 and 2004, respectively.
The  increase is  primarily  due to the  recording of a provision of $499,000 in
September 2004 related to the bankruptcy of a data center customer in July 2004.
The  remainder  of the  increase  is due to the  increase  in  overall  business
activity.


                                       36


RESEARCH AND  DEVELOPMENT.  We recorded  expenses of $8,000 and $122,000 for the
three months ended  December  31, 2003 and 2004,  respectively.  The increase is
attributable to research and development efforts at Hollywood SW.

DEPRECIATION  AND  AMORTIZATION.  Depreciation and amortization was $676,000 and
$895,000 for the three months ended December 31, 2003 and 2004, respectively, an
increase of 18%. The  acquisition  of Hollywood SW and Managed  Services and the
addition of AccessDM resulted in $116,000 $43,000 and $213,000, respectively, of
depreciation  and  amortization  for the nine months  ended  December  31, 2004.
Partially  offsetting  these  increases  was certain  data center and  corporate
computer  equipment  reaching  the end of  their  estimated  useful  lives,  and
becoming fully depreciated.

INTEREST EXPENSE. Interest expense was $143,000 and $90,000 for the three months
ended December 31, 2003 and 2004,  respectively.  The decrease was primarily due
to the March 2004 exchange of $2.5 million aggregate  principal amount of 5-Year
Notes  for  shares  of our  Class A  common  stock  and $1.7  million  aggregate
principal amount of 5-Year Notes for Convertible Notes. In addition, in November
2003,  we  repaid  a  1-year  9% note  payable  for $1.0  million,  incurred  in
connection with the November 2002 acquisition of six IDC's.

NON-CASH  INTEREST  EXPENSE.  Non-cash interest expense was $111,000 and $43,000
for the three months ended  December 31, 2003 and 2004,  respectively.  Non-cash
interest  expense results from the imputing of interest on the $1.8 million note
payable to Boeing,  incurred in March 2004,  and from the accretion of the value
of the 5-Year Notes  Warrants  attached to the 5-Year Notes (which bear interest
at 8% per year).  The  decrease is primarily  due to one-time  accretion of $1.4
million  recorded in  connection  with the March 2004  exchange of 5-Year  Notes
described above.

INCOME TAX  BENEFIT.  Income tax benefit was  $127,000 and $77,000 for the three
months ended December 31, 2003 and 2004,  respectively.  The current year amount
is  related  to the  amortization  of a deferred  tax  liability  related to our
acquisition of Hollywood SW and Managed Services.

NET LOSS. As a result of the foregoing,  we had net losses of $572,000 and $1.32
million for the three months ended December 31, 2003 and 2004, respectively.

FOR THE FISCAL  YEAR ENDED  MARCH 31,  2003 AND THE FISCAL  YEAR ENDED MARCH 31,
2004

REVENUES.  Our total  revenues were $4.2 million and $7.2 million for the fiscal
years ended March 31, 2003 and 2004,  an  increase  of 70%.  This  increase  was
primarily attributable to the acquisition of Hollywood SW which contributed $1.4
million of revenues for the fiscal year ended March 31, 2004. Also, $1.3 million
in  incremental  revenues  was derived from the six IDCs we acquired in November
2002. The remainder of the increase in revenues was primarily  from Core,  which
generated $162,000 of revenue,  and additional revenue due to customer growth in
our other IDCs.

COST OF REVENUES. Our cost of revenues was $3.1 million and $3.7 million for the
fiscal  years ended March 31, 2003 and 2004,  respectively,  an increase of 18%.
This  increase  was  primarily  attributable  to  $316,000 of  additional  rent,
utilities,  real  estate  taxes and  other  operating  expenses  for the six IDC
locations we acquired in November 2002. In addition,  Hollywood SW expenses were
$152,000,  primarily the amortization of capitalized  software costs, and Core's
operating expenses were $98,000, primarily representing personnel costs.

GROSS  PROFIT.  Gross  profit was $1.1  million and $3.5  million for the fiscal
years ended March, 31, 2003 and 2004,  respectively.  The increase was primarily
due to $1.2 million of gross profit generated by Hollywood SW. Also, an increase
of  $962,000  in gross  profit  was  attributable  to the six IDC  locations  we
acquired  in  November  2002.  Additionally,  gross  profit  at our  other  IDCs
increased by $207,000,  due to fixed data center  operating  expenses and higher
revenues.


                                       37


SELLING,   GENERAL  AND  ADMINISTRATIVE   EXPENSES.  Our  selling,  general  and
administrative  expenses were $2.3 million and $3.3 million for the fiscal years
ended March 31,  2003 and 2004,  respectively,  an increase of 42%.  Incremental
costs  associated  with Hollywood SW, Core and AccessDM were $427,000,  $58,000,
and $101,000,  respectively,  due primarily to personnel and headquarters office
expenses.  The  remainder  of the  increase is  primarily  due to:  increases in
corporate  personnel  costs of $137,000 due to higher salary and bonus  expense;
professional fees of $144,000,  due primarily to increased  accounting and legal
fees  related to  compliance  with the rules of the SEC and other  transactions;
advertising  expenses of $60,000,  due to  increased  marketing  activities  and
attendance  at trade shows;  bad debt expense of $26,000 due to increases to the
allowance for doubtful accounts; and other of $17,000 due primarily to increases
in insurance expense. As of March 31, 2004 we had thirty-four employees,  one of
whom is part-time.

RESEARCH AND DEVELOPMENT.  AccessIT  recorded expenses of $0 and $55,000 for the
fiscal  years ended March 31, 2003 and 2004.  The  increase is  attributable  to
research and development  efforts at Hollywood SW, which we acquired in November
2003.

NON-CASH,   STOCK-BASED   COMPENSATION.   We  recorded   non-cash,   stock-based
compensation  of $99,000 and  $15,000 for the fiscal  years ended March 31, 2003
and 2004,  respectively.  These  amounts  typically  represent the fair value of
stock  options  granted to  non-employees  in exchange  for goods and  services,
amortized  over the  three-year  vesting  period  of the  options.  The types of
services  performed  by  non-employees  in exchange for stock  options  included
advisory  services on real estate matters,  and  advertising and marketing.  The
fair value of these stock options was determined using the Black-Scholes  option
pricing model. The decrease is due to a one-time,  immediately  recognized grant
in the fiscal year ended March 31, 2003 of a total of 60,000 shares of our Class
A common  stock to four of our  employees,  valued  at  $48,000.  The  remaining
decrease was due to lower amortization expense from non-employee options, due to
the vesting of certain grants made in prior years.

DEPRECIATION  AND  AMORTIZATION.  Depreciation and amortization was $1.7 million
and  $2.7  million  for  the  fiscal  years  ended  March  31,  2003  and  2004,
respectively,  an increase of 60%. The increase is primarily attributable to the
acquisition of the six additional IDCs in November 2002, which included $863,000
of property and equipment and $2.7 million of intangible  assets.  Additionally,
the  acquisition  of  Hollywood  SW and Core  resulted in $183,000  and $35,000,
respectively,  of depreciation  and amortization for the fiscal year ended March
31, 2004 from their respective dates of acquisition.

INTEREST  EXPENSE.  Interest  expense was  $364,000  and $542,000 for the fiscal
years ended March 31, 2003 and 2004,  respectively.  The increase was  primarily
due to $1.2  million of the  5-Year  Notes that we issued in June and July 2003,
and also to $1.4  million of the 5-Year  Notes that we issued in the fiscal year
ended  March 31,  2003.  The 5-Year  Notes bear  interest  at 8% per year,  with
interest payable quarterly.  On March 24, 2004, $2.5 million of the 5-Year Notes
principal  were  exchanged for shares of our Class A common  stock,  and another
$1.7 million was exchanged for longer term, the Convertible Notes. Additionally,
contributing  to the  increase  was our  issuance  of a secured $1 million  note
payable in connection  with our November 2002  acquisition of six IDCs.  This 9%
note was repaid on its maturity date of November 26, 2003.  Partially offsetting
these items was interest savings resulting from our final payment of two capital
leases in July and October, 2003.

LOSS ON EARLY  EXTINGUISHMENT OF DEBT. The loss on early  extinguishment of debt
was $0 and  $126,000  for the  fiscal  years  ended  March  31,  2003 and  2004,
respectively.  This  loss on early  extinguishment  of debt was due to the March
2004  exchange  of  five-year  promissory  notes  for  Class A common  stock and
convertible notes.

NON-CASH  INTEREST  EXPENSE.  Non-cash  interest  expense was  $282,000 and $1.8
million  for the  fiscal  years  ended  March 31,  2003 and 2004,  respectively.
Non-cash  interest  expense  results from the accretion of the value of warrants
attached to our one-and  five-year  promissory  notes (which bear interest at 8%
per year).  The increase is primarily due to one-time  accretion of $1.4 million
recorded in connection  with the March 2004  exchange of the 5-Year  Notes.  The
remaining  increase in non-cash  interest expense is due to the initial issuance
of $1.4  million  of such  notes in the  second  half of  fiscal  2002,  and the


                                       38


issuance of an additional  $1.2 million of such notes with attached  warrants in
fiscal 2003.

INCOME TAX BENEFIT.  During the fiscal  years ended March 31, 2003 and 2004,  We
participated in the New Jersey  Technology Tax Transfer  program,  through which
technology-oriented  businesses  may sell their New Jersey net operating  losses
("NOLs") to other  companies.  During the fiscal  years ended March 31, 2003 and
2004, we received $185,000 and $127,000,  respectively net of fees and expenses,
from the sale of our New Jersey NOLs.  Also,  during the fiscal year ended March
31,  2004,  amortization  of a  deferred  income  tax  liability  related to our
acquisition amounted to $85,000.

NET LOSS.  As a result of the  foregoing,  we had net losses of $3.4 million and
$4.8 million for the fiscal years ended March 31, 2003 and 2004, respectively.


LIQUIDITY AND CAPITAL RESOURCES


We have incurred  operating  losses for the nine months ended  December 31, 2004
and in each year since we commenced our operations. Since our inception, we have
financed our operations substantially through the private placement of shares of
our common and  preferred  stock,  the  issuance  of our  one-and  five-year  8%
promissory notes, and our IPO. In March 2004, we refinanced  approximately  $4.2
million  aggregate  principal amount (plus accrued and unpaid interest) of these
promissory  notes  pursuant  to an exchange  offer (the  "Exchange  Offer").  In
exchange for the promissory notes, we issued 707,477  unregistered shares of our
Class A  common  stock  and  $1.7  million  aggregate  principal  amount  of new
convertible  notes which as of December 31, 2004 were convertible into a maximum
of 307,871 shares of our Class A common stock.  From inception  through December
31, 2004, we had raised cash of  approximately  $20.7 million,  $4.5 million and
$4.4 million through sales of our common stock,  preferred stock, and promissory
notes, respectively.  Additionally,  we have issued common stock in lieu of cash
payments  totaling  $5.8  million to the sellers of Hollywood  SW, Core,  Boeing
Digital,  and  FiberSat,  and for  construction  services at our IDCs.  Also, in
November  2002, we issued a $1 million 9% secured note to a seller in connection
with the  acquisition  of six IDCs from  ColoSolutions.  This note was repaid in
November 2003. See also "Subsequent  Events" for a discussion of our recent sale
of Convertible Debentures.  We have no borrowings or line of credit arrangements
with banks or other financial  institutions.  We are not a party to any material
off-balance sheet arrangements.

On  November  14,  2003 our IPO was  finalized,  resulting  in the  issuance  of
1,380,000  shares of Class A common stock. The net proceeds of our IPO were $4.8
million, of which $1.1 million was used for general business purposes.

On  November  3, 2003,  we  acquired  all of the  outstanding  capital  stock of
Hollywood SW. In connection  with the  acquisition of Hollywood SW, we issued $3
million of 8%  promissory  notes to the  sellers,  which  notes are  secured and
senior, with certain  exceptions,  to all indebtedness during the five year term
of those notes.  Our  obligations to repay our  promissory  notes and to pay any
additional  purchase  price is  secured  by a pledge  of all of  Hollywood  SW's
capital stock and any distributions and proceeds  therefrom,  except that we are
permitted to receive  cash  distributions  from  Hollywood SW to the extent that
such distributions do not exceed Hollywood SW's cash flow from operations.

On March 29, 2004, we acquired  certain assets from Boeing for use in AccessDM's
digital cinema business.  In connection with this acquisition we issued a 4-year
non-interest bearing note for $1.8 million with equal repayments of $450,000 due
each year  beginning in April 2005.  In addition,  at any time during the 90 day
period beginning March 29, 2005, Boeing can sell its 53,534  unregistered shares
of our Class A common stock to us for $250,000 in cash.


On June 4, 2004, we concluded a private placement with several investors whereby
we issued  1,217,500  unregistered  shares of our Class A common stock at a sale
price of $4.00 per share. The total net proceeds, including fees and expenses to
register  the  securities  were $4.0  million,  which is being used for  capital
investments  and  working  capital.  We  also  issued  to  investors  and to the


                                       39


investment  firm  warrants to purchase a total of 304,375  shares of our Class A
common stock at an exercise price of $4.80 per share,  which became  exercisable
upon receipt.

On July 2, 2004,  we received  notice that certain  creditors of one of our data
center customers named NorVergence Inc. (the "NorVergence") filed an involuntary
bankruptcy  petition against the NorVergence.  On July 14, 2004, the NorVergence
agreed to the entry of an order  granting  relief under Chapter 11 of the United
States  Bankruptcy  Code and then  converted  the Chapter 11  reorganization  to
Chapter 7  liquidation.  As of December 31, 2004, we had accounts  receivable of
$121,000  recorded on the  unaudited  Consolidated  Balance Sheet related to the
NorVergence.  We  also  have a  first  security  interest  in the  NorVergence's
accounts receivable.  Based on information received to date, we believe that the
NorVergence's  accounts  receivable  that  are  deemed  to  be  collectible  are
substantially  in excess of the amounts  recorded on our unaudited  Consolidated
Balance Sheet.  Therefore,  we believe that the amounts owed to us, and recorded
on the unaudited  Consolidated Balance Sheet, will be collected.  On January 26,
2005 the bankruptcy court in the matter of NorVergence approved a motion for the
trustee to pay the Company  $121,000  for past due  accounts  receivable  and on
February  25, 2005 the Company was paid this amount.  Additionally,  the Company
has been  granted  the  right to pursue  collection  of  Norvergence's  customer
accounts  receivable.  Any amounts  collected will be retained by the Company in
settlement of its claim against Norvergence.

On November 8, 2004,  we concluded a private  placement  with certain  investors
whereby we issued  282,776  unregistered  shares of our Class A common  stock at
$3.89 per share to the  investors  for gross  proceeds  of $1.1  million.  These
shares carry piggyback and demand  registration  rights,  at the sole expense of
the investors.  We realized net proceeds of approximately $1.023 million,  which
were used for the FiberSat Acquisition and for working capital.

On November 17, 2004,  we acquired  substantially  all of the assets and certain
specified  liabilities  of  FiberSat  Seller.  The  initial  purchase  price for
FiberSat consisted of 500,000  unregistered  shares of Class A common stock, and
we agreed to repay  certain  liabilities  of  FiberSat  Seller on or before  the
closing of the acquisition, with up to $500,000 in cash and 100,000 unregistered
shares of Class A common  stock.  We had the option to  exchange up to 50,000 of
such 100,000  shares of Class A common  stock to increase the cash,  and thereby
decrease the Class A common stock portion of such  repayment  based on the ratio
of one Class A common stock for each $5.00 of  additional  cash. We repaid these
liabilities by paying approximately  $381,000 and issuing 40,000 shares of Class
A common  stock.  In addition,  we may be required to pay a contingent  purchase
price for any of the three years  following  the  acquisition  in which  certain
earnings  targets are  achieved.  We have also agreed to a one-time  issuance of
additional  unregistered  shares to the sellers in accordance with a formula if,
during the 90 days following the applicable lock-up period, the average value of
our Class A common stock during such 90 days declines  below an average of $3.17
per share.

As of March 31, 2003 and 2004, we had cash and cash  equivalents of $956,000 and
$2.3 million,  respectively.  Our working capital (deficiency) at March 31, 2003
was ($954,000) and March 31, 2004 was $212,000, respectively. As of December 31,
2004, we had cash and cash equivalents of $1.52 million.  Our working capital at
December 31, 2004 was $224,000.

For the fiscal  year ended  March 31,  2004,  we raised  gross  proceeds of $6.9
million  and $1.2  million  through  sales of our common  stock from our IPO and
promissory  notes,  respectively,  and we repaid  capital lease  obligations  of
$363,000  and an  acquisition  note  payable of $1 million.  For the fiscal year
ended March 31,  2003,  we raised gross  proceeds of $125,000,  $2.5 million and
$1.4 million  through sales of our common stock,  preferred stock and promissory
notes,  respectively,  and we repaid promissory notes in the principal amount of
$333,000,  and capital lease obligations of $177,000.  For the nine months ended
December 31, 2004,  we raised net proceeds of $5.1 million  through sales of our
common  stock , we  repurchased  $32,000  of our  common  stock,  and we  repaid
promissory  notes  in  the  principal  amount  of  $448,000  and  capital  lease
obligations of $158,000.  For the nine months ended December 31, 2003, we raised
gross proceeds of $1.2 million  through sales of our 5-Year Notes,  $4.8 million


                                       40


through  sales  of our  common  stock,  an we  repaid  promissory  notes  in the
principal amount of $1 million and capital lease obligations of $358,000.

Our operating  activities  resulted in net cash (outflows) inflows of ($760,000)
and $321,000  for the fiscal years ended March 31, 2003 and 2004,  respectively.
The $1.1  million  improvement  was  primarily  due to a  decrease  in loss from
operations, and a $400,000 security deposit paid in the prior year. For the nine
months ended  December 31, 2003 and 2004, our operating  activities  resulted in
net cash outflows of $599,000 and $2.8 million,  respectively.  The increase was
primarily due to lower collection of accounts receivable, and increased payments
of accounts payable.

Investing  activities  used net cash of $2.6  million  and $3.6  million for the
fiscal  years  ended  March 31,  2003 and 2004,  respectively.  Net cash used in
investing  activities  for the fiscal year ended March 31, 2003 was primarily in
connection  with the cash portion of the purchase price of six  additional  IDCs
acquired  in November  2002 for $2.3  million.  Additions  and  improvements  to
existing  data centers of $290,000  accounted  for the majority of the remaining
cash used in investing activities for the fiscal year ended March 31, 2003.

Investing   activities   used  net  cash  of  $2.6  million  and  $2.5  million,
respectively, for the nine months ended December 31, 2003 and 2004. The increase
was due to various  purchases  of computer  and other  equipment,  primarily  to
support our digital cinema and managed data storage  businesses,  and, additions
to  Hollywood  SW's  capitalized  software  costs.  We  anticipate  that we will
experience  an  increase  in  our  capital  expenditures   consistent  with  the
anticipated growth in our operations, infrastructure and personnel.

Net cash used in investing  activities  for the fiscal year ended March 31, 2004
was due primarily to the acquisitions of Hollywood SW, Core and Boeing Digital.

We  agreed  upon  the  completion  of the IPO in  November  2003 to pay the lead
underwriter  an  advisory  fee of  $4,167  per  month  for the  12-month  period
beginning upon the completion of the IPO.

Financing  activities  contributed cash of $3.4 million and $4.6 million for the
fiscal years ended March 31, 2003 and 2004, respectively.  This contributed cash
was used to  finance  the IDC  acquisitions  we have  effected  and for  general
working capital purposes.  Net cash provided by financing activities in 2003 was
primarily from the sales of preferred stock,  common stock, and promissory notes
and in 2004 common stock and promissory notes.

Net cash  provided by financing  activities of $4.66 million for the nine months
ended December 31, 2003 was primarily due to proceeds from issuance of shares of
our  Class A common  stock of $4.79 and the  issuance  of $1.23  million  of our
5-Year Notes,  less $1.36 million  repayments of notes payable and capital lease
obligations.  Net cash provided by financing activities of $4.43 million for the
nine months ended  December 31, 2004 was due  primarily to our June 2004 private
placement and November 2004 private placement, less repayments of notes payable,
capital lease obligations and proceeds from capital leases.

We have acquired equipment under long-term capital lease obligations that expire
at various  dates through  December  2006. As of March 31, 2004 and December 31,
2004, we had an outstanding balance of $150,000 and $515,000,  respectively,  in
capital lease obligations.  These capital lease obligations covered computer and
power generating  equipment at our data centers and our corporate  office. As of
March 31, 2004, all our capital lease  obligations  were secured by equipment at
the following locations and in the following principal amounts: at our executive
offices,  telephone equipment in the remaining principal amount of $23,000,  and
Caterpillar  generators at six of our IDCs in the remaining  principal amount of
$127,000.  Also, as of December 31, 2004, all our capital lease  obligations are
secured by equipment at the following  locations and in the following  principal
amounts:  at  our  executive  offices,  telephone  equipment  in  the  remaining
principal amount of $17,000, and computer equipment for use in Core's operations
of  $14,000.  As of March  31,  2004,  minimum  future  capital  lease  payments
(including  interest) for the fiscal years ended March 31, 2005,  2006, and 2007
were $118,000,  $28,000, and $9,000,  respectively.  In July 2003, we repaid the
capital lease covering  generators at our Manhattan,  New York  AccessColocenter


                                       41


for $49,000. In August 2003, we entered into an agreement to pay a capital lease
covering   certain   storage   equipment   at  our  Jersey   City,   New  Jersey
AccessColocenter  for payments  totaling  $228,000  including  all principal and
interest  currently  due. As of December 31, 2004,  minimum future capital lease
payments  (including  interest) for the fiscal years ended December 31, 2005 and
2006,  were $576,000,  and $13,000,  respectively.  During the nine months ended
December 31, 2003 and 2004, we made early  repayments of $159,000 and $70,000 on
capital  leases,  respectively,  in order to achieve  interest  savings  and aid
future cash flow.

In  September  2003,  in  connection  with our IPO and in order to simplify  our
capital structure, we entered into an exchange agreement, under which the holder
of our  outstanding  Series A and Series B preferred stock agreed to (1) convert
all  8,202,929  shares of Series A and Series B preferred  stock held by it into
1,640,585 shares of Class A common stock; (2) exchange warrants exercisable, for
up to 951,041  shares of Class A common  stock,  for  320,000  shares of Class A
common stock;  (3) exercise  warrants  currently  exercisable  for up to 144,663
shares  of our  Class A common  stock  (143,216  shares  on a  cashless-exercise
basis);  and (4) accept 104,175 shares of our Class A common stock as payment of
all accrued dividends on shares of Series A and Series B preferred stock held by
the holder through November 10, 2003, the effective date of the IPO. On November
14, 2003 the exchange agreement was finalized, concurrent with the completion of
the IPO.

In February  2004, we sent a notice of the Exchange  Offer to the holders of the
5-Year  Notes and  holders of the notes  issued  pursuant  to the  Hollywood  SW
acquisition  (the "HS Notes"),  offering to exchange the  principal  and accrued
interest  of the  outstanding  5-Year  Notes and the HS Notes for,  at each note
holder's election, either (1) unregistered shares of our Class A common stock at
an exchange rate of $3.57 per share (the "Share  Option") or (2) the Convertible
Notes,  convertible into shares of our Class A common stock at a conversion rate
of $5.64 per share (the  "Convertible  Note  Option").  On March 24,  2004,  the
Exchange Offer was completed.  Pursuant to the Share Option, we exchanged 5-Year
Notes in the aggregate  principal amount of $2.5 million plus accrued and unpaid
interest of $46,000 for 707,477 unregistered shares of our Class A common stock.
Pursuant to the  Convertible  Note  Option,  in exchange for 5-Year Notes in the
aggregate  principal  amount of $1.7 million plus accrued and unpaid interest of
$31,000,  we issued  Convertible Notes which as of March 1, 2005 are convertible
into a maximum of 310,857  shares of our Class A common stock (1) at any time up
to the maturity date at each holder's  option or (2)  automatically  on the date
when the average  closing  price on the AMEX of our Class A common  stock for 30
consecutive  trading days has been equal to or greater than $12.00.  The holders
of all the HS Notes and holders of 5-Year Notes  totaling  $220,000 of principal
elected not to participate in the Exchange Offer.

In March 2004, in connection  with our  acquisition  of certain assets of Boeing
Digital,  we issued a $1.8 million  non-interest  bearing note, payable in equal
principal payments each year for four years.

Other  significant  commitments  consist  of  obligations  under  non-cancelable
operating leases that totaled  approximately  $16.2 million and $15.9 million as
of March 31,  2004 and  December  31,  2004,  respectively,  and are  payable in
varying monthly  installments through 2015. As of March 31, 2004, minimum future
operating lease payments for the fiscal years ended March 31, 2005,  2006, 2007,
2008,  2009 and  thereafter  (in total) were $2.3 million,  $2.2  million,  $2.1
million,  $2.1  million,  $2.2  million and $5.3  million,  respectively.  As of
December 31, 2004,  minimum future operating lease payments for the fiscal years
ended December 31, 2005,  2006,  2007, 2008, 2009 and thereafter (in total) were
$2.4 million,  $2.3 million,  $2.3 million,  $2.3 million, $1.9 million and $4.7
million, respectively.

During the fiscal  years ended March 31, 2003 and 2004 and the nine months ended
December 31, 2004, our operations  have been financed  primarily  through equity
and debt  financing,  most recently the completion of our IPO that generated net
cash  receipts of $1.1 million and the  completion  of our June 2004 and October
2004 private  placements  that  generated  net cash receipts of $4.0 million and
$1.023 million respectively.  However, we have incurred substantial losses since
inception.  During  the  fiscal  year  ended  March 31,  2003 and 2004,  we have
incurred  losses of $3.4 million and $4.8 million  respectively,  and cash flows
from operating activities of ($760,000) and $321,000, respectively. Also, during


                                       42


the nine months ended December 31, 2004, we have incurred losses of $4.0 million
and cash flows from operating activities of $(2.8) million. In addition, we have
an  accumulated  deficit of $14.7 million and $18.7 million as of March 31, 2004
and  December 31, 2004,  respectively.  Furthermore,  we have total debt service
requirements  totaling $1.55 million for the twelve months  beginning in January
2005.

In May 2004, we entered into an agreement  with the holder of 750,000  shares of
AccessDM's  common stock, to exchange all of its shares for 31,300  unregistered
shares of  AccessIT's  Class A common  stock.  As a result  of the  transaction,
AccessIT holds 100% of AccessDM's common stock.

In July 2004, we made early  repayments  totaling  $58,000 for two 5-Year Notes,
and the remaining value of the underlying 5-Year Notes Warrants was amortized to
non-cash interest expense, totaling $19,000.

In August  2004,  our Board of  Directors  authorized  the  repurchase  of up to
100,000  shares of our Class A common  stock.  The shares will be  purchased  at
prevailing  prices  from  time-to-time  in the open market  depending  on market
conditions and other factors. During the nine months ended December 31, 2004, we
purchased 9,140 shares of our Class A common stock for a total purchase price of
$32,000,  including  fees,  which has been  recorded  as  Treasury  stock in the
unaudited  Consolidated  Balance  Sheet.  In January 2005,  we purchased  42,300
shares  of our  Class A common  stock for a total  purchase  price of  $140,000,
including  fees, at an average  purchase price of $3.31 per share. As of January
31,  2005,  an  additional  48,560  shares  of our  Class A common  stock may be
repurchased.

Management  expects that we will continue to generate  operating  losses for the
foreseeable   future  due  to  depreciation  and   amortization,   research  and
development,  the continued efforts related to the identification of acquisition
targets,   marketing  and   promotional   activities  and  the   development  of
relationships with other businesses.  Certain of these costs could be reduced if
working  capital  decreased.  We may attempt to raise  additional  capital  from
various sources for future acquisitions or for working capital as necessary, but
there is no assurance that such financing will be completed as  contemplated  or
under terms acceptable to us, or our existing shareholders.  Failure to generate
additional revenues,  raise additional capital or manage discretionary  spending
could have a material  adverse  effect on our  ability  to  continue  as a going
concern and to achieve our intended business objectives.

Our management  believes that,  based on the Company's cash position at December
31, 2004, a financing  transaction  completed in February  2005 (see below under
"Subsequent Events"),  and expected cash flows from operations,  the Company has
the ability to meet its obligations for the foreseeable future.

SUBSEQUENT EVENTS

On January 26, 2005, the bankruptcy court in the matter of Norvergence  approved
a motion for the trustee to pay us $121,000  for past due  accounts  receivable,
and on February 25, 2005, we were paid this amount.  Additionally,  we have been
granted  the right to  pursue  collection  of  Norvergence's  customer  accounts
receivable.  Any amounts  collected  will be retained by us in settlement of our
claim against Norvergence.

On February 11, 2005 we consummated the acquisition of substantially  all of the
assets and certain  liabilities of the Pavilion  Theatre from  Pritchard  Square
Cinema,  LLC. The total purchase price is approximately $5.4 million,  including
transaction  fees.  The purchase  price  included a cash payment of $3.3 million
(less $500,000 held in escrow  pending the  completion of certain  construction)
and a five-year 8%  promissory  note for $1.7 million,  among other things.  The
Pavilion  Theatre  is an  eight-screen  movie  theatre  and  cafe  and will be a
component  of the Media  Services  segment.  Continuing  to  operate  as a fully
functional multiplex,  the Pavilion Theatre will also become a showplace for the
Company to  demonstrate  its integrated  digital  cinema  solutions to the movie
entertainment industry.

On February 10,  2005,  we issued  Convertible  Debentures  and the  Convertible
Debentures Warrants to a group of institutional investors for aggregate proceeds
of $7.6 million.  The  Convertible  Debentures  have a four year term,  with one
third  of the  unconverted  principal  balance  repayable  in 12  equal  monthly
installments  beginning three years after the closing. The remaining unconverted


                                       43


principal balance is repayable at maturity.  We may pay the interest in cash or,
if certain conditions are met, by issuing shares of our Class A common stock. If
we are eligible to issue  shares of our Class A common stock to repay  interest,
the number of shares issuable is based on 93% of the 5-day average closing price
preceding  the interest  due date.  The  Convertible  Debentures  are  initially
convertible  into  1,867,322  shares of our Class A common  stock,  based upon a
conversion  price of $4.07 per share subject to  adjustments  from time to time.
Upon the  redemption  of the  Convertible  Debentures,  we may issue  additional
warrants exercisable for shares of Class A common stock. Additionally, we issued
to the investors the Convertible  Debentures  Warrants to purchase up to 560,197
shares of our Class A common stock,  at an initial  exercise  price of $4.44 per
share,  subject to  adjustments  from time to time. The  Convertible  Debentures
Warrants  are  exercisable   beginning  on  September  9,  2005  until  5  years
thereafter.  We have agreed to register,  among other things, the Class A common
stock underlying the Convertible  Debentures and Convertible Debentures Warrants
on Form S-3  within  30 days from the  closing.  If,  among  other  things,  the
registration  statement is not filed within 30 days or is not declared effective
within  90 days  (120  days in the  event of an SEC  review),  then  cash  delay
payments equal to 1% of the offering proceeds per month will apply.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Our business is currently  principally  in the United States.  As a result,  our
financial  results  are not  affected  by  factors  such as  changes  in foreign
currency  exchange rates or economic  conditions in foreign  markets.  We do not
engage in hedging  transactions  to reduce our  exposure  to changes in currency
exchange rates,  although if the geographical scope of our business broadens, we
may do so in the future.


Our exposure to market risk for changes in interest  rates relates  primarily to
the  increase or  decrease in the amount of interest  income that we may earn on
our invested  cash.  Because we  currently  do not have any variable  rate debt,
there is no risk associated with fluctuating interest expense. We do not plan to
use any derivative financial instruments.  We plan to help ensure the safety and
preservation of invested principal funds by limiting default risks,  market risk
and investment risk. We plan to mitigate our default risk by investing generally
in low-risk securities.


RECENT ACCOUNTING PRONOUNCEMENTS


In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure  -an amendment of FASB Statement No.
123." This statement provides  alternative methods of transition for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition, this statement amends the disclosure requirements of
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effects of the method used on reported results.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts,  and for hedging activities under SFAS
NO. 133.  SFAS NO. 149  clarifies  under what  circumstances  a contract with an
initial net investment meets the  characteristic of a derivative as discussed in
SFAS NO. 133. In addition,  it clarifies when a derivative  contains a financing
component that warrants special  reporting in the statement of cash flows.  SFAS
NO. 149 is effective for contracts entered into or modified after June 30, 2003,
except as  specifically  noted in SFAS NO.  149.  SFAS NO. 149 should be applied
prospectively.  The  adoption of SFAS NO. 149 did not have a material  impact on
our financial position, cash flows or results of operations.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 is effective for financial  instruments  entered into or modified  after


                                       44


May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial  instruments of nonpublic  entities and the provisions of paragraphs 9
and 10 of SFAS No. 150 (and related guidance in the  appendices),  as they apply
to mandatorily redeemable  non-controlling interests, which were deferred by the
FASB on October 29,  2003.  The adoption of SFAS No. 150 did not have a material
impact on our financial position, cash flows or results of operations.

In  November  2002,  the  Emerging  Issues  Task  Force (the  "EITF")  reached a
consensus on EITF 00-21,  "Revenue  Arrangements  with  Multiple  Deliverables,"
related to the separation and allocation of consideration  for arrangements that
include  multiple  deliverables.  EITF 00-21 requires that when the deliverables
included  in this type of  arrangement  meet  certain  criteria  they  should be
accounted for separately as separate  units of accounting.  This may result in a
difference in the timing of revenue  recognition but will not result in a change
in the total amount of revenues  recognized in a bundled sales arrangement.  The
allocation  of revenues to the  separate  deliverables  is based on the relative
fair value of each item.  If the fair value is not  available  for the delivered
items then the  residual  method  must be used.  This method  requires  that the
amount allocated to the undelivered  items in the arrangement is their full fair
value.  This  would  result in the  discount,  if any,  being  allocated  to the
delivered  items.  This consensus is effective  prospectively  for  arrangements
entered into in fiscal  periods  beginning  after June 15, 2003. The adoption of
EITF 00-21 did not have a material impact on our financial position,  cash flows
or results of operations.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities -- an Interpretation  of Accounting  Research Bulletin No. 51." FIN No.
46 requires the primary  beneficiary to consolidate a variable  interest  entity
("VIE")  if it has a  variable  interest  that  will  absorb a  majority  of the
entity's  expected  losses if they  occur,  receive a majority  of the  entity's
expected residual returns if they occur, or both. FIN No. 46 applies immediately
to VIEs created after  January 31, 2003 and to VIEs in which the entity  obtains
an interest  after that date. In October 2003, the FASB deferred the latest date
by which all public  entities  must  apply FIN No. 46 to all VIEs and  potential
VIEs, both financial and  non-financial in nature, to the first reporting period
ending after  December 15, 2003. The adoption of FIN No. 46 in February 2003 did
not have a material impact on our financial  position,  cash flows or results of
operations.

On December 17, 2003, the SEC issued Staff Accounting  Bulletin ("SAB") No. 104,
"Revenue  Recognition,"  which supercedes SAB No. 101,  "Revenue  Recognition in
Financial  Statements."  SAB No. 104's primary purpose is to rescind  accounting
guidance   contained  in  SAB  No.  101  related  to  multiple  element  revenue
arrangements,  superceded as a result of the issuance of EITF 00-21, "Accounting
for Revenue Arrangements with Multiple Deliverables." Additionally,  SAB No. 104
rescinds  the "Revenue  Recognition  in Financial  Statements  Frequently  Asked
Questions  and Answers"  issued with SAB No. 101 that had been codified in Staff
Accounting Bulletin Topic 13, "Revenue Recognition." The adoption of SAB No. 104
did not have any  impact on our  financial  position,  cash  flows or results of
operations.

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment." This statement revises the original guidance contained in SFAS No. 123
and  supersedes APB Opinion No. 25,  "Accounting  for Stock Issued to Employees,
and its related  implementation  guidance.  Under SFAS No. 123 (revised 2004), a
public  entity such as AccessIT will be required to measure the cost of employee
services  received in exchange for an award of equity  instruments  based on the
grant-date fair value of the award (with limited  exceptions) and recognize such
cost over the period during which an employee is required to provide  service in
exchange for the reward  (usually  the vesting  period).  For stock  options and
similar   instruments,   grant-date   fair   value  will  be   estimated   using
option-pricing models adjusted for unique characteristics of instruments (unless
observable market prices for the same or similar instruments are available). For
small  business  issuers,  including  AccessIT,  this  is  effective  as of  the
beginning  of the first  interim or annual  reporting  period that begins  after
December  15,  2005.  Upon  adoption of this  standard,  the actual costs of our
stock-based  payment plans will be based on grant-date fair value, which can not
be determined at this time.

                                       46




                                    BUSINESS

AccessIT was organized on March 31, 2000 and we are in the business of providing
software services and technology  solutions to the motion picture industry,  and
operating IDCs.  Recently,  we have actively  expanded into new and interrelated
business areas relating to the delivery and management of digital cinema content
to  entertainment  venues  worldwide.  These  businesses,  supported  by our IDC
business,  have become our primary  strategic  focus.

Our  business  focus is to create a secure,  managed  and  complete  system that
consists of software to book, track and perform accounting functions for digital
content in movie theatres,  deliver  digital  content to multiple  locations and
provide the content  management  software for managing all brands of  in-theatre
playback systems and projection systems for the digital cinema marketplace. This
system is designed to enable the motion picture industry to move from the analog
world to the digital world. The system is intended to use all of our businesses:

MEDIA SERVICES

     o    DIGITAL MEDIA DELIVERY - digital media managed  delivery  services and
          media  player  software  for  use in  theatres  from  Access  DM,  and
          satellite delivery services from FiberSat.  ADM Cinema, which acquired
          the Pavilion Theatre,  will utilize our digital media managed delivery
          services and media player software products; and

     o    MOVIE  DISTRIBUTION AND EXHIBITOR SOFTWARE - Hollywood SW develops and
          licenses distribution and exhibitor software products and services.

DATA CENTER SERVICES

     o    DATA  CENTERS -  AccessIT's  IDCs,  including  redundant  sites in Los
          Angeles and New York City; and

     o    MANAGED  SERVICE  OFFERINGS - managed  storage and network and systems
          management services by Core and AccessIT.

Our system provides a digital content owner with the secure delivery of multiple
files to multiple locations throughout the world with proactive notification and
security management. Our system also provides the digital content exhibitor with
access to digital  content,  freedom to choose  what to play and when to play it
with proactive  notifications and management software.  We have created a system
whereby  digital content is delivered where it is supposed to go, is played when
it is supposed  to be played  along with the ability to act upon and report back
management and financial information.  We also have created software designed to
enable a movie  exhibitor to run all projects in a multiple  auditorium  theatre
from one central server, regardless of the hardware type or manufacturer.

We have two reportable segments: Media Services, which represents the operations
of AccessDM (including Boeing Digital),  ADM Cinema,  FiberSat and Hollywood SW,
and Data Center Services,  which are comprised of our IDC operations and Managed
Service Offerings.

In  February  2003,  we  organized  AccessDM,  which  in May  2004,  became  our
wholly-owned  subsidiary.  AccessDM has developed proprietary software,  Digital
Express  e-Courier,  capable of worldwide  delivery of digital data -- including
movies,  advertisements and alternative  content such as concerts,  seminars and
sporting events -- to movie theaters and other venues having digital  projection
equipment.  We are also in the process of developing  media player  software for
use by digitally-equipped movie theaters called Theatre Command Center.

In November  2003,  we  acquired  all of the capital  stock of  Hollywood  SW, a
leading  provider of proprietary  transactional  support software and consulting
services for distributors  and exhibitors of filmed  entertainment in the United
States and  Canada.  Its  licensed  software  records  and  manages  information


                                       47


relating to the planning,  scheduling,  revenue sharing, cash flow and reporting
associated  with  the  distribution  and  exhibition  of  theatrical  films.  In
addition,   Hollywood  SW's  software  complements,   and  is  integrated  with,
AccessDM's   digital  content  delivery  software  by  enabling  Hollywood  SW's
customers  to  seamlessly  plan and  schedule  delivery  of  digital  content to
entertainment  venue  operators  as  well as to  manage  the  related  financial
transactions.

In an effort to increase the  competitive  advantage of the IDCs,  on January 9,
2004, we acquired Core, a managed service provider of information  technologies.
As an information  technology  outsourcing  organization,  Core manages clients'
networks and systems in over 35  countries  in Europe,  Asia and North and South
America and more than 20 states in the United States. Core operates a 24x7 GNCC,
capable of running the networks and systems of large  corporate  clients.  The 4
largest  customers of Core accounted for  approximately  77% of its revenues for
the year ended March 31, 2004. The managed  services  capabilities  of Core have
been integrated with our IDCs and now operate under the name of AccessIT Managed
Services.

In March  2004,  we acquired  certain  assets of Boeing  Digital,  a division of
Boeing. These assets were purchased to further our strategy of becoming a leader
in the  delivery  of movies and other  digital  content to movie  theaters.  The
acquired  assets  consist  of  digital  projectors,  satellite  dishes and other
equipment installed at 28 screens within 21 theaters in the United States and at
one location in London,  England, and satellite  transmission equipment which we
installed in Los Angeles, California.

Also in March 2004, we refinanced  approximately $4.2 aggregate principal amount
(plus  accrued  and unpaid  interest)  of our  promissory  notes  pursuant to an
exchange  offer.  In exchange  for these  promissory  notes,  we issued  707,477
unregistered  shares of our  Class A common  stock  and $1.7  million  aggregate
principal  amount  of new  convertible  notes  which as of March  1,  2005  were
convertible into a maximum of 310,857 shares of our Class A common stock.

In May 2004, we entered into an agreement  with the holder of 750,000  SHARES OF
ACCESSDM's common stock, to exchange all of their shares for 31,300 unregistered
shares of AccessIT's Class A common stock. As a result of the transaction, which
was  consummated on May 26, 2004,  AccessIT now holds 100% of AccessDM's  common
stock.

In June 2004,  we  consummated a $4.87  million  private  placement of 1,217,500
unregistered  shares of our Class A common  stock with  institutional  and other
accredited investors.  Pursuant to the private placement,  we also issued to the
investors and the placement  agent warrants to purchase up to 243,500 and 60,875
shares of our Class A common stock, respectively,  at an exercise price of $4.80
per share, exercisable upon receipt.

In November  2004, we  consummated a $1.1 million  private  placement of 282,776
unregistered  shares of our Class A common stock at $3.89 per share with certain
accredited investors. The net proceeds of approximately $1.023 million from such
private  placement  were  used  for the  FiberSat  Acquisition  and for  working
capital.

Also in November 2004, we acquired  substantially  all of the assets of FiberSat
Seller through  FiberSat.  FiberSat,  headquartered  in Chatsworth,  California,
provides  services   utilizing   satellite  ground  facilities  and  fiber-optic
connectivity to receive,  process,  store,  encrypt and transmit  television and
data signals  globally.  FiberSat's  Chatsworth  facility  currently  houses the
infrastructure  operations of our digital cinema satellite delivery services. By
completing the FiberSat Acquisition,  we gained extensive satellite distribution
and  networking  capabilities  provided by  FiberSat's  fully  operational  data
storage and uplink facility located in Los Angeles, California. FiberSat has the
ability  to  provide  broadband  video,  data  and  Internet   transmission  and
encryption  services for the broadcast and cable  television and  communications
industries.

In  February  2005,  we  consummated  a  private  placement  of the  Convertible
Debentures.  The Convertible Debentures bear interest at the rate of 7% per year
and are  convertible  into  shares of our  Class A common  stock at the price of


                                       47


$4.07  per  share,  subject  to  possible  adjustments  from  time to  time.  In
connection with the Convertible  Debenture offering, we issued the participating
institutional  investors the Convertible  Debentures Warrants exercisable for up
to 560,197 shares of Class A common stock at an initial  exercise price of $4.44
per share, subject to adjustments from time to time. The Convertible  Debentures
Warrants  may be  exercised  beginning  on  September  9, 2005  until five years
thereafter.

Also in February 2005, we, through ADM Cinema,  consummated  the  acquisition of
substantially  all of the assets of the Pavilion  Theatre from Pritchard  Square
Cinema,  LLC. The Pavilion Theatre is an eight-screen movie theatre and cafe and
will be a component of the Media  Services  segment.  Continuing to operate as a
fully functional multiplex,  the Pavilion Theatre will also become our showplace
to   demonstrate   our  integrated   digital  cinema   solutions  to  the  movie
entertainment industry.

We offer  interrelated  services  that use each of our  business  units  for the
planning,  purchasing,  delivery and  management  of digital  content -- such as
movies,  advertising,  trailers and  alternative  content,  including  concerts,
seminars and sporting events -- to movie theater and other venue  operators.  We
believe that our ability to offer a wide range of fully  managed  services  will
differentiate us from other service providers,  including  distributors of other
types of digital media.

For the  three  months  ended  December  31,  2004,  we  received  47% and  53%,
respectively,  of our revenues from the Media Services and Data Center  Services
segments.  For the nine months ended December 31, 2004, we received 35% and 65%,
respectively,  of our revenue from the Media  Services and Data Center  Services
segments.  During the fiscal year ended March 31,  2004,  we received 81% of our
revenue  from the Data Center  Services  segment and 19% of our revenue from the
Media Services segment. During the quarter ended March 31, 2004, we received 69%
of our  revenue  from the Data  Center  Services  segment and 31% percent of our
revenue  from the Media  Services  segment.  For the fiscal year ended March 31,
2004, KMC Telecom, AT&T and MGM comprised  approximately 27%, 12% and 10% of our
revenues,  respectively. No other single customer accounted for greater than 10%
of  revenues  during the fiscal year ended March 31,  2004.  From our  inception
through  November 3, 2003,  all of our  revenues  have been derived from monthly
license  fees and fees from other  ancillary  services  provided  by us at these
IDCs.

Our principal executive offices are at 55 Madison Avenue, Suite 300, Morristown,
NJ 07960, and our telephone number at such offices is (973) 290-0080. Our e-mail
address is investor@accessitx.com and our web site address is www.accessitx.com.
Information  accessed on or through our web site does not  constitute  a part of
this prospectus.

MEDIA SERVICES

The Media Services  segment of our business  consists of two units:  the Digital
Media  Delivery  Services and the Hollywood SW business.  Digital Media Delivery
Services comprises AccessDM, FiberSat, and the Pavilion Theatre.

DIGITAL MEDIA DELIVERY SERVICES

AccessDM, our wholly-owned  subsidiary,  provides software and systems worldwide
that enable the delivery of digital  content to movie  theaters and other venues
having  digital  projection  equipment.  We believe the demand for systems  that
deliver   digital   content  will  increase  as  the  movie,   advertising   and
entertainment  industries  continue  to convert to a digital  format in order to
achieve cost savings,  greater  flexibility  and/or  improved image quality.  We
intend to use our IDCs and  managed  data  storage  services  together  with our
digital content delivery software to deliver digital content using satellite and
land-based  transmission providers. As a result of the acquisition of the assets
of Boeing  Digital,  we currently have an installed base of twenty eight digital
projection  systems  located in certain  movie  theaters  throughout  the United
States that are available to receive digital content delivered by AccessDM.


                                       48


AccessDM has generated  $173,000 of revenues  during the nine month period ended
December 31, 2004 from the delivery of digital content related  services.  Based
on customer needs and preferences, we may adapt or tailor the developed software
and related services to such customer needs or industry demands.

FiberSat  acquired  substantially  all of the assets and certain  liabilities of
FiberSat Seller on November 17, 2004.  Headquartered in Chatsworth,  California,
FiberSat provides services utilizing satellite ground facilities and fiber-optic
connectivity to receive,  process,  store,  encrypt and transmit  television and
data signals  globally.  FiberSat's  Chatsworth  facility  currently  houses the
infrastructure  operations  of  AccessDM's  digital  cinema  satellite  delivery
services. By completing the FiberSat Acquisition,  we gained extensive satellite
distribution   and  networking   capabilities   provided  by  FiberSat's   fully
operational data storage and uplink facility located in Los Angeles, California.
FiberSat  has  the  ability  to  provide  broadband  video,  data  and  Internet
transmission and encryption  services for the broadcast and cable television and
communications industries.  From acquisition through December 31, 2004, FiberSat
generated $348,000 of revenues.

ADM Cinema  Corporation,  our wholly owned  subsidiary,  purchased  the Pavilion
Movie  Theatre/Entertainment  Complex located in Brooklyn,  New York on February
11, 2005. The Pavilion is an  eight-screen  movie theatre and cafe and will be a
component  of the Media  Services  segment.  Continuing  to  operate  as a fully
functional multiplex,  the Pavilion will also become a showplace for the Company
to   demonstrate   its  integrated   digital  cinema   solutions  to  the  movie
entertainment industry.

MARKET OPPORTUNITY

We believe that digital content  delivery  eventually will replace,  or at least
become more prevalent than, the current method used for film delivery.  Existing
film delivery  generally  involves the  time-consuming,  somewhat  expensive and
cumbersome  process of receiving  bulk printed  film,  rebuilding  the film into
shipping  reels,   packaging  the  film  reels  into  canisters  and  physically
delivering the reels (by traditional  ground modes of  transportation)  to movie
theaters.  We  believe  that  the  expanding  use of  digital  movie  projection
equipment will lead to an increasing need for digital content delivery services.

The movie exhibition industry now has the capability to present  advertisements,
trailers and alternative entertainment in a digital format and in a commercially
viable manner. We believe the presentation of alternative entertainment at movie
theaters may both expand their hours of operation and increase  their  occupancy
rates.  Movie theater owners may also be able to profit from the presentation of
new and/or additional advertising in their theaters.

Digital Cinema Initiatives,  LLC, a consortium of seven major Hollywood studios,
was created to develop  and set  universal  standards  and to develop a business
model  designed to allow the movie  industry to effect a general  transition  to
digital  presentations.  Toward the end of 2004 the studio members  declared the
work of the  group to be  substantially  complete  and  worked to  finalize  the
remaining  open items.  Investment  banks are working  with studios to develop a
business model for digital cinema.

We believe the market  opportunity  for our digital media  delivery  services is
directly  related to the number of movie releases each year, the number of movie
screens those movies are shown upon and the transition to digital  presentations
in those  movie  theatres.  According  to the  Motion  Picture  Association,  on
average,  there are  approximately  200 major movie releases and 250 independent
movie  releases per year.  The average major movie is released to  approximately
4,000  screens in the United States and 8,000  screens  worldwide.  According to
National Association of Theatre Owners ("NATO"), there are approximately 105,000
screens  worldwide that play major movie  releases,  with  approximately  36,000
screens located in the United States. According to ReelSource, Inc., the average
film print costs $1,300 per print.  We believe that the cost to deliver  digital
movies to movie  theatres  will be much less than the cost to print and  deliver
analog movie  prints,  and such lesser cost will  provide the economic  model to
drive the conversion from analog to digital cinema.


                                       49


PRODUCTS AND SERVICES

AccessDM  products and services  are able to provide and securely  deliver,  via
electronic  transmission  (through  copper  wire,  fiber  optics or  satellite),
digital  content,  including  movies,  advertisements,  alternative  content and
educational products.

Our principal  digital media  delivery  service  offering,  which we refer to as
"Digital  Express  e-Courier  Services," is the  distribution of digital content
through our IDC platform.  Our Digital Express e-Courier Services requires us to
obtain a digital master of an audio and/or visual  presentation from the content
owner, store and deliver the digital content and track and confirm its delivery.
We expect to offer our delivery service to the owners of digital content through
a broad choice of bandwidth  providers within each platform (i.e.,  copper wire,
fiber optics or  satellite).  We intend to use our existing IDCs to  accommodate
the services we will provide.

We expect to charge our customers:

     o    A  one-time  set-up  fee based on the size of the  customer's  content
          file;

     o    a  distribution  or delivery fee based on the size of its content file
          and the  number  of  destinations  to which the  content  file will be
          delivered;

     o    a customization fee, if required; and

     o    a fee for changes to the content file or the  destination(s)  to which
          the content file is to be delivered.

INTELLECTUAL PROPERTY

AccessDM  has  applied  for service  mark  registrations  in respect of the name
AccessDM,  Access  Digital  Media and the  phrases  "Digital  Express  e-Courier
Services,"  "Theatre  Command  Center" and "The  courier  for the digital  era."
AccessDM has not yet received  U.S.  service mark  registration  for any service
marks.

TARGET CUSTOMERS

We intend to provide our digital media delivery services to major movie studios,
particularly  through  relationships  that we have developed or may develop with
these studios.  We also intend to focus on independent studios and distributors,
alternative  content  providers and  advertising  Fagencies,  which may not have
high-quality delivery services currently available.  We believe that major movie
studios will begin to expand  beyond  their  traditional  distribution  methods,
involving the physical delivery of digital files, to include  electronic digital
content delivery for the reasons discussed above.


COMPETITION


Companies that have developed forms of digital content delivery to entertainment
venues include:


     o    Regal Entertainment Group, which has developed a system for delivering
          certain  digital  content to its own  theaters,  including  non-motion
          picture content and advertising;

     o    National   Cinema   Network,   a  wholly  owned   subsidiary   of  AMC
          Entertainment,  that has  developed a system known as Digital  Theatre
          Distribution System for delivering advertising to movie theaters; and



                                       50


     o    Technicolor Digital Cinema, an affiliate of the Thomson Company, which
          has  concentrated  on an in-theater  system to manage content  file(s)
          that are delivered physically, and not electronically, to theaters.

The  competitors   referenced  above  have   significantly   greater  financial,
technical, marketing and managerial resources than we do. These competitors also
generate greater revenue and are better known than we are.  However,  we believe
that AccessDM, through its technology and management experience, its development
of software capable of delivering digital data worldwide, its development of its
Theatre Command Center software for the management of digital  content,  and the
complement of Hollywood SW's software,  may differentiate  itself from the above
companies  by  providing  a  competitive  alternative  to their forms of digital
content delivery.

MARKETING AND BUSINESS DEVELOPMENT

We intend to market  our  digital  media  delivery  services  primarily  through
networking and relationship-building  activities,  supported by presentations at
industry  trade  shows and similar  events.  We believe  that the  entertainment
business is largely based on and driven by personal and business  relationships.
We have,  therefore,  selected  three  individuals  -- A. Dale Mayo,  Russell J.
Wintner  and  David  Gajda  -- each  of  whom  has  significant  experience  and
relationships  in the  movie  and  emerging  entertainment  markets  -- to  lead
AccessDM's marketing efforts.

A. Dale Mayo,  AccessDM's  Chief  Executive  Officer,  is a  co-founder  and the
Chairman,  President and Chief  Executive  Officer of AccessIT,  and  previously
co-founded  and developed  Clearview,  a large  theater  circuit in the New York
metropolitan area which was later sold to Cablevision  Cinemas. In his tenure as
the Chief  Executive  Officer of  Clearview,  Mr. Mayo  developed  close working
relationships  with many of the top theater  operators in the United States,  as
well as heads of  distribution  in  Hollywood  and New York.  Mr. Mayo is on the
advisory board of the Will Rogers Motion Picture Pioneers Foundation.

Russell J. Wintner,  AccessDM's  President  and Chief  Operating  Officer,  is a
member of the Society of Motion Picture and Television Engineers,  and serves on
the Digital Cinema Group standards committee,  and is a board member of NATO and
a member of its Technical Committee that is working directly with Digital Cinema
Initiatives,  a consortium of seven major  Hollywood  studios created to develop
standards and a business model for the digital cinema industry.  Mr. Wintner was
a  founder  of, as well as  President  of,  WinterTek,  Inc.,  a  digital  media
consultant to various clients. He also served as Principal, Exhibitor Relations,
Alternative  Programming  and Marketing for  Technicolor  Digital  Cinema,  LLC.
Previous to such  provisions,  Mr.  Wintner  was a founder of  CineComm  Digital
Cinema,  LLC and also served as its  President  of  Exhibition  and  Alternative
Programming and Chief Operating Officer. Mr. Wintner frequently sits on industry
panels at seminars and conventions.

David  Gajda,  Hollywood  SW's  President  and Chief  Operating  Officer,  was a
co-founder  of  Hollywood  SW. Mr.  Gajda was the Chief  Executive  Officer  for
Hollywood SW from its inception  until our November 2003  acquisition.  Prior to
co-founding  Hollywood  SW, Mr.  Gajda owned and managed a strategic  consulting
company,  DWG International  Inc. ("DWG").  At DWG, he helped many entertainment
companies develop their three-to-five-year strategic systems plans.

We expect to co-market  our digital media  delivery  services to the current and
prospective  customers of Hollywood  SW, using  marketing  and sales efforts and
resources  of  both  companies.  Although  the  services  of  each  may be  used
independently,  using our digital media delivery service in conjunction with the
services  of  Hollywood  SW would  enable  owners of digital  content to deliver
securely such content to their  customers and,  thereafter,  to manage and track
data regarding the  presentation  of the digital  content,  including  different
forms of audio and/or  visual  entertainment.  As the digital  content  industry
continues  to  develop,  we may  engage  in  other  marketing  methods,  such as
advertising and service bundling, and may hire additional sales personnel.




                                       51


HOLLYWOOD SOFTWARE


Hollywood SW'S principal objective is to provide its transactional  software and
film distribution  services to film industry  customers and, through  accessdm's
digital  content  delivery  software,  to the  expanding  digital  entertainment
industry.

Hollywood  SW's  software  products  enable its  customers  to record and manage
information  relating to the planning,  booking,  scheduling and  performance of
movies in movie theaters,  and to track the related financial  operating results
and commitments.

MARKET OPPORTUNITY

The customers  for Hollywood  SW's  existing  software and  consulting  services
consist  principally of worldwide  feature film  distributors and North American
movie theater chains.  We intend to develop a new  application for  distributing
films internationally.

Our goal is to make  Hollywood  SW's  products the industry  standard  method by
which film distributors and exhibitors plan,  manage and monitor  operations and
data regarding the presentation of theatrical  entertainment.  Currently,  based
upon our calculations and certain industry figures, distributors using Hollywood
SW's distribution  software system,  called TDS,  cumulatively  managed, for the
period 1999 through 2002, approximately 36% of U.S. theater box office revenues.
In addition to providing its system currently to analog film industry customers,
Hollywood  SW has also  adapted  this  system  to serve  the  expanding  digital
entertainment  industry.  We believe that  Hollywood  SW's products and services
will be accepted as an important  component in the digital content  delivery and
management business.

We believe  that the  continued  transition  to digital  content  delivery  will
require a high degree of  coordination  among content  providers,  customers and
intermediary service providers.  Producing,  buying and delivering media content
through worldwide  distribution  channels is a highly fragmented and inefficient
process  that we  expect  to  become  increasingly  streamlined,  automated  and
enhanced  through  technologies  created  by  Hollywood  SW and  the  continuing
development of and general transition to digital forms of media.

PRODUCTS AND SERVICES

Hollywood SW provides proprietary software  applications and services to support
customers of varying sizes, through software licenses,  its ASP service in which
the Company hosts the  application  within a secure AIT colo-center and provides
client  access via the  internet  and  through a fully  outsourced  distribution
option, called, Indie Direct. Current proprietary software products of Hollywood
SW consist of the:

     o    TDS -- Theatrical  Distribution  System, which manages key operational
          and financial elements of film distribution for film distributors;

     o    EMS -- Exhibition Management System, which manages key operational and
          financial elements of film exhibition for theater circuits;

     o    MPPS -- Motion  Picture  Planning  System,  which  uses  various  film
          criteria and  historical  performance  data to plan and initiate  film
          release strategies;

     o    Media Manager System -- which facilitates the planning and tracking of
          newspaper advertising campaigns; and

     o    Digi-Central -- online marketplace for digital content in which buyers
          can search for available  digital content,  initiate  transactions and
          coordinate delivery via Access DM.


                                       52


Hollywood SW generates revenues from its software products through various fees:
software license fees, ASP service fees,  software  maintenance  fees,  software
development fees,  consulting service fees and outsourced  distribution  service
fees.  Under  its  software  license  arrangements,  up-front  fees are paid and
periodic payments are generally made upon the occurrence of certain events:  for
example,  execution  of the  license  agreement,  delivery of the  software  and
acceptance on use of the software by the customer. Software maintenance fees are
paid under separate annual support agreements, under which Hollywood SW provides
maintenance  services and technical  support.  Under Hollywood SW's ASP service,
periodic  payments  are made for the  right to  access  and use  Hollywood  SW's
software  through  the  Internet,  based on the  occurrence  of certain  events.
Maintenance  services are included as part of the annual  service  agreement for
Hollywood SW's ASP service.  Customers that license Hollywood SW's products also
may pay for product feature enhancements,  which include software  developments;
Hollywood SW has generated a significant portion of its revenues from consulting
fees that it charges (on an hourly basis) for  implementation  of the applicable
product and training of the personnel of the licensed or ASP service customers.

INTELLECTUAL PROPERTY

Hollywood SW currently has intellectual property consisting of:

     o    licensable  software products,  including TDS, EMS, MPPS and the Media
          Manager System;

     o    internet data services, including the On-Line Release Schedule;

     o    domain names, including EPayTV.com, EpayTV.net, HollywoodSoftware.com,
          HollywoodSoftware.net,         Indie-Coop.com,         Indie-Coop.net,
          Indiedirect.com,    IPayTV.com;    PersonalEDI.com,    RightsMart.com,
          RightsMart.net, TheatricalDistribution.com and Vistapos.com;

     o    unregistered  trademarks and service marks, including Coop Advertising
          V1.04, EMS, EMS ASP, Exhibitor Management System,  Hollywood SW, Inc.,
          HollywoodSoftware.com,  Indie Co-op,  Media Manager,  On-Line  Release
          Schedule, RightsMart, TDS and TheatricalDistribution.com.; and

     o    logos, including those in respect of Hollywood SW, TDS and EMS.

CUSTOMERS

Hollywood SW's customers include 20th Century Fox, Paramount Pictures, Universal
Studios, MGM, Lions Gate Films, Newmarket Films, Magnolia Pictures,  Gold Circle
Films, IFC Films,  First  Look/Overseas  Film Group,  Regent Releasing,  Brenden
Theatres, and Flagship Theatres, among others.

DOMESTIC THEATRICAL DISTRIBUTION

Hollywood  SW's TDS product  enables U.S. film  distributors  to plan,  book and
account for theatrical film releases. It also allows distributors to collect and
analyze related financial  operations data. TDS is currently licensed to several
distributors,  including 20th Century Fox, Paramount Pictures, Universal Studios
and  MGM;  these  distributors  comprised  approximately  7%,  5%,  12% and 55%,
respectively,  of  Hollywood  SW's  revenues for the five months ended March 31,
2004,  and 30%, 6%, 12% and 25% of Hollywood  SW's  revenues for the nine months
ended December 31, 2004. Also, several distributors  subscribe to Hollywood SW's
ASP service,  including IFC Films,  Newmarket  Films,  Magnolia  Pictures,  Gold
Circle  Films,  MAC  Releasing  and IFS. In  addition,  Hollywood SW licenses to
customers  other  distribution-related  software,  including  MPPS and MMS, that
further  automate and manage  related  aspects of film  distribution,  including
advertising, strategic theater selection and competitive release planning.


                                       53


Hollywood SW also  provides  outsourced  film  distribution  services  through a
division known as Indie Direct. The Indie Direct staff uses the TDS distribution
software to provide back office film booking and receivables management services
to independent film distributors and producers. Current customers include Arenas
Entertainment and Regent Releasing,

INTERNATIONAL THEATRICAL DISTRIBUTION

In  2004,  Hollywood  SW  began  developing  an  international  version  of  its
successful TDS application to support worldwide theatrical film distribution. In
December  2004,   Hollywood  SW  signed  an  agreement  with  the  international
distribution  subsidiary of a major  international  distributor,  to license and
implement  the  software in 12  overseas  territories,  encompassing  18 foreign
offices over the next 18 months.  As with its North American TDS solution,  this
worldwide  application will interface with Access DM's digital delivery service,
significantly enhancing Access DM's international market opportunities.

FILM EXHIBITION

Hollywood  SW also  has  developed  EMS.  This  web-enabled  theater  management
application is designed to manage all key aspects of film planning,  scheduling,
booking and  distributor  payment for  theatrical  exhibitors.  This head office
solution  consolidates  daily  transactional data from each theatre's box office
ticketing and concession  system,  supports  negotiations with film distributors
and passes necessary  revenue,  cash and payment  information on to the client's
accounting  system.  EMS also receives and reports  digital film delivery status
information from Access DM systems at each theatre.

COMPETITION

Within the major movie studios and exhibition circuits, Hollywood SW's principal
competitors for its products are in-house development teams, which generally are
assisted by outside contractors and other third-parties.  Most distributors that
do not use the TDS software use their own systems. Internationally, Hollywood SW
is aware of one vendor  based in the  Netherlands  providing  similar  software,
although  on a smaller  scale.  Hollywood  SW's film  exhibition  product,  EMS,
competes principally with customized solutions developed by the large exhibition
circuits  and at least  one other  competitor  that has been  targeting  mid- to
small-sized exhibitors. We believe that Hollywood SW, through its technology and
management  experience,  may  differentiate  itself  from  such  competitors  by
providing a competitive  alternative to their forms of digital content  delivery
and management business.

MARKETING AND BUSINESS DEVELOPMENT

Hollywood SW's senior management team manages its sales and business development
efforts.  Hollywood SW intends to co-market  its products and services  with the
services of AccessDM,  although  each will be able to market their  products and
services  independently.  Although new customers are generated  usually  through
referrals,  Hollywood SW also  selectively  advertises in trade journals and its
representatives regularly attend trade shows, such as ShowEast and ShowWest.

DATA CENTER SERVICES

The Data Center Services segment of our business consists of two units: our Data
Centers and Managed Services.

MARKET OPPORTUNITY/INDUSTRY BACKGROUND

We believe that the overall  market for IDC services has been largely  driven by
the rapid  growth in Internet  usage and a  significant  shift by  companies  to
outsourcing,  or engaging third parties to provide,  their data center services.


                                       54


These services are not the principal focus of these companies,  divert them from
their core businesses and require significant investment.

Growth in data use is driving complex data management services.  We believe that
the demand for  services  that store data will  continue  to grow as a result of
increasing  amounts of stored data,  increasing storage  complexity,  increasing
value of certain  information and a potential  shortage of in-house  information
technology  personnel.  In  February  2003,  Gartner  Dataquest  estimated  that
aggregate  revenues  generated by providers of  outsourced  managed data storage
services in North  America  could  approach  $17 billion by 2006,  up from $12.2
billion in 2001, representing a 7% compounded annual growth rate.

OUR DATA CENTERS

Our IDCs provide  fail-safe  environments for our customers'  equipment by using
back-up power  generators as well as back-up  battery power and  specialized air
conditioning  systems. Our IDC customers include major and mid-level network and
Internet service providers,  such as KMC Telecom,  AT&T, OnFiber  Communications
and Zone  Telecom,  as well as various  users of network  services,  traditional
voice and data  transmission  providers,  long distance  carriers and commercial
businesses.  Our IDC  services  are  enhanced  by the network  managed  services
available as a result of the acquisition of Core. We have installed our computer
equipment  for our digital  media  delivery  software and  services  unit in our
AccessColocenters.

We operate nine IDCs in the following eight states: Arkansas, Kansas, Maine, New
Hampshire,  New Jersey,  New York, Texas and Virginia,  plus a dedicated digital
delivery site in Los Angeles,  California.  In addition, we maintain an Internet
data center in Los Angeles,  California  that is dedicated to delivery of motion
pictures and other digital  content to movie theatres  worldwide.  Internet data
centers are  facilities  leased by us through which we, for monthly and variable
fees, provide our customers with:

     o    secure   and   fail-   safe   locations   for   their   computer   and
          telecommunications equipment by using back-up power generators as well
          as back-up battery power and specialized air conditioning systems;

     o    access  to  voice  and data  transmission  services  from a choice  of
          network providers; and

     o    services to monitor their computer and  telecommunications  equipment;
          and services,  to store,  back-up and protect their programs and data,
          including our AccessStorage-On-Demand  managed storage services, which
          store and copy data.

We provide our customers with flexible space in our IDCs to house data and voice
transmission equipment,  as well as their computer equipment.  Our customers may
choose from a variety of space offerings, including a single- locking cabinet, a
private cage (under 500 square feet) or a private  suite (over 500 square feet).
IDC services  require an initial  installation fee and a monthly charge based on
the size of the space offering selected by the
customer.

Our overall  utilization rate as of December 31, 2004 was approximately 25%. The
purchase  prices that we paid for our acquired IDCs reflected  their  respective
utilization rates and,  therefore,  we believe present us with an opportunity to
increase  significantly our results of operations,  largely because the variable
costs in adding new customers are relatively low.

We also offer additional services for which our customers pay additional monthly
service charges. These services include:  additional power availability;  access
to our IDC staff for a  variety  of tasks  such as  equipment  rebooting,  power
cycling,  card swapping and performing  emergency  equipment  replacements;  the
ability to connect  cables  (both  fiber and  copper)  directly  to another  IDC
customer  for voice and data  transmission  services  and the ability to use our
risers,  which are pipes used to connect  cables  (both  fiber optic and copper)


                                       55


from our customers'  computer  equipment to other companies'  computer equipment
located outside of our IDCs but within the building that our IDC is located.

We provide IDC services under  agreements  generally having terms of from one to
ten years.  As of  December  31,  2004,  we had 76  contracts,  with 58 separate
customers,  each requiring  payment of monthly fees,  with an average  remaining
term of 18 months.

In an effort to increase the  competitive  advantage of the IDCs,  on January 9,
2004, we acquired Core, a managed service provider of information  technologies.
As an information  technology  outsourcing  organization,  Core manages clients'
networks and systems in over 35  countries  in Europe,  Asia and North and South
America and more than 20 states in the United States. Core operates a 24x7 GNCC,
capable of running the  networks  and systems of large  corporate  clients.  The
managed services capabilities of Core have been integrated with our IDCs and now
operate under the name of AccessIT Managed Services.

MANAGED SERVICES OFFERINGS

We believe  that the breadth of  services in the IDCs is a critical  competitive
advantage. We have developed two distinct Managed Services offerings:


o     Network and Systems Management; and


o     Managed Storage Services.


NETWORK AND SYSTEMS MANAGEMENT


We offer our customers the economies of scale of the GNCC and access to our
advanced engineering staff.  We believe this low-cost and customizable
alternative to designing, implementing, and maintaining a large scale network
infrastructure enables our customers to focus on information technology
business development, rather than the underlying communications
infrastructure.  Our service features include network architecture and
design, systems and network monitoring and management, data and voice
integration, project management, auditing and assessment and managed carrier
services.


MANAGED STORAGE SERVICES


We offer  managed  storage  services  that use hardware  and software  from such
industry leaders as EMC, Brocade, StorageTek and

Veritas. We presently have two customers for such services.  Our managed storage
services,  known  as  AccessStorage-on-Demand,  are  generally  priced  on a per
gigabyte of usage basis and provide customers with reliable primary data storage
that is connected to their  computers.  We may also provide  customers that have
their computers located within one of our IDCs with a tape back-up copy of their
data that may then be sent to the customer's  computer if the customer's data is
lost, damaged or inaccessible.



All managed storage services are available separately or may be bundled together
with other  services.  Monthly  pricing is based on the type of storage (tape or
disk), the capacity used and the level of the access required.



OUR DATA CENTER SERVICES CUSTOMERS

Our IDCs provide services to a variety of customers, including traditional voice
and  data  transmission   providers,   long  distance  carriers  and  commercial
businesses.


Our principal data services customers include KMC Telecom and AT&T, which
comprised approximately 27% and 12%, respectively, of our revenues for the
fiscal year ended March 31, 2004.


                                       56


KMC Telecom and AT&T comprised approximately 21% and 9% of our revenues for the
nine months ended December 31, 2004, respectively.


SALES AND BUSINESS DEVELOPMENT


We market our services  through a program using a variety of media and channels,
including a small direct sales force, sales channels and referral programs.

Our IDC direct sales force  presently  consists of our  President and five other
employees. This team is supported by both our operations and legal personnel.



INTELLECTUAL PROPERTY

AccessIT has applied for U.S. service mark registration for the following
service marks:  AccessManaged Storage;  Access Digital Media; AccessDM;  Digital
Express  E-Courier  Services;  The Courier for the Digital Era; Vortex Solutions
Engine;  ADM Capstore:  Digi-Central;  Theater Command Center and  Digi-Central.
AccessIT has received U.S. service mark  registration for the following  service
marks: Access Integrated Technologies,  AccessSecure;  AccessSafe; AccessBackup;
AccessBusiness  Continuance;   AccessVault;   AccessContent;   AccessColocenter;
AccessDataVault; AccessColo; and AccessStore.

COMPETITORS

Our data center services compete with neutral colocation providers, as well
as traditional colocation providers, including local phone companies, long
distance phone companies, Internet service providers and web hosting
facilities and carrier-owned data centers.  There are also many data centers
owned and operated by smaller data center companies, landlords and
communications carriers.  The larger operators of data centers include Switch
and Data, Inc., Equinix, Inc., Globix Corporation and AboveNet, Inc.  Many
data center operators offer managed services to clients who co-locate servers
in the operator owned data center. Our focus is to deliver managed services
inside the data center as a lead product for primary data center services,
but to also offer those services to clients who have servers outside our data
centers allowing us to offer remote server and network monitoring, server and
network management and disaster recovery services.

A number of the competitors  mentioned above have greater financial,  technical,
marketing and managerial  resources than we do. These  competitors also generate
greater revenue and are better known than we are.  However,  we believe that our
data center services,  by offering IDCs along with related data center services,
may  differentiate  us from the  above  companies  by  providing  a  competitive
alternative to their forms of digital content delivery.

                                    EMPLOYEES

As of March 1, 2005, we have 92 employees, 34 of whom are part-time.  Ten of our
employees are in sales and  marketing,  32 are in research and  development  and
technical  services,  and 16 are in  finance  and  administration.  None of such
employees  is  represented  by a labor  union;  we  believe  that  our  employee
relations are satisfactory.

                                    PROPERTY

Our  executive  offices are  located in  Morristown,  New  Jersey.  Our nine IDC
facilities  are located in Jersey City,  New Jersey;  the Manhattan and Brooklyn
Boroughs of New York City; Portland, Maine; Manchester, New Hampshire;  Roanoke,
Virginia;  Wichita,  Kansas; Little Rock, Arkansas; and Waco, Texas.  FiberSat's
facility in Los Angeles,  California also contains a data center which we use as


                                       57


a dedicated  digital content delivery site. Our executive offices and all of our
other properties are leased. We do not own any real property.

In  connection  with our  acquisition  of  Hollywood  SW,  we have  assumed  the
obligations of Hollywood SW under a Commercial  Property Lease, dated January 1,
2000,  between  Hollywood  SW and  Hollywood  Media  Center,  LLC  ("HMC"),  the
landlord.  The lease is for the executive offices of Hollywood SW, has a monthly
rent of $2,335 and covers 2,115 square feet.  The lease  expired on December 31,
2003 and is currently a month to month  tenancy with the same monthly  rent.  On
May 1, 2004, an additional 933 square feet was rented on a month-to-month  basis
for additional  monthly rental  payments of $1,000.  HMC is a limited  liability
company 95% owned by David Gajda, a security holder of HMC and a key employee of
AccessIT.

In connection  with our  acquisition of the assets of FiberSat  Seller,  we have
assumed    the    obligations    of   FiberSat    Seller    under   a   Standard
Industrial/Commercial  Single-Tenant  Lease,  dated  December  2, 1996,  between
FiberSat Seller and David L. McNamara Family Trust,  the landlord.  The lease is
for the administrative  offices,  technical  operations center, and warehouse of
FiberSat,  has a monthly rent of $9,845 and covers 13,455 square feet. The lease
expires on March 31,  2007.  We have  additionally  assumed the  obligations  of
FiberSat Seller under a Lease for Communication  Equipment Space,  dated July 1,
2004, between FiberSat Seller and Time Warner Cable, the landlord.  The lease is
for space to house certain communication equipment of FiberSat and has a monthly
rent of $1,722. The lease expires on June 30, 2009.

In connection with our acquisition of the Pavilion Theatre,  we have assumed the
obligations of Pritchard Square Cinema LLC under a commercial lease dated August
9, 2002,  between Pritchard Square Cinema LLC and OLP Brooklyn Pavilion LLC, the
landlord.  The lease is for a movie theatre,  restaurant and cafe, has a monthly
initial rent of $94,000 and covers  approximately  31,120 square feet. The lease
expires  July 31,  2022 and has two  options  to renew for  additional  ten-year
terms.

We are a party to  separate  leases for each of our nine IDC  facilities.  These
leases cover an aggregate square footage of 67,200, under which we are paying an
aggregate monthly rent of $192,000. The rental periods remaining on these leases
range from month-to month (under our Roanoke,  Virginia facility lease, the term
of which we intend  to  extend  if our  customer  at that  facility  renews  its
agreement  with us) to 12 years and,  with the  exception  of our leases for the
Jersey City, New Jersey and Brooklyn, New York facilities,  which expire in 2009
and 2016,  respectively,  the leases  include  options to renew the leases.  The
lease of our executive  offices expires on May 31, 2005, has a five-year renewal
option (which we intend to exercise), covers 5,237 square feet and has a monthly
rent of  $12,219.  We  believe  that we have  sufficient  space to  conduct  our
business for the foreseeable  future.  All of our leased  properties are, in the
opinion of our management,  in satisfactory  condition and adequately covered by
insurance.

                                LEGAL PROCEEDINGS


In February  2003,  prior to the  acquisition  of Hollywood SW,  Hollywood SW
eliminated  the  position  of an  employee  and as  part of the  termination
process,  Hollywood SW attempted to secure a general  release from  liability
from the employee.  In March 2003,  we received a letter from the  employee's
attorney  seeking  unspecified  damages  to  release  the  Company  from  any
potential  claims,  including  alleged improper  classification  as an exempt
employee and unpaid vacation time. In February 2004, the employee's  attorney
filed a lawsuit in California seeking unspecified damages. In September 2004,
we settled the matter for a cash payment to the former employee of $75,000 in
exchange for the Company's  receipt of a general  release from liability from
the employee.


On July 2, 2004, we received notice that certain creditors of one of our data
center customers named NorVergence filed an involuntary  bankruptcy  petition
against the  NorVergence.  On July 14, 2004,  the  NorVergence  agreed to the
entry  of an  order  granting  relief  under  Chapter  11 of the  United  States
Bankruptcy  Code and then converted the Chapter 11  reorganization  to Chapter 7
liquidation.  As of December 31, 2004,  we had accounts  receivable  of $121,000
recorded on the unaudited Consolidated Balance Sheet related to the NorVergence.


                                       58


We also have a first security interest in the NorVergence's accounts receivable.
Based  on  information  received  to date,  we  believe  that the  NorVergence's
accounts  receivable  that are deemed to be  collectible  are  substantially  in
excess of the amounts  recorded on our  unaudited  Consolidated  Balance  Sheet.
Therefore, we believe that the amounts owed to us, and recorded on the unaudited
Consolidated Balance Sheet, will be collected.


On January 26, 2005 the bankruptcy court in the matter of NorVergence approved a
motion  for the  trustee  to pay the  Company  $121,000  for past  due  accounts
receivable  and  on  February  25,  2005  the  Company  was  paid  this  amount.
Additionally,  the Company has been  granted the right to pursue  collection  of
Norvergence's  customer  accounts  receivable.  Any  amounts  collected  will be
retained by the Company in settlement of its claim against Norvergence.






                                       59




                                   MANAGEMENT




The  following  table  sets  forth   information   concerning  our  directors,
executive officers and key employees as of March 1, 2005.


Name                                AGE    POSITION(S)


A. Dale Mayo+++..................... 63   President, Chief Executive Officer
                                          and Chairman of the Board
                                          of Directors

Jeff Butkovsky.....................  45   Senior Vice President - Chief
                                          Technology Officer

Kevin J. Farrell...................  44   Senior Vice President -- Data
                                          Center Operations and a director

Gary S. Loffredo...................  40   Senior Vice President -- Business
                                          Affairs, General Counsel, and
                                          Secretary, and a director

Brett E. Marks.....................  43   Senior Vice President -- Business
                                          Development and a director

Brian D. Pflug.....................  38   Senior Vice President -- Accounting
                                          and Finance

Wayne L. Clevenger*................  61   Director


Gerald C. Crotty+..................  53   Director

Robert Davidoff*+++................. 78   Director

Matthew W. Finlay*.................  37   Director

David Gajda........................  48   President  and  Chief   Operating
                                          Officer of Hollywood SW

Robert Jackovich...................  45   Chief Technology Officer of
                                          Hollywood SW

Erik B. Levitt.....................  30   President and Chief Operating
                                          Officer of Managed Services

Ravi V. Patel......................  52   President and Chief Operating
                                          Officer of FiberSat

Russell J. Wintner.................  52   President and Chief Operating
                                          Officer of AccessDM



    *   Member of our Audit Committee.
    +   Member of our Compensation Committee.
    ++  Member of our Nominating Committee.

The following  biographical  information  about our  directors,  advisory  board
members,  executive  officers and key  employees is based solely on  information
provided to us by them. There are no familial relationships between or among any
of our  directors,  board of advisors,  executive  officers  and key  employees,


                                       60


except for Brett E. Marks, one of our directors, who is the son of Harvey Marks,
a member of our board of advisors.

A. DALE MAYO is a co-founder of our Company and has been Chairman, President and
Chief  Executive  Officer since our inception on March 31, 2000. From January to
March 2000, Mr. Mayo explored  various  business  opportunities,  including data
center  operations and digital  cinemas.  From December 1998 to January 2000, he
had been the President and Chief Executive Officer of Cablevision  Cinemas,  LLC
("Cablevision Cinemas"). In December 1994, Mr. Mayo co-founded Clearview,  which
was sold to Cablevision Cinemas in 1998. Mr. Mayo was also the founder, chairman
and chief  executive  officer  of  Clearview  Leasing  Corporation,  a lessor of
computer peripherals and telecommunications  equipment founded in 1976. Mr. Mayo
began his career as a computer salesman with IBM in 1965.

JEFF  BUTKOVSKY has been our Senior Vice  President - Chief  Technology  Officer
since May 2004 and was our  Senior  Vice  President  --  Managed  Services  from
October  2000 to May 2004.  Previously,  Mr.  Butkovsky  had  served as  Eastern
Regional  Director  for  LogicStream,  Inc.,  a  managed  service  provider  and
colocation  company  from  March  2000 to  October  2000.  He  served as a sales
executive with Auspex Systems,  Inc., a network attached  storage company,  from
June 1999 to March  2000.  Mr.  Butkovsky  was  employed  by Micron  Electronics
Incorporated  from May 1996 to June 1999,  where he was the  Northeast  Regional
Director.

KEVIN J.  FARRELL  is a  co-founder  of our  Company  and has been  Senior  Vice
President -- Data Center  Operations and a director  since our  inception.  From
December  1998 to March 2000, he had served as Director of Operations of Gateway
Colocation, LLC, of which he was also a co-founder, where he was responsible for
the  completion of 80,000 square feet of carrier  neutral  colocation  space and
supervised infrastructure build-out,  tenant installations and daily operations.
Prior to joining Gateway, Mr. Farrell had served, from 1993 to 1998, as Building
Superintendent  and Director of Facility  Maintenance  at the Newport  Financial
Center in Jersey City, NJ. He is a former officer of the International  Union of
Operating Engineers.

GARY S. LOFFREDO has been our Senior Vice President -- Business Affairs, General
Counsel and Secretary,  and a director since  September 2000. From March 1999 to
August  2000,  he had been Vice  President,  General  Counsel and  Secretary  of
Cablevision  Cinemas. At Cablevision  Cinemas,  Mr. Loffredo was responsible for
all aspects of the legal function, including negotiating and drafting commercial
agreements,  with emphases on real estate,  construction and lease contracts. He
was also  significantly  involved  in the  business  evaluation  of  Cablevision
Cinemas' transactional work, including site selection and analysis,  negotiation
and new theater construction oversight.  Mr. Loffredo was an attorney at the law
firm of Kelley Drye & Warren LLP from September 1992 to February 1999.

BRETT E. MARKS is a co-founder of our Company and has been Senior Vice President
-- Business  Development and a director since our inception.  From December 1998
to March 2000, Mr. Marks had been Vice President of Real Estate and  Development
of  Cablevision  Cinemas.  From  June  1998  until  December  1998,  he was viCe
President  of First New York  Realty  Co.,  Inc. In  December  1994,  Mr.  Marks
co-founded,  with Mr. Mayo, Clearview and was instrumental in the site selection
process that helped to increase its number of theater locations.

BRIAN D. PFLUG has been our Senior  Vice  President  --  Accounting  and Finance
since January 2003.  From  September 2000 to December 2002, he had been our Vice
President --  Controller.  From July 1998 to September  2000,  Mr. Pflug was the
Controller of Cablevision  Cinemas,  where he was responsible for all accounting
functions, including financial reporting, payroll and accounts payable. Prior to
that,  Mr. Pflug was employed  for four years at GPU,  Inc.  (which later merged
with FirstEnergy Corp.), a large energy provider,  in the areas of SEC reporting
and accounting  research.  Mr. Pflug began his career as an auditor at Coopers &
Lybrand and is a Certified Public Accountant.

WAYNE L.  CLEVENGER has been a director of our Company  since October 2001.  Mr.
Clevenger served on our  Compensation  Committee from February 2002 to April 15,


                                       61


2004 and has served on our Audit  Committee  since April 15,  2004.  He has more
than 20 years of private equity  investment  experience.  He has been a Managing
Director of MidMark Equity  Partners II, L.P.  ("MidMark"),  and its predecessor
company since 1989. Mr. Clevenger was President of Lexington  Investment Company
from 1985 to 1989, and, previously, had been employed by DLJ Capital Corporation
(Donaldson,  Lufkin & Jenrette)  and INCO  Securities  Corporation,  the venture
capital arm of INCO  Limited.  Mr.  Clevenger  served as a director of Clearview
from May 1996 to December 1998.

GERALD C. CROTTY has been a director of our Company since August 2002, served on
our Audit  Committee  from July 2003 to April 15,  2004,  and has  served on our
Compensation Committee  since April 15, 2004. Mr. Crotty  co-founded and, since
June 2001, has directed,  Weichert  Enterprise LLC  ("Weichert  Enterprise"),  a
private and public equity market investment firm.  Weichert  Enterprise oversees
the  holdings of Excelsior  Ventures  Management,  a private  equity and venture
capital firm that Mr.  Crotty  co-founded  in 1999.  From 1991 to 1998,  he held
various executive positions with ITT Corporation,  including President and Chief
Operating  Officer of ITT Consumer  Financial Corp. and Chairman,  President and
Chief Executive Officer of ITT Information Services, Inc. Mr. Crotty also serves
as a director of AXA Premier Funds Trust.

Robert Davidoff has been a director of our company since July 2000, has been the
Chairman of our compensation committee since November 2000 and has served on our
Audit Committee  since April 2001.  Since 1990, Mr. Davidoff has been a Managing
Director of Carl Marks & Co., Inc. And, since 1989, the general  partner of CMNY
Capital II,  L.P., a venture  capital  affiliate of Carl Marks & Co. Since 1998,
Mr. Davidoff has served as a director of Sterling/Carl Marks Capital, Inc. He is
Also the Chairman and Chief Investment  Officer of CM Capital  Corporation,  the
firm's  leveraged  buyout  affiliate.  Mr.  Davidoff  is  a  Director  of  Hubco
Exploration,  Inc.,  Rex Stores  Corporation  and  Marisa  Christina,  Inc.  Mr.
Davidoff served as a director of Clearview from December 1994 to December 1998.

Matthew W. Finlay has been a director of our company  since October 2001 and has
been the chairman of our audit  committee  since February 2002. He is a director
Of Midmark,  which he joined in 1997.  Previously,  he had been a vice president
With the New York merchant banking firm Juno Partners and its investment banking
affiliate, Mille Capital, from 1995 to 1997. Mr. Finlay began his career in 1990
as an analyst with the investment banking firm Southport Partners.

DAVID GAJDA is a co-founder  of  Hollywood  SW and had been its Chief  Executive
Officer since its inception in 1997. Following the completion of our acquisition
of Hollywood SW, Mr. Gajda  resigned as its Chief  Executive  Officer and became
the President and Chief Operating  Officer of Hollywood SW. Prior to co-founding
Hollywood SW, Mr. Gajda owned and managed a strategic  consulting company,  DWG,
from 1990 to 1997. At DWG, he helped many entertainment  companies develop their
three- to five-year strategic systems plans.

ROBERT  JACKOVICH is a co-founder of Hollywood SW and had been its President and
Chief Technology  Officer since its inception in 1997.  Following the completion
of our  acquisition  of Hollywood  SW, Mr.  Jackovich  resigned as President but
remained  the Chief  Technology  Officer of Hollywood  SW. Prior to  co-founding
Hollywood SW, Mr. Jackovich was the Chief Information Officer of Savoy Pictures,
Inc., from 1993 to 1996, where he managed and facilitated the efforts associated
with   establishing   the   organization  and  systems  of  this  start-up  film
distribution studio.

RUSSELL J. WINTNER is the President and Chief Operating Officer of AccessDM.
Mr. Wintner was the President of WinterTek, Inc., a digital media consultant
to various  clients,  from  November  2002 to July 2003.  From  November 2000 to
November  2002,  he  served  as  Principal,  Exhibitor  Relations,   Alternative
Programming and Marketing for Technicolor Digital Cinema, LLC. From October 1999
until November  2000, Mr. Wintner  founded and served as President of WinterTek,
Inc. In 1996,  he  co-founded  CineComm  Digital  Cinema,  LLC and served as its
President of Exhibition and Alternative  Programming and Chief Operating Officer
until October 1999.

                                       62



ERIK  LEVITT  has been the  President  and Chief  Operating  Officer  of Managed
Services  since the Company  acquired  Core in January  2004.  Mr. Levitt is the
founder of Core and had been an executive officer at Core since its inception in
1995.  Prior to founding Core, Mr. Levitt held  consulting  positions at Merrill
Lynch Private  Banking and Volvo Cars of North  America.  Most recently he spent
four years as the Lead Engineer for the Funds Transfer Network at Citigroup. Mr.
Levitt received an advanced degree in Management and International Business from
the  Stern  School of  Business  at NYU and was an  International  Baccalaureate
student at the United Nations International School.

RAVI V. PATEL has been the  President  and Chief  Operating  Officer of FiberSat
since  November  2004.  From April 2001 to October  2004,  Mr.  Patel  served as
President and Chief  Executive  Officer of FiberSat  Seller.  He joined FiberSat
Seller in January 2000 as Executive Vice President and Chief Financial  Officer.
Mr.  Patel  has  over 25  years  varied  financial  and  operational  management
experience,  including  as  President  and  Consultant  of  RVP  Enterprises,  a
financial  consulting firm providing Chief Financial Officer services to smaller
companies.  Also, he has  previously  served as Vice  President,  Operations and
Chief  Financial  Officer of Uncle  Milton  Industries,  Inc.,  a specialty  toy
manufacturer,  and Vice  President,  Chief  Financial  Officer  of The  Spectrum
Companies,  a  biotech  firm.  Mr.  Patel  was  a  founder  and  Vice  President
Business/Ground  Support Systems, Chief Financial Officer of Inflight ATI, Inc.,
an  entrepreneurial  company formed for the  development of ATMs for use onboard
commercial  aircraft.  Also, Mr. Patel was the Vice  President,  Chief Operating
Officer and Chief Financial Officer with Aero-design Technology, Inc., a company
that  provided  innovative  products  tot the airline  industry.  Mr.  Patel was
previously with Donaldson  Company,  Inc., a filtration  company,  where he held
various positions from senior corporate internal auditor to general manager. Mr.
Patel started his career as a staff  accountant with Arthur Young and Company in
Chicago.  Mr. Patel holds  Bachelor of Commerce  and Master of Commerce  degrees
from MS University in Baroda,  India. He received his MBA from the University of
Chicago.

BOARD OF DIRECTORS

Under our  bylaws,  our board of  directors  must have at least two but not more
than ten members.  Our board of  directors  currently  has eight  members and is
elected  annually  by the  plurality  vote of our  stockholders.  Vacancies  and
newly-created  directorships resulting from an increase in the authorized number
of directors may be filled by a majority  vote of the directors  then in office,
even if less than a quorum.  All members of our board of  directors  hold office
until the next annual meeting of stockholders and the election and qualification
of their successors,  or until their earlier death,  resignation or removal. Our
officers, subject to the terms of any applicable employment agreements, serve at
the discretion of our board of directors.

We also have a board of advisors comprised of four members.  No compensation
has been paid to any of these members for their services as members of the
board of advisors.

Our  board of  directors  presently  has four  independent  directors  -- Robert
Davidoff , Gerald C.  Crotty,  Matthew W.  Finlay  and Wayne L.  Clevenger.  The
independent  directors are persons who are neither officers nor employees of our
Company and whom our board of directors  has  affirmatively  determined  have no
material  relationship  with us that  would  interfere  with their  exercise  of
independent judgment.  Our board of directors intends to meet at least quarterly
and the independent  directors  serving on our board of directors intend to meet
in  executive  session  (i.e.,  without  the  presence  of  any  non-independent
directors) at least once a year.


Our board of directors  has three  standing  committees,  consisting of an audit
committee, a compensation committee and a nominating committee.

AUDIT COMMITTEE


The audit committee consists of Messrs. Davidoff, Clevenger and
Finlay.  Mr. Finlay is the Chairman of the audit committee.  The audit
committee meets at least quarterly with our management and our


                                       63


independent registered public accounting firm to review and help
ensure the adequacy of our internal controls and to review the results and
scope of the auditors' engagement and other financial
reporting and control matters. Messrs. Davidoff, Clevenger and
Finlay are all financially literate, and Mr. Davidoff is financially
sophisticated, as those terms are defined under the rules of the AMEX. Mr.
Davidoff is also a financial expert, as such term is defined under the
Sarbanes-Oxley Act of 2002.

The audit  committee has adopted a formal written  charter  specifying:  (i) the
scope of the audit committee's responsibilities and how it is to carry out those
responsibilities,  including structure,  processes and membership  requirements;
(ii) the audit  committee's  responsibility  for  ensuring  its receipt from the
outside  auditor of a formal written  statement  delineating  all  relationships
between the auditor and the  company,  consistent  with  Independence  Standards
Board Standard 1, adopted in January 1999 by the  Independence  Standards  Board
(the private sector standard-setting body governing the independence of auditors
from their  public  company  clients)  and the  committee's  responsibility  for
actively  engaging  in  communications  with the  auditor  with  respect  to any
relationships  or services that may impact the objectivity  and  independence of
the auditor and for taking,  or recommending  that the entire board of directors
take, appropriate action to oversee the independence of the outside auditor; and
(iii) the outside  auditor's  ultimate  accountability to the board of directors
and the audit committee, as representatives of our company's  stockholders,  and
these  stockholder  representatives'  ultimate  authority and  responsibility to
select,  evaluate and,  where  appropriate,  replace the outside  auditor (or to
nominate the outside auditor for stockholder approval). Our audit committee will
review and reassess the adequacy of our written charter on an annual basis.

The audit committee has adopted guidelines and procedures: (i) making it
directly responsible for the appointment, compensation and oversight of the work
of any public accounting firm engaged by it (including resolution of any
disagreements between management and the firm regarding financial reporting) for
the purpose of preparing or issuing an audit report or related work, and each
such public accounting firm will report directly to the audit committee; (ii)
providing for the (a) receipt, retention and treatment of complaints received by
our Company regarding accounting, internal accounting controls or auditing
matters and (b) confidential, anonymous submission by Company employees of
concerns regarding questionable accounting or auditing matters; (iii) affording
it the authority to engage independent counsel and other advisers, as it may
determine to be necessary to carry out its duties; and (iv) providing for
appropriate funding for payment of: (a) the public accounting firm engaged by
our Company for the purpose of rendering or issuing an audit report and (b) any
advisers engaged by the audit committee as described under clause (iii) above.

The audit committee is also  responsible for the review,  approval and oversight
of all  related  party  transactions  between  our  Company  and  our  officers,
directors, employees and principal stockholders.


COMPENSATION COMMITTEE

The compensation  committee consists of Messrs.  Mayo,  Davidoff and Crotty. Mr.
Davidoff  is  the  Chairman  of the  compensation  committee.  The  compensation
committee  approves the compensation  package of our Chief Executive Officer and
reviews and recommends to our board of directors the levels of compensation  and
benefits payable to our other executive officers, reviews general policy matters
relating to employee  compensation  and  benefits and  recommends  to the entire
board of  directors,  for its approval,  stock option  grants and  discretionary
bonuses to our officers, employees, directors and consultants.


NOMINATING COMMITTEE

The nominating committee consists of Messrs. Mayo and Davidoff.  Mr. Mayo is the
Chairman of the nominating  committee.  The nominating  committee  evaluates and
approves  nominations  for annual election to, and to fill any vacancies in, our
board of directors.



                                       64





CODE OF ETHICS

We  have  adopted  a code of  ethics,  as  contemplated  by  Section  406 of the
Sarbanes-Oxley  Act of 2002.  Such code of ethics is  included  on our  website,
www.accessitx.com.  We will disclose any amendment to, or waiver of, a provision
of our code of ethics on a Form 8-K filed with the SEC.




                                       65




EXECUTIVE COMPENSATION


The following table sets forth  information for fiscal years 2004, 2003 and 2002
in respect of the  compensation  earned by our Chief  Executive  Officer and our
four other most highly  compensated  executive  officers during fiscal year 2004
(the "Named Executives").  We awarded or paid compensation for services rendered
by them in all capacities to us during the applicable fiscal years.






                                                             Long-Term
                            Annual Compensation             Compensation
                           ---------------------           ---------------

                                                               Restricted  Securities
Name and                                                           Stock     Underlying    All Other
Principal         Fiscal                          Other Annual    Awards      Options     Compensation
Position(s)       Year      Salary($)    Bonus($) Compensation(1)  ($)(2)     (#)(3)         ($)(4)
-------------     ------    ----------  --------- --------------- -------    --------  -----------------

                                                                 
A. Dale Mayo       2004      $250,000    $252,035     $14,400       --         --         $27,428(5)
Chief Executive    2003      $250,000    $147,973     $14,400       --         --         $16,453(5)
Officer and        2002      $200,000    $ 66,875     $14,400       --         --          $7,435(5)
President

Gary S. Loffredo   2004      $155,000    $ 35,000     $10,000       --      50,000         $8,146
Senior Vice        2003      $150,000    $  7,500     $10,000       --      20,000        $22,065(6)
President -        2002      $150,000    $ 12,500     $10,000       --      20,000         $6,646
Business Affairs;
General Counsel
and
Secretary

Jeff Butkovsky     2004      $130,000    $ 15,000    $  7,200       --      30,000         $3,744
Senior Vice        2003      $125,000    $ 10,000    $  5,400       --      20,000        $15,673(7)
President -        2002      $125,000    $  7,500    $     --       --      10,000         $3,780
Chief Technology
Officer

Brian Pflug        2004      $105,000    $ 35,000    $  7,200       --      50,000         $6,573
Senior Vice        2003      $100,000    $  7,500    $     --       --      10,000        $21,502(6)
President -        2002      $100,000    $  2,500    $     --       --      10,000         $5,089
Accounting and
Finance

Kevin J. Farrell   2004      $103,125    $  15,000    $  7,200       --         --          $5,696
Senior Vice        2003      $100,000    $  10,000    $  7,200       --         --          $5,502
President -        2002      $100,000    $  10,000    $  7,200       --         --          $5,089
Data Center
Operations


     (1)  Reflects car allowances paid by us.

     (2)  We have not made any restricted stock awards.

     (3)  Reflects stock options granted under our 2000 Stock Option Plan to
          Messrs. Loffredo, Butkovsky and Pflug.

     (4)  Includes our matching contributions under our 401(k) plan and the
          premiums for group term life insurance paid by us. Under our 401(k)
          plan, we automatically match 50% of employee contributions up to the
          lesser of 15% of the employee's pay (on a per- payroll period basis)
          or the statutory annual limit set by the Internal Revenue Service.

     (5)  Includes premiums for a ten-year term life insurance policy in the
          benefits amount of $5 million, under which we are the beneficiary and
          the proceeds of which are to be used to repurchase, after
          reimbursement of all premiums paid by us, shares of our capital stock
          held by Mr. Mayo's estate.

     (6)  Includes $16,000 of shares of Class A common stock issued by us to
          Messrs. Loffredo and Pflug in December 2002, which shares were valued
          by an independent appraiser and are not subject to any contractual
          restrictions.

     (7)  Includes $12,000 of shares of Class A common stock issued by us to Mr.
          Butkovsky in December 2002, which shares were valued by an independent
          appraiser and are not subject to any contractual restrictions.





                                       66





The following table sets forth  information  concerning stock options granted to
the Named Executives during fiscal year 2004.


                                            Individual Grants
                               ----------------------------------------------
                                         % of Total
                                          Options
                               Shares    Granted to
                              Underlying  Employees
                              Options     in Fiscal    Exercise   Expiration
Name                         Granted(#)     Year       Price($)     Date
----------------            ------------  -----------  ----------  ----------
A. Dale Mayo                       --         --        --          --
Gary S. Loffredo               50,000        26%        $5.00    11/04/2013
Jeff Butkovsky                 30,000        16%        $5.00    11/04/2013
Brian Pflug                    50,000         26%       $5.00    11/04/2013
Kevin J. Farrell                   --         --        --          --

The following table sets forth information regarding the number of stock options
exercised by the Named  Executives  during fiscal year 2004 and, as of March 31,
2004,  the number of  securities  underlying  unexercised  stock options and the
value of the  in-the-money  options  held by the Named  Executives.  We have not
granted any stock appreciation rights.

Aggregate  option  exercises  in last  fiscal  year and fiscal  year-end  option
values.






                                      Number of Securities     Value of Unexercised
                                     Underlying Unexercised    In-the-Money Options
                                     Options at FY-End (#)       at FY-End ($)(1)
                                     ----------------------    ---------------------
                     Shares
                    Acquired
                       on          Value
    Name           Exercise(#)    Realized($)  Exercisable  Unexercisable   Exercisable   Unexercisable
-----------        -----------    -----------  -----------  -------------   -----------   -------------
                                                                         
A. Dale Mayo            --            --           --           --              --            --
Gary S. Loffredo        --            --        90,000        70,000         $16,667       $33,333
Jeff Butkovsky          --            --        38,333        46,677          $8,333       $16,668
Brian Pflug             --            --        45,086        60,000          $8,333       $16,668
Kevin J. Farrell        --            --           --            --             --            --



     (1)  Based on the trading price of shares of our Class A common stock on
          March 31, 2004.



                                       67





EQUITY COMPENSATION PLANS

The  following  table  sets forth  certain  information,  as of March 31,  2004,
regarding the shares of AccessIT's  Class A common stock and  AccessDM's  common
stock authorized for issuance under their respective equity compensation plans.


                                                                     Number of
                         Number of shares of                       shares of
                            common stock      Weighted average   common stock
                            issuable upon       of exercise        remaining
                             exercise of          price of       available for
                         outstanding options    outstanding     future issuance
Plan                             (#)             options ($)          (#)
-----                    -------------------   --------------    ---------------
AccessIT Amended and
Restated 2000 Stock
Option Plan approved by
stockholders............      520,564(1)            $6.12          79,436(1)
AccessIT compensation
plans not approved by
stockholders............         N/A                 N/A              N/A
AccessDM compensation
plan approved by
stockholders............     1,000,000(2)           $0.21         1,000,000(2)
AccessDM compensation
plans not approved by
stockholders............         N/A                 N/A              N/A

(1) Shares of AccessIT Class A common stock

(2) Shares of AccessDM common stock

ACCESSIT STOCK OPTION PLAN

Our board of directors  adopted our Plan, on June 1, 2000 and, in July 2000, our
stockholders  approved the Plan by written  consent.  Under the Plan,  which was
amended and restated in January 2003 and further  amended in September  2003 and
October 2004, we grant both  incentive  and  non-statutory  stock options to our
employees,  non-employee  directors and consultants.  The primary purpose of the
Plan is to enable us to attract, retain and motivate our employees, non-employee
directors and consultants. The Plan, as amended, authorizes up to 850,000 shares
of our Class A common  stock for issuance  upon the exercise of options  granted
under the Plan. As of December 31, 2004,  there were options to purchase 251,103
shares of our Class A common stock available for grant under the Plan.

Under the Plan, stock options covering no more than 100,000 shares may be
granted to any participant in any single calendar year and no participant may be
granted incentive stock options with an aggregate fair market value, as of the
date on which such options were granted, of more than $100,000 becoming
exercisable for the first time in any given calendar year. Options granted under
the Plan expire 10 years following the date of grant (or such shorter period of
time as may be provided in a stock option agreement or five years in the case of
incentive stock options granted to stockholders who own greater than 10% of the
total combined voting power of our company) and are subject to restrictions on
transfer. Options granted under the Plan vest generally over periods up to three
years. The Plan is administered by our board of directors.

The Plan  provides  for the granting of incentive  stock  options with  exercise
prices of not less than 100% of the fair market value of our common stock on the
date of grant.  Incentive  stock options  granted to holders of more than 10% of
the total combined  voting power of our company must have exercise prices of not
less  than  110% of the fair  market  value of our  common  stock on the date of
grant.  Incentive and  non-statutory  stock  options  granted under the Plan are
subject to vesting provisions, and exercise is subject to the continuous service
of  the  optionee.  The  exercise  prices  and  vesting  periods  (if  any)  for
non-statutory options are set in the discretion of our board of directors.  Upon


                                       68


a change of control of our company,  all options  (incentive and  non-statutory)
that have not previously vested will become  immediately and fully  exercisable.
In connection with the grants of options under the Plan, we and the participants
have executed stock option agreements setting forth the terms of the grant.

ACCESSDM STOCK OPTION PLAN

AccessDM's board of directors  adopted its stock option plan on May 13, 2003 and
its  stockholders  approved the plan on May 13, 2003.  Under the plan,  AccessDM
grants stock options to its employees,  non-employee  directors and consultants.
The plan authorizes up to 2,000,000 shares of AccessDM common stock for issuance
upon the exercise of options  granted  under the plan.  As of December 31, 2004,
AccessDM has issued  options to purchase  1,005,000 of its shares to  employees,
and there were  options to  purchase  995,000  shares of AccessDM  common  stock
available for grant under the plan.

Under the plan,  stock  options  covering  no more than  500,000  shares  may be
granted to any participant in any single calendar year and no participant may be
granted  incentive  stock options with an aggregate fair market value, as of the
date on  which  such  options  were  granted,  of more  than  $100,000  becoming
exercisable for the first time in any given calendar year. Options granted under
the plan expire 10 years  following the date of grant (or such shorter period of
time as may be provided in a stock option agreement or five years in the case of
incentive stock options granted to stockholders  who own greater than 10% of the
total  combined  voting power of AccessDM)  and are subject to  restrictions  on
transfer. Options granted under the plan vest generally over periods up to three
years. The plan is administered by AccessDM's board of directors.

The plan  provides  for the granting of incentive  stock  options with  exercise
prices of not less than 100% of the fair market value of AccessDM's common stock
on the date of grant.  Incentive  stock options  granted to holders of more than
10% of the total combined  voting power of AccessDM must have exercise prices of
not less than 110% of the fair market value of AccessDM common stock on the date
of grant.  Incentive and non-statutory  stock options granted under the plan are
subject to vesting provisions, and exercise is subject to the continuous service
of  the  optionee.  The  exercise  prices  and  vesting  periods  (if  any)  for
non-statutory  options  are  set  in  the  discretion  of  AccessDM's  board  of
directors.  Upon a change of control of  AccessDM,  all options  (incentive  and
non-statutory) that have not previously vested will become immediately and fully
exercisable. In connection with the grants of options under
the plan,  AccessDM and the participants  have executed stock option  agreements
setting forth the terms of the grant.


EMPLOYEE BENEFIT PLANS



Since 2002, we belonged to a Professional Employer Organization ("PEO").
Through the PEO, we purchased all of our benefits and payroll services, along
with other PEO member companies. For tax filing and for benefits purposes,
the  employees  of our  company  were  considered  to be  employees  of the PEO.
However,  Hollywood SW was not a member of the PEO, and  purchased  its benefits
from other providers.

Through the PEO, our Company had a 401(k) plan that permitted eligible employees
to  contribute  up to 15% of their  compensation,  not to exceed  the  statutory
limit.  We  automatically  matched  50% of  all  our  employees'  contributions.
Employee  contributions,  employer  matching  contributions and related earnings
vested immediately.  Total expenses for our prior 401(k) plan and the PEO 401(k)
plan were  $37,000  and  $39,000  for the fiscal  years ended March 31, 2003 and
2004, respectively.

Hollywood SW's  employees were covered by a profit sharing plan qualified  under
IRS section 401. The plan provided for Hollywood SW to make discretionary profit
contributions   on  behalf  of  eligible   employees.   Hollywood   SW  made  no
contributions in 2003 or 2004.

                                       69


Effective  January 1, 2005, we terminated our PEO  arrangement and are currently
purchasing employee benefits from other providers. Effective January 1, 2005, we
also terminated the Hollywood SW profit sharing plan. We also  established a new
401(k)  plan  with  a  company  match  of  50%  of  the  first  6%  of  employee
contributions. Employer matching contributions vest over a 5-year period.

EMPLOYMENT AGREEMENTS

A. DALE MAYO. In July 2000, we entered into an employment agreement with A. Dale
Mayo,  which was amended on December 1, 2000. The amended  employment  agreement
provides for our payment of an annual base salary of $250,000 and annual bonuses
equal to 3.5% of our  annual  gross  revenues  up to $10  million  and 2% of any
annual gross revenues in excess of $10 million.  In connection  with our IPO, we
and Mr. Mayo entered into a second  amendment to the  employment  agreement  and
have agreed that his  employment  term will be extended  through  September  30,
2006;  however,  it will be automatically  renewed for successive one-year terms
unless  written  notice is given by  either  AccessIT  or Mr.  Mayo at least six
months prior to the end of the term (as may be extended) that such party desires
to terminate  the  agreement.  We and Mr. Mayo have further  agreed his combined
annual  salary and bonus will be  limited  to $1.2  million in any fiscal  year.
Under his employment  agreement,  Mr. Mayo has agreed to not disclose or use any
confidential  information of our Company and, for a period of one year after the
termination  or  expiration of his  agreement,  not to compete with our Company,
within certain geographical limitations.  We may terminate Mr. Mayo's employment
if  Mr.  Mayo  is  convicted  of  theft  or  embezzlement,  fraud,  unauthorized
appropriation  of any assets or property or any felony  involving  dishonesty or
moral turpitude. In the event of such termination, our Company will pay only any
earned  but  unpaid  salary  up to the  date  of  termination.  If  our  Company
terminates  Mr. Mayo for any other reason,  Mr. Mayo will be entitled to receive
his salary until the scheduled  expiration of the  agreement,  during which time
Mr. Mayo will be obligated to seek other employment.

KEVIN J. FARRELL.  In April 2000, we entered into an employment  agreement  with
Kevin Farrell.  The employment  agreement  provides for our payment of an annual
base salary of $100,000,  which  amount was  increased to $112,500 on January 1,
2004. A bonus may be granted in the sole  discretion  of our board of directors.
The  employment  agreement  expires on December  31, 2005;  however,  it will be
automatically  renewed for  successive  one-year  terms unless written notice is
given by either our Company or Mr. Farrell at least 120 days prior to the end of
the term (as it may be  extended)  that such  party  desires  to  terminate  the
agreement.  Mr. Farrell's employment will terminate on his death,  disability or
termination for cause (as defined therein). In addition, Mr. Farrell has entered
into a  confidentiality,  non-solicitation  and  non-compete  agreement with us,
under  which Mr.  Farrell  has agreed to not  disclose  or use any  confidential
information of our Company, to assign all intellectual  property made, developed
or conceived by Mr. Farrell in connection with his employment by our Company and
to not compete with, or to solicit  employees  from, our company for a period of
one year after his employment agreement is terminated or expires.

DAVID GAJDA. Under his employment  agreement with Hollywood SW, Mr. Gajda serves
as the President  and Chief  Operating  Officer of Hollywood SW. The  employment
agreement  provides  for the payment by Hollywood SW of an annual base salary of
$175,000 plus a bonus,  if and as determined in the sole discretion of Hollywood
SW's board of directors based upon any  performance  targets that may be adopted
by that board. The employment agreement expires on October 31, 2005; however, it
will be  automatically  renewed for  successive  one-year  terms unless  written
notice is given by either  Hollywood  SW or Mr.  Gajda at least 90 days prior to
the end of the term (as it may be extended) that such party desires to terminate
the agreement.  Mr. Gajda's employment will terminate on his death,  disability,
by Mr.  Gajda for good reason (as defined  therein) or by Hollywood SW for cause
(as defined  therein).  If Mr. Gajda's  employment is terminated by him for good
reason or by  Hollywood SW without  cause,  Mr. Gajda is entitled to receive his
base salary until the expiration of his employment term. In addition,  Mr. Gajda
has entered into a confidentiality,  non-solicitation and non-compete  agreement
with  Hollywood  SW,  under which Mr.  Gajda has agreed to keep secret and treat
confidentially  all  confidential  information  of  Hollywood  SW,  to assign to
Hollywood SW all  intellectual  property made,  developed or conceived by him in
connection  with his  employment  by  Hollywood  SW and to not compete  with the


                                       70


business of Hollywood SW or to solicit  employees  from our company or Hollywood
SW for any period during which he receives severance payments from Hollywood SW.
These  restrictions are in addition to those contained in the Hollywood SW stock
purchase agreement.

ROBERT JACKOVICH. Under his employment agreement with Hollywood SW, Mr.
Jackovich serves as the Chief Technology Officer of Hollywood SW. The employment
agreement provides for the payment by Hollywood SW of an annual base salary of
$175,000 plus a bonus, if and as determined in the sole discretion of Hollywood
SW's board of directors based upon any performance targets that may be adopted
by that board. The employment agreement expires on October 31, 2005; however, it
will be automatically renewed for successive one-year terms unless written
notice is given by either Hollywood SW or Mr. Jackovich at least 90 days prior
to the end of the term (as it may be extended) that such party desires to
terminate the agreement. Mr. Jackovich's employment will terminate on his death,
disability, by Mr. Jackovich for good reason (as defined therein) or by
Hollywood SW for cause (as defined therein). If Mr. Jackovich's employment is
terminated by him for good reason or by Hollywood SW without cause, Mr.
Jackovich is entitled to receive his base salary until the expiration of his
employment term. In addition, Mr. Jackovich has entered into a confidentiality,
non-solicitation and non-compete agreement with Hollywood SW, under which Mr.
Jackovich will agree to keep secret and treat confidentially all confidential
information of Hollywood SW, to assign to Hollywood SW all intellectual property
made, developed or conceived by him in connection with his employment by
Hollywood SW and to not compete with the business of Hollywood SW or to solicit
employees from our company or Hollywood SW for any period during which he
receives severance payments from Hollywood SW. These restrictions are in
addition to those contained in the Hollywood SW stock purchase agreement. If,
however, Mr. Jackovich's employment is terminated by Hollywood SW without cause
or by him for good reason, he may work for a consulting company or a company in
the film production, exhibition or distribution business if such company does
not provide outsourced solutions similar to those of Hollywood SW to third
parties.



ERIK LEVITT.  Under his employment agreement with Core, Mr. Levitt serves as the
President  and Chief  Operating  Officer of  Managed  Services.  The  employment
agreement  provides for the payment by Core of an annual base salary of $100,000
plus a bonus,  if and as  determined  in the sole  discretion of Core's board of
directors.  The employment agreement expires on March 31, 2007; however, it will
be automatically  renewed for successive one-year terms unless written notice is
given by either Core or Mr. Levitt at least 90 days prior to the end of the term
(as it may be extended) that such party desires to terminate the agreement.  Mr.
Levitt's employment will terminate on his death, disability or by Core for cause
(as  defined   therein).   In   addition,   Mr.   Levitt  has  entered   into  a
confidentiality,  non-solicitation  and non-compete  agreement with Core,  under
which  Mr.  Levitt  has  agreed to keep  secret  and  treat  confidentially  all
confidential information of Core, to assign to AccessIT or Core all intellectual
property made,  developed or conceived by him in connection  with his employment
by Core and to not compete  with the  business  of Core or to solicit  employees
from AccessIT or Core during the term of his employment and for a period of five
years thereafter.  These  restrictions are in addition to those contained in the
Core stock purchase agreement.

RUSSELL  WINTNER.  Under his employment  agreement  with  AccessDM,  Mr. Wintner
serves as the President and Chief Operating Officer of AccessDM.  The employment
agreement  provides  for the  payment by  AccessDM  of an annual  base salary of
$160,000 plus a bonus, if and as determined in the sole discretion of AccessDM's
board of  directors.  The  employment  agreement  expires on October  31,  2005;
however,  it will be automatically  renewed for successive one-year terms unless
written notice is given by either AccessDM or Mr. Wintner at least 90 days prior
to the end of the  term (as it may be  extended)  that  such  party  desires  to
terminate the agreement.  Mr. Wintner's  employment will terminate on his death,
disability  or by  AccessDM  for cause (as  defined  therein).  Mr.  Wintner has
entered  into a  confidentiality,  inventions  and  non-compete  agreement  with
AccessDM,  under  which  Mr.  Wintner  has  agreed  to  keep  secret  and  treat
confidentially all confidential  information of AccessDM,  to assign to AccessIT
or AccessDM all  intellectual  property  made,  developed or conceived by him in
connection  with his employment by AccessDM and to not compete with the business
of AccessDM or to solicit  employees  from  AccessIT or AccessDM  for any period
during his employment and for two years thereafter.



                                       71


DIRECTORS' COMPENSATION

Our  directors do not  presently  receive any cash  compensation  for serving as
directors or participating  on any committee of our board of directors,  but are
reimbursed  for the  out-of-pocket  expenses that they incur in attending  board
meetings.  Non-employee directors are eligible for grants under our Plan and, to
date,  four present  directors and one former director have been granted options
covering an aggregate of 40,000  shares of our Class A common stock for services
provided by them as directors.





                                       72




                           RELATED PARTY TRANSACTIONS


RELATED PARTY TRANSACTIONS

In April 2000, A. Dale Mayo, one of our  co-founders and our President and Chief
Executive  Officer,  and Brett E. Marks, a founder and an executive  officer and
director  of our  Company,  invested  $200,000  and  $100,000  respectively,  in
Fibertech & Wireless,  Inc., a holding  company formed on March 29, 2000 with no
material  assets or business  activity,  and received  10,000,000  and 5,000,000
shares, respectively, of the common stock of Fibertech & Wireless, Inc. Upon the
merger of Fibertech & Wireless,  Inc. into  AccessColo,  Inc. in September 2000,
each of such  shares  was  exchanged  for  0.6205 of a share of common  stock of
AccessColo,  Inc., and resulted in A. Dale Mayo owning 1,241,000 shares of Class
A common stock and Brett E. Marks owning 620,500 shares of Class A common stock.
We changed its name from  AccessColo,  Inc. to Access  Integrated  Technologies,
Inc. In November 2001.

Kevin A. Booth, one of our co-founders and a former director of our Company (and
a former employee), and Kevin J. Farrell, a co-founder, director and Senior Vice
President -- Data Center Operations of our Company, each received 400,000 shares
of Class A common stock in April 2000, upon formation of AccessColo, Inc. and in
connection with their employment and status as co-founders. At the time of their
receipt of such shares,  we were a subsidiary  of Fibertech & Wireless,  Inc. In
July  2003,  Mr.  Booth  left our  employ  and also  resigned  from our Board of
Directors.

In October 2001, A. Dale Mayo  returned  153,333  shares of Class B common stock
and Brett E. Marks, Kevin A. Booth and Kevin J. Farrell returned 76,667,  85,000
and  85,000  shares,  respectively,  of Class A common  stock  and  received  no
consideration from us for such returned shares.

In December  2002,  A. Dale Mayo  returned  30,000  shares of our Class B common
stock and Brett E. Marks,  Kevin A. Booth and Kevin J. Farrell  returned 10,000,
10,000 and 10,000 shares, respectively,  of Class A common stock and received no
consideration from us for such returned shares.

In connection with the execution of one of our long-term real property
leases, A. Dale Mayo and Brett E. Marks posted a letter of credit in the
aggregate amount of $525,000 in June 2000. This letter of credit was reduced
by one-third in each of the three successive years and terminated in june
2003.  We reimbursed messrs. Mayo and marks for the issuance costs of
approximately $10,000 for the letter of credit.

Wayne Clevenger and Matthew Finlay, two of our directors, are directors of
MidMark, which previously held all of our outstanding Series A and Series B
preferred stock and related contingent warrants.  In connection with its
purchase of shares of our Series A and Series B preferred stock, we paid MidMark
a $75,000 investment banking fee. In September 2003, we entered into an exchange
agreement  with  MidMark,  under which we agreed to issue  2,207,976  additional
shares of Class A common stock to MidMark in exchange for all of our outstanding
shares of Series A and Series B preferred  stock,  including  accrued  dividends
thereon,  and through the exercise and  exchange of certain  warrants.  Upon the
IPO,  MidMark (i) converted  all  8,202,929  shares of its Series A and Series B
preferred  stock into 1,640,585  shares of Class A common stock;  (ii) exchanged
warrants that were exercisable,  subject to certain future conditions, for up to
951,041  shares of Class A common  stock,  for 320,000  shares of Class A common
stock; (iii) exercised a warrant exercisable for up to 144,663 shares of Class A
common stock (143,216 shares on a  cashless-exercise  basis);  and (iv) accepted
104,175  shares of Class A common  stock as payment of all accrued  dividends on
shares of Series A and Series B preferred  stock held by such  stockholder.  The
number of shares of Class A common stock issued as payment of accrued  dividends
was  calculated  at the  offering  price of $5.00.  Additionally,  MidMark  also
purchased  $333,000 of one-year  notes,  which was repaid in April 2002, and was
issued 6,902 of the one-year notes  warrants.  Each of these directors have been
granted  options to purchase  5,000 shares of our Class A common stock.  We paid
MidMark a management fee of $50,000 per year until November 2003.



                                       73


From  March  2002 to  August  2002,  we  borrowed  from,  and  issued  five-year
promissory notes (each bearing interest at 8% per year) to, Mr. Mayo, Mr. Marks,
CMNY,  John L.  O'Hara,  a member of our board of  advisors,  and several  other
investors in the aggregate principal amount of $3.175 million. From June 2003 to
July 2003, we borrowed from, and issued five-year promissory notes (each bearing
interest  at 8% per year) to, Mr.  O'Hara and  several  other  investors  in the
aggregate  principal amount of $1.23 million. In connection with these five-year
notes, we granted to these investors ten-year warrants with an exercise price of
$0.05 per share to  purchase  up to an  aggregate  of 440,500  shares of Class A
common stock,  which warrants were  exercised  before the completion of the IPO.
Messrs.  Mayo,  Marks and O'Hara  and CMNY have  exercised  all of the  warrants
attached to the  five-year  notes held by them and  purchased  an  aggregate  of
142,500  shares of Class A common stock.  The net proceeds of the five-year note
issuances were used to repay the one-year notes and to fund our working  capital
requirements.

On March 24, 2004, pursuant to the Exchange Offer, we exchanged $2.5 million and
$1.7 million aggregate principal amount of five-year promissory notes for shares
of Class A common stock and for longer term 6% convertible notes,  respectively.
We issued 707,477 unregistered shares of Class A common stock and $1.7 aggregate
principal amount of convertible notes which as of March 1, 2005 were convertible
into a maximum of 310,857  shares of Class A common  stock (i) at any time up to
the maturity date at each holder's option or (ii) automatically on the date when
the average  closing price on the American  Stock Exchange of the Class A common
stock for 30 consecutive trading days has been equal to or greater than $12.00.


A. Dale Mayo and Brett E. Marks invested $250,000 and $125,000, respectively, in
our  offering of one-year 8% notes and received  warrants to purchase  4,601 and
2,301 shares,  respectively,  of class a common stock at $0.05 per share.  these
notes were  repaid  prior to March 31,  2002.  messrs.  Mayo and Marks  invested
$250,000 and $125,000,  respectively, in our offering of five-year 8% promissory
notes and received warrants to purchase 25,000 and 12,500 shares,  respectively,
of class a common  stock at $0.05  per  share.  in  September  2003,  all of the
warrants that were attached to our one-year and five-year  promissory notes held
by messrs.  Mayo and Marks were exercised.  In March 2004 Messrs. Mayo and Marks
participated  in the Exchange Offer and exchanged their 5-year notes and accrued
interest totaling $382,000 for Convertible Notes, convertible into 67,713 shares
of Class A common  stock.  As of March 31, 2003 and 2004,  the  principal due to
these executive officers of $375,000 and $382,000,  respectively, is included in
notes payable.

Warren H. Colodner, one of our former directors, is a partner in the law firm
of Kirkpatrick & Lockhart LLP, which provided legal services to us, including
handling legal matters  related to the IPO. For the fiscal years ended March 31,
2003 and 2004, we purchased  approximately $124,000 and $639,000,  respectively,
of legal services from this firm. Mr.  Colodner was granted  options to purchase
4,000 shares of Class A common stock.

Robert Davidoff, one of our directors, is the general partner of CMNY Capital
II, L.P., which holds 157,927 shares of Class A common stock, and a director
of Sterling/Carl Marks Capital, Inc., which holds 51,025 shares of Class A
common stock. CMNY Capital II, L.P. also invested $1 million in our offering
of one-year promissory notes, which was repaid in MARCH 2002, and invested $1
million in our offering of five-year promissory notes. The warrants attached
to such one-year and five-year notes were exercised in August 2003 and are
included in the share numbers above. MR. Davidoff has also been granted
options to purchase  9,000  shares of Class A common  stock.  In March 2004 CMNY
Capital II, LP  participated  in the Exchange  Offer and exchanged its five-year
promissory notes and accrued interest totaling $1 million for Convertible Notes,
convertible  into 180,569  shares of Class A common stock.  As of March 31, 2003
and 2004,  the  principal  due to CMNY  Capital  II, LP of $1 million in each of
those years, is included in notes payable.


Harvey  Marks,  a member of our  Board of  Advisors,  is the  father of Brett E.
Marks, one of our founders and executive officers, and is a partner in an entity
that performs real estate  services for us. we incurred real estate  commissions
of $26,000  related to services  provided by this entity  during the fiscal year


                                       74


ended March 31, 2002.  Harvey  Marks also has been  granted  options to purchase
41,025 shares of Class A common stock at a weighted  average  exercise  price of
$6.83 per share.

John L.  O'Hara,  a member of our board of  advisors,  is the  President of John
O'Hara  Contracting,  Inc.,  which performs  construction  and other work at our
IDCs. Mr. O'Hara has invested  $50,000 in our five-year  notes,  and holds 5,000
five-year  note attached  warrants.  This  contractor  has been paid $18,000 and
$10,000 for the fiscal years ended March 31, 2003 and 2004,  respectively.  John
O'Hara Contracting, Inc. also, owns 8,000 shares of Class A common stock, issued
as partial  consideration  for work performed during the fiscal year ended March
31, 2001. In September  2003, Mr. O'Hara  exercised the five-year  warrants.  In
addition,  in March 2004,  Mr.  O'Hara  participated  in the Exchange  Offer and
exchanged  his 5 year notes and  accrued  interest  totaling  $51,000 for 14,264
shares of Class A common stock.

Edward H. Herbst, one of the members of our board of advisors, owns an
architectural services firm that performs work at our IDCs.  His firm was
paid  $3,000 and $1,000 for the fiscal  years ended March 31, 2003 and March 31,
2004, respectively. In addition, Mr. Herbst holds options to purchase 600 shares
of our Class A common stock.

In January  2003,  the board of directors  approved the purchase of two separate
ten-year,  term life insurance policies on the life of A. Dale Mayo. Each policy
carries  a death  benefit  of $5  million,  and WE ARE the  beneficiary  OF each
policy.  Under  one of the  policies,  however,  the  proceeds  will  be used to
repurchase,  after  reimbursement of all premiums paid by US some, or all of the
shares of our capital  stock held by Mr.  Mayo's  estate at the  then-determined
fair market value.

In connection with the Hollywood SW acquisition, we purchased all of the
outstanding capital stock of Hollywood SW from its security holders, David Gajda
and Robert  Jackovich,  on November 3, 2003.  Messrs.  Gajda and Jackovich  have
continued as executive officers of Hollywood SW under new employment  agreements
and have  received an  aggregate of 400,000  unregistered  shares of our Class A
common stock, less 40,444  unregistered shares of Class A common stock that were
issued to certain optionees of Hollywood SW.

Hollywood SW and Hollywood Media Center, LLC, a limited liability company
that is 95% owned by David Gajda, one of the sellers of Hollywood SW, entered
into a Commercial Property Lease, dated January 1, 2000, for 2,115 square
feet of office space.  We have assumed Hollywood SW's obligations under this
lease  pursuant to the  acquisition,  including the monthly  rental  payments of
$2,335.  The lease is currently a  month-to-month  tenancy with the same monthly
rent.  Mr. Gajda is the  President of Hollywood SW. On May 1, 2004 an additional
933 square feet were  rented on a  month-to-month  basis for monthly  additional
rental payments of $1,000.

In connection with Russell J. Wintner's employment arrangement with AccessDM,
we paid Mr. Wintner a finder's fee of $25,000 during the fiscal year ended March
2004, in connection with his efforts related to the Hollywood SW acquisition.

We  entered  into  a  consulting  agreement  with  Kevin  A.  Booth,  one of our
co-founders  and directors,  following the termination of his employment with us
as of July 5,  2003.  Under  the terms of the  agreement,  Mr.  Booth  agreed to
provide consulting services to us in connection with the IPO and our acquisition
of  Hollywood  SW,  for which we paid him  $10,000  per month  (plus  reasonable
out-of-pocket  expenses)  for the  period  beginning  on July  5,  2003  through
September  30,  2003.  We also  paid  Mr.  Booth  $20,000  in  November  2003 in
connection  with the completion of the IPO. After September 30, 2003, we may, in
our sole discretion, retain Mr. Booth's services for future projects on mutually
agreed to terms.  Mr.  Booth has  agreed  that the term of his  confidentiality,
non-solicitation  and non-compete  agreement,  which he entered into as of april
10, 2000, will remain in effect through July 4, 2004.

In connection  with the Core  acquisition,  we purchased all of the  outstanding
capital stock of Core from its sole security holder,  Erik Levitt, on January 9,
2004.  Mr.  Levitt  continued  as an  executive  officer  of  Core  under  a new


                                       75


employment  agreement and as  consideration  for the sale of Core capital stock,
received $250,000 and 100,000 unregistered shares of Class A common stock.





                                       76




                             PRINCIPAL STOCKHOLDERS



The following "Principal Stockholders" table sets forth, as of March 1, 2005,
certain information with respect to the beneficial ownership of the Class A
common stock as to (i) each person known by us to beneficially own more than
five percent of the outstanding shares of our Class A common stock, (ii) each
of our directors, (iii) each of our Named Executives and (iv) all of our
directors and executive officers as a group.

                             PRINCIPAL STOCKHOLDERS





                                                                         SHARES
                                                                       WHICH MAY
                                                                       BE OFFERED
                                                                        PURSUANT
                                           SHARES BENEFICIALLY OWNED    TO THIS
                                            PRIOR TO OFFERING (A)       OFFERING
                                          ----------------------------   ----------
NAME (B)                                      NUMBER           PERCENT
----------------------                    ---------------      -------    ----------
                                                               
A. Dale Mayo..........................     1,040,554 (c)       10.0%         -
Brett E. Marks........................       556,134 (d)        5.9%         -
Kevin J. Farrell......................       305,000            3.2%         -
Gary S. Loffredo......................       139,998 (e)        1.5%         -
Jeff Butkovsky........................        73,333 (f)         *           -
Brian Pflug...........................        88,518 (g)         *           -
Robert Davidoff, 40 Stoner Avenue, Great
Neck, NY 11021.........................        5,000 (h)         *           -
Gerald Crotty..........................        3,000 (h)         *           -
James Weichert, 1625 State Route 10
Morris Plains, NJ 07950-2933...........      531,588            5.6%         -
MidMark Equity Partners II, L.P., 177
Madison Avenue, Morristown, NJ 07960...    2,214,879 (i)       23.5%         -
Wayne L. Clevenger, c/o MidMark Equity
Partners II, L.P., 177 Madison Avenue,
Morristown, NJ 07960...................        1,667 (j)         *           -
Matthew Finlay, c/o MidMark Equity
Partners II, L.P., 177 Madison Avenue,
Morristown, NJ 07960...................        1,667 (k)         *           -
All directors and executive officers as a
group..................................    4,961,338           46.3%         -

--------------------
*    Less than 1%


(a)  Applicable  percentage of ownership is based on 9,415,422 shares of Class A
     common stock  outstanding  as of March 1, 2005 together with all applicable
     options, warrants and other securities convertible into shares of our Class
     A common stock for such stockholder.  Beneficial ownership is determined in
     accordance  with the rules of the SEC, and includes  voting and  investment
     power with  respect to shares.  Shares of Class A common  stock  subject to
     options,  warrants or other convertible  securities  exercisable  within 60
     days  after  March  1,  2005  are  deemed  outstanding  for  computing  the
     percentage ownership of the person holding such options,  warrants or other
     convertible  securities,  but are not deemed  outstanding for computing the
     percentage  of any other  person.  Except  as  otherwise  noted,  the named
     beneficial  owner has the sole voting and investment  power with respect to
     the shares shown.

(b)  Unless  otherwise  indicated,  the business address of each person named in
     the table is c/o Access Integrated  Technologies,  Inc., 55 Madison Avenue,
     Suite 300, Morristown, New Jersey 07960.

(c)  Includes  885,811  shares  of Class B  common  stock  held by Mr.  Mayo and
     100,000 shares of Class B common stock held by Mr. Mayo's spouse.  Mr. Mayo
     disclaims  beneficial  ownership  of all  100,000  shares of Class B common
     stock held by Mr. Mayo's spouse. The holder of each share of class B common
     stock is entitled to ten votes per share.  Including  the voting  rights of
     his shares of Class B common  stock,  Mr. Mayo may  exercise up to 51.3% of

                                       77


     the total  voting power of our common  stock.  Each share of Class B common
     stock is convertible  at any time at the holder's  option into one share of
     Class A common stock.

(d)  Includes  35,906 shares of Class A common stock held by Mr. Marks'  spouse.
     (e) Includes 119,998 shares of Class A common stock underlying options
     exercisable  within  sixty days of March 1, 2005 that may be acquired  upon
     exercise of such options.

(f)  Includes  58,333  shares  of  Class  A  common  stock  underlying   options
     exercisable  within  sixty days of March 1, 2005 that may be acquired  upon
     exercise of such options.

(g)  Includes  68,518  shares  of  Class  A  common  stock  underlying   options
     exercisable  within  sixty days of March 1, 2005 that may be acquired  upon
     exercise of such options.

(h)  Represents  shares of Class A common stock underlying  options  exercisable
     within  sixty days of March 1, 2005 that may be acquired  upon  exercise of
     such options.

(i)  Includes  beneficial  ownership  by MidMark  Advisors  II, LLC, the general
     partner of MidMark.

(j)  Mr.  Clevenger is a managing  director of MidMark and a managing  member of
     MidMark  Advisors  II,  LLC.  Represents  shares  of Class A  common  stock
     underlying options  exercisable within sixty days of March 1, 2005 that may
     be acquired upon exercise of such options.

(k)  Mr.  Finlay is a director of MidMark.  Represents  shares of Class A common
     stock  underlying  options  exercisable  within sixty days of March 1, 2005
     that may be acquired upon exercise of such options.











DESCRIPTION OF SECURITIES

The  following  summary  description  of our capital stock is not intended to be
complete and is subject,  and  qualified in its  entirety by  reference,  to our
amended and restated certificate of incorporation and our bylaws.




GENERAL

We have  authorized  capital stock  consisting  of  80,000,000  shares of common
stock, par value $0.001 per share, and 15,000,000 shares of preferred stock, par
value $0.001 per share.  Of our  authorized  shares of common stock,  40,000,000
shares are  designated as Class A and  15,000,000  are designated as Class B. Of
our authorized shares of preferred stock, no shares are designated or issued.



We have reserved 850,000 shares of our Class A common stock for issuance
under our Plan, of which stock options covering 598,897 shares of our Class A
common stock had been granted as of December 31, 2004.

Holders of a majority  of our  outstanding  shares of capital  stock  present or
represented by proxy at any meeting of our stockholders  constitute a quorum. If
a quorum  exists,  holders  of a majority  of the voting  power of the shares of
capital stock present at the meeting may generally approve matters coming before
any stockholders  meeting.  The affirmative vote of the holders of a majority of
the voting power of the  outstanding  shares of our capital stock is required to
approve significant corporate transactions,  including a liquidation,  merger or
sale of substantially all of our assets. The holders of our Class B common stock
are entitled to ten votes per share.

COMMON STOCK

VOTING RIGHTS. Holders of our common stock are entitled to the following vote(s)
per share on all matters  submitted to a vote of our  stockholders:  the Class A
common stock,  one vote per share;  and the Class B common stock,  ten votes per
share. The holders of our outstanding  shares of common stock vote together as a
single  class  on  all  matters   submitted  to  a  vote  (or  consent)  of  our
stockholders.

CONVERSION. Each outstanding share of Class B common stock may be converted into
one  share of Class A common  stock at any time,  and from time to time,  at the
option of the holder of such share.

DIVIDENDS;  LIQUIDATION;  PREEMPTIVE  RIGHTS.  Holders of our  common  stock are
entitled  to receive  dividends  only if, as and when  declared  by our board of
directors out of funds legally  available for that purpose.  In the event of our
liquidation,  dissolution  or  winding-up,  holders  of  our  common  stock  are
entitled,  subject to any priorities due to any holders of our preferred  stock,
ratably  to share in all assets  remaining  after  payment  of our  liabilities.
Holders of our common stock have no preemptive  rights nor,  except with respect
to the conversion rights of the Class B common stockholder  described above, any
other  rights  to  subscribe  for  shares  or  securities  convertible  into  or
exchangeable for shares of our common stock.


PREFERRED STOCK


No shares of preferred stock are currently outstanding. Our amended and restated
certificate of incorporation  authorizes the issuance of up to 15,000,000 shares
of preferred stock. Our board of directors,  within the limitations set forth in
our  certificate of  incorporation,  is authorized to issue preferred stock from
time to time in one or more  series or classes  and to fix the number of shares,
fix  or  alter  the  dividend  rights,  dividend  rates,  rights  and  terms  of
redemption,  redemption  price or  prices,  liquidation  preference,  conversion
rights,  voting rights and any other rights,  preferences  or limitations of any
unissued  shares of preferred  stock,  and to fix and amend the number of shares
constituting any issued or unissued series or class and the designation thereof,
or any of the  foregoing.  To the extent  that  shares of  preferred  stock with
voting rights are issued,  such  issuance  would affect the voting rights of the

                                       79


holders of our common  stock by  increasing  the  number of  outstanding  shares
entitled to vote and, if  applicable,  by creating a separate class or series of
voting  rights.  Additionally,  the  issuance  of  preferred  stock,  in certain
circumstances, may have the effect of delaying, deterring or preventing a change
of control of our company, may discourage bids for our common stock at a premium
over market price and may adversely  affect the market price, and the voting and
other rights of the holders, of our common
stock.


OPTIONS


We have adopted a stock option plan under which we have reserved  850,000 shares
of our Class A common  stock for issuance  upon the  exercise of stock  options.
Options vest generally over a three-year period.

CONVERTIBLE NOTES AND DEBENTURES

We  currently  have  outstanding  subordinated  convertible  notes  which may be
converted  into a maximum  of 310,857  shares of our Class A common  stock as of
March 1, 2005,  at any time until March 24, 2011 at the  election of each holder
or  automatically  on the date  when the  average  closing  price of our Class A
common stock for 30  consecutive  trading days has been equal to or greater than
$12.00 per share.  The  convertible  notes do not confer  upon the  holders  any
rights as stockholders of our Company.

Also, in  connection  with our February  2005 private  placement,  we issued the
Convertible  Debentures  to a group of  institutional  investors  for  aggregate
proceeds of $7.6 million. The Convertible Debentures have a four year term, with
one third of the  unconverted  principal  balance  repayable in 12 equal monthly
installments  beginning  three  years  after the  closing of the  February  2005
private  placement.   The  remaining   unconverted   principal  balance  of  the
Convertible  Debentures is due at maturity.  We may pay the interest in cash or,
if certain conditions are met, by issuing shares of our shares of Class A common
stock.  If we are  eligible to issue shares of our Class A common stock to repay
interest,  the number of shares  issuable  is based on 93% of the 5-day  average
closing price preceding the interest due date. The Convertible Debentures may be
converted  (i)  voluntarily  by any  holder,  at any time until its  Convertible
Debentures are no longer  outstanding or (ii) at our option,  after the 24 month
anniversary of the original issuance date, on the business day after each of the
closing  prices of our  Class A common  stock for 20  consecutive  trading  days
exceeds  $7.90 per share,  provided  that the  trading  volume of Class A common
stock for each of such trading  days is greater than or equal to 100,000  shares
and certain other  conditions are met. The Convertible  Debentures are initially
convertible  into  1,867,322  shares of our Class A common stock,  based upon an
initial  conversion price of $4.07 per share subject to adjustments from time to
time.  The  Convertible  Debentures do not confer upon the holders any rights as
stockholders of our company.


WARRANTS



In connection with our IPO, we issued to the underwriter warrants to purchase up
to 120,000  shares of our Class A common stock at an exercise price of $6.25 per
share, subject to weighted average adjustments for issuance of additional shares
of our  Class A common  stock at a price  less than the  lesser of the  exercise
price then in effect or the  "market  price" of our Class A common  stock on the
date  immediately  prior to such issuance.  Such warrants are exercisable at any
time through  November 10, 2007.  As of March 29, 2005,  the exercise  price has
been adjusted to $6.03 per share.

In  connection  with our June 2, 2004  private  placement,  we issued  warrants,
exercisable  upon receipt,  to the investors to purchase up to 243,500 shares of
our Class A common stock at any time  through June 4, 2009 at an exercise  price
of $4.80.  Additionally,  we issued warrants,  exercisable upon receipt,  to the
placement  agent in  connection  with such  private  placement.  These  warrants
entitle  the  placement  agent to  purchase  up to 60,875  shares of our Class A
common stock at any time through June 4, 2009 at an exercise  price of $4.80 per
share.

In  connection  with  our  February  2005  private  placement,   we  issued  the
Convertible  Debentures Warrants to purchase up to 560,197 shares of our Class A
common  stock,  at an  initial  exercise  price of $4.44 per  share,  subject to


                                       80


adjustments  from  time  to  time.  The  Convertible   Debentures  Warrants  are
exercisable  beginning on September 9, 2005 until 5 years  thereafter.  Also, if
certain conditions are met, we may redeem the Convertible Debentures,  whereupon
we must, among other things,  issue five-year warrants exercisable for shares of
our Class A common stock (the "Redemption Warrants").

None of the warrants described above confer upon the holder any voting, dividend
or other rights as a stockholder of our company.


REGISTRATION RIGHTS


Except  with  respect to the shares  issued  pursuant  to our June 2004  private
placement (as more fully described below), the owners of the following shares of
our Class A common stock currently  outstanding or issuable upon the exercise of
warrants or other  convertible  securities are entitled to  registration  rights
under the Securities Act:

o    securities issued prior to our IPO;

o    securities issued pursuant to the Exchange Offer;

o    securities  issued pursuant to our  acquisitions of Hollywood SW, Core, and
     the assets of Boeing Digital and FiberSat Seller; and

o    securities  issued  pursuant to our November 2004 and February 2005 private
     placements.

Under the terms of  agreements  between us and the holders of those  registrable
securities, if we propose to register any of our securities under the Securities
Act,  either for our own  account or for the account of other  security  holders
exercising  registration  rights,  such  owners are  entitled  to notice of such
registration  and,  subject to  customary  underwriting  cutbacks  due to market
factors  which  may  result  in the  limitation  of the  number  of shares to be
underwritten, to include their shares in the registration. Additionally, of such
shares entitled to registration, a pre-IPO owner of shares is entitled to demand
registration  rights  pursuant  to which  it may  require  us on two  occasions,
commencing 180 days following our IPO, to file a  registration  statement  under
the Securities Act with respect to its shares of common stock;  we would then be
required to use our reasonable efforts to effect the registration.  Further, the
owners of the above referenced  registrable securities may require us to file an
unlimited  number of registration  statements on Form S-3 (to the extent that we
are eligible to use such Form).  We have agreed to pay all  registration  rights
expenses,  except for underwriting  discounts,  selling  commissions and counsel
fees (subject to, in certain limited instances, thresholds in excess of $20,000)
of, each seller in connection with the registration of his or its shares.

Most of the above  registration  rights terminate with respect to each holder if
and when such  stockholder  either holds less than 1% of our outstanding  common
stock or is eligible to sell all of his or its registrable securities under Rule
144(d) of the  Securities  Act  within any  three-month  period  without  volume
restrictions  or under Rule  144(k) of the  Securities  Act.  Accordingly,  if a
holder is not an "affiliate"  of ours,  then such holder's  registration  rights
will  terminate  no later than two years after its  purchase  of the  applicable
registrable shares.

In connection  with our IPO, we were required to register  under the  Securities
Act  120,000  shares of our  Class A common  stock  issuable  upon  exercise  of
warrants that were issued to the lead underwriter,  or the nominees thereof, and
keep such registration  statement, to which this prospectus is a part, effective
until November 10, 2007.

Owners of 1,521,875  shares of our Class A common stock issued or issuable  upon
exercise of warrants in connection  with our June 2, 2004 private  placement are
entitled to  registration  of those shares under the  Securities  Act. Under the
terms of agreements between us and the holders of those registrable  securities,
we were required to file the registration statement on or prior to July 4, 2004.
We were required to cause such registration  statement to be declared  effective
under the Securities Act within certain  prescribed time frames and to keep such
registration  statement  effective until the earlier of two years after the date
of  effectiveness  or the date on which the  holders  are able to  resell  their
shares  without  volume  restrictions  pursuant to Rule 144(k) of the Securities
Act.  We filed  such  registration  statement  on Form SB-2  which was  declared
effective  on July 20,  2004.  If we are  unable  to  timely  file any  required
post-effective  amendment to such Form SB-2, cause a post-effective amendment to
such Form SB-2 to become  effective  within the prescribed time frames or keep a


                                       81


post-effective  amendment to such Form SB-2  effective for the  prescribed  time
frames,  we will be  required to pay to each  holder  liquidated  damages in the
amount of 1% of the amount  invested  by such  holder  pursuant  to the  private
placement,  and if the breach remains uncured,  2% in liquidated damages for the
first  month and 1.5% each  month  thereafter.  Failure  to pay such  liquidated
damages  will  require us to pay  interest to each holder at the rate of 12% per
annum until such amounts are paid in full. We filed a  post-effective  amendment
to such Form SB-2 with the SEC on March 14, 2005.

In connection with our February 2005 private placement,  owners of (i) 1,867,322
shares of our Class A common stock issuable upon  conversion of the  Convertible
Debentures,   (ii)  560,197   shares   issuable  upon  exercise  of  outstanding
Convertible Debentures Warrants, (iii) up to approximately 456,936 shares of our
Class A  common  stock  issuable  as  payment  of  interest  on the  Convertible
Debentures (the "Interest Shares"),  and (iv) up to approximately 653,563 shares
issuable upon exercise of the Redemption  Warrants are entitled to  registration
of those shares under the Securities Act. Under the terms of agreements  between
us and the holders of those registrable securities, we were required to file (x)
a  registration  statement  on Form S-3 for resale of the shares  issuable  upon
conversion  of the  Convertible  Debentures  and  exercise  of  the  Convertible
Debentures  Warrants  no  later  than  March  11,  2005  and (y) a  registration
statement  for resale of the shares  issuable  upon  exercise of the  Redemption
Warrants and the Interest  Shares at an  appropriate  later date.  Also,  we are
required to cause such  registration  statements to be declared  effective under
the  Securities  Act  within  certain  prescribed  time  frames and to keep such
registration statements effective until the date of effectiveness or the date on
which the holders are able to resell the shares registered for resale thereunder
without volume restrictions pursuant to Rule 144(k) of the Securities Act. If we
are unable to timely file the registration  statements,  cause such registration
statements to become  effective  within the prescribed  time frames or keep such
registration  statements  effective for the prescribed  time frames,  we will be
required to pay to each holder  certain  partial  liquidated  damages on a daily
pro-rata  basis for any portion of a month  prior to the cure of the breach.  We
filed a  registration  statement  on Form S-3 for resale of the shares  issuable
upon  conversion of the  Convertible  Debentures and exercise of the Convertible
Debentures Warrants and issuable as the Interest Shares on March 11, 2005 and it
was declared effective by the SEC on March 21, 2005.

LOCK-UP AGREEMENTS

In connection with our IPO,  holders of all of our  outstanding  shares of stock
and persons who have been granted  options or warrants to purchase shares of our
Class A common  stock  agreed  not to,  directly  or  indirectly,  offer,  sell,
announce an intention to sell, contract to sell, pledge, hypothecate,  grant any
option to purchase,  or  otherwise  dispose of any shares of our common stock or
any securities  convertible  into or exercisable  for shares of our common stock
for a period of 18 months  following the date of our IPO prospectus  without the
prior written consent of the lead  underwriter.  However,  the period was for 12
months  following the date of our IPO  prospectus  for  stockholders  that owned
20,000 shares of our common stock or less, and  stockholders  that own more than
20,000  shares of our  common  stock  have been  permitted  to sell up to 10,000
shares per quarter beginning 12 months following the date of our IPO prospectus.
In addition, in connection with our acquisition of Hollywood SW, our acquisition
of Core and our March 24, 2004  exchange  offering,  those  persons who received
unregistered  shares of our Class A common stock have agreed to the same lock-up
period.  However,  we  have  agreed  that,  subject  to the  lead  underwriter's
agreement,  those persons who received their  unregistered  shares in connection
with  the  Hollywood  SW  acquisition   will  be  released  from  their  lock-up
restrictions  with respect to at least  50,000  shares per quarter if any of our
other  stockholders  that hold at least 100,000 shares are permitted to sell any
of their shares during the lock-up period.  In addition,  in connection with our
June 2004 private  placement,  we agreed to take such actions as are required to
ensure that none of our  executive  officers sold more than five percent (5%) of
the total number of shares of Class A common stock that such  executive  officer
beneficially  owned  for a  period  of six  (6)  months  following  the  initial
effective date of the registration  statement  relating to this offering without
the consent of the investors of our private offering; provided, however, that an
executive  officer  may  transfer an  unlimited  number of shares of our Class A
common stock for estate or tax planning purposes, so long as such transfer is to
a person that is and remains at all times  controlled by such executive  officer
and such person enters into a lock-up agreement with us that contains provisions
substantially  similar to those provided  above.  In connection with our October


                                       82


2004  private  placement,  we have agreed to the same  lock-up  provision as the
foregoing June 2004 private placement lock-up provision, except that the lock-up
period in such  November  2004  private  placement  was for three  months  after
November 8, 2004.  The shares of Class A common stock being  offered  under this
prospectus  will not be subject  to any  lock-up  provisions  and will be freely
tradable.


ANTI-TAKEOVER LAW


We are  subject  to  Section  203 of the  DGCL.  Section  203,  which  regulates
corporate  business  combinations and similar events.  DGCL Section 203 prevents
certain Delaware corporations,  including those whose securities are listed on a
national  securities  exchange,  like the  AMEX,  from  engaging  in a  business
combination  with  any  interested  stockholder  during  the  three-year  period
following  the date that such  stockholder  became  an  interested  stockholder,
unless appropriate approvals by its board of directors or stockholders have been
obtained.  For purposes of DGCL Section 203, a business  combination  includes a
merger or consolidation  involving our company and the interested stockholder or
the sale of 10% or more of our assets to an interested stockholder.  In general,
DGCL Section 203 defines an interested stockholder of us as any entity or person
beneficially  owning 15% or more of our outstanding  voting stock and any entity
or person affiliated with, controlling or controlled by such entity or person. A
Delaware  corporation  may  opt out of  DGCL  Section  203  through  an  express
provision in its original  certificate of incorporation or an express  provision
in its certificate of incorporation or bylaws resulting from amendments approved
by the holders of a majority of its outstanding voting shares. We have not opted
out of DGCL Section 203.

DIRECTOR AND OFFICER LIABILITY AND INDEMNIFICATION


Our amended and restated  certificate of  incorporation  eliminates the monetary
liability  of our  directors  to  the  fullest  extent  permitted  by the  DGCL.
Consequently,  no director will be personally  liable to us or our  stockholders
for  monetary  damages  resulting  from his or her  conduct as a director of our
company, except liability for:


     o    any breach of the director's duty of loyalty to the company or its
          stockholders;

     o    any act or  omission  not in good faith or that  involves  intentional
          misconduct or a knowing violation of law;

     o    any acts under Section 174 of the DGCL; or

     o    any transaction from which the director  derives an improper  personal
          benefit.

Additionally,  under recent Delaware court decisions, a director's liability may
not be limited or  eliminated  for a "conscious  disregard of a known risk" that
calls into question whether the director acted in good faith.


Our amended and restated  certificate of  incorporation  and bylaws both provide
for  indemnification  of our directors,  officers and other authorized  persons,
which may include  employees  and agents,  to the maximum  extent  permitted  by
Delaware law. Our directors and officers may also be protected against costs and
liabilities  that they incur by virtue of serving  in those  capacities  under a
liability  insurance policy  maintained by us, which provides  coverage up to $5
million.


Insofar as indemnification  for liabilities arising under the Securities Act may
be permitted to directors,  officers and controlling persons of a small business
issuer, like our company, pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the SEC such indemnification is against
public  policy  as  expressed  in  the   Securities   Act  and  is,   therefore,
unenforceable.


                                       83





                              PLAN OF DISTRIBUTION


In  connection  with the IPO we completed on November 14, 2003,  we are offering
shares of our Class A common stock issuable upon exercise of the warrants issued
to the lead  underwriter  of the IPO, or nominees  thereof.  The warrants may be
exercised  anytime  until  November  10, 2007 by  surrendering  the  certificate
representing  such warrant with a duly executed  election to purchase,  together
with payment at our  principal  offices of the aggregate  exercise  price of the
warrants being  exercised.  Upon notice of such exercise and payment in full, we
will instruct our transfer agent to prepare certificates representing the shares
purchased.   When  such   certificates  are  prepared,   we  will  deliver  such
certificates to the exercising  warrant holder. If less than all of the warrants
evidenced by the warrants are exercised,  a new  certificate  will be issued for
the remaining number of warrants.


                                 TRANSFER AGENT


The  transfer  agent for our Class A common stock is American  Stock  Transfer &
Trust Company.



                                  LEGAL MATTERS





The validity of the offered shares of Class A common stock will be passed on
for us by Gary S. Loffredo, Esq., our Senior Vice President, General Counsel,
Secretary and Director.  As of March 1, 2005, Mr. Loffredo beneficially owned
139,998 shares of our Class A common stock.


                                     EXPERTS

The consolidated financial statements of AccessIT at March 31, 2003 and 2004 and
for each of the two fiscal years in the period ended March 31, 2004  included in
this   prospectus   have  been  so   included  in  reliance  on  the  report  of
PricewaterhouseCoopers  LLP ("PwC"), an independent registered public accounting
firm, given on the authority of said firm as experts in auditing and accounting.


The financial statements of Hollywood SW at March 31, 2002 and 2003 and for each
of the two fiscal years in the period ended March 31, 2003  appearing  elsewhere
in this  prospectus  have been  audited  by BDO  Seidman,  LLP,  an  independent
certified  public  accountants,  to the extent and for the  periods set forth in
their report  thereon,  and are included in reliance upon said report given upon
the authority of such firm as experts in accounting and auditing.

The financial  statements of FiberSat  Seller as of December 31, 2003  appearing
elsewhere  in this  prospectus  have been  audited by Singer  Lewak  Greenbaum &
Goldstein  LLP,  an  independent  registered  public  accounting  firm,  and are
included in reliance  upon said report given upon the  authority of such firm as
experts in accounting and auditing.


  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                                   DISCLOSURE

On September 9, 2004,  the audit  committee of our Board of Directors  dismissed
PwC as our independent  registered public accounting firm and engaged Eisner LLP
("Eisner") as our new independent registered public accounting firm.

The audit reports of PwC on our consolidated  financial statements as of and for
the fiscal  years  ended  March 31,  2003 and March 31, 2004 did not contain any
adverse  opinion or  disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principle.

During the fiscal  years  ended  March 31,  2003 and March 31,  2004 and through
September 9, 2004, there were no disagreements  between us and PwC on any matter
of  accounting  principles  or  practices,  financial  statement  disclosure  or


                                       84


auditing  scope or  procedure,  which  disagreements  if not  resolved  to PwC's
satisfaction  would have caused PwC to make reference  thereto in its reports on
the consolidated financial statements for such years.


No reportable events of the type described in Item  304(a)(1)(iv)(B) of
Regulation  S-B occurred  during the fiscal years ended March 31, 2003 and March
31, 2004 and through September 9, 2004.


We had provided PwC with the above  statements and requested that PwC furnish us
with a letter  addressed  to the SEC  stating  whether or not it agrees with the
above  statements.  A copy of the letter from PwC dated  September  10, 2004 was
filed as an  exhibit  to our Form 8-K  filed on  September  14,  2004  (file No.
041028711).

During the two fiscal  years ended March 31, 2003 and March 31, 2004 and through
September  9, 2004,  we have not  consulted  with  Eisner on any matter that (i)
involved the  application  of accounting  principles to a specific  completed or
contemplated transaction, or the type of audit opinion that might be rendered on
our financial statements, in each case where written or oral advice was provided
that was an important  factor  considered by us in reaching a decision as to the
accounting,  auditing  or  financial  reporting  issue;  or (ii) was  either the
subject of a disagreement, as that term is described in Item 304(a)(1)(iv)(A) of
Regulation  S-B and the related  instruction  to Item 304 of Regulation  S-B, or
reportable  information,  as that term is described in Item  304(a)(1)(iv)(B) of
Regulation S-B.

                       WHERE YOU CAN FIND MORE INFORMATION


We have  filed  with the SEC a  registration  statement  on Form SB-2  under the
Securities  Act with respect to the shares of Class A common stock being offered
for sale pursuant to this prospectus.  This  prospectus,  filed as a part of the
registration statement, does not contain all of the information set forth in the
registration  statement,  portions of which have been omitted in accordance with
the rules and regulations of the SEC. For further information with respect to us
and the Class A common stock we are offering,  we refer you to the  registration
statement. Statements made in this prospectus as to the contents of any contract
or other document are not necessarily  complete and, in each instance,  we refer
you to a copy of the  contract  or other  document  filed as an  exhibit  to the
registration  statement and each such  statement is qualified in its entirety by
such reference.  The registration  statement,  including exhibits and schedules,
may be  inspected  without  charge  at the  Public  Reference  Room of the  SEC,
Judiciary Plaza Building,  450 Fifth Street,  N.W.,  Washington DC 20549. Copies
may be obtained,  at prescribed rates, from the Public Reference Room of the SEC
at Room 1024,  Judiciary Plaza Building,  450 Fifth Street,  N.W.  Washington DC
20549. You may obtain information regarding the Public Reference Room by calling
the  SEC  at  1-800-SEC-0330.  The  SEC  maintains  a  web  site  that  contains
registration  statements,   reports,  proxy  statements  and  other  information
regarding  registrants that file electronically with the SEC. The address of the
SEC's web site is WWW.SEC.GOV.

We are subject to the reporting and other  requirements of the Exchange Act. For
as long as we are subject to the reporting  requirements of the Exchange Act, we
will provide our stockholders with annual reports  containing  audited financial
statements  and  interim  quarterly  reports  containing   unaudited   financial
information.









                                       85





                          INDEX TO FINANCIAL STATEMENTS


                                                                            PAGE
AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF ACCESS INTEGRATED TECHNOLOGIES,
INC.:

Report of Independent Registered Public Accounting Firm..................    F-3

Consolidated balance sheets as of March 31, 2003 and 2004................    F-4

Consolidated  statements  of  operations  for the fiscal years ended
March 31, 2003 and 2004..................................................    F-5

Consolidated statements of stockholders' equity for the fiscal
years ended March 31, 2003 and 2004......................................    F-6

Consolidated statements of cash flows for the fiscal years ended
March 31, 2003 and 2004..................................................    F-8

Notes to consolidated financial statements...............................    F-9


UNAUDITED CONSOLIDATED  FINANCIAL STATEMENTS OF ACCESS INTEGRATED  TECHNOLOGIES,
INC.:

Consolidated Balance Sheet at December 31, 2004..........................   F-40

Consolidated Statements of Operations for the three months ended
December 31, 2003 and 2004...............................................   F-41

Consolidated  Statements of Operations for the nine months ended
December 31, 2003 and 2004...............................................   F-42

Consolidated  Statements of Cash Flows for the nine months ended
December 31, 2003 and 2004...............................................   F-43

Notes to consolidated financial statements...............................   F-44

AUDITED FINANCIAL STATEMENTS OF HOLLYWOOD SOFTWARE, INC.:

Report of Independent Certified Public
Accountants..............................................................   F-57

Balance sheets as of March 31, 2002 and 2003.............................   F-58

Statements of operations for the fiscal years ended March 31,
2002 and 2003............................................................   F-59

Statements  of  stockholders'  equity for the fiscal years ended
March 31, 2002 and 2003..................................................   F-60

Statements of cash flows for the fiscal years ended March 31,
2002 and 2003............................................................   F-61

Notes to financial statements............................................   F-62

UNAUDITED FINANCIAL STATEMENTS OF HOLLYWOOD SOFTARE, INC.

Balance sheet as of September 30, 2003...................................   F-74

Statements of  operations  for the three and six months ended
September 30, 2002 and 2003..............................................   F-75

Statement of stockholders' equity for the six months ended
September 30, 2003.......................................................   F-76

                                       F-1


Statements  of cash flows for the three and six months  ended
September 30, 2002 and 2003..............................................   F-77

Notes to Financial Statements............................................   F-78

AUDITED FINANCIAL STATEMENTS OF FIBERSAT GLOBAL SERVICES, LLC:

Report of Independent Registered Public Accounting Firm..................   F-89

Balance  sheet  as of  December 31,  2003,  and  the
 related  statements  of operations, members'
equity and cash flows for the year then ended............................   F-90

Notes to Financial Statements............................................   F-94


UNAUDITED FINANCIAL STATEMENTS OF FIBERSAT GLOBAL SERVICES, LLC:


Balance sheet as of September 30, 2004 and the related statements of
operations, members'  equity and cash flows for the nine  months  ended
September  30, 2004 (unaudited)..........................................  F-101


Notes to Financial Statements (unaudited)................................  F-105

PRO FORMA:
  Pro forma condensed combined statements of operations for the
  fiscal yearended March 31, 2004 (unaudited) and for the nine months
  ended December 31, 2004 (unaudited)....................................    P-1





                                       F-2





           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors and Stockholders of Access Integrated Technologies,
Inc.:

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements  of  operations,  stockholders'  equity  and cash flows
present  fairly,  in all material  respects,  the  financial  position of Access
Integrated  Technologies,  Inc. and its subsidiaries at March 31, 2003 and 2004,
and the  results  of their  operations  and their cash flows for each of the two
years  in the  period  ended  March  31,  2004  in  conformity  with  accounting
principles  generally accepted in the United States of America.  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 audits.  We conducted our audits of these  statements in accordance with the
standards of the Public  Company  Accounting  Oversight  Board (United  States).
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,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.




/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 9, 2004







                                      F-3





                     ACCESS INTEGRATED TECHNOLOGIES, INC.


                           CONSOLIDATED BALANCE SHEETS

                      (In thousands, except for share data)




                                                          MARCH 31,
                                                         2003     2004
                                                        ------   ------
                       ASSETS
CURRENT ASSETS
  Cash and cash equivalents                               $956   $2,330

  Accounts receivable, net........................          41      509
  Prepaid and other current assets................         287      296
  Unbilled revenue................................          43        8
Total current assets..............................       1,327    3,143

  Property and equipment, net.....................       5,133    5,865
  Intangible assets, net..........................       2,309    4,200
  Capitalized software costs, net.................         --     1,430
  Goodwill........................................         --     5,378
  Deferred costs..................................         212       91
  Unbilled revenue, net of current portion........         444      596
  Security deposits...............................         469      472
Total assets......................................      $9,894  $21,175

LIABILITIES, REDEEMABLE STOCK AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts  payable and accrued expenses...............     $792   $1,371

  Current portion of notes payable...................    1,152      650
  Current portion of customer security deposits .....       --       38
  Current portion of capital leases..................      261      115
  Current portion of deferred revenue................       76      755
  Current portion of deferred rent expense...........       --        2
Total current liabilities............................    2,281    2,931

  Notes payable, net of current portion..............    1,730    5,589
  Customer security deposits, net of current portion       138      117
  Deferred revenue, net of current portion...........      287      271
  Capital leases, net of current portion.............      252       35
  Deferred rent expense..............................      667      884
  Minority interest in subsidiary....................       --       10
  Deferred tax liability.............................       --    1,520
  Total liabilities..................................    5,355   11,357

COMMITMENTS AND CONTINGENCIES (See Note 9)


Mandatorily redeemable convertible preferred stock
  Preferred stock with mandatory redemption - Series A,
   $0.001 par value, 3,500,000 authorized; issued and
   outstanding, 2003 - 3,226,538 and 2004 - 0 shares....   879       --

  Preferred stock with mandatory redemption - Series B,
    $0.001 par value, 5,000,000 authorized; issued and
    outstanding, 2003 - 4,976,391 and
    2004 - 0 shares..................................... 2,032       --

  Redeemable Class A common stock, issued and outstanding,
    2003 - 0 and 2004 - 53,534 shares, respectively.....    --      238

Stockholders' Equity:

 Class A common stock, $0.001 par value per share;
 40,000,000 shares authorized; shares issued
 and outstanding, 2003 - 2,015,770
 and 2004 - 7,281,730 shares, respectively..............     2        7

 Class B common stock, $0.001 par value per share;
   15,000,000  shares  authorized;  shares  issued  and
   outstanding, 2003 and 2004 1,005,811 shares......         1        1
 Additional paid-in capital.........................    11,530   24,271
 Deferred stock-based compensation..................       (11)      --
 Accumulated deficit................................   (9,894)  (14,699)
                                                       -------  -------
Total stockholders' equity..........................     1,628    9,580
                                                         -----   ------



Total Liabilities, Redeemable Stock and Stockholders'
Equity...............................................   $9,894  $21,175
                                                        ======  =======
See accompanying notes to consolidated financial statements.






                                      F-4






                     ACCESS INTEGRATED TECHNOLOGIES, INC.

                    CONSOLIDATED STATEMENTS OF OPERATIONS
             (In thousands, except for share and per share data)




                                                          For the Fiscal Years Ended
                                                                    March 31,
                                                           --------------------------

                                                             2003            2004
                                                            ------          -----

Revenues

                                                                
 Media services..............................             $   --           $1,356
 Data centers................................               4,228           5,845
       Total revenues                                       4,228           7,201

Cost of revenues (exclusive of depreciation shown
 below)
   Media services.............................                 --             152
   Data centers...............................               3,101          3,515
          Total costs of revenues............                3,101          3,667

Gross profit.................................                1,127          3,534

Operating expenses

Selling, general and administrative (excludes non-
cash stock-based compensation of $99 in 2003 and
$15 in 2004).................................                2,305          3,277
Research and development.....................                   --             55
Non-cash stock-based compensation............                   99             15
Depreciation and amortization................                1,687          2,692

Total operating expenses.....................                4,091          6,039

Loss from operations.........................               (2,964)         (2,505)

Interest income..............................                   13              6
Interest expense.............................                 (364)          (542)
Loss on early extinguishment of debt.........                   --           (126)
Non-cash interest expense....................                 (282)        (1,823)
Minority interest in subsidiary..............                   --             25
Other income (expense), net..................                    8            (52)
Net loss before income taxes.................               (3,589)        (5,017)

Income tax benefit...........................                  185            212

Net loss.....................................               (3,404)        (4,805)

Accretion related to redeemable convertible

Preferred stock..............................                 (628)        (1,588)
Accretion of preferred dividends.............                 (229)          (220)

Net loss available to common stockholders....              $(4,261)       $(6,613)

Net loss available to common stockholders per common share:
Basic and diluted............................               $(1.41)        $(1.37)

Weighted average number of common shares outstanding:
Basic and diluted............................            3,027,865      4,826,776








See accompanying notes to consolidated financial statements.
                                      F-5












                     ACCESS INTEGRATED TECHNOLOGIES, INC.

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      (In thousands, except for share data)




                                                                       Class A           Class B
                                                                     Common Stock       Common Stock
                                                                     ------------       ------------       Additional
                                                                                                            Paid-In
                                                                   Shares    Amount    Shares     Amount     Capital
                                                                  --------   ------    ------     ------    ---------

                                                                                           
Balances as of March 31, 2002.................................  1,958,770       $2    1,067,811      $1     $11,277

  Issuance of common stock for cash...........................     20,000       --           --      --         125
  Exercise of warrants to purchase common stock...............      5,000       --           --      --          --
  Issuance of warrants to purchase common stock
  (attached to Series B preferred stock)......................         --       --           --      --         343
  Issuance of warrants to purchase common stock
  (attached to notes payable).................................         --       --           --      --         680
  Conversion of Class B common stock to Class A common stock..     62,000       --     (62,000)      --          --
  Cancellation of stock issued for goods and services.........   (30,000)       --           --      --        (300)
  Contribution of Class A common stock from founders..........   (60,000)       --           --      --         (48)
  Issuance of Class A common stock to employees...............     60,000       --           --      --          48
  Stock-based compensation....................................         --       --           --      --          51
  Forfeiture of non-employee stock options....................         --       --           --      --         (18)
  Amortization of stock-based compensation....................         --       --           --      --          --
  Accretion of preferred stock to redemption amount...........         --       --           --      --        (628)
  Net loss....................................................         --       --           --      --          --
                                                                 --------   ------    ------     ------   ---------

Balances as of March 31, 2003.................................  2,015,770       $2    1,005,811      $1     $11,530

  Issuance of common stock, net...............................  1,380,000        1           --      --       4,372
  Issuance of warrant to purchase common stock................         --       --           --      --         385
  Issuance of common stock in exchange for preferred stock
   and contingent warrants....................................  2,207,976        2           --      --       4,498
  Issuance of warrants to purchase common stock
   (attached to notes payable)................................         --       --           --      --         615
  Issuance of common stock for the purchase of
    Hollywood Software, Inc...................................    400,000       --           --      --       1,380
  Issuance of common stock for the purchase of
    Core Technology Services, Inc.............................    100,000       --           --      --         345
  Issuance of common stock upon completion of notes exchange..    707,477        1           --      --       2,566
  Issuance of common stock for goods and services.............      9,700       --           --      --           7
  Exercise of warrants to purchase common stock
      (attached to notes payable)............................     460,807        1           --      --          22
  Amortization of stock-based compensation....................         --       --           --      --          --
  Accretion of preferred stock to redemption amount...........         --       --           --      --      (1,588)
  Gain on sale of stock by subsidiary.........................         --       --           --      --         139
  Net loss....................................................         --       --           --      --          --
                                                                 --------   ------    ------     ------   ---------

Balances as of March 31, 2004                                   7,281,730       $7    1,005,811      $1     $24,271
                                                                =========   ======    =========  ======    ========



See accompanying notes to consolidated financial statements.

                                      F-6





                     ACCESS INTEGRATED TECHNOLOGIES, INC.

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - (continued)
                    (In thousands, except for share data)




                                                                  Deferred Stock-                         Total
                                                                        Based           Accumulated    Stockholders'
                                                                    Compensation         Deficit         Equity
                                                                 ----------------      -------------   -------------


                                                                                             
Balances as of March 31, 2002 ....................................   $    (77)           $ (6,490)         $  4,713


 Issuance of common stock for cash ...............................         --                  --               125
  Exercise of warrants to purchase common stock ..................         --                  --               --
  Issuance of warrants to purchase common stock
  (attached to Series B preferred stock) .........................         --                  --               343
  Issuance of warrants to purchase common stock
  (attached to notes payable) ....................................         --                  --               680

  Conversion of Class B common stock to Class A common stock .....         --                  --               --

  Cancellation of stock issued for goods and services ............         --                  --              (300)
  Contribution of Class A common stock from founders .............         --                  --               (48)
  Issuance of Class A common stock to employees ..................         --                  --                48
  Stock-based compensation .......................................         (3)                 --                48
  Forfeiture of non-employee stock options .......................         18                  --                --
  Amortization of stock-based compensation .......................         51                  --                51
  Accretion of preferred stock to redemption amount ..............         --                  --              (628)

  Net loss .......................................................         --              (3,404)           (3,404)
                                                                        -----               -----             -----

Balances as of March 31, 2003 ....................................   $    (11)           $ (9,894)         $  1,628

  Issuance of common stock, net ..................................         --                  --             4,373
  Issuance of warrant to purchase common stock ...................         --                  --               385
  Issuance of common stock in exchange for preferred stock
  and contingentwarrants ..........................................        --                  --             4,500
  Issuance of warrants to purchase common stock
   (attached to notes payable).....................................        --                  --               615
  Issuance of common stock for the purchase of Hollywood Software, Inc     --                  --             1,380
  Issuance of common stock for the purchase of Core Technology
   Services, Inc..................................................         --                  --               345
  Issuance of common stock upon completion of notes exchange .....         --                  --             2,567
  Issuance of common stock for goods and services ................         (4)                 --                 3
  Exercise of warrants to purchase common stock
    (attached to notes payable)...................................         --                  --                23
  Amortization of stock-based compensation .......................         15                  --                15
  Accretion of preferred stock to redemption amount ..............         --                  --            (1,588)
  Gain on sale of stock by subsidiary ............................         --                  --               139
  Net loss .......................................................         --              (4,805)           (4,805)
                                                                        -----               -----             -----

Balances as of March 31, 2004 ....................................       $ --            $(14,699)         $  9,580
                                                                        =====               =====             =====




See accompanying notes to consolidated financial statements.






                                      F-7






                     ACCESS INTEGRATED TECHNOLOGIES, INC.


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)




                                                                        For the Fiscal Years Ended
                                                                                    March 31,
                                                                                2003      2004
                                                                                ----      ----

Cash flows from operating activities
                                                                                
Net loss................................................................    $(3,404)    $ (4,805)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization...........................................      1,687        2,692
Amortization of software development costs..............................         --          118
Non-cash stock-based compensation.......................................         99           15
Non-cash interest expense...............................................        282        1,823
Minority Interest.......................................................         --         (25)
Loss on early extinguishment of debt....................................         --          126
Changes in operating assets and liabilities:
Accounts receivable.....................................................         88         (283)
Prepaid and other current assets........................................        (76)           4
Other assets............................................................       (342)         (24)
Accounts payable and accrued expenses...................................        257          292
Deferred revenue........................................................        354          237
Other liabilities.......................................................        295          151
                                                                                ---          ---

Net cash (used in) provided by operating activities.....................       (760)         321
                                                                               -----       -----

Cash flows from investing activities:
Purchases of property and equipment.....................................       (327)        (279)
Purchases of intangible assets..........................................          --         (50)
Additions to capitalized software costs.................................          --        (198)
Acquisition of Hollywood software, net of cash acquired.................          --      (2,387)
Acquisition of Core Technology Services.................................          --        (275)
Acquisition of Boeing Digital Cinema assets.............................          --        (405)
Settlement of Bridgepoint obligation....................................       (200)          --
Settlement of Tower obligation..........................................       (750)          --
Increase (decrease) in restricted cash..................................        951           --
Acquisition of data centers.............................................     (2,309)          --
                                                                             -------      ------

Net cash (used in) investing activities.................................     (2,635)      (3,594)
                                                                             -------      -------

Cash flows from financing activities:
Net proceeds from issuance of preferred stock...........................      2,375           --
Net proceeds from issuance of notes payable and warrants................      1,360        1,230
Repayment of notes payable..............................................       (333)      (1,000)
Principal payments on capital leases....................................       (177)        (363)
Proceeds from issuance of common stock..................................        125        4,780
                                                                             -------      -------

Net cash provided by financing activities...............................      3,350        4,647
                                                                             -------      -------

Net (decrease) increase in cash and cash equivalents....................        (45)       1,374
Cash and cash equivalents at beginning of year..........................      1,001          956
                                                                              -----        -----

Cash and cash equivalents at end of year................................       $956       $2,330
                                                                              ======      =======






See accompanying notes to consolidated financial statements.






                                      F-8






                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


NOTE 1.     NATURE OF OPERATIONS



Access Integrated  Technologies,  Inc. ("AccessIT") was incorporated in Delaware
in March 2000. Access Digital Media Inc.  ("AccessDM") a wholly owned subsidiary
of AccessIT,  was incorporated in Delaware in February 2003. Hollywood Software,
Inc.  ("Hollywood  SW") was  incorporated in California in October 1997, and was
acquired by AccessIT on November 3, 2003 (see Note 7). Core Technology Services,
Inc. ("Core") was incorporated in New York in November 1995, and was acquired by
AccessIT on January 9, 2004 (see Note 7). AccessIT,  AccessDM,  Hollywood SW and
Core are referred to herein  collectively  as the "Company."  AccessIT  designs,
builds,  and  operates a national  platform  of  carrier-diverse  Internet  Data
Centers  ("IDCs")  in which the  Company's  customers  have  access to:  secure,
flexible  space for  installing  network and server  equipment;  multiple  fiber
providers for connecting to the Internet  and/or other carrier  networks;  and a
broad  range  of  value-added  data  center  services  including  the  Company's
AccessStorage-on-Demand  managed storage service solutions.  The Company's IDCs,
called  AccessColocenters,  are  designed  to  serve  a  variety  of  customers,
including  traditional  voice/data  competitive local exchange  carriers,  other
integrated  communication  providers,  Internet Service  Providers,  Application
Service  Providers  ("ASP"),  Streaming and Content Delivery Service  Providers,
storage  outsourcers,  and small  and  medium  sized  enterprises.  The  Company
currently operates nine IDCs located in eight states:  Arkansas,  Kansas, Maine,
New  Hampshire,  New  Jersey,  New York,  Texas and  Virginia,  plus a dedicated
digital delivery site in Los Angeles, California. AccessDM was formed to utilize
AccessIT's  existing  infrastructure to store and distribute  digital content to
movie  theaters  and  other  remote  venues.  Hollywood  SW  is  a  provider  of
proprietary  enterprise  software and consulting  services for  distributors and
exhibitors of filmed entertainment in the United States and Canada. Its software
manages  the  planning,  booking  scheduling,  revenue  sharing,  cash  flow and
reporting  associated with the distribution and exhibition of theatrical  films.
Core is a managed  service  provider of  information  technologies;  its primary
offering is to provide  managed  network  services  through their global network
command center.


BASIS OF PRESENTATION



For the  fiscal  years  ended  March 31,  2003 and 2004,  the  Company  has been
financed  primarily through equity and debt financing,  including the completion
of its initial  public  offering in November 2003 (the "IPO") that generated net
cash receipts of $1,067 and, most recently, the June 2004 completion of a $4,870
private  placement of Class A Common Stock (the "Private  Placement").  However,
the Company has  incurred  substantial  losses since  inception.  For the fiscal
years ended March 31, 2003 and 2004,  the Company  incurred net losses of $3,404
and $4,805  respectively,  and negative and positive  cash flows from  operating
activities  of ($760) and $321,  respectively.  In addition,  the Company has an
accumulated  deficit of $14,699 as of March 31, 2004.  Furthermore,  the Company
has debt service requirements of $1,104 for the twelve months beginning in March
2004, of which $879 of principal  and interest  payments are due by December 31,
2004.  Management  expects that the Company will continue to generate  operating
losses for the  foreseeable  future due to the continued  efforts related to the
identification of acquisition targets,  marketing and promotional activities and
the development of relationships  with other businesses.  Certain of these costs
could be reduced if  working  capital  decreased.  Based on the  Company's  cash
position at March 31, 2004,  the Private  Placement and expected cash flows from
operations,  management  believes  that the  Company has the ability to meet its
obligations  for the  foreseeable  future.  The  Company  may  attempt  to raise
additional  capital from various sources for future  acquisitions or for working
capital  as  necessary.  There  is no  assurance  that  such  financing  will be
completed  as  contemplated  or under  terms  acceptable  to the  Company or its
existing shareholders. Failure to generate additional revenues, raise additional
capital or manage discretionary spending could have a material adverse effect on
the Company's ability to continue as a going concern and to achieve its intended


                                      F-9


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


business objectives.  The accompanying  consolidated financial statements do not
reflect any adjustments which may result from the outcome of such uncertainties.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The  consolidated   financial  statements  include  the  accounts  of  AccessIT,
Hollywood SW, Core and ACCESSDM. All intercompany transactions and balances have
been eliminated.


CASH AND CASH EQUIVALENTS

The Company  considers  all highly liquid  instruments  with a maturity from the
date  of  purchase  of  three  months  or  less  to be  cash  equivalents.  Cash
equivalents consist of money market mutual funds.

FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK

Financial  instruments,  which potentially subject the Company to concentrations
of credit risk,  consist of cash and cash equivalents to the extent these exceed
federal insurance limits and accounts receivable. Risks associated with cash and
cash equivalents are mitigated by the Company's  investment policy, which limits
the Company's investing of excess cash and cash equivalents to only money market
mutual funds.

The Company  places its cash with high credit  quality  financial  institutions.
These balances, as reflected in the financial institution's records, are insured
in the U.S. by the Federal Deposit  Insurance  Corporation for up to $100. As of
March 31, 2004,  uninsured cash balances in the U.S.  aggregated $2,132 with two
financial institutions.

The Company's customer base is primarily  composed of businesses  throughout the
United  States.  For the  fiscal  year  ended  March 31,  2003,  four  customers
accounted for 21%, 17%, 11% and 10% of revenues,  respectively,  and as of March
31,  2003  four  customers  accounted  for  16%,  13%,  12% and 10% of  accounts
receivable,  respectively.  For the fiscal  year  ended  March 31,  2004,  three
customers  accounted for 27%, 12% and 10% of revenues,  respectively,  and as of
March 31, 2004 four  customers  accounted  for 17%, 15%, 12% and 12% of accounts
receivable,  respectively.  No other single customer  accounted for greater than
10% of accounts receivable or revenues during the years ended March 31, 2003 and
2004.  As of March 31,  2003 and 2004,  the  Company  had  established  bad debt
reserves of $12 and $64, respectively.


PROPERTY AND EQUIPMENT

Property and equipment  are stated at original  cost.  Depreciation  is computed
using the straight-line method over the estimated useful lives of the respective
assets as follows:

Computer equipment                     3-5 years
Machinery and equipment                3-6 years
Furniture and fixtures                 3-6 years


Leasehold improvements are being amortized over the shorter of the lease term or
the estimated useful life of the  improvement.  Maintenance and repair costs are
charged to expense as incurred.  Major  renewals,  betterments and additions are
capitalized.  Included in property  and  equipment as of March 31, 2003 and 2004


                                      F-10


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

was $100 of  construction  services for which the Company issued common stock as
consideration (See Note 11).


FAIR VALUE OF FINANCIAL INSTRUMENTS


The carrying amounts of the Company's financial instruments,  which include cash
and cash equivalents,  accounts receivable,  accounts payable,  accrued expenses
and other  obligations,  approximate  their fair  value due to the  short-  term
maturities  of the  related  instruments.  Based on  borrowing  rates  currently
available to the Company for loans with  similar  terms,  the carrying  value of
notes  payable and  capital  lease  obligations  approximates  fair  value.  The
carrying  value of the Company's  Series A and Series B  mandatorily  redeemable
convertible  Preferred Stock was recorded below its  liquidation  value at March
31,  2003 (See Note 5). The fair value of the  Company's  outstanding  preferred
securities  at March 31,  2003 was not readily  determinable  since there was no
market for such securities.


IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF


The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
144,  "Accounting  for the  Impairment or Disposal of  Long-Lived  Assets" as of
April 1,  2002.  SFAS No.  144  supersedes  SFAS No.  121,  "Accounting  for the
Impairment of Long-Lived Assets and of Long-Lived Assets to be Disposed Of", and
portions of Accounting  Principles Board Opinion No. 30,  "Reporting the Results
of Operations - Reporting the Effects of Disposal of a Segment of Business,  and
Extraordinary,  Unusual and Infrequently Occurring Events and Transactions," and
amends Accounting Research Bulletin No. 51, "Consolidated Financial Statements".
SFAS No. 144 generally conforms,  among other things,  impairment accounting for
assets to be  disposed  of,  including  those in  discontinued  operations.  The
Company reviews the recoverability of its long- lived assets on a periodic basis
in  order to  identify  business  conditions,  which  may  indicate  a  possible
impairment.  The assessment for potential  impairment is based  primarily on the
Company's  ability to recover the carrying value of its  long-lived  assets from
expected  future   undiscounted   cash  flows.  If  the  total  expected  future
undiscounted  cash flows is less than the carrying amount of the assets,  a loss
is recognized for the difference between the fair value (computed based upon the
expected future discounted cash flows) and the carrying value of the assets.


INTANGIBLE ASSETS


The Company has adopted SFAS No. 141, "Business  Combinations" and SFAS No. 142,
"Goodwill  and other  Intangible  Assets."  SFAS No. 141  requires  all business
combinations  to be accounted for using the purchase  method of  accounting  and
that  certain  intangible  assets  acquired  in a business  combination  must be
recognized  as  assets  separate  from  goodwill.  SFAS No.  142  addressed  the
recognition and measurement of goodwill and other intangible  assets  subsequent
to their  acquisition.  SFAS No. 142 also addresses the initial  recognition and
measurement  of intangible  assets  acquired  outside of a business  combination
whether  acquired  individually or with a group of other assets.  This statement
provides that intangible  assets with indefinite  lives and goodwill will not be
amortized but will be tested at least annually for impairment.  If an impairment
is  indicated  then the asset will be written  down to its fair value  typically
based upon its future expected  discounted cash flows.  Intangible assets of the
Company as of March 31, 2003 consist of customer  contracts  determined  to be a
finite-lived intangible asset and is being amortized over its useful life, which
is estimated to be three years. In addition,  during the fiscal year ended March
31, 2004, the Company acquired  intangible assets related to customer contracts,
trade names,  trademarks and covenants not to compete.  These were determined to
be  finite-lived  intangibles  assets and are being  amortized over their useful
lives ranging from 2 to 10 years. In addition the Company  recorded  goodwill in
connection with the acquisitions of Hollywood SW and Core.




                                      F-11


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

REVENUE RECOGNITION


Revenues in the Data centers  segment  consist of license  fees for  colocation,
riser  access  charges,  electric  and cross  connect  fees,  and  non-recurring
installation  and  consulting  fees.  Revenues  from  colocation,  riser  access
charges,  electric and cross connect fees are billed  monthly and, in accordance
with Staff  Accounting  Bulletin  No. 104,  "Revenue  Recognition  in  Financial
Statements," are recognized ratably over the term of the contract, generally two
to nine years.  Certain customer  contracts  contain  periodic  increases in the
amount of license fees to be paid,  and those amounts are  recognized as license
fee  revenues  on  a  straight-line  basis  over  the  term  of  the  contracts.
Installation  fees are recognized on a time and materials basis in the period in
which the services were provided and represent the  culmination  of the earnings
process  as no  significant  obligations  remain.  Amounts  collected  prior  to
satisfying  the above revenue  recognition  criteria are  classified as deferred
revenue.  Amounts  satisfying  the above revenue  recognition  criteria prior to
billing are classified as unbilled revenue.

Revenues in the Media Services segment consist of software and related revenues,
generated by Hollywood  SW.  Software  revenues are  accounted for in accordance
with Statement of Position 97-2,  "Software Revenue  Recognition"  ("SOP 97-2"),
and Staff  Accounting  Bulletin No. 104  "Revenue  Recognition."  The  Company's
software revenues are generated from the following primary sources: (1) software
licensing,   including  customer  licenses  and  ASP  agreements,  (2)  software
maintenance contracts,  and (3) professional consulting services, which includes
systems implementation, training, custom software development services and other
professional services.

Software  licensing  revenue is recognized when the following  criteria are met:
(a) persuasive  evidence of an arrangement exists, (b) delivery has occurred and
no significant  obligations remain, (c) the fee is fixed or determinable and (d)
collection is determined to be probable.  Significant  upfront fees are received
in addition to periodic  amounts  upon  achievement  of  contractual  events for
licensing of the Company's products. Such amounts are deferred until the revenue
recognition  criteria have been met, which  typically  occurs after delivery and
acceptance.

For  arrangements  with  multiple  elements  (e.g.   delivered  and  undelivered
products,  maintenance and other services),  the Company  separately  negotiates
each element of the  arrangement  based on the fair value of the  elements.  The
fair  values for ongoing  maintenance  and  support  obligations  are based upon
separate sales of renewals to customers or upon substantive renewal rates quoted
in the agreements. The fair values for services, such as training or consulting,
are based upon hourly  billing rates of these  services when sold  separately to
other  customers.  In instances  where the Company is not able to determine fair
value of each element and the services are essential to the functionality of the
software, percentage-of-completion accounting is followed to recognize revenue.

Customers not wishing to license and operate the software themselves may use the
software through an ASP arrangement,  in which the Company hosts the application
and provides  customer access via the internet.  Annual minimum ASP service fees
are  recognized  ratably over the contract term.  Overage  revenues for usage in
excess of stated minimums are recognized monthly.

Maintenance  services and website  subscription fees are recognized ratably over
the  contract  term.  Professional  consulting  services,  sales of third  party
products and resale  hardware  revenues are recognized as services are provided.
Software  development  revenues are recognized when delivery has occurred and no
significant obligations remain.

Deferred  revenue is recorded  in cases of (1) a portion or the entire  contract
amount  cannot be  recognized  as revenue due to  non-delivery  or acceptance of
licensed software or custom  programming,  (2) incomplete  implementation of ASP
service arrangements, or (3) unexpired pro-rata periods of maintenance,  minimum
ASP service fees or website  subscription  fees.  As license  fees,  maintenance


                                      F-12


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

fees,  minimum ASP service fees and website  subscription fees are often paid in
advance,  a portion of this revenue is deferred  until the contract  ends.  Such
amounts are classified as deferred revenue in the Consolidated Balance Sheet and
are recognized as revenue in accordance with the Company's  revenue  recognition
policies described above.

CAPITALIZED SOFTWARE COSTS

The Company  accounts for software costs under SFAS No. 86,  "Accounting for the
Costs of Computer Software to Be Sold, Leased, or Otherwise  Marketed." Software
development  costs that are incurred  subsequent to  establishing  technological
feasibility  and  until  the  product  is  released,  are  capitalized.  Amounts
capitalized  as  software   development  costs  are  generally  amortized  on  a
straight-line  basis over five years. The Company reviews  capitalized  software
costs for impairment on an annual basis.  To the extent that the carrying amount
exceeds the estimated net realizable value of the capitalized  software cost, an
impairment  charge is recorded.  No impairment  was recorded for the fiscal year
ended March 31, 2004.  Amortization of capitalized  software  development costs,
included in costs of revenues, for the fiscal year ended March 31, 2004 amounted
to $118.


INCOME TAXES

The Company  accounts  for income  taxes under the asset and  liability  method.
Under the asset and liability  method,  deferred tax assets and  liabilities are
recognized  based upon the differences  arising from the carrying amounts of the
Company's assets and liabilities for tax and financial  reporting purposes using
enacted tax rates in effect for the year in which the  differences  are expected
to reverse. The effect on deferred tax assets and liabilities of a change in tax
rates is  recognized  in income in the  period  when the  change in tax rates is
enacted.  A valuation  allowance is established when it is determined that it is
more likely than not that some  portion of the  deferred  tax assets will not be
realized.

The Company has a tax net operating loss ("NOL"). A full valuation allowance has
been applied against this NOL and its other deferred tax assets.

NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS

Computations  of basic and diluted net loss per share of Common  Stock have been
made in accordance with SFAS No. 128,  "Earnings Per Share".  Basic net loss per
share is computed by dividing  net loss  available to Common  Stockholders  (the
numerator)  by the weighted  average  number of common shares  outstanding  (the
denominator) during the period. Shares issued during the period are weighted for
the portion of the period that they are outstanding.  The computation of diluted
net loss per share is  similar  to the  computation  of basic net loss per share
except that the  denominator  is increased  to include the number of  additional
common shares that would have been outstanding if the dilutive  potential common
shares had been issued. The Company has incurred a net loss for the fiscal years
ending  March 31, 2003 and 2004;  therefore,  the impact of  dilutive  potential
common  shares  has  been  excluded  from  the   computation   as  it  would  be
anti-dilutive.

The following  outstanding stock options,  warrants (prior to the application of
the  treasury  stock  method),  convertible  notes  and  redeemable  convertible
preferred stock (on an as-converted basis) were excluded from the computation of
diluted net loss per share:


                                                      2003          2004
                                                     ------        -------

Stock options....................................     306,397      520,564
1-Year Notes Warrants............................      25,305           --
5-Year Notes Warrants............................     312,500           --


                                      F-13


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

2001 Warrants....................................     430,205           --
Contingent Warrants A-C..........................     680,092           --
Underwriters warrants............................          --      120,000
Mandatorily redeemable convertible preferred stock  8,202,929           --
Shares issuable related to convertible notes.......        --       308,225

ISSUANCE OF STOCK BY SUBSIDIARIES0

Sales of stock by a  subsidiary  are  accounted  for in  accordance  with  Staff
Accounting  Bulletin  No.  51,  Topic  5H,  "Accounting  for Sales of Stock of a
Subsidiary." At the time a subsidiary sells its stock to unrelated  parties at a
price different from the Company's book value per share,  the Company's share of
the subsidiary's  net equity changes.  If, at that time, the subsidiary is not a
newly-formed,  non-operating entity, nor a research and development, start-up or
development stage company,  nor is there question as to the subsidiary's ability
to continue  in  existence,  the Company  records the change in its share of the
subsidiary's  net  equity  as a gain or loss in its  Consolidated  Statement  of
Operations.  Otherwise,  the  increase is  reflected  in  "subsidiaries'  equity
transactions" in the Company's Consolidated Statements of Shareholders' Equity.


STOCK-BASED COMPENSATION

The Company has stock based  employee  compensation  plans,  which are described
more  fully  in Note 6.  The  Company  accounts  for its  stock  based  employee
compensation  plans in accordance  with the provisions of Accounting  Principles
Board ("APB") Opinion No. 25,  "Accounting  for Stock Issued to Employees",  and
related interpretations.  As such, compensation is recorded on the date of grant
only if the current  fair value of the  underlying  stock  exceeds the  exercise
price.  The  Company  has  adopted  the  disclosure  standards  of SFAS No.  148
"Accounting for Stock-Based  Compensation - Transaction and Disclosures",  which
amends SFAS No. 123, "Accounting for Stock-Based  Compensation",  which requires
the Company to provide pro forma net loss and earnings per share disclosures for
employee  stock  option  grants  made  in  1995  and  future  years  as  if  the
fair-value-based  method of accounting  for stock options as defined in SFAS No.
123 had been applied.  The following table illustrates the effect on net loss if
the Company had applied the fair value recognition provisions of SFAS No. 123 to
stock based employee  compensation for the fiscal years ended March 31, 2003 and
2004:



                                                         2003          2004
                                                        ------        -------

Net loss as reported................................   $(3,404)      $(4,805)

Deduct: Total stock-based employee compensation expense
determined under fair value based method, net of related
income tax benefits.................................      (524)         (489)
                                                        -------       --------

Pro forma net loss..................................   $(3,928)      $(5,294)
                                                       ========       ========

Basic and diluted net loss available to common
stockholders per share

As reported.........................................    $(1.41)       $(1.37)
Pro forma...........................................    $(1.58)       $(1.47)


The fair value of each stock option  granted during the year is estimated on the
date of grant using the  Black-Scholes  option  pricing model with the following
assumptions:

                                      F-14


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)



                                                          2003     2004
                                                          -----   ------

Expected life (years)..................................     10       10
Expected volatility....................................    110%     110%
Expected dividend yield................................      0%       0%

Weighted average risk-free interest rate...............   4.28%    4.32%
Weighted average fair value per share of employee options
granted during the year................................. $1.05    $3.93

RESEARCH AND DEVELOPMENT

AccessIT recorded expenses of  $0 and $55 for the fiscal years ended March
31, 2003 and 2004.  The increase is attributable to research and development
efforts at Hollywood SW, which the Company acquired in November 2003.


ADVERTISING COSTS

The Company has incurred advertising costs of $6 and $19,  respectively,  during
the fiscal years ended March 31, 2003 and 2004.  Advertising  costs are expensed
as incurred.


USE OF ESTIMATES

The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  at the date of the  consolidated  financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.  The Company's most significant  estimates related to revenue
recognition,  capitalization of software,  amortization of intangible assets and
depreciation of fixed assets. Actual results could differ from those estimates.


RISK AND UNCERTAINTIES

The Company is subject of all of the risks  inherent in an early stage  business
in the collocation,  managed storage, and software development  industry.  These
risks include, but are not limited to, limited operating history, limited senior
management  resources,  rapidly changing technology business  environments,  the
need for substantial cash investments to fund its operations,  reliance on third
parties, the competitive nature of the industry,  development and maintenance of
efficient information technologies,  and uncertainty regarding the protection of
proprietary intellectual properties.


RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts,  and for hedging activities under SFAS
No. 133.  SFAS No. 149  clarifies  under what  circumstances  a contract with an
initial net investment meets the  characteristic of a derivative as discussed in
SFAS No. 133. In addition,  it clarifies when a derivative  contains a financing
component that warrants special  reporting in the statement of cash flows.  SFAS
No. 149 is effective for contracts entered into or modified after June 30, 2003,
except as  specifically  noted in SFAS No.  149.  SFAS No. 149 should be applied
prospectively.  The  adoption  of SFAS No.  149 did not  materially  impact  the
Company's financial position, cash flows or results of operations.

                                      F-15


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 is effective for financial  instruments  entered into or modified  after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial  instruments of nonpublic  entities and the provisions of paragraphs 9
and 10 of SFAS No. 150 (and related guidance in the  appendices),  as they apply
to mandatorily redeemable  non-controlling interests, which were deferred by the
FASB on October 29, 2003. The adoption of SFAS No. 150 did not materially impact
the Company's financial position, cash flows or results of operations.

In  November  2002,  the  EITF  reached  a  consensus  on EITF  00-21,  "Revenue
Arrangements  with  Multiple   Deliverables,"  related  to  the  separation  and
allocation of consideration for arrangements that include multiple deliverables.
EITF  00-21  requires  that  when  the  deliverables  included  in this  type of
arrangement  meet certain  criteria they should be accounted  for  separately as
separate units of  accounting.  This may result in a difference in the timing of
revenue  recognition  but will not  result in a change  in the  total  amount of
revenues  recognized in a bundled sales arrangement.  The allocation of revenues
to the separate  deliverables  is based on the relative fair value of each item.
If the fair value is not  available  for the  delivered  items then the residual
method  must be used.  This method  requires  that the amount  allocated  to the
undelivered items in the arrangement is their full fair value. This would result
in the discount,  if any, being allocated to the delivered items. This consensus
is effective  prospectively  for  arrangements  entered  into in fiscal  periods
beginning  after  June 15,  2003.  The  adoption  of EITF  00-21  did not have a
material impact on the Company's financial position, or cash flows or results of
operations.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities -- an Interpretation  of Accounting  Research Bulletin No. 51." FIN No.
46 requires the primary  beneficiary to consolidate a variable  interest  entity
("VIE")  if it has a  variable  interest  that  will  absorb a  majority  of the
entity's  expected  losses if they  occur,  receive a majority  of the  entity's
expected residual returns if they occur, or both. FIN No. 46 applies immediately
to VIEs created after  January 31, 2003 and to VIEs in which the entity  obtains
an interest  after that date. In October 2003, the FASB deferred the latest date
by which all public  entities  must  apply FIN No. 46 to all VIEs and  potential
VIEs, both financial and  non-financial in nature, to the first reporting period
ending after  December 15, 2003. The adoption of FIN No. 46 in February 2003 did
not have a material impact on the Company's  financial  position,  cash flows or
results of operations.

On December 17, 2003, the SEC issued Staff Accounting  Bulletin ("SAB") No. 104,
"Revenue  Recognition,"  which supercedes SAB No. 101,  "Revenue  Recognition in
Financial  Statements."  SAB No. 104's primary purpose is to rescind  accounting
guidance   contained  in  SAB  No.  101  related  to  multiple  element  revenue
arrangements,  superceded as a result of the issuance of EITF 00-21, "Accounting
for Revenue Arrangements with Multiple Deliverables." Additionally,  SAB No. 104
rescinds  the "Revenue  Recognition  in Financial  Statements  Frequently  Asked
Questions  and Answers"  issued with SAB No. 101 that had been codified in Staff
Accounting Bulletin Topic 13, "Revenue Recognition." The adoption of SAB No. 104
did not have any  impact on the  Company's  financial  position,  cash  flows or
results of operations.

NOTE 3. CONSOLIDATED BALANCE SHEET COMPONENTS


CASH AND CASH EQUIVALENTS


Cash and cash  equivalents  consisted of the  following as of March 31, 2003 and
2004:

                                      F-16


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


                                                            2003       2004
                                                           -----      ------

Bank balances.........................................      $375      $1,248
Money market fund.....................................       581       1,082
                                                           -----      ------
Total cash and cash equivalents.......................      $956      $2,330
                                                           =====      ======

As of March 31, 2003 and 2004, cost  approximated  market value of cash and cash
equivalents.




PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid  expenses and other current  assets consist of the following as of March
31, 2003 and 2004:

                                                            2003       2004
                                                           -----      ------

Insurance..............................................     $34         $81
Deposits...............................................     107          11
Deferred costs, current................................      91          97
Other..................................................      55         107
                                                           -----      ------
                                                           $287        $296
                                                           =====      ======


PROPERTY AND EQUIPMENT, NET


Property and equipment,  net was comprised of the following as of March 31, 2003
and 2004:

                                                            2003       2004
                                                           -----      ------

Leasehold improvements................................    $3,888      $3,911
Computer equipment and software.......................     2,651       2,945
Machinery and equipment...............................       621       2,591
Furniture and fixtures................................       285         306
Other.................................................        26          --
                                                           -----      ------
                                                           7,471       9,753
Less - Accumulated depreciation.......................    (2,338)     (3,888)
                                                           -----      ------
Total property and equipment, net.....................    $5,133      $5,865
                                                           =====      ======

Leasehold  improvements  consist primarily of costs incurred in the construction
of the Company's  Jersey City, New Jersey and Brooklyn,  New York IDCs, and from
the Bridgepoint  International  ("BridgePoint")  and R.E.  Stafford,  Inc. d/b/a
ColoSolutions ("ColoSolutions") acquisitions. Included in leasehold improvements
as of March 31, 2003 and 2004 was $100 of  construction  services  for which the
Company issued Common Stock as  consideration.  Computer  equipment and software
consists  primarily of costs incurred for equipment and related software used in
the Company's Managed Storage Services business, and from the Hollywood SW, Core
and Boeing Digital Cinema ("Boeing Digital") acquisitions (See Note 7).

INTANGIBLE ASSETS, NET

Intangible  assets,  net was comprised of the following as of March 31, 2003 and
2004:

                                                            2003       2004
                                                           -----      ------

Trademarks......................................            $  --        $45


                                      F-17


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


Corporate trade names...........................               --        150
Customer contracts..............................            2,705      3,691
Covenants not to compete........................               --      1,852
                                                           -----      ------
                                                            2,705      5,738
Less - accumulated amortization.................             (396)    (1,538)
                                                           -----      ------
Total intangible assets, net                               $2,309     $4,200
                                                           =====      ======

CAPITALIZED SOFTWARE COSTS, NET

Capitalized  software costs,  net was comprised of the following as of March 31,
2003 and 2004:

                                                            2003       2004
                                                           -----      ------

Capitalized software..............................         $--       $1,548
Less - accumulated amortization...................          --         (118)
                                                           -----     -------
Total capitalized software costs, net.............         $--       $1,430
                                                           =====      ======


ACCOUNTS PAYABLE AND ACCRUED EXPENSES


Accounts payable and accrued expenses consisted of the following as of March 31,
2003 and 2004:

                                                            2003       2004
                                                           -----      ------
Accounts payable........................................    $430       $541
Accrued compensation and benefits.......................     134        178
Accrued taxes payable...................................      --        162
Interest payable........................................      70         97
Other...................................................     158        393
                                                           ------     -------
Total accounts payable and accrued expenses.............    $792     $1,371
                                                           ======     =======

NOTE 4. NOTES PAYABLE

During the period from December 2001 through  February  2002, the Company raised
$1,345 from the issuance of 1-year  subordinated  promissory  notes (the "1-Year
Notes") with detachable warrants to several investors. Of these amounts, $333 of
the  notes  payable  were  issued  to two of the  Company's  founders,  who also
received  warrants to purchase Common Stock (see Note 11). The 1-Year Notes have
an  initial  term of one year from the  respective  dates of  issuance  and bear
interest at an initial rate of 8% per annum.  The full amount of  principal  and
interest are due at the maturity  date.  The Company may prepay the 1-Year Notes
at any time.  As of March 31, 2002,  the Company had repaid $1,012 of the 1-Year
Notes,  plus  accrued  interest of $15. In April  2003,  the Company  repaid the
remaining $333 of the 1-Year Notes, plus accrued interest of $17.

In February  2002,  the  Company  commenced  an offering of 5-year  subordinated
promissory  notes (the "5-Year  Notes")  with  detachable  warrants.  During the
fiscal  years  ended  March 31, 2003 and 2004,  the  Company  raised  $1,360 and
$1,230,  respectively,  from the issuance of 5-Year Notes to several  investors.
Through  March 31,  2004,  the  Company  had  raised a total of $4,405  from the
issuance of 5-Year Notes, including $375 from two of the Company's founders, who
also received warrants to purchase Common Stock (see Note 11). The 5- Year Notes
were  issued  primarily  to repay the  1-Year  Notes  and to fund the  Company's
working  capital  needs.  The 5-Year  Notes bear  interest  at 8% per annum with
repayment terms as follows: (1) for a period of two years


                                      F-18


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

after the issuance  date,  interest-only  payments  are to be paid  quarterly in
arrears and (2) for the remaining three years until the final maturity date, the
Company shall pay (a) quarterly  payments of principal in equal installments and
(b) quarterly  payments of interest on the remaining  unpaid principal amount of
the 5-Year  Notes.  The Company may prepay the 5-Year Notes at any time,  and as
described below, in March 2004 the Company exchanged certain of the 5-Year Notes
for Class A Common Stock and new convertible notes.

Concurrent  with the  issuance  of the 1-Year  Notes and the 5-Year  Notes,  the
Company issued 25,305 1-Year Notes warrants and 440,500 5-Year Notes warrants
(see Note 6).

In November  2002,  the Company issued a 9%, one year note payable for $1,000 as
part of the purchase  price for six data centers  acquired  from  ColoSolutions,
Inc.  (the  "ColoSolutions  Note")  (see  Note  7).  On  November  26,  2003 the
ColoSolutions  Note was  repaid.  The  amount  repaid of $1,009  represents  the
principal of $1,000,  interest of $22,  less agreed upon  deductions  of $13 for
certain expense reimbursements.

In November 2003, the Company  issued two notes payable  totaling  $3,000 to the
founders of Hollywood SW as part of the purchase price for Hollywood SW (the "HS
Note") (see Note 7). The HS Note bears interest at 8% per annum and is repayable
in 20 equal  quarterly  installments  of principal  and interest  totaling  $183
beginning on March 31, 2004, which may be prepaid at any time

In February  2004,  the Company sent a notice to the holders of the 5-Year Notes
and the HS Notes,  offering to exchange (the "Exchange Offer") the principal and
accrued  interest of the outstanding  5-Year Notes and the HS Notes for, at each
note holder's election,  either (1) unregistered shares of the Company's Class A
Common Stock at an exchange rate of $3.57 per share (the "Share  Option") or (2)
Subordinated  Convertible  Promissory Notes ("Convertible  Notes"),  convertible
into shares of the Company's  Class A Common Stock at a conversion rate of $5.64
per share (the "Convertible Note Option"). On March 24, 2004, the Exchange Offer
was completed.  Pursuant to the Share Option, the Company exchanged 5-Year Notes
in the aggregate  principal amount of $2,480 plus accrued and unpaid interest of
$46 for 707,477 unregistered shares of its Class A Common Stock. Pursuant to the
Convertible Note Option, in exchange for 5-Year Notes in the aggregate principal
amount of $1,705 plus  accrued and unpaid  interest of $31,  the Company  issued
Convertible Notes which are, as of March 31, 2004, convertible into a maximum of
308,225  shares of its Class A Common  Stock (1) at any time up to the  maturity
date at each holder's option or (2)  automatically  on the date when the average
closing price on the American  Stock  Exchange of the  Company's  Class A Common
Stock for 30 consecutive  trading days has been equal to or greater than $12.00.
The holders of all the HS Notes,  and holders of 5-Year Notes  totaling  $220 of
principal elected not to participate in the Exchange Offer.

The  Convertible  Notes have terms as follows:  (1) an interest rate of 6.0% per
annum,  payable  quarterly  beginning in March 2004,  (2)  principal  repayments
beginning  two years  after  the date  that the  respective  5-Year  Notes  were
scheduled to begin principal  repayments,  and (3) principal repayments of 5% of
the  Convertible  Notes  amount  in  equal  quarterly  installments  for  eleven
quarters,  with a balloon payment of all remaining principal and interest in the
twelfth quarter.

The 5-Year Notes  exchanged  pursuant to the Share Option were  accounted for in
accordance   with   Accounting   Principles   Board   Opinion  No.  26,   "Early
Extinguishment of Debt".  Accordingly,  the difference between the fair value of
the Class A Common Stock issued and the net carrying  amount of the 5-Year Notes
was recorded in the Consolidated Income Statement. The fair value of the Class A
Common Stock  exchanged was determined by an independent  appraiser to be $2,568
and the net carrying  amount of the 5-Year Notes was $2,501,  net of unamortized
debt issuance costs of $25.  Additionally,  the Company incurred $59 of costs in
connection with the Share Option,  resulting in a loss upon debt  extinguishment
totaling $126.

                                      F-19


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

The 5-Year Notes  exchanged  pursuant to the Note Option were  accounted  for in
accordance with Emerging Issues Task Force Issue No. 96-19, "Debtor's Accounting
for a Modification or Exchange of Debt Instruments". It has been determined that
there was not a  significant  change in the fair  value of the cash flows of the
Convertible Notes. Accordingly, the Convertible Notes have been reflected in the
Consolidated  Balance  Sheet at the  current  face  amount of  $1,736  and a new
effective interest rate has been calculated.

In March 2004, in connection with the acquisition of assets of Boeing
Digital,  the Company issued a non-interest bearing note payable for $1,800. The
estimated  fair  value of this  note has been  determined  to be  $1,367  and is
included in notes payable on the consolidated balance sheet.

NOTE 5. MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK

On October 8, 2001, the Company  authorized the issuance of 3,226,538  shares of
the Series A 8% Mandatorily  Redeemable Convertible Preferred Stock (the "Series
A  Preferred  Stock")  at  approximately  $0.62 per  share,  resulting  in gross
proceeds of $2,000,  before considering  expenses of $203.  Concurrent with this
issuance,  the Company issued warrants to purchase up to 430,205 shares of Class
A Common  Stock  (the  "2001  Warrant").  On  November  27,  2002,  the  Company
authorized  the  issuance  of  4,976,391  shares of the  Series B 8%  Cumulative
Convertible  Preferred Stock, par value $0.001 (the "Series B Preferred  Stock")
to the  existing  Series A Preferred  Stock  holder at  approximately  $0.50 per
share,  resulting in gross proceeds of $2,500,  before  considering  expenses of
$125.  Concurrent with this issuance,  the Company issued  381,909,  144,663 and
100,401  warrants  to purchase  Class A Common  Stock  ("Contingent  Warrant A",
"Contingent Warrant B" and "Contingent Warrant C",  respectively).  The issuance
of the Series A Preferred Stock resulted in a beneficial  conversion  feature of
$1,078,  calculated in accordance  with EITF Issue No.  00-27,  "Application  of
Issue No. 98-5 to Certain  Convertible  Instruments." The beneficial  conversion
feature was  reflected  as an issuance  cost and  therefore  was  reflected as a
charge  against  the Series A  Preferred  Stock and an  increase  to  additional
paid-in capital.

As of March 31, 2003, the carrying value of the Company's Series A Preferred
Stock was below its liquidation value, as the Company incurred aggregate
costs of $2,000 related to the issuance of the Preferred Stock, of which $203
represents  cash payments,  $719 represents the estimated fair value of the 2001
Warrants  issued as  consideration  for the issuance of the  Company's  Series A
Preferred Stock and $1,078 is the beneficial conversion feature. As of March 31,
2003, the Company's carrying value of the Series B Preferred Stock was below its
liquidation  value, as the Company  incurred  aggregate costs of $468 related to
the issuance of the Preferred Stock, of which $125 represents cash payments, and
$343 represents the estimated fair value of Contingent  Warrant A and Contingent
Warrant B, issued as  consideration  for the issuance of the Company's  Series B
Preferred Stock.

The Series A Preferred  Stock and Series B Preferred Stock was redeemable at the
election  of each of the  holders  of the  then-outstanding  shares  of Series A
Preferred  Stock and Series B Preferred  Stock at any time on or after the fifth
anniversary  of the original  issuance  date of the Series A Preferred  Stock if
certain  liquidity events shall not have occurred by then, at a redemption price
equal to the greater of the (1) Company's  gross revenue from all sources or (2)
five times the  Company's  combined  earnings  from its data center  operations,
before deduction for certain defined expenses, for the twelve months immediately
preceding the month of exercise of the redemption  rights,  in each case divided
by the number of fully-diluted, as converted shares of Common Stock outstanding.
The Company has the option of first  redeeming only 25% of the redeemed Series A
Preferred  Stock and Series B Preferred  Stock,  with the  remainder  then to be
redeemed  in 3 annual  installments.  However,  in the  event  that the  Company
completes a qualifying  underwritten  public  offering of its Common Stock,  the
Company  can  terminate  the Series A and Series B  Preferred  Stock  redemption


                                      F-20


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

rights and instead issue new warrants  with an exercise  price of $0.05 equal to
10% of the number of shares of Common Stock into which the Series A and Series B
Preferred Stock may be converted, respectively. Total accretion for the Series A
Preferred Stock to its estimated redemption value was $628 and $1,121 during the
fiscal years ended March 31, 2003 and 2004, respectively, of which $412 and $990
related to the accretion to the estimated redemption amount,  respectively,  and
$216 and $131 related to the  accretion of the  beneficial  conversion  feature,
respectively. Accretion for the Series B Preferred Stock to its redemption value
was $468 for the  fiscal  year  ended  March 31,  2004.  There was no  accretion
recorded  for the Series B  Preferred  Stock for the fiscal year ended March 31,
2003, as the estimated  redemption amount was below the original carrying amount
of the Series B Preferred Stock.

In  September  2003,  the  Company  entered  into an  agreement  (the  "Exchange
Agreement")  with the holder of the Series A and Series B Preferred Stock to (1)
convert all 8,202,929 shares of Series A and Series B Preferred Stock held by it
into  1,640,585  shares of Class A Common Stock:  (2) exchange the 2001 Warrant,
Contingent  Warrant A and  Contingent  Warrant C for  320,000  shares of Class A
Common Stock;  (3) exercise  Contingent  Warrant B to purchase 143,216 shares of
Class A Common  Stock on a  cashless-exercise  basis;  and (4) accept  shares of
Class A Common  Stock at a price per share of $5.00  pursuant  to the  Company's
November  2003 IPO,  as  consideration  for the  conversion  of all  accumulated
dividends  on the Series A and Series B Preferred  Stock  through the  effective
date of the IPO. On November 14, 2003,  the Exchange  Agreement  was  finalized,
concurrent  with the completion of the IPO. The Company issued 104,175 shares of
Class A Common Stock as  consideration  for the  conversion  of all  accumulated
dividends on the Series A and B Preferred Stock. The Company recorded  remaining
accretion on the Series A Preferred  Stock and Series B Preferred  Stock of $523
and $468, respectively,  related to the Exchange Agreement, which is included in
the above amounts. As of March 31, 2004, there is no Series A Preferred Stock or
Series B Preferred Stock issued or outstanding.

NOTE 6. STOCKHOLDERS' EQUITY


CAPITAL STOCK


As of March 31, 2004, the Company is authorized to issue 95,000,000 shares of
capital stock of which  80,000,000  shares have been designated as Common Stock,
PAR VALUE  $0.001 PER SHARE,  and  15,000,000  shares  have been  designated  as
Preferred Stock, par value $0.001 per share. Of the Company's  authorized Common
Stock,  40,000,000  shares are designated as Class A Common Stock and 15,000,000
shares  are  designated  as Class B Common  Stock.  Each share of Class B Common
Stock has voting  rights equal to 10 votes to 1 vote per share for each share of
the Class A Common  Stock.  Each share of Class B Common  Stock may be converted
into one  share  of Class A Common  Stock  at any  time,  at the  option  of the
stockholder.

In April 2000, two founders of the Company purchased  1,861,500 shares of Common
Stock,  of which 620,500 were shares of Class A Common Stock and 1,241,000  were


                                      F-21


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

shares of Class B Common Stock. During the fiscal year ended March 31, 2001, one
of the Company's  founders  converted 19,856 shares of Class B Common Stock into
Class A Common Stock. In April 2000, two founders of the Company each received a
grant of 100,000 shares of Class A Common Stock in connection with the execution
of  certain  agreements.  Additionally,  each of these  two  founders  purchased
300,000  shares  of Class A Common  Stock at par  value.  The  Company  recorded
stock-based compensation expense of approximately $129 for these share issuances
for the fiscal year ended March 31, 2001.  For the fiscal year ended,  2003, one
of the Company's  founders  converted 62,000 shares of Class B Common Stock into
Class A Common Stock.


In October 2001, in connection  with the sale of Series A Preferred  Stock to an
outside investor,  the founders of the Company forfeited an aggregate of 246,667
shares of Class A Common Stock and 153,333 shares of Class B Common Stock to the
Company.  No  consideration  was paid by the  Company  for the  return  of these
shares.

During the year ended March 31, 2003,  20,000 shares of Class A Common Stock was
sold to one investor,  one investor  exercised 5-Year Notes Warrants to purchase
5,000 shares of Class A Common Stock (see Note 6), and 30,000  shares of Class A
Common  Stock,  previously  issued  to a vendor  in  exchange  for  construction
services,  were returned to the Company under a settlement  agreement  (see Note
9).


In December 2002, the Company's  founders  contributed  60,000 shares of Class A
Common Stock back to the Company,  and those shares were simultaneously  granted
to certain  employees  of the  Company at the then  estimated  fair value of the
Common Stock. The Company recorded  stock-based  compensation expense of $48 for
these share grants.  In addition,  the Company also agreed to pay the employees'
tax on these  grants,  and recorded an  additional  $19 to selling,  general and
administrative expense for the estimated tax impact.

In August and September  2003,  several holders of 1-Year Notes and 5-Year Notes
exercised  warrants to purchase 420,688 shares of Class A Common Stock by paying
$21, and in October 2003 the remaining  holders of 1-Year Notes and 5-Year Notes
exercised  warrants to purchase  40,119 shares of Class A Common Stock by paying
$2.

In July 2003,  in  connection  with the IPO,  the  Company's  Board of Directors
approved a reverse stock split,  subject to the  completion of the IPO, to issue
one share of Common  Stock in exchange for each five shares of Common Stock held
by its stockholders of record (the "1-5 Reverse Split"). The stockholders of the
Company  approved this reverse  stock split  effective as of September 18, 2003.
The IPO was  completed  on November  14,  2003.  The  accompanying  consolidated
financial  statements  have been adjusted  retroactively  to reflect the reverse
split of all outstanding Common Stock.

On November 3, 2003, the Company issued 400,000  unregistered  shares of Class A
Common  Stock to the  shareholders  of  Hollywood  SW,  in  connection  with the
acquisition of Hollywood SW.

On November  10, 2003,  the  Company's  registration  statement on Form SB-2 was
declared  effective  by the SEC.  On  November  14,  2003,  the  Company  issued
1,380,000  shares of its Class A Common  Stock,  180,000  of which  shares  were
issued in connection with the lead underwriter's  exercise of its over-allotment
option, at the IPO price of $5.00. The Company's stock is listed on the American
Stock  Exchange  under the symbol "AIX".  The net proceeds  from the IPO,  after
deducting  all  offering   expenses,   including   underwriting   discounts  and
commissions,  the cash  portion of the purchase  price of Hollywood  SW, and the
repayment of a note payable, was approximately $1,067.

In  connection  with the  Exchange  Agreement,  on November 14, 2003 the Company
issued a total of 2,207,976  shares of Class A Common Stock to the holder of the
Series A  Preferred  Stock,  Series B  Preferred  Stock and  related  contingent
warrants.

On November 14, 2003, the Company issued 8,700 shares of Class A Common Stock to
an information  technology  consulting firm, pursuant to a software  development
agreement with AccessDM.

On January 9, 2004, the Company issued  100,000  unregistered  shares of Class A
Common Stock to the sole shareholder of Core, in connection with the acquisition
of Core.

In February  2004,  the Company issued 1,000 shares of Class A Common Stock to a
consultant in exchange for assistance with IPO related matters.

                                      F-22


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


On March 24, 2004,  the Company issued  707,477  unregistered  shares of Class A
Common Stock to several  investors,  in connection with the  consummation of the
Exchange  Offer.  Additionally as of March 31, 2004, a maximum of 308,225 shares
of Class A Common Stock are issuable upon conversion of the Convertible Notes.

On March 29, 2004,  the Company  issued  53,534  unregistered  shares of Class A
Common  Stock  to  The  Boeing  Company  ("Boeing"),   in  connection  with  the
acquisition of substantially all the assets of Boeing Digital.


STOCK OPTION PLAN

In June 2000,  the Company  adopted the 2000 Stock Option Plan,  as amended (the
"Plan") under which incentive and  nonstatutory  stock options may be granted to
employees,  outside  directors,  and consultants.  The purpose of the Plan is to
enable  the  Company  to  attract,  retain and  motivate  employees,  directors,
advisors  and  consultants.  The Company  initially  reserved a total of 400,000
shares of the  Company's  Class A Common Stock for issuance upon the exercise of
options  granted in accordance  with the Plan. In September  2003, the amount of
stock  options  available  for grant  under the Plan was  increased  to 600,000.
Options  granted  under the Plan expire 10 years  following the date of grant (5
years for  stockholders  who own greater than 10% of the outstanding  stock) and
are subject to  limitations  on transfer.  Options  granted  under the Plan vest
generally over  three-year  periods.  The Plan is  administered by the Company's
Board of Directors.

The Plan  provides for the granting of incentive  stock options at not less than
100% of the fair value of the underlying stock at the grant date.  Option grants
under the Plan are  subject  to  various  vesting  provisions,  all of which are
contingent  upon the  continuous  service of the  optionee.  Options  granted to
stockholders who own greater than 10% of the outstanding stock must be issued at
prices not less than 110% of the trading value of the stock on the date of grant
as  determined  by the  Company's  Board of  Directors.  The exercise  price and
vesting  period of  nonstatutory  options is at the  discretion of the Company's
Board of Directors.  Upon a change of control, all shares granted under the Plan
shall immediately vest.

The following table summarizes the activity of the Plan:

                                    OPTIONS OUTSTANDING
                                    -------------------
                                                                     Weighted-
                                        Shares                        Average
                                       Available                     Exercise
                                         For          Number of      Price Per
                                        Grant          Shares          Share
                                    -------------   --------------  -----------


Balances, March 31, 2002..........     157,043        242,957          $8.10
   Options granted................     (78,000)        78,000          $4.10
   Options forfeited..............      14,560        (14,560)        $11.85
                                    -------------   --------------  -----------

Balances, March 31, 2003..........      93,603        306,397          $6.90
   Increase in authorized options.     200,000           --              --
   Options granted................    (214,167)       214,167          $5.01
                                    -------------   --------------  -----------
Balances, March 31, 2004..........      79,436        520,564          $6.12
                                    =============   ==============  ===========

The following table summarizes information about stock options outstanding as of
March 31, 2004:


                                      F-23


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)





                               Options Outstanding           Options Exercisable
                               -------------------          ---------------------
                                  Weighted-
                                  Average       Weighted-    Number         Weighted-
                       Number    Remaining       Average      of            Average
                         of      Contractual     Exercise    Shares        Exercise
Exercise Prices        Shares       Life          Price    Exercisable       Price
---------------        ------       ----          -----    -----------       -----
                                                           
  $2.50                  50,000      8.72          $2.50      16,667         $2.50
  $5.00                 272,564      8.93          $5.00      64,064         $5.00
  $5.05                  25,000      9.71          $5.05          --         $5.05
  $7.50                 118,400      6.64          $7.50     103,733         $7.50
 $12.50                  54,600      6.58         $12.50      18,200        $12.50
                         ------      ----         ------      ------        ------

                        520,564      7.71          $6.12     202,664         $6.75
                        =======      ====          =====     =======         =====




In May 2003, AccessDM adopted the 2003 Stock Option Plan (the "AccessDM
Plan") under which incentive and nonstatutory stock options may be granted to
employees, outside directors, and consultants. The purpose of the AccessDM
plan is to enable accessdm to attract, retain and motivate employees,
directors, advisors and consultants.  AccessDM reserved a total of 2,000,000
shares of AccessDM's Common Stock for issuance upon the exercise of options
granted in accordance with the AccessDM Plan.  During the fiscal year ended
March 31, 2004, AccessDM granted stock options to purchase 1,000,000 shares
of its Common Stock to employees of AccessDM.  Options granted under the
AccessDM Plan expire 10 years following the date of grant (5 years for
stockholders who own greater than 10% of the outstanding stock) and are
subject to limitations on transfer.  Options granted under the AccessDM Plan
vest generally over three-year periods.  The AccessDM Plan is administered by
AccessDM's Board of Directors.

The AccessDM  Plan  provides for the granting of incentive  stock options at not
less  than 100% of the fair  value of the  underlying  stock at the grant  date.
Option grants under the AccessDM Plan are subject to various vesting provisions,
all of which are contingent upon the continuous  service of the optionee.  As of
March 31,  2004,  none of such stock  options  are  vested.  Options  granted to
stockholders who own greater than 10% of the outstanding stock must be issued at
prices not less than 110% of the trading value of the stock on the date of grant
as determined by the AccessDM's  Board of Directors.  The exercise price of such
options  range  from  $0.20  to  $0.25  and have a  weighted  average  remaining
contractual life of 9.41 years.

NON-EMPLOYEE STOCK-BASED COMPENSATION

The  Company  uses the  fair  value  method  to value  options  granted  to non-
employees. In connection with its grant of options to non-employees, the Company
has recorded deferred stock-based compensation of $3 and $4 for the fiscal years
ended March 31, 2003 and 2004,  respectively.  The Company has amortized $51 and
$15 for the  fiscal  years  ended  March  31,  2003 and 2004,  respectively,  to
stock-based compensation expense on an accelerated basis over the vesting period
of the  individual  options,  in  accordance  with FASB  Interpretation  No. 28,
"Accounting  for Stock  Appreciation  Rights and Other  Variable Stock Option or
Award Plans-an Interpretation of APB Opinions No. 15 and 25."

The  Company's   calculations  for  non-employee  grants  were  made  using  the
Black-Scholes   option  pricing  model  with  the  following   weighted  average
assumptions:


                                             For the Fiscal Years Ended
                                                      March 31,

                                                     2003        2004
                                                   -------     -------
Dividend yield................................         0%          0%
Expected volatility...........................       110%        110%


                                      F-24


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


Risk-free interest rate.......................      6.08%        5.91%

Expected life (in years)......................        10           10

WARRANTS

In  connection  with the sale of the  shares of  Series A  Preferred  Stock,  in
October  2001 the  Company  issued the 2001  Warrants  to purchase up to 430,205
shares of the Class A Common  Stock at $0.05 per share,  subject to certain call
and put  rights  upon the  occurrence  of certain  events.  These  warrants  are
exercisable  during the period commencing on the earlier of (1) October 1, 2006,
(2) a change of control or other liquidity event of the Company, or (3) 120 days
following the Company's  listing on any major U.S.  stock exchange and ending on
November  1,  2011.  If the fair value of the  Company's  Common  Stock  exceeds
certain target prices at certain dates between the issuance date and October 26,
2011, the 2001 Warrants will terminate in their entirety.

Additionally, if the holders of shares of Series A Preferred Stock exercise
their  redemption  rights,  they may also require the Company to redeem the 2001
Warrants (the "Warrant Put Rights") using the same formula  described herein for
the redemption of the Series A Preferred Stock.  However,  in the event that the
Company plans to undertake an underwritten  public offering of its Common Stock,
the Company can terminate the Warrant Put Rights and instead issue a new warrant
equal to 10% of the warrant shares.  Management has determined that the value of
these put  rights is  immaterial.  The value of the  warrants  was  ascribed  an
estimated  fair  value of $719  and has been  recognized  as  issuance  cost and
therefore has been charged against the carrying value of the Company's  Series A
Preferred Stock.

In  connection  with the  issuance  of the Series B Preferred  Stock  during the
fiscal year ended March 31, 2003,  the Company  issued  Contingent  Warrant A to
purchase an  aggregate  of 381,909  shares of Class A Common  Stock at $0.05 per
share,  subject to certain  call and put rights upon the  occurrence  of certain
events.  In the event that any portion of the 2001  Warrant is  exercised,  then
Contingent  Warrant A will be  increased  by  8.955% of the  number of shares of
Class A Common Stock so issued  pursuant to the 2001 Warrant  exercise,  up to a
maximum of 38,526 additional shares.  Contingent Warrant A is exercisable during
the period  commencing  on the earlier of (1) November 27, 2007, or (2) a change
of control or other liquidity  event of the Company,  and ending on November 27,
2012. If the fair value of the Company's  Common Stock  exceeds  certain  target
prices at certain  dates  between  the  issuance  date and  November  26,  2012,
Contingent  Warrant  A will  terminate  in its  entirety.  Additionally,  if the
holders of shares of Series B Preferred Stock exercise their redemption  rights,
they  may  also  require  the  Company  to  redeem  Contingent  Warrant  A  (the
"Contingent  Warrant A Put Rights") using the same formula  described herein for
the redemption of the Series B Preferred Stock.  However,  in the event that the
Company  completes an  underwritten  public  offering of its Common  Stock,  the
Company can  terminate the  Contingent  Warrant A Put Rights and instead issue a
new warrant  equal to 10% of the  Contingent  Warrant A shares.  Management  has
determined  that the  value of these  put  rights  is  immaterial.  The value of
Contingent  Warrant A was ascribed an estimated  fair value of $249 and has been
recognized as issuance cost and therefore has been charged  against the carrying
value of the Company's Series B Preferred Stock.

Also,  in  connection  with the  issuance of the Series B Preferred  Stock,  the
Company issued  Contingent  Warrant B to purchase an aggregate of 144,663 shares
of Class A Common  Stock at $0.05 per share,  subject  to  certain  call and put
rights upon the occurrence of certain  events.  In the event that any portion of
the 2001 Warrant is exercised,  Contingent  Warrant B will be increased by 3.4%,
up to a maximum of 14,593 additional shares. Contingent Warrant B is exercisable
during the period  commencing  on March 31,  2003 and ending on March 31,  2008.
However,  if the Company has met certain revenue targets by March 31, 2003, this
warrant will  terminate in its entirety.  The Company has not met the stipulated
revenue   targets,   and  therefore   Contingent   Warrant  B  is   exercisable.


                                      F-25


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


Additionally,  if the  holders of shares of Series B  Preferred  Stock  exercise
their redemption rights,  they may also require the Company to redeem Contingent
Warrant  B (the  "Contingent  Warrant  B Put  Rights")  using  the same  formula
described herein for the redemption of the Series B Preferred Stock. However, in
the event that the Company  completes  an  underwritten  public  offering of its
Common Stock, the Company can terminate the Contingent  Warrant B Put Rights and
instead  issue a new warrant  equal to 10% of the  Contingent  Warrant B shares.
Management has determined that the value of these put rights is immaterial.  The
value of  Contingent  Warrant B was ascribed an estimated  fair value of $94 and
has been  recognized as issuance cost and therefore has been charged against the
carrying value of the Company's Series B Preferred Stock.

Additionally,  in connection with the issuance of the Series B Preferred  Stock,
the  Company  issued  Contingent  Warrant C to purchase  an  aggregate  of up to
100,401  shares of Class A Common  Stock at $0.05 per share,  subject to certain
call and put rights upon the occurrence of certain events.  Contingent Warrant C
is exercisable  during the period  commencing on November 27, 2002 and ending on
November 27, 2012.  Contingent Warrant C may be exercised only in the event that
the 2001 Warrant is exercised.  Contingent  Warrant C shall be exercisable for a
number of shares of Class A Common  Stock equal to 23.4% of the number of shares
so  issued  in  accordance  with  the  2001  Warrant,   up  to  100,401  shares.
Additionally,  if the  holders of shares of Series B  Preferred  Stock  exercise
their redemption rights,  they may also require the Company to redeem Contingent
Warrant  C (the  "Contingent  Warrant  C Put  Rights")  using  the same  formula
described herein for the redemption of the Series B Preferred Stock. However, in
the event that the Company  completes  an  underwritten  public  offering of its
Common Stock, the Company can terminate the Contingent  Warrant C Put Rights and
instead issue a new warrant equal to 10% of the Contingent  Warrant C shares. No
value was ascribed to Contingent  Warrant C or the related put rights because of
the uncertainty surrounding the exercise of the 2001 warrant.

On November 14,  2003,  in  connection  with the  completion  of the IPO and the
consummation of the Exchange Agreement,  the 2001 Warrant,  Contingent Warrant A
and  Contingent  Warrant C were  exchanged for 320,000  shares of Class A Common
Stock and  Contingent  Warrant B was exercised on a  cashless-exercise  basis to
purchase 143,216 shares of Class A Common Stock.

Additionally,  in  connection  with the IPO,  the  Company  issued a warrant  to
purchase  up to an  additional  120,000  shares  of Class A Common  Stock to the
underwriter  at an  exercise  price of  $6.25  per  share.  These  warrants  are
immediately  exercisable  and expire on November  10,  2007.  The value of these
warrants was  estimated to be $385,  and was recorded as an offering cost of the
IPO  through an  increase  to  additional  paid-in  capital.  In  valuing  these
warrants,  the following  assumptions were made using the  Black-Scholes  option
pricing model: no dividend yield,  expected volatility of 102%, expected life of
four years, and a risk-free interest rate of 2.81%.

In connection with the issuance of 1-Year Notes (see Note 4) payable to certain
investors, the Company also issued to the holders of the 1-Year Notes warrants
to purchase shares of the Company's Class A Common Stock (the "1-Year Notes
Warrants"). As of March 31, 2002, the Company had issued an aggregate amount of
25,305 1-Year Notes Warrants to the holders of the 1-Year Notes. Of these
warrants, 6,902 warrants were issued to two of the Company's founders (see Note
11). The 1-Year Notes warrants have an exercise price of $0.05 per share and are
exercisable at any time from the date of issuance through the earlier of 10
years from the date of issuance or the closing of a firm commitment underwritten
public offering of the Company's Common Stock. In the event the holders of the
Company's Series A Preferred Stock exercise their redemption rights, certain
investors holding an aggregate of 20,705 of the 1- Year Notes Warrants may, but
are not obligated, require the Company, simultaneous with its redemption of the
Series A Preferred Stock, to redeem their respective 1-Year Notes Warrants (the
"1-Year Notes Warrants Put Rights") for cash. The purchase price for the 1-Year


                                      F-26


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


Notes  Warrants Put Rights is based on the same  formula as described  herein as
the  Series  A  Preferred  Stock  redemption  rights.  However,  if the  Company
completes an initial public offering of its Common Stock before the 1-Year Notes
Warrants Put Rights are  exercised,  such put rights will be terminated and will
not be exercisable. Management has determined that the value of these put rights
is  immaterial.  The 25,305  warrants were  ascribed an estimated  fair value of
$127,  which has been recognized as issuance cost and therefore has been charged
against the carrying value of the related notes payable.  During the fiscal year
ended March 31, 2002, a total of $126 was amortized to non-cash interest expense
to accrete the value of the notes to their face value over the expected  term of
the related notes.  The remainder was amortized in 2003. In August and September
2003, warrants to purchase 17,686 shares of Class A Common Stock were exercised,
and in October 2003 warrants to purchase the  remaining  7,619 of Class A Common
Stock were exercised.

In  connection  with the  issuance  of the 5-Year  Notes (see Note 4) payable to
certain  investors,  the Company  also issued  warrants to the holders of the 5-
Year Notes to purchase  shares of the  Company's  Class A Common  Stock (the "5-
Year Notes  Warrants").  During the fiscal years ended March 31, 2002,  2003 and
2004, the Company  issued  181,500,  136,000 and 123,000 5-Year Notes  Warrants,
respectively,  to the holders of the 5-Year  Notes in the ratio of one-half of a
5-Year Note Warrant for every dollar of 5-Year Notes issued.  Of these warrants,
37,500  were  issued  during the fiscal  year ended March 31, 2002 to two of the
Company's  founders  (see Note 11). The 5-Year Notes  Warrants  have an exercise
price  of $0.05  per  share  and are  exercisable  at any time  from the date of
issuance  through  the  earlier of (1) 10 years from the date of issuance or (2)
the closing of a firm commitment  underwritten  public offering of the Company's
Common Stock.  In the event that the Company repays any  investor's  5-Year Note
(plus accrued  interest)  within one year of its  respective  issuance date, the
number of Warrants  granted to such investor  shall be reduced by 20%. The total
440,500 of 5-Year Note Warrants were ascribed an estimated fair value of $2,202,
which has been  recognized  as  issuance  cost and  therefore  has been  charged
against the carrying value of the related notes payable. During the fiscal years
ended  March 31,  2003 and  2004,  a total of $282 and  $402,  respectively  was
amortized  to  non-cash  interest  expense to accrete  the value of the notes to
their face value over the expected term of the related notes.  Additionally,  in
connection with the Exchange Offer, the remaining value of the underlying 5-Year
Notes warrants was amortized to non-cash interest  expense,  totaling $1,421. Of
the total 5-Year  Notes  Warrants to purchase  440,500  shares of Class A Common
Stock,  5,000 5-Year Notes  Warrants  were  exercised in May 2002,  5-Year Notes
Warrants to purchase  403,000  shares of Class A Common Stock were  exercised in
August and September  2003, and the remaining  32,500 5-Year Notes Warrants were
exercised in October 2003.


NOTE 7. ACQUISITIONS

COLOSOLUTIONS

In November 2002, the Company acquired six data centers from ColoSolutions,  for
$3,550 including  acquisition  costs and the assumption of capital leases in the
aggregate  amount of $249 on certain  machinery and equipment  (see Note 9). The
purchase price consisted of cash plus a $1,000 1-Year Note payable (see Note 4).
The  acquired   assets   consist   mainly  of  customer   contracts,   leasehold
improvements,  and machinery and equipment.  The  acquisition has been accounted
for using the  purchase  method and  accordingly,  the  purchase  price has been
allocated to the assets  acquired based on the estimated fair values on the date
of  acquisition.  The acquired  operations  have been  included in the Company's
results of  operations  since the date of  acquisition.  The purchase  price was
allocated as follows:


Customer contracts........................................     $2,705
Leasehold improvements....................................         87
Machinery and equipment...................................        758
                                                              --------


                                      F-27


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


Total.....................................................     $3,550


The purchase price was allocated among the identifiable  tangible and intangible
assets based on the fair market value of those  assets.  The customer  contracts
were valued using the income approach. Under this approach, indications of value
are  developed by  discounting  future  debt-free  net cash flows to measure the
intrinsic value by reference to an enterprise's  expected annual  debt-free cash
flows.  This analysis  resulted in an allocation  of  approximately  $2,705 to a
contract intangible, which was capitalized and being amortized over three years.
Total  amortization  expense  related to this asset for the fiscal  years  ended
March 31, 2003 and 2004 was $396 and $919, respectively.





                                      F-28


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)





Amortization of these assets in future years is expected to be as follows:

Fiscal Year ended March 31,
2005.................................................     $839

2006..................................................     551

HOLLYWOOD SOFTWARE

On November 3, 2003, the Company completed the acquisition of all of the capital
stock of Hollywood SW, after  amending the agreement it had entered into on July
17,  2003.  To complete the  acquisition  of  Hollywood  SW, the Company  issued
secured  promissory  notes to the two  holders  of all of the  capital  stock of
Hollywood SW, each in the principal  amount of $3,625 (the "Notes").  The amount
of the Notes represented the original purchase price of $7,300 (based on the IPO
price less the underwriter's  discount),  less $50 that had already been paid by
the Company.  The Notes were due no later than five business days after the date
that  the  Company's  registration  statement  was  declared  effective  by  the
Securities and Exchange Commission.

On November 14, 2003,  four business days after the  registration  statement was
declared effective, the Notes were exchanged for $2,500 in cash of which $50 had
already been paid,  promissory notes in the aggregate principal amount of $3,000
and 400,000 unregistered shares of Class A Common Stock. For purchase accounting
purposes, the purchase price is $7,102,  consisting of $2,722 of cash (including
$222 of expenses);  $1,380 of the Company's Class A Common Stock (400,000 shares
valued at $3.45 per share,  as  determined  by a valuation  from an  independent
appraiser);  and $3,000 of promissory notes. In addition,  a contingent purchase
price is payable each year for the three years  following the closing if certain
earnings  targets  are  achieved.  The  company  has also  agreed to a  one-time
issuance of additional  unregistered  shares to the sellers in accordance with a
formula if, during the 90 days  following the  applicable  lock-up  period,  the
average value of the Company's Class A Common Stock during such 90 days declines
below an average of $3.60 per share.  The results of  operations of Hollywood SW
have been included in the Company's  consolidated financial statements since the
acquisition date.

The  total  purchase  price  of  $7,102,  including  fees  and  expenses  of the
acquisition,  has been allocated to the net assets acquired,  including tangible
and  intangible  assets and  liabilities  assumed,  based upon the results of an
independent  appraisal  of fair  value,  with the excess  purchase  price  being
allocated to goodwill.  The fair value of the  tangible  and  intangible  assets
acquired and liabilities assumed has been reflected in the Consolidated  Balance
Sheet as follows:

Tangible and intangible assets acquired:
Current assets............................................    $535
Property and equipment....................................      25
Capitalized software cost.................................   1,350
Intangible assets.........................................   2,170
Goodwill..................................................   5,184
                                                            -------

Total tangible and intangible assets acquired.............   9,264
Less liabilities assumed:
Current liabilities.......................................     733
Deferred tax liability....................................   1,429
                                                            -------
TOTAL LIABILITIES ASSUMED.................................   2,162
                                                            -------
Total purchase price......................................  $7,102
                                                            =======


                                      F-29


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


The intangible  assets consist of customer  contracts,  covenants not to compete
agreements  and corporate  trade names.  These assets are being  amortized  over
their estimated useful lives of 5, 5 and 10 years, respectively.

Amortization of these assets in future years is expected to be as follows:

Fiscal Year ended March 31,

2005......................................................$422
2006...................................................... 422
2007...................................................... 422
2008...................................................... 422
2009...................................................... 422
Thereafter................................................  60

CORE TECHNOLOGY SERVICES

On December  22,  2003,  the Company  signed an agreement to purchase all of the
outstanding  Common Stock of Core,  and on January 9, 2004,  the  acquisition of
Core  was  completed.   Core  is  a  managed  service  provider  of  information
technologies;  its primary  product is managed  network  services  through their
global network command center. The Company believes that the acquisition of Core
will expand the existing  capabilities  and  services of its IDCs.  The purchase
price consisted of $250 in cash and 100,000 unregistered shares of the Company's
Class A  Common  Stock.  In  addition,  the  Company  may be  required  to pay a
contingent  purchase  price for any of the three years  following the closing in
which certain  earnings  targets are achieved;  any additional  payment is to be
made in the same  proportionate  combination of cash and unregistered  shares of
the Company's Class A Common Stock as the purchase price payable at closing. The
Company has also agreed to a one-time issuance of additional unregistered shares
of its Class A Common  Stock to the seller up to a maximum of 20,000  shares if,
in accordance  with an agreed upon  formula,  the trading value of the Company's
Class A Common  Stock is less than $4.00  during the 90 day period at the end of
the lock-up  period.  Based on a valuation  from an independent  appraiser,  the
restricted  stock issued in the Core  acquisition  was  estimated to have a fair
value of $3.45 per share.

The  total  purchase  price of $620,  including  $25 of fees and  expenses,  was
allocated to the net assets acquired,  including tangible and intangible assets,
based upon the  results of an  independent  appraisal  of Fair  value,  with the
excess  purchase  price  being  allocated  to  goodwill.  The fair  value of the
tangible and intangible  assets acquired has been reflected in the  Consolidated
Balance Sheet as follows:

Tangible and intangible assets acquired:
Property and equipment....................        $152
Intangible assets.........................         450
Goodwill..................................         194
                                                   -----
Total tangible and intangible
assets acquired...........................         796

Deferred tax liability....................         176
                                                  ------
Total purchase price......................        $620
                                                  ======

The intangible  assets consist of customer  contracts,  covenants not to compete
agreements  and corporate  trade names.  These assets are being  amortized  over
their estimated useful lives of 5, 5 and 10 years, respectively.





                                      F-30


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)





Amortization of these assets in future years is expected to be as follows:
Fiscal Year ended March 31,
2005...................................................... $87
2006......................................................  87
2007......................................................  87
2008......................................................  87
2009......................................................  87
Thereafter................................................  15

BOEING DIGITAL

On March 29, 2004 the  Company  acquired  certain  assets of Boeing  Digital,  a
division  of Boeing.  These  assets  were  purchased  to further  the  Company's
strategy  of  becoming  a leader in the  delivery  of movies  and other  digital
content to movie theaters.  The acquired  assets consist of digital  projectors,
satellite dishes and other equipment  installed at 28 screens within 21 theaters
in the United  States  and at one  theater in  London,  England,  and  satellite
transmission equipment located in Los Angeles,  California. The initial purchase
price consisted of: $250 in cash;  53,534  unregistered  shares of the Company's
Class A Common Stock; and a non-interest bearing note payable for $1,800 payable
in equal installments over 4 years. In addition,  the Company has agreed to make
payments  totaling a maximum  of $1,000  over 4 years,  representing  20% of the
gross receipts  generated by the acquired assets (the "Future  Revenue  Share").
Additionally,  at any time during the 90 day period  immediately  following  the
first 12 months  after the  closing,  Boeing  can sell its  53,534  unregistered
shares of the Company's Class A Common Stock to the Company in exchange for $250
in cash (the "Boeing Put Option").

Based on a valuation  from an  independent  appraiser,  for purchase  accounting
purposes the total purchase price is $2,010,  including estimated fees and setup
costs of $155. The unregistered  stock issued in the Boeing Digital  acquisition
was  estimated to have a fair value of $238.  Due to the Boeing Put Option,  the
Class A Common  Stock issued to Boeing has been  reflected  on the  consolidated
balance sheet as redeemable Class A Common Stock,  until such time as the Boeing
Put Option expires or is exercised.  During the period from issuance through the
exercise or expiration  of the Boeing Put Option,  the  redeemable  Common Stock
will be accreted to its redemption amount. The related accretion from the period
from  acquisition  to March 31,  2004 was not  material.  The fair  value of the
assets acquired has been reflected in the consolidated balance sheet as follows:

Property & equipment..........................          $1,645
Intangible assets.............................             364
                                                        ------
Total.........................................          $2,010
                                                        ======

The intangible assets consist of customer contracts and covenants not to compete
agreements.  These assets are being amortized over their estimated  useful lives
of 2 and 4 years, respectively.






                                      F-31



                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)





Amortization of these assets in future years is expected to be as follows:
Fiscal Year ended March 31,


2005............................................     $162
2006............................................      162
2007............................................       21
2008............................................       19

NOTE 8. INCOME TAXES

The  benefit  from  income  taxes for the years  ended  March 31,  2003 and 2004
consisted of the following:


                                                          2003     2004
                                                         ------   ------

Current..............................................     $185     $127
Deferred.............................................       --       85
                                                         ------   ------
Total................................................     $185     $212
                                                         ======   ======

Net deferred tax assets / (liabilities) consist of the following as of March 31,
2003 and 2004:



                                                          2003     2004
                                                         ------   ------


Deferred tax assets

Net operating loss carryforwards....................    $2,183   $3,082



Depreciation and Amortization.......................       751    1,100
Deferred rent expense ..............................       273      381
Stock based compensation ...........................       212      208
Revenue deferral ...................................        --      347
Other...............................................       174       71
                                                         ------   ------
Total deferred tax assets...........................     3,593    5,189
                                                         ------   ------

Deferred tax liabilities

Intangibles ........................................        --    1,720

Total deferred tax liabilities......................        --    1,720

Net deferred tax assets before valuation allowance..     3,593    3,469
Valuation allowance.................................    (3,593)  (4,989)
                                                         ------   ------

Net deferred tax assets / (liabilities).............      $--   $(1,520)
                                                         ======  =======

The Company has  provided a  valuation  allowance  for either all or most of its
deferred  tax  assets  since  realization  of future  benefits  from  deductible
temporary  differences and net operating loss carryovers  cannot be sufficiently
assured  at March  31,  2003 or March 31,  2004.  The  change  in the  valuation
allowance in the current year is approximately $1,396.


As of March 31, 2004, the Company has federal and state net operating loss
carryforwards of approximately $7,500 available to reduce future taxable
income.  The federal net operating  loss  carryforwards  will begin to expire in
2020.  Under the provisions of the Internal  Revenue Code,  certain  substantial


                                      F-32


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


changes in the  Company's  ownership may result in a limitation on the amount of
net operating loss carryforwards that can be used in future years.  Depending on
a variety of factors  this  limitation,  if  applicable,  could  cause a portion
and/or all of these net operating losses to expire before utilization occurs.

The Company  received  approval to sell a portion of its unused  cumulative  New
Jersey NOLs carryforwards  under the State of New Jersey's  Technology  Business
Tax Certificate  Transfer Program (the "Program").  The Program allows qualified
technology and biotechnology  businesses in New Jersey to sell unused amounts of
NOL carryforwards and defined research and development tax credits for cash. For
the fiscal years ended March 31, 2003 and 2004, the Company has received benefit
of  approximately  $185 and $127,  respectively  from the sale of NOLs under the
Program.

The  differences  between the United States  federal  statutory tax rate and the
Company's  effective  tax rate are as follows as of fiscal  year ended March 31,
2003 and March 31, 2004:


                                                          2003     2004
                                                         ------   ------

Tax benefit at the U.S. Statutory Federal Rate......     (34.0%)  (34.0%)
State tax benefit...................................      (3.4%)   (2.9%)
Change in valuation allowance.......................      29.1%    18.9%
Disallowed interest.................................       2.7%    12.4%
Other...............................................       0.5%     1.4%
                                                         ------   ------

Effective tax rate..................................      (5.1%)   (4.2%)
                                                         ======   ======

NOTE 9. COMMITMENTS AND CONTINGENCIES


LEASES


The Company leases its IDCs and corporate office under  noncancelable  operating
lease agreements  expiring  through 2015. The IDCs lease agreements  provide for
base rental  rates which  increase at defined  intervals  during the term of the
lease.  The Company  accounts for rent  abatements and  increasing  base rentals
using  the  straight-line  method  over the life of the  lease.  The  difference
between the  straight-line  expense and the cash payment is recorded as deferred
rent expense.

The  Company  leases  certain  equipment  for  use in  its  IDCs  and  corporate
headquarters  under  noncancelable  capital lease agreements that expire through
2006.




                                      F-33


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)

Minimum  future  operating and capital  lease  payments as of March 31, 2004 are
summarized as follows:

                                                 Capital    Operating
                                                 Leases      Leases
                                                ----------  ----------

Fiscal Year ending March 31,

2005..............................................   $118     $2,275
2006..............................................     28      2,226
2007..............................................      9      2,139
2008..............................................     --      2,167
2009..............................................     --      2,196
Thereafter........................................     --      5,289
                                                     -----    -------

Total minimum lease payments......................   $155    $16,292
                                                             ========

Less amount representing interest.................      5
                                                      ----

Present value of net minimum lease payments,
including current maturities of $115...............  $150
                                                    ======

Total rent  expense  was  approximately  $2,318 and $2,461 for the fiscal  years
ended March 31, 2003 and 2004, respectively.

Assets  recorded under  capitalized  lease  agreements  included in property and
equipment consists of the following:


                                                     2003      2004
                                                    ------   -------
Computer equipment.................................  $338     $369
Machinery and equipment............................   383      413
                                                    ------   -------

                                                      721      782
Less: Accumulated amortization.....................  (236)    (459)
                                                    ------   -------

Net assets under capital lease.....................  $485     $323
                                                    ======   =======


EMPLOYMENT AGREEMENTS


The Company has  employment  agreements  with six  executives  which provide for
compensation  and certain other benefits.  These  agreements  provide for annual
base salaries in the aggregate of $1,000 as well as for bonus payments to one of
the executives based on revenue results.

OTHER

During the fiscal year ended March 31, 2002,  the Company  became  involved in a
dispute with one of its  contractors.  The contractor filed a mechanic's lien in
the amount of $951 representing the amount the contractor  alleged was due under
the contract. In July 2002, the Company settled the dispute for the cash payment
of $750 and the return by the contractor of $300 of Common Stock the Company had
issued as partial consideration for construction services.

The Company is a party to litigation  with a former employee of Hollywood SW. In
February 2003, prior to the Company's  acquisition of Hollywood SW, Hollywood SW
eliminated the position of an employee,  and as part of the termination process,


                                      F-34


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


Hollywood  SW  attempted to secure a general  release  from  liability  from the
employee.  In March  2003,  the Company  received a letter  from the  employee's
attorney seeking  unspecified  damages to release the Company from any potential
claims,  including  alleged  improper  classification  as an exempt employee and
unpaid vacation time. In February 2004, the employee's  attorney filed a lawsuit
in California seeking unspecified  damages. The Company is discussing the matter
with the employee's attorney and has contested the matter.

NOTE 10. EMPLOYEE BENEFIT PLANS

In July 2002, the Company terminated its then existing benefits plans, including
its  401(k)  plan,  and joined a  Professional  Employer  Organization  ("PEO").
Through the PEO, the Company purchases all of its benefits and payroll services,
together  with other PEO  member  companies.  For tax  filing  and for  benefits
purposes,  the  employees of the Company are  considered  to be employees of the
PEO.  However,  Hollywood  SW is not a member  of the  PEO,  and  purchases  its
benefits  from other  providers.  Through the PEO, the Company has a 401(k) Plan
that allows  eligible  employees to contribute up to 15% of their  compensation,
not to exceed the  statutory  limit.  The Company  matches  50% of all  employee
contributions.  Employee  contributions,  employer  matching  contributions  and
related earnings vest  immediately.  Total expense under this plan and the prior
401(k) plan totaled $37 and $39, respectively,  for the fiscal years ended March
31, 2003 and 2004.

Hollywood SW's  employees are covered by a profit  sharing plan qualified  under
IRS section 401. The plan provides for Hollywood SW to make discretionary profit
contributions   on  behalf  of  eligible   employees.   Hollywood   SW  made  no
contributions in 2003 or 2004.

NOTE 11. RELATED PARTY TRANSACTIONS

In connection  with the execution of one of the  Company's  long-term  operating
leases, two of the Company's founders posted a letter of credit in the amount of
$525.  This  letter of credit was  reduced  each year for three  years  until it
reached  zero in June  2003.  The  Company  reimbursed  these  founders  for the
issuance costs of  approximately  $10 for the letter of credit during the fiscal
year ended March 31, 2001.

Two  executives of the Company were  investors in the 1-Year Notes  described in
Note 4. These executives  collectively received 6,902 warrants to purchase Class
A Common  Stock at $0.05 per share.  These notes were repaid  prior to March 31,
2002. Both executives also  participated in the 5-Year Notes,  and  collectively
received  37,500  additional  warrants.  In  September  2003,  these  executives
exercised  all of their  1-Year  Notes  Warrants  and 5-Year  Notes  Warrants in
exchange for payments totaling $2. These executives participated in the Exchange
Offer and chose the Note  Option,  under which they  exchanged  5-Year Notes and
accrued interest  totaling $382 for Convertible  Notes,  convertible into 67,713
shares of Class A Common Stock.  As of March 31, 2003 and 2004 the principal due
to these executives amounted to $375 and $382.

Two of the Company's directors,  are directors of MidMark, which held all of the
Company's  outstanding  Preferred Stock and related contingent warrants until an
exchange was consummated in November 2003. The Company paid this related party a
management fee of $50 per year until November 2003.  MidMark also purchased $333
of one-year  notes,  which was repaid in April 2002, and was issued 6,902 of the
one-year notes warrants. In addition,  the Company paid a $75 investment banking
fee in connection with the issuance of the Series A and Series B Preferred Stock
financings.  Also,  each of these directors has been granted options to purchase
5,000 shares of Class A Common Stock.  In September  2003,  the Company  entered
into the Exchange  Agreement  with MidMark in  connection  with its agreement to
convert  all of  its  shares  of  Preferred  Stock.  Pursuant  to  the  Exchange
Agreement,  MidMark received  2,207,976 shares of Class A Common Stock (see Note
5). In addition, these directors are members of the Company's Audit Committee.


                                      F-35


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


A former director of the Company is also a partner of a law firm which
perforMed legal services for the company. For the years ended march 31, 2003
and 2004, the company purchased approximately $124 and $639, respectively, of
legal services from this firm. The former director was granted options to
purchase 4,000 shares of class a common stock.


A  director  of the  Company is also a director  of an  investment  firm and the
general  partner of another  investment  firm which  collectively  hold  208,952
shares of the Company's  Class A Common Stock.  One of these firms also invested
$1,000 in the  Company's  1-Year  Notes,  which was  repaid in March  2002,  and
invested $1,000 in the Company's 5-Year Notes. 1-Year Notes Warrants to purchase
6,902  shares of Class A Common  Stock and 5-Year  Notes  Warrants  to  purchase
100,000 shares of Class A Common Stock were issued in connection with the 1-Year
Notes and 5-Year Notes purchases.  In August 2003, the 1-Year Notes Warrants and
5-Year Notes Warrants were exercised in exchange for a payment of $5.  Principal
and interest  under the 5-Year  Notes of $1,018 was  exchanged  for  Convertible
Notes,  convertible  into 180,569 shares of the Company's  Class A Common Stock,
pursuant to the Exchange Offer in March 2004 (See Note 4). The director has been
granted options to purchase 9,000 shares of Class A Common Stock.


A member of the Company's board of advisors is related to one of the
Company's executives, and is a partner in an entity that performs real estate
services for the Company. No amounts were paid to the individual during the
years ended March 31, 2003 and March 31, 2004. This individual also has been
granted options to purchase 41,025 shares of Class A Common Stock at a
weighted average exercise price of $6.83 per share.

One of the members of the Company's  board of advisors  owns a contracting  firm
that performs work at the Company's  IDCs, and the owner of this company is also
an investor in the Company's 5-Year Notes. This contractor has been paid $18 and
$10 for the years ended March 31,  2003 and 2004,  respectively.  In March 2002,
the owner of this  company  purchased  $50 of the  Company's  5- Year  Notes and
received  5,000 5-Year  Notes  Warrants.  In  addition,  this company owns 8,000
shares of the Company's  Class A Common Stock,  issued as partial  consideration
for work performed during the year ended March 31, 2001. In September 2003, this
individual  exercised the 5-Year Notes Warrants.  In March 2004, this individual
participated  in the Exchange Offer,  and under the Share Option,  exchanged the
5-Year Notes  principal  and interest of $51 for 14,264 shares of Class A Common
Stock.

One of the  members of the  Company's  board of advisors  owns an  architectural
services firm that performs  work at the Company's  IDCs.  This firm was paid $3
and $1 for the years ended March 31, 2003 and March 31, 2004,  respectively.  In
addition,  this individual holds options to purchase 600 shares of the Company's
Class A Common Stock.

The Company has purchased two separate ten-year, term life insurance policies on
the life of one of its  executives.  Each  policy  carries  a death  benefit  of
$5,000,  and the Company is the  beneficiary  of each policy.  Under one policy,
however,  the proceeds will be used to repurchase,  after  reimbursement  of all
premiums paid by the Company, some or all of the shares of the Company's capital
stock held by the executive's estate at the then- determined fair market value.


In connection  with the Hollywood SW acquisition,  the Company  purchased all of
the  outstanding  capital  stock of  Hollywood SW from its two  stockholders  on
November 3, 2003. The selling  stockholders have continued as executive officers
of Hollywood SW under new  employment  agreements and have received an aggregate
of 400,000  unregistered  shares of the  Company's  Class A Common  Stock,  less
40,444  shares of Class A Common Stock that were issued to certain  optionees of



                                      F-36


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)



Hollywood  SW (see Note 7).  Hollywood SW and  Hollywood  Media  Center,  LLC, a
limited  liability  company  that  is 95%  owned  by one  of the  company's  key
employees,  entered into a commercial property lease, dated january 1, 2000, for
2,115  square feet of office  space.  the company  has  assumed  hollywood  sw's
obligations under this lease pursuant to the acquisition,  including the monthly
rental  payments of  approximately  $2. The lease is currently a  month-to-month
tenancy  with the same  monthly  rent.  Rents  paid  under  this  lease  totaled
approximately $31 for each of the fiscal years ended March 31, 2003 and 2004. On
May 1, 2004 an additional 933 square feet were rented on a month-to-month  basis
for monthly additional rental payments of $1.


In connection with the Core acquisition, the Company purchased all of the
outstanding  capital stock of Core from its sole  stockholder on January 9, 2004
(see Note 7). The selling stockholder  continued as an executive officer of Core
under a new  employment  agreement  and as  consideration  for the  sale of Core
capital stock,  received $250 and 100,000  unregistered shares of Class A Common
Stock.


In December 2002, one of the Company's founders returned 30,000 shares of the
Company's Class B Common Stock and the three other founders returned a total
of 30,000 of Class A Common Stock and received no consideration from the Company
for such returned shares.


In connection with his employment arrangement with AccessDM, AccessIT paid
one of its key  employees  a finder's  fee of $25  during the fiscal  year ended
March  2004,  in  connection  with  his  efforts  related  to the  Hollywood  SW
acquisition.

The  Company  entered  into a  consulting  agreement  with  one  of  its  former
employees.  Under the terms of the  agreement,  the  former  employee  agreed to
provide  consulting  services to the Company in connection  with the IPO and the
Company's  acquisition  of Hollywood  SW, for which the Company paid him $10 per
month (plus reasonable  out-of-pocket expenses) for the period beginning on July
5, 2003 through  September  30, 2003.  The Company also paid him $20 in November
2003 in connection with the completion of the IPO. After September 30, 2003, the
Company may, in its sole discretion,  retain the former employee's  services for
future projects on mutually agreed to terms. The former employee has agreed that
the term of his  confidentiality,  non-solicitation  and non-compete  agreement,
which he entered into as of April 10, 2000,  will remain in effect  through July
4, 2004.


NOTE 12. SUPPLEMENTAL CASH FLOW DISCLOSURE

                                                                 MARCH 31,
                                                                ----------

                                                               2003     2004
                                                              -----    -----

Interest paid..........................................        $314     $513
Assets acquired under capital leases...................         242       31

Notes issued in ColoSolutions acquisition..............       1,000       --
Notes converted/exchanged for Class A common stock.....         --     2,526
Notes issued in Hollywood SW acquisition...............         --     3,000
Note issued in Boeing Digital acquisition..............         --     1,366
Adjustment to BridgePoint purchase price                        217       --
Accretion on mandatorily redeemable convertible preferred
 stock.................................................         628    1,588


NOTE 13. SIGNIFICANT AGREEMENTS AND TRANSACTIONS

                                      F-37


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)


ACCESS DIGITAL MEDIA, INC.

In March 2003,  the Company  engaged  The Casey Group to help  develop  software
designed  to enable the  delivery  of digital  content.  This  software  will be
utilized by AccessDM in its planned  operations.  As compensation  for assisting
the Company in the development of the software,  the cost of which was agreed to
be $174,  the Company  issued to The Casey Group  750,000  shares of  AccessDM's
Common Stock in September  2003 and 8,700  shares of  AccessIT's  Class A Common
Stock in November  2003.  The shares of  AccessDM's  Common  Stock issued to The
Casey Group represent 20% of AccessDM's  outstanding  capital stock after giving
effect to such issuance.  The cost of the software has been recorded as property
and equipment, net in the Consolidated Balance Sheet and is being amortized over
its expected  useful life,  which is estimated to be three years. As a result of
this transaction,  the Company recorded a minority interest of $35 and a gain on
the  sale of stock  by its  subsidiary  of $139,  which  has  been  recorded  in
additional  paid-in  capital  in the  Consolidated  Statement  of  Stockholders'
Equity.  For the fiscal year ended March 31, 2004 the Company  reduced  minority
interest by $25, representing The Casey Group's share of AccessDM's net loss.

NOTE 14. SEGMENT INFORMATION

Segment  information  has  been  prepared  in  accordance  with  SFAS  No.  131,
"Disclosures  about  Segments of an  Enterprise  and Related  Information".  The
Company has two reportable  segments:  Data Center  Services and Media Services.
The segments  were  determined  based on products and services  provided by each
segment.  Accounting policies of the segments are the same as those described in
Note 2.  Performance  of the segments is evaluated  on operating  income  before
interest, taxes, depreciation and amortization. The Datacenters segment provides
services  through its nine IDC's  including  the  license of data center  space,
provision of power, data connections to other  businesses,  and the installation
of equipment, and the operations of Core. The Media Services segment consists of
Hollywood SW and  AccessDM.  Hollywood SW develops and licenses  software to the
theatrical distribution and exhibition industries,  provides services as an ASP,
and provides software enhancements and consulting services.  AccessDM was formed
to store and  distribute  digital  content to movie  theaters and other  venues.
Prior to November 3, 2003, the Company operated only in the Datacenters segment.
All of the Company's revenues were generated inside the United States.

Selected segment data:

                                                       For the Fiscal Years
                                                          Ended March 31,
                                                      -------------------------
                                                        2003           2004
                                                        ----           ----

Operating income (loss) before interest, taxes,
depreciation and amortization:

Media Services....................................       --          $   621
Datacenters.......................................   (1,277)           (433)
                                                        ----           ----

Total.............................................  $(1,277)            $187
                                                    =======            ======

There were no intersegment revenues or expenses for the fiscal years ended March
31, 2003 and March 31, 2004.


                                                            As of March 31,
                                                      -------------------------
                                                        2003           2004
                                                        ----           ----
Assets:
Media Services....................................    $   --        $ 10,475
Datacenters.......................................     9,894          10,701
                                                     -------        ---------
Total.............................................    $9,894         $21,175
                                                     =======        ========




                                      F-38


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)





A  reconciliation  of the totals  reported  for the  operating  segments  to the
significant line items in the consolidated financial statements is as follows:



                                      Fiscal Year Ending
                                           March 31,
                                      2003          2004
                                    -------       -------
Reportable segment operating
income (loss)                       $(1,277)        $187
Less:
  Depreciation and                    1,687        2,692
     amortization
                                    -------       -------
Total loss from operations          $(2,964)      $(2,505)
                                    =======       =======

NOTE 15. SUBSEQUENT EVENTS

In April 2004, AccessDM entered into a professional services agreement with
an  information  technology  consulting  firm  to  develop  software  for use in
AccessDM's service offering.  The total cost of the software is $315, payable in
installments as events are met, with final delivery expected in September 2004.

In  April  2004,  the  Company  entered  into a  non-binding  agreement  with an
investment firm to raise approximately $5 million to $7 million from the Private
Placement.  On June 4, 2004, the transaction  concluded with the Company issuing
1,217,500  unregistered  shares of Class A Common Stock at a sale price of $4.00
per share. Net proceeds to the Company,  including fees and expenses to register
the  securities  are  expected to be  approximately  $4.0  million.  The Company
intends to use the net proceeds for capital investments and for working capital.
The Company also issued to investors and to the  investment  firm in the Private
Placement,  warrants  to  purchase a total of  304,375  shares of Class A Common
Stock at an exercise  price of $4.80 per share,  exercisable  upon receipt.  The
Company has agreed to  register  the shares and  warrants  issued in the Private
Placement with the SEC by filing a Form SB-2 on or before July 5, 2004.  Certain
monetary penalties apply if the Company fails to file Form SB-2 by July 5, 2004,
or the  registration  statement  is not declared  effective  within a stipulated
period of time.

In May 2004,  the Company  entered into an agreement  with the holder of 750,000
shares of AccessDM's  Common  Stock,  to exchange all of their shares for 31,300
unregistered  shares  of  AccessIT's  Class A Common  Stock.  As a result of the
transaction, AccessIT holds 100% of AccessDM's Common Stock.





                                      F-39






                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEET
                      (In thousands, except for share data)
                                   (unaudited)

                                                             December 31, 2004
                                                             -----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents..........................               $1,515
Accounts receivable, net............................               1,251

Prepaid and other current assets....................                 439
Unbilled revenue....................................                 291
                                                                --------------
Total current assets................................               3,496
                                                                --------------

Property and equipment, net.........................               8,276
Intangible assets, net..............................               3,695
Capitalized software costs, net.....................               1,558
Goodwill............................................               5,478
Deferred costs......................................                 331
Unbilled revenue, net of current portion............                  76
Security deposits...................................                 341
                                                                --------------
Total assets........................................             $23,251
                                                                ==============



LIABILITIES, REDEEMABLE STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses....                           $921
Current portion of notes payable....................               1,009
Current portion of customer security deposits.......                 118
Current portion of capital leases...................                 494

Current portion of deferred revenue.................                 688
Current portion of deferred rent expense............                  42
                                                                --------------
Total current liabilities...........................               3,272
                                                                --------------

Notes payable, net of current portion...............               4,937
Customer security deposits, net of current portion..                 156
Deferred revenue, net of current portion............                 236
Capital leases, net of current portion..............                  21
Deferred rent expense...............................                 951
Deferred tax liability..............................               1,287
Total liabilities...................................              10,860

COMMITMENTS AND CONTINGENCIES (See Note 7)

Redeemable Class A common stock, issued and
outstanding, 53,534 shares                                           247

Stockholders' Equity:
Class  A  common  stock,  $0.001
par  value  per  share;   40,000,000  shares
authorized; shares issued, 9,353,328 and shares
outstanding, 9,344,224..............................                  10
Class  B  common  stock,  $0.001  par  value  per  share;
15,000,000  shares authorized; shares issued and
outstanding, 1,005,811 .............................                   1
Treasury stock, at cost; 9,140 shares...............                 (32)
Additional paid-in capital..........................              30,853

Accumulated deficit.................................             (18,688)
                                                                --------------
Total stockholders' equity..........................              12,144
                                                                --------------
Total liabilities, redeemable stock
and stockholders' equity............................             $23,251
                                                                ==============



See accompanying notes to Consolidated Financial Statements.





                                      F-40







                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except for share and per share data)

                                   (unaudited)

                                                          THREE  MONTHS ENDED
                                                          -------------------

                                                             December 31,
                                                             ------------
                                                          2003         2004
                                                          ----         ----
Revenues:
 Media services...................................       $ 637       $1,300
 Data center services.............................       1,406        1,439
                                                         -----       ------
Total revenues....................................       2,043        2,739

Costs of revenues (exclusive of depreciation and
amortization shown below):

 Media services, including amortization of
    software development costs of $43 and $92
    for 2003 and 2004.............................          57         570
Data center services..............................         837        1,062
                                                         -----       ------
Total costs of revenues...........................         894        1,632

Gross profit......................................       1,149        1,107


Operating expenses: Selling, general and
  administrative...................................        872        1,303



Provision for doubtful accounts...................          42           23
Research and Development..........................           8          122
                                                         -----       ------
Depreciation and amortization.....................         676          895

Total operating expenses..........................       1,598        2,343
                                                         -----       ------

Loss from operations..............................        (449)      (1,236)

Interest expense..................................        (143)         (90)
Non-cash interest expense.........................        (111)         (43)
Other income (expense), net.......................           4          (27)
                                                         -----       ------
Net loss before income taxes......................        (699)      (1,396)

Income tax benefit................................         127           77
                                                         -----       ------

Net loss..........................................        (572)      (1,319)


Accretion related to redeemable convertible
preferred stock...................................      (1,125)          --
Accretion of preferred dividends..................         (40)          --
                                                         -----       ------

Net loss available to common stockholders.........     $(1,737)     $(1,319)
                                                       ========     ========

Net loss available to common stockholders per
 common share:
Basic and diluted.................................      $(0.30)      $(0.13)
                                                       ========     ========

Weighted average number of common shares
 outstanding:
Basic and diluted.................................   5,725,153   10,041,879
                                                     =========   ==========

See accompanying notes to Consolidated Financial Statements.


                                      F-41









                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except for share and per share data)
                                   (unaudited)

                                                          Nine Months Ended
                                                          -----------------
                                                             December 31,
                                                             ------------
                                                       2003            2004
                                                       ----            ----
Revenues:
 Media services...................................     $ 637         $2,496
 Data center services.............................     4,235          4,639
                                                       -----          -----
Total revenues....................................     4,872          7,135

Costs of revenues (exclusive of depreciation
and amortization shown below):
 Media services, including amortization of
 software development costs of $43 and $220
 for 2003 and 2004................................        57            912
Data center services..............................     2,586          3,102
                                                       -----          -----
Total costs of revenues...........................     2,643          4,014

Gross profit......................................     2,229          3,121

Operating expenses:
Selling, general and administrative (excludes
non-cash stock-based compensation of $10 in
2003 and $4 in 2004)..............................     2,021          3,588
Provision for doubtful accounts...................        55            598
Research and development..........................         8            288
Non-cash stock-based compensation.................        10              4
Depreciation and amortization.....................     1,915          2,457
                                                       -----          -----

Total operating expenses..........................     4,009          6,935
                                                       -----          -----

Loss from operations..............................    (1,780)        (3,814)

Interest expense..................................      (389)          (279)
Non-cash interest expense.........................      (302)          (155)
Other income, net.................................        11             17
                                                       -----          -----
Net loss before income taxes and minority
interest in subsidiary............................    (2,460)        (4,231)

Income tax benefit................................       127            233
                                                       -----          -----
Net loss before minority interest in subsidiary...    (2,333)        (3,998)

Minority interest in subsidiary...................       --              10
                                                       -----          -----

Net loss..........................................    (2,333)        (3,988)

Accretion related to redeemable convertible
    preferred stock...............................     (1,590)           --
Accretion of preferred dividends..................      (220)            --
                                                       -----          -----

Net loss available to common stockholders.........   $(4,143)       $(3,988)
                                                     ========       ========

Net loss available to common stockholders per
 common share:
Basic and diluted.................................    $(1.05)        $(0.42)
                                                     ========        =======

Weighted average number of common shares
 outstanding:
Basic and diluted................................. 3,954,827      9,432,380
                                                   ==========     =========


See accompanying notes to Consolidated Financial Statements.


                                       F-42





                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (In thousands - unaudited)








                                                                 Nine MonthsEnded
                                                                 ----------------
                                                                    December 31,
                                                                    ------------
                                                                2003          2004
                                                                ----          ----
Cash flows from operating activities:
                                                                     
Net loss...............................................         $(2,333)   $(3,988)
Adjustments to reconcile net loss to net cash used
 in operating activities:
Depreciation and amortization..........................           1,915      2,457
Amortization of software development costs.............              43        220
Amortization of deferred tax liability.................              --       (233)
Provision for doubtful accounts........................              55        598
Non-cash stock-based compensation......................              10          4
Non-cash interest expense..............................             302        155
Minority interest......................................              (6)       (10)
Gain on exchange of minority interest shares...........              --        (13)
Decrease in fair value of common stock warrants........              --        (91)
Changes in operating assets and liabilities:
Accounts receivable....................................            (566)      (807)
Prepaid and other current assets.......................            (259)      (100)
Other assets...........................................            (146)      (355)
Accounts payable and accrued expenses..................            (125)      (607)
Deferred revenue.......................................             323       (107)
Other liabilities......................................             188        118
                                                                    ---        ---

Net cash used in operating activities..................            (599)    (2,759)
                                                                  -------   -------

Cash flows from investing activities:
Purchases of property and equipment........                        (136)    (1,637)
Purchase of intangible assets..........................            (110)       (38)
Additions to capitalized software costs................              --       (302)
Acquisition of Hollywood Software, net of cash
 acquired..............................................          (2,354)        --
Acquisition of FiberSat, net of cash acquired .........              --       (508)

Net cash used in investing activities..................          (2,600)    (2,485)
                                                                  -------   -------
Cash flows from financing activities:
Net proceeds from issuance of notes payable and
 warrants..............................................           1,230         --
Repayment of notes payable.............................          (1,000)      (448)
Principal payments on capital leases...................            (358)      (158)
Repurchase of common stock.............................              --        (32)
Proceeds from issuance of common stock.................           4,788      5,067
                                                                   -----     -----

Net cash provided by financing activities..............           4,660      4,429

Net (decrease) increase in cash and cash equivalents...           1,461       (815)

Cash and cash equivalents at beginning of period.......             956      2,330
                                                                    ---      -----

Cash and cash equivalents at end of period.............          $2,417     $1,515
                                                                  ======    ======






See accompanying notes to Consolidated Financial Statements.




                                       F-43








                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


NOTE 1. NATURE OF OPERATIONS



Access Integrated  Technologies,  Inc. ("AccessIT") was incorporated in Delaware
in  March  2000.  ACCESS  DIGITAL  MEDIA,  INC.  ("AccessDM"),  a  wholly  owned
subsidiary of AccessIT, was incorporated in Delaware in February 2003. Hollywood
Software,  Inc. ("Hollywood SW") was incorporated in California in October 1997,
and was acquired by AccessIT on November 3, 2003. Core Technology Services, Inc.
("Managed  Services")  was  incorporated  in New York in November  1995, and was
acquired  by  AccessIT  on  January  9,  2004.  FiberSat  Global  Services,  LLC
("FiberSat")  was organized in  California  in August 1998,  and was acquired by
FiberSat  Global  Services  Inc., a wholly  owned  subsidiary  of  AccessIT,  on
November  17,  2004.  ADM  Cinema  Coporation  ("ADM  Cinema"),  a wholly  owned
subsidiary  of  AccessIT,  was  incorporated  in Delaware on  December21,  2004.
AccessIT,  AccessDM, Hollywood SW, Managed Services, FiberSat and ADM Cinema are
referred to herein collectively as the ("Company"). AccessIT operates a national
platform  of  carrier-diverse  Internet  Data  Centers  ("IDCs")  in  which  the
Company's  customers  have  access to:  secure,  flexible  space for  installing
network and server  equipment;  multiple  fiber  providers for connecting to the
internet and/or other carrier  networks;  and a broad range of value-added  data
center services including the Company's  AccessStorage-on-Demand managed storage
service solutions. The Company's IDCs, called AccessColocenters, are designed to
serve a variety of customers, including traditional voice/data competitive local
exchange carriers, other integrated  communication  providers,  Internet Service
Providers,   Application  Service  Providers  ("ASPs"),  Streaming  and  Content
Delivery  Service  Providers,  storage  outsourcers,  and small and medium sized
enterprises.  The Company currently  operates nine IDCs located in eight states:
Arkansas,  Kansas,  Maine,  New  Hampshire,  New  Jersey,  New  York,  Texas and
Virginia,  plus a dedicated  digital  delivery site in Los Angeles,  California.
AccessDM is in the business of storing and distributing digital content to movie
theaters and other  remote  venues.  Hollywood  SW is a provider of  proprietary
enterprise  software and consulting  services for distributors and exhibitors of
filmed  entertainment in the United States and Canada.  Its software manages the
planning,  booking,  scheduling,   revenue  sharing,  cash  flow  and  reporting
associated with the  distribution  and exhibition of theatrical  films.  Managed
Services  is a provider  of  information  technology  consulting  services;  its
primary offering is to provide managed network  monitoring  services through its
global network  command  center.  FiberSat  provides  satellite-based  broadband
video,  data and  Internet  transmission  and  encryption  services for multiple
customers in the broadcast and cable television and  communications  industries,
and also operates an outsourced network operations center.


BASIS OF PRESENTATION

The accompanying  unaudited  consolidated interim financial information has been
prepared by AccessIT.  The unaudited Consolidated Financial Statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States  for  interim  financial   information  and  in  accordance  with
Regulation  S-B.  Accordingly,   they  do  not  include  all  of  the  financial


                                       F-44


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal  recurring  adjustments)  considered  necessary for a fair
presentation have been included.

For the nine months ended December 31, 2003 and 2004,  the Company  incurred net
losses of $2,333 and $3,988 respectively, and negative cash flows from operating
activities  of $599 and $2,759,  respectively.  In addition,  the Company has an
accumulated deficit of $18,688 as of December 31, 2004. Furthermore, the Company
has debt  service  requirements  (including  interest)  of $1,550 for the twelve
months  beginning  in January  2005.  Management  expects  that the Company will
continue  to  generate  operating  losses  for  the  foreseeable  future  due to
depreciation and amortization,  research and development,  the continued efforts
related to the identification of acquisition targets,  marketing and promotional
activities and the development of relationships  with other businesses.  Certain
of these  costs  could be  reduced if working  capital  decreased.  Based on the
Company's cash position at December 31, 2004, a financing  transaction completed
in  February  2005 (see Note 12),  and  expected  cash  flows  from  operations;
management believes that the Company has the ability to meet its obligations for
the foreseeable future. The Company may attempt to raise additional capital from
various  sources for future  acquisitions  or for working  capital as necessary.
There is no assurance that such financing will be completed as  contemplated  or
under terms acceptable to the Company or its existing  shareholders.  Failure to
generate additional  revenues,  raise additional capital or manage discretionary
spending  could  have a  material  adverse  effect on the  Company's  ability to
continue as a going concern and to achieve its intended business objectives. The
accompanying unaudited financial statements do not reflect any adjustments which
may result from the outcome of such uncertainties.

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 the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

The results of operations for the respective interim periods are not necessarily
indicative  of the results to be expected  for the full year.  The  accompanying
unaudited  Consolidated  Financial Statements should be read in conjunction with
the audited Consolidated  Financial Statements and the notes thereto included in
AccessIT's  Form  10-KSB for the fiscal year ended March 31, 2004 filed with the
Securities and Exchange Commission ("SEC").  Certain  reclassifications of prior
period data have been made to conform to the current presentation.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The  unaudited   Consolidated  Financial  Statements  include  the  accounts  of
AccessIT, AccessDM, Hollywood SW, Managed Services, FiberSat and ADM Cinema. All
intercompany transactions and balances have been eliminated.

REVENUE RECOGNITION

Revenues in the Media Services segment primarily consist of software and related
revenues,  generated by Hollywood  SW.  Software  revenues are  accounted for in
accordance with Statement of Position 97-2, "Software Revenue Recognition" ("SOP
97-2"), and Staff Accounting Bulletin No. 104 "Revenue  Recognition in Financial
Statements" ("SAB No. 104"). The Company's  software revenues are generated from
the  following  primary  sources:  (1) software  licensing,  including  customer
licenses  and  ASP  agreements,  (2)  software  maintenance  contracts,  and (3)
professional   consulting  services,   which  includes  systems  implementation,
training, custom software development services and other professional services.

Software  licensing  revenue is recognized when the following  criteria are met:
(a) persuasive  evidence of an arrangement exists, (b) delivery has occurred and
no significant  obligations remain, (c) the fee is fixed or determinable and (d)
collection is determined to be probable.  Significant  upfront fees are received
in addition to periodic  amounts  upon  achievement  of  contractual  events for
licensing of the Company's products. Such amounts are deferred until the revenue
recognition  criteria have been met, which  typically  occurs after delivery and
acceptance.

For  arrangements  with  multiple  elements  (e.g.,  delivered  and  undelivered
products,  maintenance and other services),  the Company  separately  negotiates
each element of the  arrangement  based on the fair value of the  elements.  The


                                       F-45


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


fair  values for ongoing  maintenance  and  support  obligations  are based upon
separate sales of renewals to customers or upon substantive renewal rates quoted
in the agreements. The fair values for services, such as training or consulting,
are based upon hourly  billing rates of these  services when sold  separately to
other  customers.  In instances  where the Company is not able to determine fair
value of each element and the services are essential to the functionality of the
software, percentage-of-completion accounting is followed to recognize revenue.

Customers not wishing to license and operate the software themselves may use the
software through an ASP arrangement,  in which the Company hosts the application
and provides  customer access via the internet.  Annual minimum ASP service fees
are  recognized  ratably over the contract term.  Overage  revenues for usage in
excess of stated minimums are recognized monthly.

Maintenance  services and website  subscription fees are recognized ratably over
the  contract  term.  Professional  consulting  services,  sales of third  party
products and resale  hardware  revenues are recognized as services are provided.
Software  development  revenues are recognized when delivery has occurred and no
significant obligations remain.

Deferred  revenue is recorded  in cases of (1) a portion or the entire  contract
amount  cannot be  recognized  as revenue due to  non-delivery  or acceptance of
licensed software or custom  programming,  (2) incomplete  implementation of ASP
service arrangements, or (3) unexpired pro-rata periods of maintenance,  minimum
ASP service fees or website  subscription  fees.  As license  fees,  maintenance
fees,  minimum ASP service fees and website  subscription fees are often paid in
advance,  a portion of this revenue is deferred  until the contract  ends.  Such
amounts are classified as deferred revenue in the unaudited Consolidated Balance
Sheet and are  recognized  as revenue in accordance  with the Company's  revenue
recognition policies described above.

Revenues in the Media  Services  segment also include  digital  cinema - related
revenues generated by AccessDM. These revenues consist of (1) satellite delivery
revenues,  (2) data encryption and preparation fee revenues and (3) landing fees
for  delivery  to  each  movie  theatre.  These  revenues  are  recognized  upon
completion of the related services.

In addition,  revenues in the Media Services  segment  include  FiberSat,  which
consist of satellite  transmission and network  monitoring and maintenance fees.
These fees consist of monthly recurring  billings  pursuant to contracts,  which
are  recognized as revenues in the month earned,  and other  billings  which are
recognized  on a time and  materials  basis in the period in which the  services
were provided, in accordance with SAB No. 104.

Revenues in the Data Center Services  segment consist  primarily of license fees
for  colocation,  riser access  charges,  electric and cross connect  fees,  and
non-recurring installation and consulting fees. Revenues from colocation,  riser
access  charges,  electric  and cross  connect  fees are billed  monthly and, in
accordance  with  SAB No.  104,  are  recognized  ratably  over  the term of the
contract,  generally  one to nine  years.  Certain  customer  contracts  contain
periodic  increases in the amount of license fees to be paid,  and those amounts
are recognized as license fee revenues on a straight-line basis over the term of
the contracts. Installation fees are recognized on a time and materials basis in
the period in which the services were provided and represent the  culmination of
the earnings process as no significant  obligations  remain.  Amounts  collected
prior to satisfying  the above revenue  recognition  criteria are  classified as
deferred  revenue.  Amounts  satisfying  revenue  recognition  criteria prior to
billing are classified as unbilled revenue.

In addition,  within our Data Center Services segment, Managed Services revenues
consist  of network  monitoring  and  maintenance  fees.  These fees  consist of
monthly  recurring  billings  pursuant to  contracts,  which are  recognized  as
revenues in the month earned,  and other billings which are recognized on a time
and materials basis in the period in which the services were provided.

                                       F-46


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)



CAPITALIZED SOFTWARE COSTS


The Company accounts for software development costs under Statement of Financial
Accounting  Standards  ("SFAS")  No. 86,  "Accounting  for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed".  Software development costs
that are incurred  subsequent  to  establishing  technological  feasibility  are
capitalized  until  the  product  is  available  for  general  release.  Amounts
capitalized as software  development costs are amortized  periodically using the
greater of the units sold  during  the period or on a  straight-line  basis over
five years. The Company reviews capitalized  software costs for impairment on an
annual basis.  To the extent that the carrying  amount exceeds the estimated net
realizable  value of the  capitalized  software  cost, an  impairment  charge is
recorded.  No  impairment  was recorded  for the nine months ended  December 31,
2004.  Amortization of capitalized software development costs, included in costs
of revenues,  for the three months ended  December 31, 2003 and 2004 amounted to
$43 and $92,  respectively.  Amortization  of capitalized  software  development
costs,  included in costs of revenues,  for the nine months  ended  December 31,
2003 and 2004 amounted to $43 and $220, respectively.


NET LOSS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS

Computations  of basic and  diluted  net loss per share of Class A Common  Stock
("Class A Shares") and Class B Common Stock (collectively,  "Common Stock") have
been made in accordance with SFAS No. 128, "Earnings Per Share".  Basic net loss
per share is computed by dividing net loss available to common stockholders (the
numerator) by the weighted average number of shares of Common Stock  outstanding
(the  denominator)  during  the  period.  Shares  issued  during  the period are
weighted  for  the  portion  of  the  period  that  they  are  outstanding.  The
computation of diluted net loss per share is similar to the computation of basic
net loss per share  except  that the  denominator  is  increased  to include the
number of additional  shares of Common Stock that would have been outstanding if
the  dilutive  potential  shares  of  Common  Stock  had  been  issued  and were
outstanding.  The Company has  incurred net losses for the three and nine months
ending December 31, 2003 and 2004;  therefore,  the impact of dilutive potential
shares of Common Stock has been  excluded  from the  computation  as it would be
anti-dilutive.

The following  outstanding stock options,  warrants (prior to the application of
the  treasury  stock  method),  convertible  notes  and  redeemable  convertible
preferred stock (on an as-converted basis) were excluded from the computation of
diluted net loss per share:


                                                    December 31,
                                                    ------------
                                                   2003     2004
                                                   ----     ----

Stock options................................    498,897  598,897
Underwriter warrants.........................    120,000  120,000
Shares issuable related to convertible notes.        --   307,871
Private Placement Warrants...................        --   304,375


STOCK-BASED COMPENSATION


The Company has stock based  employee  compensation  plans,  which are described
more  fully  in Note 6.  The  Company  accounts  for its  stock  based  employee
compensation  plans in accordance  with the provisions of Accounting  Principles
Board ("APB") Opinion No. 25,  "Accounting  for Stock Issued to Employees",  and
related interpretations.  As such, compensation is recorded on the date of grant
only if the current  fair value of the  underlying  stock  exceeds the  exercise
price.  The  Company  has  adopted  the  disclosure  standards  of SFAS No.  148
"Accounting for Stock-Based  Compensation - Transaction and Disclosures",  which
amends SFAS No. 123, "Accounting for Stock-Based  Compensation",  which requires
the Company to provide pro forma net loss and earnings per share disclosures for
stock  option  grants made in 1995 and future  years as if the  fair-value-based


                                       F-47


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


method of  accounting  for stock  options  as  defined  in SFAS No. 123 had been
applied.  The following table  illustrates the effect on net loss if the Company
had applied the fair value recognition provisions to stock based compensation:







                                                            Three Months Ended        Nine Months Ended
                                                            ------------------        -----------------
                                                                December 31,              December 31,
                                                                ------------              ------------
                                                                  2003       2004       2003       2004
                                                                  ----       ----       ----       ----
                                                                                   
Net loss as reported...........................................  $ (572)   $(1,319)   $(2,333)  $(3,988)
Stock-based compensation expense included in net loss..........      --        --          10         4
Stock-based compensation expense determined under fair value
 based method, net of related income tax benefits..............    (108)      (158)      (341)     (464)
                                                                  -----      -----      -----     -----
Pro forma net loss.............................................  $ (680)   $(1,477)   $(2,664)  $(4,448)
                                                                 ======   ========   ========  ========


Basic and diluted net loss available to common stockholders
per share:

As reported....................................................  $(0.30)   $(0.13)    $(1.05)   $(0.42)
Pro forma......................................................  $(0.32)   $(0.15)    $(1.13)   $(0.47)




USE OF ESTIMATES

The  preparation  of  Consolidated   Financial  Statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  at the date of the  Consolidated  Financial
Statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period.  The Company's most significant  estimates related to software
revenue recognition,  capitalization of software development costs, amortization
of intangible  assets and  depreciation  of fixed assets.  Actual  results could
differ from those estimates.

NOTE 3. RECENT ACCOUNTING STANDARDS

In December 2002, the Financial  Accounting  Standards Board (the "FASB") issued
SFAS  No.  148,  "Accounting  for  Stock-Based  Compensation  -  Transition  and
Disclosure  -an amendment of FASB  Statement No. 123." This  statement  provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee  compensation.  In addition,  this
statement  amends  the  disclosure  requirements  of  SFAS  No.  123 to  require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based  employee  compensation  and the effects of
the method used on reported results.

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment." This statement revises the original guidance contained in SFAS No. 123
and supersedes  Accounting  Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees,  and its related implementation  guidance.  Under
SFAS No. 123 (revised  2004),  a public entity such as AccessIT will be required
to measure the cost of employee  services  received in exchange  for an award of
equity instruments based on the grant-date fair value of the award (with limited
exceptions)  and recognize such cost over the period during which an employee is
required to provide  service in  exchange  for the reward  (usually  the vesting
period). For stock options and similar  instruments,  grant-date fair value will
be estimated using option-pricing models adjusted for unique  characteristics of
instruments (unless observable market prices for the same or similar instruments
are  available).  For  small  business  issuers,  including  AccessIT,  this  is
effective as of the  beginning of the first interim or annual  reporting  period
that begins after December 15, 2005.



                                       F-48


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


Upon  adoption of this  standard,  the actual costs of our  stock-based  payment
plans will be based on  grant-date  fair value,  which can not be  determined at
this time

NOTE 4. NOTES PAYABLE

In February  2002, the Company  commenced an offering of 5-year 8%  subordinated
promissory notes (the "5-Year Notes") with detachable warrants to purchase Class
A Shares (the "5-Year Notes  Warrants").  During the nine months ended  December
31, 2003,  the Company raised an aggregate of $1,230 from the issuance of 5-Year
Notes to several  investors.  Through  March 31,  2004 the  Company had raised a
total of $4,405 from the issuance of 5-Year Notes and no additional 5-Year Notes
were issued  during the nine months ended  December  31,  2004.  As of March 31,
2004,  5-Year Notes Warrants to purchase 440,500 Class A Shares were issued,  of
which 5-Year Warrants to purchase  123,000 Class A Shares were issued during the
nine months ended December 31, 2003 (see Note 6).

In November 2003, the Company issued two 8% notes payable totaling $3,000 to the
founders of Hollywood SW as part of the purchase price for Hollywood SW (the "HS
Notes").  During the nine months ended  December 31,  2004,  the Company  repaid
principal of $378 on the HS Notes.

In February  2004,  the Company sent a notice to the holders of the 5-Year Notes
and the HS Notes offering to exchange (the  "Exchange  Offer") the principal and
accrued  interest of the outstanding  5-Year Notes and the HS Notes for, at each
note holder's  election,  either (1) unregistered  Class A Shares at an exchange
rate of $3.57 per share (the  "Share  Option") or (2)  Subordinated  Convertible
Promissory  Notes  ("Convertible  Notes"),  which are  convertible  into Class A
Shares at a conversion rate of $5.64 per share (the  "Convertible Note Option").
On March 24,  2004,  the  Exchange  Offer was  completed.  Pursuant to the Share
Option, the Company exchanged 5-Year Notes in the aggregate  principal amount of
$2,480 plus accrued and unpaid interest of $46 for 707,477  unregistered Class A
Shares. Pursuant to the Convertible Note Option, in exchange for 5-Year Notes in
the  aggregate  principal  amount of $1,705 plus accrued and unpaid  interest of
$31, the Company  issued  Convertible  Notes which are, as of December 31, 2004,
convertible  into a maximum of  307,871  shares of its Class A Shares (1) at any
time up to the maturity date at each holder's option or (2) automatically on the
date when the average  closing price on the American Stock Exchange of the Class
A Shares for 30  consecutive  trading  days has been  equal to or  greater  than
$12.00.  The  holders of all the HS Notes and holders of 5-Year  Notes  totaling
$220 of principal elected not to participate in the Exchange Offer.

In March 2004, in connection  with its  acquisition  of certain assets of Boeing
Digital from the Boeing  Company  ("Boeing"),  the Company issued a non-interest
bearing note payable with a face amount of $1,800.  The estimated  fair value of
this note was  determined to be $1,367 on the closing date and interest is being
imputed over the 4 year term of the note,  to non-cash  interest  expense in the
unaudited Consolidated Statement of Operations.  On December 31, 2004, the value
of the note,  (including  imputed  interest)  is $1,489 and is included in notes
payable in the  unaudited  Consolidated  Balance  Sheet.  For the three and nine
months ended December 31, 2004,  non-cash  interest expense  resulting from this
note was $41 and $123, respectively.

In July 2004, the Company made early repayments totaling $58 for two 5 -Year
Notes, and the remaining value of the underlying 5 - Year Notes Warrants was
amortized to non-cash interest expense, totaling $17.

During the nine months ended  December 31, 2004, the Company made scheduled
principal payments of $12 on the 5-Year Notes.




                                       F-49


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


NOTE 5. MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK


PREFERRED STOCK

In  October  2001,  the  Company  issued  3,226,538  shares  of the  Series A 8%
Mandatorily  Redeemable  Convertible  Preferred  Stock (the  "Series A Preferred
Stock") at approximately $0.62 per share,  resulting in gross proceeds of $2,000
before considering expenses of $203. Concurrent with this issuance,  the Company
issued  warrants to purchase up to 430,205 Class A Shares (the "2001  Warrant").
In November 2002, the Company issued  4,976,391 shares of Series B 8% Cumulative
Convertible  Preferred Stock, par value $0.001 (the "Series B Preferred  Stock")
the Series A Preferred Stock holder at approximately $0.50 per share,  resulting
in gross proceeds of $2,500 before considering expenses of $125. Concurrent with
this issuance,  the Company issued three warrants to purchase  381,909,  144,663
and 100,401 Class A Shares  ("Contingent  Warrant A", "Contingent Warrant B" and
"Contingent  Warrant C",  respectively).  The issuance of the Series A Preferred
Stock  resulted  in a  beneficial  conversion  feature of $1,078  calculated  in
accordance   with  Emerging   Issues  Task  Force   ("EITF")  Issue  No.  00-27,
"Application  of  Issue  No.  98-5  to  Certain  Convertible  Instruments".  The
beneficial  conversion  feature was  reflected as an issuance cost and therefore
was reflected as a charge  against the Series A Preferred  Stock and an increase
to additional paid-in capital.  As described below, in November 2003 the Company
exchanged all of its Series A Preferred Stock, Series B Preferred Stock, related
warrants and accumulated dividends for 2,207,976 Class A Shares.

Total  accretion for the Series A Preferred  Stock to its  estimated  redemption
value was $657 and $1,121, respectively,  during the three and nine months ended
December 31, 2003,  respectively of which $633 and $990 related to the accretion
to the estimated  redemption amount and $24 and $131,  respectively,  related to
the accretion of the beneficial  conversion feature.  Accretion for the Series B
Preferred  Stock to its redemption  value was $468 for the three and nine months
ended December 31, 2003.

In September  2003,  the Company  entered into an agreement  (the "Exchange
Agreement") with the holder of the Series A and Series B Preferred Stock to:
(1) convert all 8,202,929  shares of Series A and Series B Preferred  Stock
held by it into 1,640,585  Class A Shares;  (2) exchange the 2001 Warrant,
Contingent Warrant A and Contingent Warrant C for 320,000 Class A Shares; (3)
exercise  Contingent  Warrant  B to  purchase  143,216  Class A Shares on a
cashless-exercise basis; and (4) accept Class A Shares at a price per share
of $5.00 pursuant to the Company's November 2003 initial public offering (the
"IPO"), as consideration for the conversion of all accumulated dividends on
the Series A and Series B Preferred Stock through the effective date of the
IPO. On November 14, 2003, the Exchange Agreement was finalized, concurrent
with the completion of the IPO. The Company issued 104,175 Class A Shares as
consideration for the conversion of all accumulated dividends on the Series A
and B  Preferred  Stock.  As of  December  31,  2004,  there is no Series A
Preferred Stock or Series B Preferred Stock issued or outstanding.


NOTE 6. STOCKHOLDERS' EQUITY

CAPITAL STOCK


In August 2004, the Company's Board of Directors authorized the repurchase of
up to 100,000 Class A Shares. The shares will be purchased at prevailing
prices from time-to-time in the open market depending on market conditions
and other  factors.  During the nine months ended December 31, 2004, the Company
purchased  9,140  Class A Shares for a total  purchase  price of $32,  including
fees,  which has been recorded as Treasury  stock in the unaudited  Consolidated
Balance Sheet. In January 2005, the Company  purchased 42,300 Class A Shares for
a total purchase price of $140 including  fees, at an average  purchase price of
$3.31 per share. As of January 31, 2005, an additional 48,560 Class A Shares may
be repurchased.

In November 2004, the Company issued 540,000 unregistered shares of Class A
Shares in connection with the acquisition of FiberSat (see Note 11).


                                       F-50


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)



In October  2004,  the Company  entered  into a stock  purchase  agreement  with
investors  to issue and sell  282,776  unregistered  Class A Shares at $3.89 per
share to the investors  for gross  proceeds of $1,100 (the "October 2004 Private
Placement"). These shares carry piggyback and demand registration rights, at the
sole expense of the investor.  The net proceeds to the Company of  approximately
$1,023 were used for the FiberSat acquisition and for working capital.

In  June  2004,  the  Company  issued  in  a  private  placement  (the  "Private
Placement")  1,217,500  unregistered Class A Shares at a sale price of $4.00 per
share.  The total net  proceeds to the Company,  including  fees and expenses to
subsequently  register the securities were approximately  $4,000. The Company is
using the net  proceeds for capital  investments  and for working  capital.  The
Company  also  issued  to  investors  and the  investment  firm  in the  Private
Placement, warrants to purchase a total of 304,375 Class A Shares at an exercise
price of $4.80 per share,  exercisable  upon  receipt  (the  "Private  Placement
Warrants").  The Company  agreed to register the Class A Shares issued and to be
issued upon exercising of the Private Placement  Warrants with the SEC by filing
a Form SB-2 on or before July 5, 2004.  The Company  filed the Form SB-2 on July
2, 2004, and the Form SB-2 was declared effective on July 20, 2004.

In May 2004,  the Company  entered into an agreement  with the holder of 750,000
shares of AccessDM's  common  stock,  to exchange all of those shares for 31,300
unregistered Class A Shares. This transaction was consummated in May 2004 and as
a result, AccessIT holds 100% of AccessDM's common stock. In connection with the
transaction,  the Company  recorded a gain of $13,  representing  the difference
between the fair value of the Class A Shares given and the AccessDM common stock
received.   The  gain  is  included  in  other  income,  net  in  the  unaudited
Consolidated Statements of Operations.


STOCK OPTION PLAN


At the annual  stockholders'  meeting held in October 2004, the  stockholders
voted to  approve  an  increase  in the  number  of  AccessIT  stock  options
available for grant from 600,000 Class A Shares to 850,000 Class A Shares.


Under AccessIT's stock option plan,  AccessIT granted options to purchase 66,000
Class A Shares to its employees, and options to purchase 1,667 Class A Shares to
a vendor in exchange for  services,  during the nine months  ended  December 31,
2004,  all at an exercise price of $5.00 per share.  In addition,  in July 2004,
AccessIT  granted  options to purchase 5,000 Class A Shares at an exercise price
of $5.00 per share to each of two non-employee members of its Board of Directors
for their Board member service.  Amortization of deferred stock compensation for
the  three  months  ended  December  31,  2003 and 2004 was less than $1 in each
period..  Amortization of deferred stock  compensation for the nine months ended
December 31, 2003 and 2004  amounted to $10 and $4,  respectively,  and has been
recorded  as  non-cash   stock-based   compensation  expense  in  the  unaudited
Consolidated  Statements of Operations.  Also, in May 2004,  options to purchase
3,334 Class A Shares, previously issued to a vendor were forfeited following the
termination of the underlying services agreement,  and in December 2004, options
to purchase 6,000 Class A Shares were forfeited .following the termination of an
employee.

As of December 31, 2004,  there were options to purchase  251,103 Class A Shares
available for grant under AccessIT's stock option plan.


Under  AccessDM's  stock option plan,  AccessDM issued options to purchase 5,000
shares of its common  stock to an  employee  at an  exercise  price of $0.25 per
share,  during the nine months ended December 31, 2004. As of December 31, 2004,
AccessDM has issued  options to purchase  1,005,000 of its shares to  employees,
and there were  options to  purchase  995,000  shares of AccessDM  common  stock
available for grant.


                                       F-51


WARRANTS

                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)



In  connection  with the  issuance of the 5-Year Notes (see Note 4), the Company
issued 5-Year Notes Warrants to the holders of the 5-Year Notes. During the nine
months ended  December 31, 2003,  the Company  issued  5-Year Notes  Warrants to
purchase  123,000 Class A Shares to the holders of the 5-Year Notes in the ratio
of one-half of a 5-Year Note Warrant for every dollar principal amount of 5-Year
Notes issued. In total, 5-Year Notes Warrants to purchase 440,500 Class A Shares
were  issued and were  ascribed  an  estimated  fair value of $2,202,  which was
recognized as issuance cost and therefore was charged against the carrying value
of the related notes payable.  In March 2004, the Company completed the Exchange
Offer covering the majority of the outstanding 5-Year Notes and related warrants
(see Note 4), and the remaining  $1,421  aggregate  amount of underlying  5-Year
Notes  Warrants was  amortized to Non-Cash  Interest  Expense.  During the three
months ended December 31, 2003,  and 2004 a total of $111 and $2,  respectively,
was amortized to non-cash  interest expense to accrete the value of the notes to
their face value over the expected  term of the related  notes.  During the nine
months ended December 31, 2003 and 2004, a total of $302 and $13,  respectively,
was amortized to non-cash  interest expense to accrete the value of the notes to
their face value over the expected term of the related  notes.  In addition,  in
July 2004, the Company made early repayments totaling $58 for two 5 -Year Notes,
and the remaining $19 of the  underlying  5-Year Notes Warrants was amortized to
non-cash interest expense.


In connection  with the Private  Placement,  the Company issued to the investors
and to the  investment  firm in the  Private  Placement,  Warrants  to  purchase
304,375  Class A Shares at an  exercise  price of $4.80 per share.  The  Private
Placement Warrants are exercisable from the date of issuance and for a period of
five years thereafter.  However,  the Private Placement Warrants may be redeemed
by the  Company at any time after the date that is one year from the issue date,
upon thirty days  advance  written  notice to the holder,  for $0.05 per Private
Placement  Warrant  to  purchase  one  Class  A  Share,  provided,  that  (i)  a
registration  statement with the SEC is then in effect as to such Class A Shares
and will be in effect  as of a date  thirty  days  from the date of  giving  the
redemption notice and (ii) for a period of twenty (20) trading days prior to the
giving of the  redemption  notice the Class A Shares  have  closed at a price of
$9.20 per share or higher.  The Company  agreed to  register  the Class A Shares
issued and to be issued upon exercising of the Private  Placement  Warrants with
the SEC by filing a Form SB-2 on or before July 5, 2004.  The Company  filed the
Form SB-2 on July 2, 2004,  and the Form SB-2 was  declared  effective  July 20,
2004.

In accordance with EITF 00-19,  "Accounting for Derivative Financial Instruments
Indexed To, and Potentially Settled In, a Company's Own Stock," and the terms of
the Private Placement Warrants, the fair value of the Private Placement Warrants
were initially accounted for as a liability, with an offsetting reduction to the
carrying value of the common stock.  The warrant  liability was  reclassified to
equity as of the July 20, 2004 effective date of the registration statement.

The fair value of the Private Placement Warrants was estimated to be $797 on the
closing date of the transaction,  using the Black-Scholes  option-pricing  model
with the following assumptions: no dividends: risk-free interest rate 3.94%, the
contractual  life of 5 years  and  volatility  of 72%.  The  fair  value  of the
warrants was re-measured at June 30, 2004 and estimated to be $776. The decrease
in the fair value of $21 from the transaction date to June 30, 2004 was recorded
as a credit to other  income,  net in the  unaudited  Consolidated  Statement of
Operations.  The fair value of the warrants  decreased by $70 from June 30, 2004
to July 20, 2004 and such decrease was recorded as a credit to other income, net
in the unaudited Consolidated Statement of Operations.


NOTE 7. COMMITMENTS AND CONTINGENCIES


On July 2, 2004, the Company  received  notice that certain  creditors of one of
its data center customers filed an involuntary  bankruptcy  petition against the
customer.  On July  14,  2004,  the  customer  agreed  to the  entry of an order
granting  relief under Chapter 11 of the United States  Bankruptcy Code and then
converted the Chapter 11 reorganization to Chapter 7 liquidation. As of December
31,  2004,   the  Company  had  accounts   receivable   of  $121,   representing
approximately   2  months  of  service   charges,   recorded  on  the  unaudited
Consolidated  Balance  Sheet  related to this  customer.  In  addition,  through
December  31,  2004 the Company  had $499 of  unbilled  revenue  related to this


                                       F-52


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


customer.  The Company has provided an  allowance  for $499 against the unbilled
revenue,  which is shown in the provision for doubtful accounts in the unaudited
Consolidated Statements of Operations. The Company has a first security interest
in the customer's  accounts  receivable and the bankruptcy trustee is conducting
an investigation as to the nature and amount of the accounts  receivable.  Based
on  information  received to date,  the  Company  believes  that the  customer's
accounts  receivable  which are deemed to be collectible  are  substantially  in
excess  of the  amounts  owed to the  Company,  and  recorded  on the  unaudited
Consolidated  Balance Sheet.  Therefore,  the Company  believes that the amounts
owed to the Company,  and recorded on the unaudited  Consolidated  Balance Sheet
will be collected.

In March 2004, the Company acquired certain digital cinema - related assets from
the  Boeing  Company.   The  purchase  price  for  the  assets  included  53,534
unregistered  Class A Shares.  At any time  during the 90 day  period  beginning
March 29, 2005,  Boeing can sell its 53,534  unregistered  Class A Shares to the
Company in exchange for $250 in cash.


NOTE 8. SUPPLEMENTAL CASH FLOW DISCLOSURE




                                                    Three Months Ended   Nine Months Ended
                                                    ------------------   -----------------

                                                    December 31,         December 31,
                                                    ------------         ------------
                                                    2003      2004        2003     2004
                                                    ----      ----        ----     ----

                                                                       
Interest paid..................................     $122     $  91        $306     $292

Accretion on mandatorily redeemable
 convertible preferred stock...................    1,125        --       1,590       --

Common stock issued to vendor in lieu of cash..       --        --         174       --
Exchange of preferred stock and warrants
 for common stock..............................    4,172        --       4,172       --

Issuance of common stock and notes to
 acquire Hollywood Software, Inc. .............    4,380        --       4,380       --
Issuance of warrants to purchase common stock..       --        --          --      706
Issuance of common stock to acquire FiberSat
 Global Services, LLC..........................       --    $1,625          --   $1,625



NOTE 9. SEGMENT INFORMATION


Segment  information  has  been  prepared  in  accordance  with  SFAS  No.  131,
"Disclosures  about  Segments of an  Enterprise  and Related  Information".  The
Company has two reportable  segments:  Data Center  Services and Media Services.
The segments were determined based on the products and services provided by each
segment.  Accounting policies of the segments are the same as those described in
Note 2.  Performance  of the segments is evaluated  on operating  income  before
interest, taxes, depreciation and amortization. The Data Center Services segment
provides  services  through its nine IDC's  including the license of data center
space,  provision  of  power,  data  connections  to other  businesses,  and the
installation  of equipment,  and the operations of Managed  Services.  The Media
Services segment  consists of Hollywood SW, AccessDM and FiberSat.  Hollywood SW
develops and licenses  software to the  theatrical  distribution  and exhibition
industries,  provides services as an ASP, and provides software enhancements and
consulting  services.  AccessDM is in the  business of storing and  distributing
digital content to movie theaters and other venues.  FiberSat is in the business
of providing satellite-based broadband video, data and Internet transmission and
encryption services for multiple customers in the broadcast and cable television
and  communications   industries,  and  also  operates  an  outsourced  networks
operations  center.  Prior to November 3, 2003, the Company operated only in the
Data Center  Services  segment.  All of the Company's  revenues  were  generated
inside the United States.




                                       F-53


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


Information  related to the  segments  of the Company  and its  subsidiaries  is
detailed below:







                                                   Data
                                         Media     Center                 Total
                                        Services  Services  Corporate  Consolidated
                                        --------  --------  ---------  ------------

FOR THE THREE MONTHS ENDED DECEMBER
31, 2003:
   Total income (loss) from
                                                              
    operations.........................    $322      $(13)     $(758)     $(449)
   Depreciation and
    Amortization.......................      73        581        22        676
   Operating income (loss) before
    interest, taxes, depreciation
    and amortization...................     395        568      (736)       227

FOR THE THREE MONTHS ENDED DECEMBER
31, 2004:
   Total loss from
    operations.........................   $(244)     $(132)    $(860)   $(1,236)
   Depreciation and
    Amortization.......................     426        443        26        895
   Operating income (loss) before
    interest, taxes, depreciation and
    amortization.......................     182        311      (834)      (341)

FOR THE NINE MONTHS ENDED DECEMBER
31, 2003:
   Total income (loss) from
    operations.........................    $322      $(126)  $(1,976)   $(1,780)
   Depreciation and
    Amortization.......................      73      1,774        68      1,915
   Operating income (loss) before
    interest, taxes, depreciation and
    amortization.......................     395      1,648    (1,908)       135

FOR THE NINE MONTHS ENDED DECEMBER
31, 2004:
   Total income (loss) from
    operations.........................   $(649)     $(256)  $(2,909)   $(3,814)
   Depreciation and
    Amortization.......................   1,025      1,355        77      2,457
   Operating income (loss) before
    interest, taxes, depreciation and
    amortization.......................     376      1,099    (2,832)    (1,357)

AS OF DECEMBER 31,2004:
   Total Assets........................ $16,089     $5,752    $1,410    $23,251





NOTE 10. RELATED PARTY TRANSACTIONS



As of December 31, 2003 and 2004,  the Company had  principal  amounts of $1,400
and  $4,000,  respectively,  in notes  payable  to  related  parties,  including
officers of the Company.  During the three  months  ended  December 31, 2003 and
2004, there were $0 and $131, respectively, principal repayments for these notes


                                       F-54


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


payable.  During the nine months ended December 31, 2003 and 2004, there were $0
and $509, respectively, of principal repayments for these notes payable.


NOTE 11. ACQUISITIONS


On October  19,  2004,  the Company and its  wholly-owned  subsidiary,  FiberSat
Global Services,  Inc., entered into an agreement to purchase  substantially all
of the assets and certain specified liabilities of FiberSat Global Services, LLC
("FiberSat").  On November 17, 2004,  the FiberSat  acquisition  was  completed.
FiberSat,  headquartered in Chatsworth,  California, provides services utilizing
satellite ground  facilities and fiber-optic  connectivity to receive,  process,
store,  encrypt and transmit  television and data signals  globally.  FiberSat's
Chatsworth  facility  currently  houses  the  infrastructure  operations  of the
Company's digital cinema satellite delivery services.


The initial purchase price for FiberSat consisted of 500,000  unregistered Class
A Shares, and the Company agreed to repay certain  liabilities of FiberSat on or
before  the  closing  of the  acquisition,  with up to $500 in cash and  100,000
unregistered Class A Shares. The Company had the option to exchange up to 50,000
of such 100,000  Class A Shares to increase the cash,  and thereby  decrease the
Class A Share portion of such repayment  based on the ratio of one Class A Share
for each $5.00 of  additional  cash.  The Company  repaid these  liabilities  by
paying  approximately  $381 and  issuing  40,000  shares of Class A  Shares.  In
addition, the Company may be required to pay a contingent purchase price for any
of the three years following the acquisition in which certain  earnings  targets
are achieved.  The Company has also agreed to a one-time  issuance of additional
unregistered  shares to the sellers in accordance  with a formula if, during the
90 days  following  the  applicable  lock-up  period,  the average  value of the
Company's  Class A Shares during such 90 days declines below an average of $3.17
per share.


Following  the FiberSat  acquisition,  the  following  is the initial  estimated
purchase price allocation:
Current assets........................................        $214
Property and equipment, net...........................       2,164
Intangible assets ....................................         560
Goodwill .............................................          24
Other noncurrent assets ..............................          16

Total tangible and intangible assets acquired.........       2,978
Less: liabilities assumed:

Current liabilities...................................         711

Long-term liabilities.................................          80

Total Liabilities.....................................         791

Total Purchase Price..................................      $2,187
                                                            ======


NOTE 12.  SUBSEQUENT  EVENTS

On December  23,  2004,  ADM Cinema  Corporation,  the  Company's  wholly  owned
subsidiary,  entered into an asset  purchase  agreement  with  Pritchard  Square
Cinema,  LLC, a New York limited  liability  company (the "Seller"),  and Norman
Adie, the Seller's managing member, to purchase  substantially all of the assets
and certain  liabilities of the Seller's  Pavilion  Movie  Theatre/Entertainment
Complex (the "Pavilion Theatre") located in Brooklyn,  New York. On February 11,
2005 the acquisition of the Pavilion  Theatre was completed.  The total purchase
price is approximately  $5.4 million,  including  transaction fees. The purchase
price  included a cash payment of $3,300  (less $500 held in escrow  pending the
completion  of certain  construction)  and a five-year  8%  promissory  note for
$1,700, among other things. The Pavilion


                                       F-55


                      ACCESS INTEGRATED TECHNOLOGIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               (In thousands, except for share and per share data)
                                  (unaudited)


Theatre is an eight-screen movie theatre and cafe and will be a component of the
Media Services segment.  Continuing to operate as a fully functional  multiplex,
the Pavilion Theatre will also become a showplace for the Company to demonstrate
its integrated digital cinema solutions to the movie entertainment industry. The
Company will file the  financial  statements of the Seller and the Company's pro
forma  financial  information  pursuant  to  the  Exchange  Act  and  the  rules
promulgated thereunder.

On  February  10,  2005,  the  Company  issued 7%  convertible  debentures  (the
"Convertible  Debentures") and warrants ("the Convertible  Debentures Warrants")
to a group of  institutional  investors for aggregate  proceeds of $7.6 million.
The  Convertible  Debentures  have a four  year  term,  with  one  third  of the
unconverted  principal  balance  repayable  in  12  equal  monthly  installments
beginning  three years after the closing.  The remaining  unconverted  principal
balance is repayable  at maturity.  The Company may pay the interest in cash or,
if certain  conditions are met, by issuing shares of its Class A Shares.  If the
Company is  eligible to issue  Class A Shares to repay  interest,  the number of
shares issuable is based on 93% of the 5-day average closing price preceding the
interest due date. The  Convertible  Debentures are initially  convertible  into
1,867,322  shares  Class A Shares,  based upon a  conversion  price of $4.07 per
share  subject to  adjustments  from time to time.  Upon the  redemption  of the
Convertible  Debentures,  the Company may issue additional warrants  exercisable
for  Class  A  Shares.  Additionally,   the  Company  issued  to  the  investors
Convertible  Debentures  Warrants to  purchase  up to 560,197  shares of Class A
Shares, at an initial exercise price of $4.44 per share,  subject to adjustments
from time to time. The Convertible Debentures Warrants are exercisable beginning
on September 9, 2005 until 5 years  thereafter.  The offering of the Convertible
Debentures  and  the  Convertible   Debentures  Warrants  was  exempt  from  the
registration  requirements  of the  Securities  Act,  under  Section 4(2) of the
Securities Act and Rule 506 promulgated thereunder.


The  Company has agreed to  register,  among  other  things,  the Class A Shares
underlying the  Convertible  Debentures and Convertible  Debentures  Warrants on
Form  S-3  within  30 days  from  the  closing.  If,  among  other  things,  the
registration  statement is not filed within 30 days or is not declared effective
within  90 days  (120  days in the  event of an SEC  review),  then  cash  delay
payments equal to 1% of the offering proceeds per month will apply.

On January 26, 2005, the bankruptcy court in the matter of Norvergence  approved
a motion  for the  trustee to pay the  Company  $121,000  for past due  accounts
receivable.  Additionally,  the  Company  has been  granted  the right to pursue
collection of Norvergence's customer accounts receivable.  Any amounts collected
will be retained by the Company in settlement of its claim against Norvergence.




                                       F-56






              REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Hollywood Software, Inc.
Hollywood, California


We have audited the accompanying balance sheets of Hollywood Software, Inc. (the
"Company")  as of March  31,  2002  and  2003,  and the  related  statements  of
operations, stockholders' equity, and cash flows for the years 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 audits.


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

In our opinion,  the financial  statements referred to above, present fairly, in
all material respects, the financial position of Hollywood Software,  Inc. as of
March 31, 2002 and 2003,  and the results of its  operations  and its cash flows
for the years then ended,  in conformity with  accounting  principles  generally
accepted in the United States of America.


/s/ BDO Seidman, LLP

July 3, 2003
Los Angeles, California




                                       F-57





                            HOLLYWOOD SOFTWARE, INC.
                                 BALANCE SHEETS


                                                     March 31,
                                                     ---------
                                                 2002         2003
                                                 ----         ----

                           Assets

Current assets
Cash and cash equivalents.....................  $235,195     $262,297
Accounts receivable, net of allowance for
doubtful accounts of $0 and $5,325,
respectively..................................   187,099      332,322
Prepaids and other current assets.............    16,260        9,510
                                                  ------        -----

Total current assets..........................   438,554      604,129
Property and equipment, net (Note 3)..........    45,244       30,678
Capitalized software costs, net (Note 3)......   380,407      479,317
                                                 -------      --------
Total assets..................................  $864,205   $1,114,124
                                                ========   ==========

Liabilities and Stockholders' Equity
Current liabilities

Accounts payable and accrued expenses (Note 3)   $53,381      $79,191
Current portion of notes payable (Note 5).....    12,500        8,333
Deferred taxes (Note 6).......................     3,200       51,300
Deferred revenue (Note 3).....................   459,853      530,124
                                                 -------      -------

Total current liabilities.....................   528,934      668,948
Notes payable, net of current portion (Note 5)     8,333           --
                                                   -----          ---

Total liabilities.............................   537,267      668,948
                                                 -------      -------

Commitments and contingencies (Note 8)
Stockholders' equity
Common stock, no par value, 50,000,000
shares authorized,  10,000,000 shares
issued and outstanding as of March 31, 2002
and 2003......................................   20,000       20,000

Retained earnings.............................  306,938      425,176
                                                -------      -------

Total stockholders' equity...................   326,938      445,176
                                                -------      -------

Total liabilities and stockholders' equity...  $864,205   $1,114,124
                                               ========   ==========



See accompanying notes to financial statements.







                                       F-58




                            HOLLYWOOD SOFTWARE, INC.
                            STATEMENTS OF OPERATIONS


                                               YEARS ENDED MARCH 31,
                                               ---------------------

                                              2002         2003
                                              ----         ----
Revenues
License fees...............................   $296,476   $546,914
Maintenance fees...........................    474,138    489,329
Development fees...........................    230,500    189,205
Consulting fees............................    890,451    682,798
                                               -------    -------

Total revenues.............................  1,891,565  1,908,246
                                             ---------  ---------

Costs and operating expenses
Costs of revenues..........................    367,593    318,710
Research and development...................    387,477    289,424
General and administrative.................  1,176,004  1,131,256
                                             ---------  ---------

Total costs and operating expenses.........  1,931,074  1,739,390
                                             ---------  ---------

Income (loss) from operations..............    (39,509)   168,856
Interest expense...........................     (4,769)    (2,264)
Other income...............................      7,473        546
                                                 -----        ---

Income (loss) before income taxes..........    (36,805)   167,138
Income taxes...............................        800     48,900
                                                   ---     ------

Net income (loss)..........................  $ (37,605)  $118,238
                                             =========   ========

Earning (loss) per share (Note 2):
Basic......................................    $ (0.00)     $0.01
                                               =======      =====

Diluted....................................    $ (0.00)     $0.01
                                               =======      =====

Weighted average number of shares (Note 2):
Basic...................................... 10,000,000 10,000,000
                                            ========== ==========

Diluted.................................... 10,000,000 10,293,167
                                            ========== ==========




See accompanying notes to financial statements.







                                       F-59




                            HOLLYWOOD SOFTWARE, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                                               Common   Retained
                                                Stock   Earnings      Total
                                                -----   --------      -----

Balance, April 1, 2001...............         $20,000   $344,543   $364,543

Net loss.............................              --    (37,605)   (37,605)
                                                   --   --------   --------


Balance, March 31, 2002..............          20,000    306,938    326,938

Net income...........................              --    118,238    118,238
                                                   --    -------    -------


Balance, March 31, 2003..............         $20,000    425,176   $445,176
                                              =======    =======   ========











See accompanying notes to financial statements.







                                       F-60





                            HOLLYWOOD SOFTWARE, INC.
                            STATEMENTS OF CASH FLOWS


                                                YEARS ENDED MARCH 31,
                                                ---------------------
                                                 2002       2003
                                                 ----       -----

Cash flows from operating activities
Net income (loss)............................. $(37,605) $118,238
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation..................................   21,020    27,067
Amortization of software development costs....  129,688   186,837
Provision for doubtful accounts...............       --     5,325
Deferred taxes................................       --    48,100
Changes in operating assets and liabilities:
Accounts receivable........................... (104,583) (150,548)
Prepaids and other current assets.............   13,560     6,750
Accounts payable and accrued liabilities......  (97,166)   25,810
Deferred revenue..............................   95,645    70,271
                                                 ------    ------

Net cash provided by operating activities.....   20,559   337,850
                                                 ------    ------

Cash flows from investing activities
Purchases of property and equipment...........  (14,790)  (12,501)
Capitalized software development costs........ (204,895) (285,747)
                                               --------- ---------

Net cash used in investing activities......... (219,685) (298,248)
                                               --------- ---------

Cash flows from financing activities
Proceeds from issuance of notes payable.......   25,000        --
Repayment of notes payable....................   (4,167)  (12,500)
                                                 -------  --------

Net cash provided (used) in financing
activities....................................   20,833   (12,500)
                                                 ------   --------

Net (decrease) increase in cash and cash
equivalents................................... (178,293)   27,102
Cash and cash equivalents, beginning of year..  413,488   235,195
                                                ------    -------

Cash and cash equivalents, end of year........ $235,195  $262,297
                                               ========  ========

Supplemental cash flow disclosures:
Interest paid.................................   $4,769    $2,264
Taxes paid....................................       --        --
                                                     ==        ==



See accompanying notes to financial statements.





                                       F-61




                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS



NOTE 1--COMPANY ORGANIZATION AND NATURE OF OPERATIONS


Hollywood Software,  Inc.  ("Company") was incorporated in California in October
1997. The Company is a leading provider of proprietary  enterprise  software and
consulting  services for distributors and exhibitors of filmed  entertainment in
the United  States and Canada.  Its software  applications  manage the planning,
booking,  scheduling,  revenue sharing, cash flow, and reporting associated with
the distribution and exhibition of theatrical films.  Services include strategic
and technical consulting, systems implementation and training.


NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

The Company  considers all liquid  assets with an initial  maturity date that is
less than three months from the date of purchase to be cash equivalents.

CONCENTRATIONS OF CREDIT RISK

Financial  instruments,  which potentially subject the Company to concentrations
of credit risk, consist of cash and cash equivalents,  to the extent they exceed
federal depository insurance limits, and accounts receivable. The Company places
its cash with high credit quality financial  institutions.  As of March 31, 2002
and  2003,   uninsured   cash   balances   aggregated   $135,195  and  $162,297,
respectively.


The Company  customer  base  primarily  includes film  distributors  and theatre
owners through the United States and Canada.  Allowances  for doubtful  accounts
are recorded for estimated  losses  resulting from the inability of customers to
make  required  payments.  The  amount of the  reserves  is based on  historical
experience  and the  Company's  analysis  of the  accounts  receivable  balances
outstanding.  As of March 31, 2002,  four customers  accounted for 26%, 24%, 21%
and 10% of  revenues  and  three  customers  accounted  for 45%,  23% and 14% of
accounts  receivable.  As of March 31, 2003, three customers  accounted for 28%,
14% and 13% of revenues and five customers  accounted for 26%, 16%, 15%, 10% and
10% of accounts receivable.


PROPERTY AND EQUIPMENT

Property  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Depreciation  is computed  using the  double-declining  balance  method over the
useful lives of the respective assets as follows:


                                                     USEFUL LIVES
Computer software.................................       3
Computer equipment................................       5
Furniture and fixtures............................       7
Leasehold improvements............................   Lease term or
                                                      useful life

Leasehold improvements are depreciated over the shorter of the lease term or the
estimated  useful  life of the  improvement.  Maintenance  and repair  costs are
charged to expense as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF



                                       F-62


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS




The Company reviews the  recoverability  of its long-lived  assets on a periodic
basis in order to identify  business  conditions  which may  indicate a possible
impairment.  The assessment for potential  impairment is based  primarily on the
Company's  ability to recover the carrying  value of its long- lived assets from
expected  future   undiscounted   cash  flows.  If  the  total  expected  future
undiscounted  cash flows are less than the carrying amount of the assets, a loss
is recognized for the difference between the fair value (computed based upon the
expected future  discounted cash flows) and the carrying value of the assets. No
impairment was recorded during the years ended March 31, 2002 and 2003.




CAPITALIZED SOFTWARE COSTS

The  Company  has  adopted  SFAS No. 86,  "Accounting  for the Costs of Computer
Software to Be Sold, Leased, or Otherwise  Marketed." Software development costs
that are incurred  subsequent  to  establishing  technological  feasibility  are
capitalized.  Amounts  capitalized as software  development  costs are generally
amortized  on a  straight-line  basis  over  five  years.  The  company  reviews
capitalized software costs for impairment on an annual basis. To the extent that
the  carrying  amount  exceeds  the  estimated  net  realizable   value  of  the
capitalized  software cost, an impairment charge is recorded.  No impairment was
recorded in 2002 and 2003.


During the years ended March 31, 2002 and 2003, the company capitalized $204,895
and $285,747,  respectively.  Amortization of capitalized  software  development
costs,  included  in costs of  revenues,  for the years ended March 31, 2002 and
2003 amounted to $129,688 and $186,837, respectively.

REVENUE RECOGNITION

The Company  accounts  for  software  revenue  recognition  in  accordance  with
Statement of Position 97-2,  "Software Revenue  Recognition,"  ("SOP 97-2"). The
Company's revenues are generated from the following primary sources: i) software
licensing,  including customer licenses and ASP service agreements, ii) software
maintenance  contracts,  iii) professional  consulting services,  which includes
systems implementation, training, custom software development services and other
professional services.

Software licensing revenue is recognized when the following criteria are met: a)
persuasive  evidence of an arrangement  exists,  b) delivery has occurred and no
significant  obligations  remain,  c) the fee is  fixed or  determinable  and d)
collectivity is determined to be probable. Significant upfront fees are received
in addition to periodic amounts upon  achievement of contractual  milestones for
licensing of the Company's products. Such amounts are deferred until the revenue
recognition  criteria has been met,  which  typically  occurs after delivery and
acceptance.

For  arrangements  with  multiple  elements  (e.g.   delivered  and  undelivered
products,  maintenance and other services),  the Company  separately  negotiates
each element of the  arrangement  based on the fair value of the  elements.  The
fair  values for ongoing  maintenance  and  support  obligations  are based upon
separate sales of renewals to customers or upon substantive renewal rates quoted
in the agreements. The fair values for services, such as training or consulting,
are based upon hourly  billing rates of these  services when sold  separately to
other customers.

Customers not wishing to license and operate the Company's  software  themselves
may use the software through an ASP arrangement,  in which the Company hosts the
application and provides  customer  access via the internet.  Annual minimum ASP
service fees are recognized ratably over the contract term. Overage revenues for
usage in excess of stated minimums are recognized monthly.

Maintenance  services and website  subscription fees are recognized ratably over
the  contract  term.  Professional  consulting  services,  sales of third  party
products and resale  hardware  revenues are recognized as services are provided.


                                       F-63


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS




Software  development  revenues are recognized when delivery has occurred and no
significant obligations remain.

Deferred  revenue is recorded  when i) a portion or the entire  contract  amount
cannot be  recognized as revenue due to  non-delivery  or acceptance of licensed
software or custom  programming,  ii) incomplete  implementation  of ASP service
arrangements,  or iii) unexpired  pro-rata  periods of maintenance,  minimum ASP
service fees or website  subscription  fees. As license fees,  maintenance fees,
minimum  ASP  service  fees and  website  subscription  fees are  often  paid in
advance,  a portion of this revenue is deferred  until the contract  ends.  Such
amounts are included in the Company's  balance sheet under the caption "Deferred
Revenue," and are recognized as revenue in accordance with the Company's revenue
recognition policies described above.

INCOME TAXES

The Company  accounts  for income  taxes under the asset and  liability  method.
Deferred tax assets and  liabilities  are  determined  based upon the  temporary
differences  between the financial  statement  carrying amounts and tax bases of
assets and  liabilities  using enacted tax rates expected to be in effect in the
year in which the  temporary  differences  are expected to reverse.  A valuation
allowance is established  when it is more likely than not that some portion,  or
all, of the deferred tax asset will not be realized.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

RESEARCH AND DEVELOPMENT

Research  and  development   costs  are  expensed  as  incurred.   Research  and
development  costs  amounted to $387,477  and $289,424 for the years ended March
31, 2002 and 2003, respectively.

ADVERTISING EXPENSES

Advertising  costs are expensed as incurred.  Advertising  costs totaled $17,058
and $7,912 for the years ended March 31, 2002 and 2003, respectively.

EMPLOYEE STOCK COMPENSATION

The Company accounts for its stock option plan in accordance with the provisions
of  Accounting  Principles  Board (APB)  Opinion No. 25,  "Accounting  for Stock
Issued to Employees",  and related  interpretations.  Under the intrinsic  value
method, the Company recognizes compensation expense on the date of grant only if
the estimated fair value of the underlying stock exceeds the exercise price. The
Company recorded no stock based employee  compensation  cost for the years ended
March 31, 2002 and 2003.

The Company has adopted the  disclosure  standards of SFAS No. 123,  "Accounting
for Stock-Based  Compensation",  which requires the Company to provide pro forma
net  income  disclosures  for  employee  stock  option  grants  made  as if  the
fair-value-based  method of accounting  for stock options as defined in SFAS 123


                                       F-64


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS




had been  applied.  The  following  table  illustrates  the effect on net income
(loss) if the Company had applied the fair value recognition  provisions of SFAS
No. 123 to stock based employee  compensation for the years ended March 31, 2002
and 2003:









                                       F-65


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS




                                                         March 31,
                                                         ---------
                                                     2002      2003
                                                     ----      ----

Net income (loss), as reported.................... $(37,605)  $118,238
Additional stock-based employee compensation
expense determined under the fair value based
method, net of income tax benefits................  (39,598)  (42,757)
                                                    --------  --------

Pro forma net income (loss)....................... $(77,203)   $75,481
                                                   ---------   -------

Income (loss) per share:
As reported:
Basic.............................................   $(0.00)     $0.01
                                                     ========    =====

Diluted...........................................   $(0.00)     $0.01
                                                     ========    =====

Pro forma:
Basic.............................................   $(0.01)     $0.01
                                                     ========    =====

Diluted...........................................   $(0.01)     $0.01
                                                     ========    =====


The fair value of each stock option  granted during the year is estimated on the
date of grant using the  Black-Scholes  option  pricing model with the following
assumptions:
                                                             MARCH 31,
                                                             ---------
                                                          2002   2003
                                                          ----   ----

Expected life (years)....................................   10     10
Expected volatility......................................    0%     0%
Expected dividend yield..................................    0%     0%
Risk-free interest rate.................................. 5.33%  5.11%

The weighted-average fair value of options granted during the year totaled $0.05
and $0.00 for March 31, 2002 and 2003, respectively.

EARNINGS (LOSS) PER SHARE


The Company  accounts for earnings  per share in  accordance  with SFAS No. 128,
"Earnings per Share".  SFAS No. 128 requires  presentation  of basic and diluted
earnings  per share.  Basic  earnings  (loss) per share is  computed by dividing
income (loss) available to common shareholders by the weighted average number of
common shares  outstanding for the reporting period.  Diluted earnings per share
is computed  based on the same shares plus the  potential  shares  issuable upon
assumed exercise of outstanding stock options or other security  contracts,  but
does not include the impact of dilutive securities that would be anti-dilutive.







                                       F-66



                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS








The following  table sets forth the  computation  of basic and diluted  earnings
(loss) per share:


                                                     Year ended March 31
                                                     -------------------
                                                    2002       2003
                                                    ----       ----
Numerator:
Net income (loss) available to common
shareholders...................................   $(37,605)    $118,238

Denominator:
Basic earnings per share - weighted average
shares......................................... 10,000,000   10,000,000
Effect of dilutive securities:
Stock options..................................         --      293,167
                                                        --      -------
Denominator for diluted earnings per share --
weighted average shares........................ 10,000,000   10,293,167
                                                ----------   ----------
Earnings (loss) per share:

Basic..........................................     $(0.00)       $0.01
                                                    =======       =====

Diluted........................................     $(0.00)       $0.01
                                                    =======       =====


For the years ended March 2002 and 2003,  total stock  options of 1,790,000  and
1,311,000  were not included in the  computation  of diluted  income  (loss) per
share because their effect was anti-dilutive.

RECENT ACCOUNTING PRONOUNCEMENTS


In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal Activities".  This statement requires that a liability for
a cost  associated  with an exit or  disposal  activity be  recognized  when the
liability is incurred.  The  provisions of this statement are effective for exit
or disposal  activities  that are initiated after December 31, 2002. The Company
adopted  SFAS  No.  146 on  January  1,  2003  and it has had no  effect  on the
Company's financial position or operations.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition  and Disclosures" which amends SFAS No. 123, "Accounting
for Stock-Based Compensation". SFAS 148 provides alternate methods of transition
for a voluntary  change to the fair value method of accounting  for  stock-based
employee compensation.  In addition, SFAS 148 amends the disclosure requirements
of SFAS 123 to require  more  prominent  and more  frequent  disclosures  in the
financial statement about the effects of stock- based compensation.  The Company
has adopted the  disclosure  provision  of SFAS 148 for the year ended March 31,
2003.

In April 2003, the FASB issued Statement of Financial  Accounting  Standards No.
149,  "Amendment  of  Statement  133  on  Derivative   Instruments  and  Hedging
Activities."  SFAS No.  149  amends  and  clarifies  accounting  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for hedging  activities under Statement of Financial  Accounting
Standards No. 133. SFAS No. 149 clarifies  under what  circumstances  a contract
with an initial net  investment  meets the  characteristic  of a  derivative  as
discussed in SFAS No. 133. In addition,  it clarifies when a derivative contains
a financing  component that warrants special  reporting in the statement of cash
flows.  SFAS No. 149 is effective for contracts  entered into or modified  after


                                       F-67


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS




June 30, 2003, except as specifically noted in SFAS No. 149. SFAS No. 149 should
be applied  prospectively.  At this time,  the  adoption  of SFAS No. 149 is not
expected to materially  impact the Company's  financial  condition or results of
operations.

In May 2003,  the FASB Issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. This
Statement is effective for financial  instruments entered into or modified after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial instruments of nonpublic entities. For nonpublic entities, mandatorily
redeemable financial instruments are subject to the provisions of this Statement
for the first fiscal period  beginning  after December 15, 2003. The Company has
not yet evaluated its mandatorily  redeemable financial  instruments and related
financial instruments for purposes of determining the impact of SFAS No. 150.

In November 2002, the FASB issued interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees.  Including  indirect  Guarantees of
Indebtedness   of  Others,"  which   disclosures  are  effective  for  financial
statements  for periods  ending after  December 15, 2002.  While the Company has
various  guarantees  included in  contracts  in the normal  course of  business,
primarily  in the form of  indemnities,  these  guarantees  would only result in
immaterial  increases  in  future  costs,  but  do  not  represent   significant
commitments or contingent liabilities of the indebtedness of others.


In January  2003,  the FASB  issued  interpretation  No. 46,  "Consolidation  of
Variable  Interest  Entities"  (FIN 46)  which  requires  the  consolidation  of
variable interest  entities,  as defined.  FIN 46 is applicable  immediately for
variable  interest entities created after January 1, 2003. For variable interest
entities  created  prior  to  January  1,  2003,  the  provisions  of FIN 46 are
applicable no later than July 1, 2003.  The Company does not  currently  believe
that any material entities will be consolidated as a result of FIN 46.

In  November  2002,  the  EITF  reached  a  consensus  on EITF  00-21,  "Revenue
Arrangements  with  Multiple   Deliverables,"  related  to  the  separation  and
allocation of consideration for arrangements that include multiple deliverables.
The  EITF  requires  that  when  the  deliverables  included  in  this  type  of
arrangement  meet certain  criteria they should be accounted  for  separately as
separate units of  accounting.  This may result in a difference in the timing of
revenue  recognition  but will not  result in a change  in the  total  amount of
revenues  recognized in a bundled sales arrangement.  The allocation of revenues
to the separate  deliverables  is based on the relative fair value of each item.
If the fair value is not  available  for the  delivered  items then the residual
method  must be used.  This method  requires  that the amount  allocated  to the
undelivered items in the arrangement is their full fair value. This would result
in the discount,  if any, being allocated to the delivered items. This consensus
is effective  prospectively  for  arrangements  entered  into in fiscal  periods
beginning  after June 15,  2003.  We do not expect the adoption of EITF 00-21 to
have a material impact on our consolidated financial statements.




                                       F-68



                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS






NOTE 3--BALANCE SHEET COMPONENTS



PROPERTY AND EQUIPMENT


Property and equipment consisted of the following as of March 31, 2002 and 2003:

                                                         MARCH 31,
                                                         ---------
                                                        2002     2003
                                                        ----     ----

Furniture and fixtures...........................      $9,426     $9,426
Computer equipment...............................     120,454    131,455
Computer software................................      11,482     12,982
Office furniture.................................      10,792     10,792
                                                       ------     ------

                                                      152,154    164,655
Less: Accumulated depreciation...................    (106,910)  (133,977)
                                                     ---------  --------

Total property and equipment, net................     $45,244    $30,678
                                                      =======    =======



Computer equipment  consists primarily of costs incurred for computers,  servers
and  backup  battery  devices  used in the  Company's  operations.  Depreciation
expense for the years  ended  March 31,  2002 and 2003 was $21,020 and  $27,067,
respectively.





CAPITALIZED SOFTWARE DEVELOPMENT COSTS


The Company capitalizes the cost of software development in accordance with SFAS
No. 86,  "Accounting for the Costs of Computer  Software to Be Sold,  Leased, or
Otherwise  Marketed."  Capitalized  software  development costs consisted of the
following as of March 31, 2002 and 2003:


                                                         MARCH 31,
                                                         ---------
                                                        2002     2003
                                                        ----     ----

Development costs................................    $648,440   $934,187
Less: Accumulated amortization...................    (268,033)  (454,870)
                                                     --------   ---------

Unamortized development costs, net...............    $380,407   $479,317
                                                     ========   ========

Accounts payable and accrued expenses consisted of the following as of March 31,
2002 and 2003:

                                                         MARCH 31,
                                                         ---------
                                                        2002     2003
                                                        ----     ----

Accounts payable....................................     $383    $16,013
Accrued compensation and benefits...................   47,265     36,615
Other accrued liabilities...........................    5,733     26,563
                                                        -----     ------

Total accounts payable and accrued expenses.........  $53,381    $79,191
                                                      =======    =======



                                      F-69


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS


Accrued  compensation and benefits primarily relate to accrued employee vacation
costs. Other accrued liabilities relate to general business obligations incurred
prior to the  balance  sheet  date,  which  were  paid in  subsequent  reporting
periods.

DEFERRED REVENUES

Deferred revenues consisted of the following as of March 31, 2002 and 2003:

                                                         MARCH 31,
                                                         ---------
                                                        2002     2003
                                                        ----     ----

License fees......................................   $100,000    $    --
ASP service fees..................................     85,687    168,901
Maintenance fees..................................    249,749    238,826
Web site subscription fees........................     24,417     35,533
Development fees..................................         --     86,864
                                                     --------     ------

Total.............................................   $459,853   $530,124
                                                     ========   ========

Deferred revenues represent amounts collected from customers prior to satisfying
the Company's revenue recognition criteria.


NOTE 4--LINE OF CREDIT

In  November  2001,  the Company  received a $200,000  line of credit from Wells
Fargo Bank for general  corporate  purposes.  The credit line bears  interest at
7.50% per annum.  The Company  has not  borrowed  any funds,  nor  incurred  any
interest  charges under the credit line.  The line of credit expires in November
2003.

NOTE 5--NOTES PAYABLE


In November 2001, the Company incurred a $25,000 term loan from Wells Fargo Bank
for the  purchase  of a battery  backup  system to mitigate  risks from  rolling
blackouts due to an energy crisis in California.  In addition to receivables and
other assets of the Company, two shareholders pledged certain personal assets as
collateral  for the loan.  The Company makes  monthly  payments of principal and
interest on the loan,  which is schedule  to expire in November  2003.  The term
loan bears interest at 8.25% per annum.


A summary of Notes Payable is as follows:
                                                         MARCH 31,
                                                         ---------
                                                        2002     2003
                                                        ----     ----

Notes payable......................................   $20,833     $8,333
Less: Current portion..............................   (12,500)    (8,333)
                                                      --------    -------

Notes payable, less current portion................    $8,333        $--
                                                       ======        ====


                                       F-70


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS



NOTE 6--INCOME TAXES

Provision for income taxes consists of the following:
                                                            Years ended
                                                             March 31,
                                                             ---------

                                                           2002     2003
                                                           ----     ----

Current:
Federal................................................   $ --     $  --
State..................................................    800       800
Deferred:
Federal................................................     --    36,300
State..................................................     --    11,800
                                                          ----    ------

                                                          $800   $48,900
                                                          ====   =======


Net deferred tax  liabilities  consist of the following as of March 31, 2002 and
2003:

                                                            March 31,

                                                       2002          2003
                                                       ----          ----

Deferred tax assets:
Net operating loss carryforwards.................     $22,200       $33,200
Deferred revenues................................     183,200       211,200
Accounts payable and accruals....................      21,300        31,500

Total deferred tax assets........................     226,700       275,900

Deferred tax liabilities:

Accounts receivable..............................     (74,500)    (132,400)
Capitalized software costs.......................    (151,500)    (190,900)
Depreciation.....................................      (3,900)      (3,900)
                                                       ------       ------

Total deferred tax liabilities...................    (229,900)    (327,200)
                                                     --------     --------

Net deferred tax liability.......................     $(3,200)    $(51,300)
                                                      -------     --------

At  March  31,  2003,  the  Company  has net  operating  loss  carryforwards  of
approximately  $90,000 and $45,000  for Federal and State,  respectively,  which
will expire at various dates through 2020.



NOTE 7--STOCKHOLDER'S EQUITY


STOCK DIVIDEND


On November 7, 2000 the Board of Directors declared a 1,000:1 stock dividend and
increased the common shares  authorized from 50,000 to 50,000,000 and issued and
outstanding from 10,000 shares to 10,000,000  shares.  All stock related data in
the financial  statements  reflect the stock dividend for all periods presented.
The  amendment to the  Company's  articles of  incorporation  was filed with the
State of California subsequent to March 31, 2003.

                                       F-71


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS


STOCK OPTION PLAN


In December  2000,  the Company  adopted the 2000 Stock Option Plan (the "Plan")
under which  non-qualified  stock options may be granted to  employees,  outside
directors and  consultants.  The purpose of the Plan is to enable the Company to
attract, retain and motivate employees, directors, advisors and consultants. The
Company has reserved a total of 5,000,000  shares of the Company's  common stock
for issuance upon the exercise of options granted in accordance with the Plan.


Options granted under the Plan expire in 10 years following the date of grant (5
years for  stockholders  who own greater than 10% of outstanding  stock) and are
subject to  limitation  on transfer.  The Plan is  administered  by the Board of
Directors.


The Plan provides for granting of incentive  stock options at not less than 100%
of the fair  market  value of the  underlying  stock at the grant  date.  Option
grants under the Plan are subject to various  vesting  provisions,  all of which
are contingent upon the continuous  service of the optionee.  Options granted to
stockholders who own greater than 10% of the outstanding stock must be issued at
prices not less than 100% of the fair  market  value of the stock on the date of
grant as  determined  by the  Company's  Board of  Directors.  Upon a change  in
control of the  Company,  all shares  granted  under the Plan shall  immediately
vest.

The following table summarizes the activity of the Plan:

                                       F-72


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS


                                                                       Weighted
                                                          Options      Average
                                             Shares       Granted -    Exercise
                                             Available    Number of    Price Per
                                             for Grant    Shares       Share
                                             ---------    ---------    ---------

Balances, March 31, 2001............         3,379,000    1,621,000      $.55
Options granted.....................          (224,000)     224,000      $.78
Options forfeited...................            55,000      (55,000)     $.60
                                             ---------    ---------    ---------

Balances, March 31, 2002............         3,210,000    1,790,000      $.58
Options granted.....................          (300,000)     300,000     $1.00
                                             ---------    ---------    ---------

Balances, March 31, 2003............         2,910,000    2,090,000      $.64
                                             =========    =========     ========



The following summarizes stock options outstanding as of March 31, 2003:

                          Options Outstanding         Options Exercisable
                          -------------------         -------------------

                                           Weighted              Weighted
                               Weighted    Average               Average
                    Average    Exercise     Shares               Exercise
Exercise Prices     Shares    Life (Years)  Price   Exercisable   Price
---------------     ------    ------------  -----   -----------   -----

     $.25           150,000        7.7       $.25      75,000      $.25
     $.40           605,000        7.7       $.40     302,500      $.40
     $.50            24,000        8.2       $.50       6,000      $.50
     $.60           561,000        7.7       $.60     280,500      $.60
     $.75           150,000        8.1       $.75      37,500      $.75
    $1.00           600,000        8.4      $1.00     137,500     $1.00
                  ---------        ---      -----     -------     -----

                  2,090,000        8.0       $.64     839,000      $.57
                  =========        ===       ====     =======     =====

NOTE 8--COMMITMENTS AND CONTINGENCIES

LEASES

The Company leases its development  and Corporate  offices under non- cancelable
operating lease  agreements,  which expire at various dates through August 2005.
The lease  agreements  provide for base rental rates,  which increase at defined
intervals  during  the term of the  lease.  The  Company  does not  account  for
increasing base rentals using a straight-line  method over the lease term as the
differences between the straight-line method and cash payment is not material.


The Company's  rental  expense for operating  leases was $67,282 and $79,309 for
the years ended March 31, 2002 and 2003,  respectively.  Future minimum payments
under  non-cancelable  operating  leases with initial or remaining  terms of one
year or more consist of the following at March 31, 2003:


Years ending March 31,

                                                              Amount


2004........................................................  $49,087
2005........................................................   28,804
2006........................................................   10,944
                                                              -------

                                                              $88,835
                                                              =======

Employee Benefit Plans

The Company's employees are covered by a profit sharing plan qualified under IRS
section 401.  The plan  provides  for the Company to make  discretionary  profit
contributions on behalf of eligible employees. The Company made no contributions
in 2002 or 2003.


NOTE 9--RELATED PARTY TRANSACTIONS


The Company leases office space from a company  controlled by the Company's CEO.
Office  rental  rates  approximate  market  value for the size,  type and office
location.  Rents paid under this lease totaled $28,260 and $31,170 for the years
ended March 31, 2002 or 2003, respectively.

From  time to time,  the  Company  uses an  outside  contractor  related  to the
Company's president. Rates paid for work provided are consistent with comparable
contractors. Fees paid during the years ended March 31, 2002 or 2003 amounted to
$11,695 and $47,483, respectively.



                                       F-73



                            HOLLYWOOD SOFTWARE, INC.
                                  BALANCE SHEET



                                                                   September 30,
                                                                        2003
                                                                   -------------

Assets

Current assets
 Cash and cash equivalents                                       $    335,711
  Accounts receivable, net of allowance for doubtful
   accounts of $5,325                                                 276,055
 Prepaids and other current assets                                     14,098
                                                                   ----------

Total current assets                                                  625,864

Property and equipment, net (Note 3)                                   27,778

Capitalized software costs, net (Note 3)                              453,655
                                                                   ----------

Total assets                                                     $  1,107,297
                                                                  ===========

Liabilities and Stockholders' Equity

Current liabilities
 Accounts payable and accrued expenses (Note 3)                  $    116,618
  Current portion of notes payable (Note 4)                             2,083
  Due to shareholder (Note 5)                                          50,000
  Deferred taxes (Note 6)                                              52,800
 Deferred revenue (Note 3)                                            470,280
                                                                   ----------
Total current liabilities                                             691,781
                                                                   ----------
Total liabilities                                                     691,781
                                                                   ----------

Commitments and contingencies

Stockholders' equity
  Common stock, no par value, 50,000,000 shares
   authorized, 10,000,000 shares issued and
   outstanding as of September 30, 2003                                20,000
 Retained earnings                                                    395,516
                                                                  -----------

Total stockholders' equity                                            415,516
                                                                  -----------

Total liabilities and stockholders' equity                       $  1,107,297
                                                                  ===========

See accompanying notes to financial statements.



                                       F-74



                            HOLLYWOOD SOFTWARE, INC.
                            STATEMENTS OF OPERATIONS


                                  Three Months Ended        Six Months Ended
                                     September 30,            September 30,
                                  ------------------        -----------------
                                   2002         2003         2002        2003
                                   ----         ----         ----        ----

Revenues
 License fees                 $  173,935  $    204,106  $   375,099  $ 299,198
 Maintenance fees                128,514       107,618      255,152    213,282
 Development fees                 55,000       138,223      126,855    192,975
 Consulting fees                 217,626        83,915      400,274    122,904
                                 -------        ------      -------    -------

Total revenues                   575,075       533,862    1,157,380    828,359
                                 -------       -------    ---------    -------



Costs and operating expenses
 Costs of revenues                91,250        49,787      165,155     49,284
 Research and development         53,225        66,014      109,550    213,539
 General and administrative      251,765       344,470      557,950    604,806
                                 -------       -------    ---------    -------

Total costs and operating
expenses                         396,240       460,271      832,655    867,629
                                 -------       -------    ---------    -------

Income (loss) from
operations                       178,835        73,591      324,725    (39,270)

Interest expense                    (320)          (72)        (760)      (202)
Other income                         433             7          691        865
                                 -------       -------    ---------    -------

Income (loss) before income
taxes                            178,948        73,526      324,656    (38,607)

Provision (benefit) for
income taxes                      52,107         1,053       94,363     (8,947)
                                 -------       -------    ---------    -------

Net income (loss)             $  126,841  $     72,473  $   230,293  $ (29,660)
                                ========    ==========    =========    =======

Earning (loss) per share
(Note 2):

  Basic                       $     0.01  $       0.01  $      0.02  $   (0.00)
                                =========   ===========   ==========   =======
  Diluted                     $     0.01  $       0.01  $      0.02  $   (0.00)
                                =========   ===========   ==========   =======

Weighted average number of
shares
  (Note 2):
  Basic                       10,000,000    10,000,000   10,000,000 10,000,000
                              ==========   ===========   ========== ==========

  Diluted                     10,293,167    10,000,000   10,293,167 10,000,000
                              ==========   ===========   ========== ==========

See accompanying notes to financial statements.



                                       F-75




                            HOLLYWOOD SOFTWARE, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY

                                                Common     Retained    Total
                                                 Stock     Earnings
                                                --------   --------    -------

Balance, March 31, 2003                       $  20,000  $ 425,176   $ 445,176

Net loss                                              -    (29,660 )   (29,660)
                                                --------   --------    -------

Balance, September 30, 2003                   $  20,000  $ 395,516   $ 415,516
                                                ========   ========    =======

                See accompanying notes to financial statements.




                                       F-76



                            HOLLYWOOD SOFTWARE, INC.
                            STATEMENTS OF CASH FLOWS


                                         Three Months Ended    Six Months Ended
                                           September 30,         September 30,
                                        -------------------   ------------------

                                         2002       2003       2002       2003
                                        -------    ------     ------     -------

Cash flows from operating activities
 Net income (loss)                    $ 126,841   $ 72,473  $ 230,293 $ (29,660)
  Adjustments to reconcile net
  income (loss) to cash
  provided by operating activities:
  Depreciation                            6,767      6,400     13,534    13,400
  Amortization of software
  development costs                      48,463     36,191     97,820    79,673
  Deferred taxes                         52,107     11,500     94,363     1,500
  Changes in operating assets and
   liabilities:
   Accounts receivable                  (43,902)     2,322   (253,135)   56,267
   Prepaids and other current assets      5,764     (4,613)     7,598    (4,588)
   Accounts payable and accrued
   liabilities                           18,881     40,294     33,388    37,427
   Deferred revenue                    (124,498)    (7,927)  (206,758)  (59,844)
                                        -------    --------   --------   -------

Net cash provided by operating
activities                               90,423    156,640     17,103    94,175
                                        -------    --------   --------   -------

Cash flows from investing activities
 Purchases of property and equipment          -          -     (8,738)  (10,500)
 Capitalized software development
 costs                                  (80,208)   (54,011)  (164,882)  (54,011)
                                        -------    --------   --------   -------

Net cash used in investing activities   (80,208)   (54,011)  (173,620)  (64,511)
                                        -------    --------   --------   -------

Cash flows from financing activities
 Repayment of notes payable              (3,125)    (3,125)    (6,250)   (6,250)

 Loans from shareholders                      -     50,000          -    50,000
                                        -------    --------   --------   -------

Net cash provided by (used in)
financing activities                     (3,125)    46,875     (6,250)   43,750
                                        -------    --------   --------   -------

Net increase (decrease) in
cash and cash equivalents                  7,090   149,504   (162,767)   73,414

Cash and cash equivalents, beginning
of period                                65,338    186,207    235,195   262,297
                                        -------    --------   --------   -------

Cash and cash equivalents, end of
period                                $  72,428  $ 335,711  $  72,428 $ 335,711
                                       ========   ========   ========   ========

Supplemental cash flow disclosures
  Cash paid during the three-months
  ended for:
    Interest paid                     $     319  $      72  $     760  $    203
    Taxes paid                                -    (10,447)         -   (10,447)
                                       ========   ========   ========   ========

                See accompanying notes to financial statements.







                                       F-77






                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - COMPANY ORGANIZATION, NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Hollywood  Software,  Inc. (the  "Company")  was  incorporated  in California in
October  1997.  The  Company is a leading  provider  of  proprietary  enterprise
software and  consulting  services for  distributors  and  exhibitors  of filmed
entertainment in the United States and Canada. Its software  applications manage
the planning,  booking,  scheduling,  revenue sharing,  cash flow, and reporting
associated with the  distribution and exhibition of theatrical  films.  Services
include strategic and technical consulting, systems implementation and training.

The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
for interim financial statements. In the opinion of management,  all adjustments
and normal recurring accruals considered  necessary for a fair presentation have
been included.  Operating  results for the three and six months ended  September
30, 2003 are not necessarily  indicative of the results that may be expected for
the year ending  March 31,  2004.  The interim  financial  statements  and notes
thereto  should be read in  conjunction  with the  Company's  audited  financial
statements and notes thereto for the year ended March 31, 2003.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



CASH AND CASH EQUIVALENTS

The Company  considers all liquid  assets with an initial  maturity date that is
less than three months from the date of purchase to be cash equivalents.


CONCENTRATIONS OF CREDIT RISK


Financial  instruments,  which potentially subject the Company to concentrations
of credit risk, consist of cash and cash equivalents,  to the extent they exceed
federal depository insurance limits, and accounts receivable. The Company places
its cash with high credit quality  financial  institutions.  As of September 30,
2003 uninsured cash balances aggregated $235,711.

The Company  customer  base  primarily  includes film  distributors  and theatre
owners through the United States and Canada.  Allowances  for doubtful  accounts
are recorded for estimated  losses  resulting from the inability of customers to
make  required  payments.  The  amount of the  reserves  is based on  historical
experience  and the  Company's  analysis  of the  accounts  receivable  balances
outstanding.  For the  three and six  months  ended  September  30,  2002,  four
customers  accounted  for 10%,  16%, 17% and 33%,  and 10%,  11%, 18% and 32% of
revenues,  respectively,  and three customers accounted for 46%, 16%, and 13% of
accounts  receivable at September  30, 2002.  For the three and six months ended
September 30, 2003, two customers accounted for 20% and 37%, and three customers
accounted for 10%, 13% and 37% of revenues,  respectively,  and three  customers
accounted for 54%, 14% and 12% of accounts receivable at September 30, 2002.


PROPERTY AND EQUIPMENT

Property  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Depreciation  is computed  using the  double-declining  balance  method over the
useful lives of the respective assets as follows:



                                                  Useful Lives
                                               ------------------

               Computer software                        3
               Computer equipment                       5
               Furniture and fixtures                   7
                                                  Lease term or
               Leasehold improvements              useful life


                                       F-78


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS


Leasehold improvements are depreciated over the shorter of the lease term or the
estimated  useful  life of the  improvement.  Maintenance  and repair  costs are
charged to expense as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF


The Company reviews the  recoverability  of its long-lived  assets on a periodic
basis in order to identify  business  conditions  which may  indicate a possible
impairment.  The assessment for potential  impairment is based  primarily on the
Company's  ability to recover the carrying  value of its long- lived assets from
expected  future   undiscounted   cash  flows.  If  the  total  expected  future
undiscounted  cash flows are less than the carrying amount of the assets, a loss
is recognized for the difference between the fair value (computed based upon the
expected future  discounted cash flows) and the carrying value of the assets. No
impairment was recorded during the three and six months ended September 30, 2002
and 2003.


CAPITALIZED SOFTWARE COSTS


The  Company  has  adopted  SFAS No. 86,  "Accounting  for the Costs of Computer
Software to Be Sold, Leased, or Otherwise  Marketed." Software development costs
that are incurred  subsequent  to  establishing  technological  feasibility  are
capitalized.  Amounts  capitalized as software  development  costs are generally
amortized  on a  straight-line  basis  over  five  years.  The  company  reviews
capitalized software costs for impairment on an annual basis. To the extent that
the  carrying  amount  exceeds  the  estimated  net  realizable   value  of  the
capitalized  software cost, an impairment charge is recorded.  No impairment was
recorded during the three and six months ended September 30, 2002 and 2003.


Amortization of capitalized  software  development  costs,  included in costs of
revenues,  amounted to $48,463 and $36,191 for the three months ended  September
30,  2002 and 2003,  respectively,  and  $97,820  and $79,674 for the six months
ended September 30, 2002 and 2003, respectively.


REVENUE RECOGNITION


The Company  accounts  for  software  revenue  recognition  in  accordance  with
Statement  of Position  97-2,  "Software  Revenue  Recognition."  The  Company's
revenues  are  generated  from  the  following  primary  sources:   i)  software
licensing,  including customer licenses and ASP service agreements, ii) software
maintenance  contracts,  iii) professional  consulting services,  which includes
systems implementation, training, custom software development services and other
professional services.

Software licensing revenue is recognized when the following criteria are met: a)
persuasive  evidence of an arrangement  exists,  b) delivery has occurred and no
significant  obligations  remain,  c) the fee is  fixed or  determinable  and d)
collectivity is determined to be probable. Significant upfront fees are received
in addition to periodic amounts upon  achievement of contractual  milestones for
licensing of the Company's products. Such amounts are deferred until the revenue
recognition  criteria has been met,  which  typically  occurs after delivery and
acceptance.


For  arrangements  with  multiple  elements  (e.g.   delivered  and  undelivered
products,  maintenance and other services),  the Company  separately  negotiates
each element of the  arrangement  based on the fair value of the  elements.  The
fair  values for ongoing  maintenance  and  support  obligations  are based upon
separate sales of renewals to customers or upon substantive renewal rates quoted
in the agreements. The fair values for services, such as training or consulting,
are based upon hourly  billing rates of these  services when sold  separately to
other customers.

Customers not wishing to license and operate the Company's  software  themselves
may  use  the  software   through  an  Application   Service   Provider  ("ASP")
arrangement,  in which the Company hosts the application  and provides  customer


                                       F-79


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS


access via the internet.  Annual minimum ASP service fees are recognized ratably
over the contract term.  Overage revenues for usage in excess of stated minimums
are recognized monthly.

Maintenance  services and website  subscription fees are recognized ratably over
the  contract  term.  Professional  consulting  services,  sales of third  party
products and resale  hardware  revenues are recognized as services are provided.
Software  development  revenues are recognized when delivery has occurred and no
significant obligations remain.

Deferred  revenue is recorded  when i) a portion or the entire  contract  amount
cannot be  recognized as revenue due to  non-delivery  or acceptance of licensed
software or custom  programming,  ii) incomplete  implementation  of ASP service
arrangements,  or iii) unexpired  pro-rata  periods of maintenance,  minimum ASP
service fees or website  subscription  fees. As license fees,  maintenance fees,
minimum  ASP  service  fees and  website  subscription  fees are  often  paid in
advance,  a portion of this revenue is deferred  until the contract  ends.  Such
amounts are included in the Company's  balance sheet under the caption "Deferred
Revenue," and are recognized as revenue in accordance with the Company's revenue
recognition policies described above.


INCOME TAXES

The Company  accounts  for income  taxes under the asset and  liability  method.
Deferred tax assets and  liabilities  are  determined  based upon the  temporary
differences  between the financial  statement  carrying amounts and tax bases of
assets and  liabilities  using enacted tax rates expected to be in effect in the
year in which the  temporary  differences  are expected to reverse.  A valuation
allowance is established  when it is more likely than not that some portion,  or
all, of the deferred tax asset will not be realized.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

RESEARCH AND DEVELOPMENT


Research  and  development   costs  are  expensed  as  incurred.   Research  and
development  costs  amounted to $53,225 and $66,014 for the three  months  ended
September 30, 2002 and 2003, respectively, and $109,550 and $213,539 for the six
months ended September 30, 2002 and 2003, respectively.


ADVERTISING EXPENSES


Advertising  costs are expensed as incurred.  Advertising  costs  totaled $0 and
$3,408 for the three months ended September 30, 2002 and 2003, respectively, and
$282  and  $3,433  for the  six  months  ended  September  30,  2002  and  2003,
respectively.



EMPLOYEE STOCK COMPENSATION


The Company accounts for its stock option plan in accordance with the provisions
of  Accounting  Principles  Board (APB)  Opinion No. 25,  "Accounting  for Stock
Issued to Employees",  and related  interpretations.  Under the intrinsic  value
method, the Company recognizes compensation expense on the date of grant only if


                                       F-80


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS


the current market price of the underlying stock exceeds the exercise price. The
Company recorded no stock based employee compensation cost for the three and six
months ended September 30, 2002 and 2003.

The Company has adopted the  disclosure  standards of SFAS No. 123,  "Accounting
for Stock-Based  Compensation",  which requires the Company to provide pro forma
net  income  disclosures  for  employee  stock  option  grants  made  as if  the
fair-value-based  method of accounting  for stock options as defined in SFAS 123
had been  applied.  The  following  table  illustrates  the effect on net income
(loss) if the Company had applied the fair value recognition  provisions of SFAS
No. 123 to stock based employee  compensation for the three and six months ended
September 30, 2002 and 2003:





                                        Three Months Ended    Six Months Ended
                                          September 30,        September 30,
                                        ------------------    ----------------
                                                             

                                         2002        2003      2002      2003
                                         ----        ----      ----      ----



Net income (loss), as reported        $ 126,841   $ 72,473  $ 230,293 $ (29,660)
Additional stock-based employee
  compensation expense
  determined under the fair value
  based method, net of income
  tax benefits                           (6,413 )   (6,413 )  (12,827)  (12,827)

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


Pro forma net income (loss)           $ 120,428   $ 66,060    217,466   (42,487)
                                        ========    =======   =======   ========

Income (loss) per share:
 As reported:
   Basic                              $    0.01   $   0.01  $   0.02  $  (0.00 )
                                        ========    =======   =======   ========


   Diluted                            $    0.01   $   0.01  $   0.02  $  (0.00 )
                                        ========    =======   =======   ========

 Pro forma:
   Basic                              $    0.01   $   0.01  $   0.02  $  (0.00 )
                                        ========    =======   =======   ========

   Diluted                            $    0.01   $   0.01  $   0.02  $  (0.00 )
                                        ========    =======   =======   ========




EARNINGS (LOSS) PER SHARE


The Company  accounts for earnings  per share in  accordance  with SFAS No. 128,
"Earnings per Share".  SFAS No. 128 requires  presentation  of basic and diluted
earnings  per share.  Basic  earnings  (loss) per share is  computed by dividing
income (loss) available to common shareholders by the weighted average number of
common shares  outstanding for the reporting period.  Diluted earnings per share
is computed  based on the same shares plus the  potential  shares  issuable upon
assumed exercise of outstanding stock options or other security  contracts,  but
does not include the impact of dilutive securities that would be anti-dilutive.


                                       F-81


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS



The following  table sets forth the  computation  of basic and diluted  earnings
(loss) per share:





                                     Three Months Ended      Six Months Ended
                                       September 30,          September 30,


                                                             
                                     2002        2003        2002        2003
                                   ----------  ---------  ----------  ---------
Numerator:
  Net income (loss) available to
    common shareholders             $126,841    $ 72,473  $ 230,293  $ (29,660)
                                   ----------  ---------  ----------  ---------

Denominator:
  Basic earnings per share -
    weighted average shares       10,000,000  10,000,000 10,000,000  10,000,00

  Effect of dilutive securities:
    Stock options                    293,167           -    293,167          -
                                   ----------  ---------  ----------  ---------

Denominator for diluted earnings
  per share - weighted average
  shares                          10,293,167  10,000,000 10,293,167  10,000,00
                                   ----------  ---------  ----------  ---------

Earnings (loss) per share:
   Basic                            $   0.01  $     0.01 $     0.02  $   (0.00)
                                   =========   =========  =========   =========


   Diluted                          $   0.01  $     0.01 $     0.02  $   (0.00)
                                   =========   =========  =========   =========




For the three and six months  ended  September  30,  2002 and 2003,  total stock
options of 2,090,000  were not  included in the  computation  of diluted  income
(loss) per share because their effect was anti-dilutive.


RECENT ACCOUNTING PRONOUNCEMENTS


In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded  in other  contracts,  and for  hedging  activities  under
Statement of Financial  Accounting  Standards  No. 133.  SFAS No. 149  clarifies
under what  circumstances  a contract with an initial net  investment  meets the
characteristic  of a derivative  as  discussed in SFAS No. 133. In addition,  it
clarifies when a derivative contains a financing component that warrants special
reporting  in the  statement  of cash  flows.  SFAS  No.  149 is  effective  for
contracts  entered into or modified after June 30, 2003,  except as specifically
noted in SFAS No.  149.  SFAS No. 149 should be applied  prospectively.  At this
time,  the  adoption of SFAS No. 149 is not  expected to  materially  impact the
Company's financial condition or results of operations.

In May 2003,  the FASB Issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 is effective for financial  instruments  entered into or modified  after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial instruments of nonpublic entities. For nonpublic entities, mandatorily
redeemable  financial  instruments are subject to the provisions of SFAS No. 150
for the first fiscal period  beginning  after December 15, 2003. As of September
30,  2003,  the  Company  did not  have  any  mandatorily  redeemable  financial
instruments or related financial  instruments to be accounted for under SFAS No.
150.


                                       F-82


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS



NOTE 3 - BALANCE SHEET COMPONENTS



PROPERTY AND EQUIPMENT


Property and equipment consisted of the following as of September 30, 2003:





                                                           

                                                               September 30,2003
                                                               -----------------
Furniture and fixtures                                         $           9,426
Computer equipment                                                       133,056
Computer software                                                         21,881
Office furniture                                                          10,792
                                                               -----------------
                                                                         175,155
Less:  Accumulated depreciation                                        (147,377)
                                                               -----------------
Total property and equipment, net                               $         27,778
                                                                ================



Computer equipment  consists primarily of costs incurred for computers,  servers
and  backup  battery  devices  used in the  Company's  operations.  Depreciation
expense for the three  months ended  September  30, 2002 and 2003 was $6,767 and
$6,400,  respectively.  Depreciation  expense for the six months ended September
30, 2002 and 2003 was $13,534 and $13,400, respectively.



CAPITALIZED SOFTWARE DEVELOPMENT COSTS


The Company capitalizes the cost of software development in accordance with SFAS
No. 86,  "Accounting for the Costs of Computer  Software to Be Sold,  Leased, or
Otherwise  Marketed."  Capitalized  software  development costs consisted of the
following as of September 30, 2003:






                                                            
                                                               September 30,2003
                                                               -----------------
Development costs                                              $         988,198
Less:  Accumulated amortization                                      (  534,543)
                                                               -----------------
Unamortized development costs, net                             $         453,655
                                                               =================





                                       F-83


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS




ACCOUNTS PAYABLE AND ACCRUED EXPENSES


Accounts payable and accrued expenses consisted of the following as of September
30, 2003:






                                                              September 30, 2003

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

                                                              
Accounts payable                                                 $        54,022
Accrued compensation and benefits                                         44,656
Other accrued liabilities                                                 17,940
                                                              ------------------
Total accounts payable and accrued expenses                     $        116,618
                                                                ================



Accrued  compensation and benefits primarily relate to accrued employee vacation
costs. Other accrued liabilities relate to general business obligations incurred
prior to the  balance  sheet  date,  which  were  paid in  subsequent  reporting
periods.



DEFERRED REVENUES


Deferred revenues consisted of the following as of September 30, 2003:



                                                           
                                                              September 30, 2003
                                                              ------------------
ASP service fees                                               $         304,299
Maintenance fees                                                         109,510
Web site subscription fees 20,088                                         20,088
Development fees                                                          36,383
                                                              ------------------
Total                                                               $    470,280
                                                              ==================




Deferred revenues represent amounts collected from customers prior to satisfying
the Company's revenue recognition criteria.

NOTE 4 - LINE OF CREDIT AND NOTES PAYABLE

In November 2001, the Company  entered into a $200,000 line of credit from Wells
Fargo Bank for general  corporate  purposes.  The credit line bears  interest at
7.50% per annum.  The Company  has not  borrowed  any funds,  nor  incurred  any
interest  charges under the credit line.  The line of credit expires in November
2003.


In November 2001, the Company incurred a $25,000 term loan from Wells Fargo Bank
for the  purchase  of a battery  backup  system to mitigate  risks from  rolling
blackouts due to an energy crisis in California.  In addition to receivables and
other assets of the Company, two shareholders pledged certain personal assets as
collateral  for the loan.  The Company makes  monthly  payments of principal and
interest on the loan,  which is scheduled to expire in November  2003.  The term
loan bears interest at 8.25% per annum.




                                       F-84


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS






A summary of Notes Payable is as follows:


                                                              September 30, 2003
                                                              ------------------
                                                           
Notes payable                                                 $          52,083
Less:  Current portion                                                  (52,083)
                                                               -----------------
Notes payable, less current portion                            $              -
                                                               =================




NOTE 5 - DUE TO SHAREHOLDER

In August 2003,  the Company  incurred a $50,000 loan from a  shareholder  as an
advance  for future  legal  fees.  The loan is  non-interest  bearing and due on
demand. The loan was repaid in October 2003.

NOTE 6 - INCOME TAXES



Provision (benefit) for income taxes consists of the following:






                                   Three Months Ended           Six Months Ended
                                     September 30,                 September 30,
                                  ---------------------       ------------------
                                                              

                                    2002        2003             2002       2003
                                  ---------   ---------       --------    -------
 Current:
  Federal                         $      -    $ 10,447       $     -      $(10,447)
  State                                  -          -              -             -

 Deferred:
  Federal                           39,155           -        70,847             -
  State                             12,952      11,500        23,516         1,500
                                  ---------   ---------      --------        -----
                                  $ 52,107    $  1,053      $ 94,363      $ (8,947)
                                  =========   =========     =========     ========




Net deferred tax liabilities consist of the following as of September 30, 2003:






                                                              September 30, 2003
                                                              ------------------
                                                           
Deferred tax assets:
 Net operating loss carryforwards                              $           8,000
 Deferred revenues                                                       187,300
 Accounts payable and accruals                                            46,500
                                                              ------------------
Total deferred tax assets                                                241,800
                                                              ------------------
Deferred tax liabilities:
 Accounts receivable                                                  (110,000 )
 Capitalized software costs                                           (180,700 )
 Depreciation                                                           (3,900 )
                                                              ------------------
Total deferred tax liabilities                                        (294,600 )
                                                              ------------------
Net deferred tax liability                                     $       (52,800 )
                                                               =================




                                       F-85


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS




NOTE 7 - STOCKHOLDER'S EQUITY


STOCK DIVIDEND


On November 7, 2000 the Board of Directors declared a 1,000:1 stock dividend and
increased the common shares  authorized from 50,000 to 50,000,000 and issued and
outstanding from 10,000 shares to 10,000,000  shares.  All stock related data in
the financial  statements  reflect the stock dividend for all periods presented.
The  amendment to the  Company's  articles of  incorporation  was filed with the
State of California on July 31, 2003.


Stock Option Plan


In December  2000,  the Company  adopted the 2000 Stock Option Plan (the "Plan")
under which  non-qualified  stock options may be granted to  employees,  outside
directors and  consultants.  The purpose of the Plan is to enable the Company to
attract, retain and motivate employees, directors, advisors and consultants. The
Company has reserved a total of 5,000,000  shares of the Company's  common stock
for issuance upon the exercise of options granted in accordance with the Plan.


Options granted under the Plan expire in 10 years following the date of grant (5
years for  stockholders  who own greater than 10% of outstanding  stock) and are
subject to  limitation  on transfer.  The Plan is  administered  by the Board of
Directors.


The Plan provides for granting of incentive  stock options at not less than 100%
of the fair  market  value of the  underlying  stock at the grant  date.  Option
grants under the Plan are subject to various  vesting  provisions,  all of which
are contingent upon the continuous  service of the optionee.  Options granted to
stockholders who own greater than 10% of the outstanding stock must be issued at
prices not less than 100% of the fair  market  value of the stock on the date of
grant as  determined  by the  Company's  Board of  Directors.  Upon a change  in
control of the  Company,  all shares  granted  under the Plan shall  immediately
vest.


The following table summarizes the activity of the Plan:







                                                                    Weighted
                                              Shares    Options     Average
                                              Available Granted-    Exercise
                                              for       Number      Price
                                              Grant     of Shares   Per Share
                                              --------- ----------  --------
                                           
                                                           

Balances, March 31, 2003                      2,910,000 2,090,000      $.64

Options granted                                    -          -           -
Options forfeited                                  -          -           -
                                              --------- ----------  --------
                                              2,910,000 2,090,000
Balances, September 30, 2003                          0         0      $.64
                                              --------- ---------   --------




                                       F-86



                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS



The following summarizes stock options outstanding as of September 30, 2003:









                        Options Outstanding                Options Exercisable
                ----------------------------------------   -------------------

                                                     
                                                                     Weighted
                            Weighted       Weighted                   Agerage
Exercise                  Average Life     Average       Shares     Exercise
 Prices         Shares      (Years)      Exercise Price  Exercisable  Price
-------------------------------------------------------------------------------
   $  .25        150,000         7.2           $  .25      93,750    $ .25
   $  .40        605,000         7.2           $  .40     378,125    $ .40
   $  .50         24,000         7.7           $  .50       9,000    $ .50
   $  .60        561,000         7.2           $  .60     350,625    $ .60
   $  .75        150,000         7.6           $  .75      56,250    $ .75
   $ 1.00        600,000         7.9           $ 1.00     212,500    $1.00
   ------        --------    ----------      ----------  ---------   -------
                2,090,000        7.5             $.64    1,100,250   $ .59
                =========    =============    ============  ========= ========




NOTE 8 - COMMITMENTS AND CONTINGENCIES

LEASES


As of September  30, 2003,  the Company  leases its  development  and  Corporate
offices  under non-  cancelable  operating  lease  agreements,  which  expire at
various dates through August 2005. The lease agreements  provide for base rental
rates,  which increase at defined  intervals  during the term of the lease.  The
Company  does not account for  increasing  base  rentals  using a  straight-line
method over the lease term as the differences  between the straight-line  method
and cash payment is not material.

The Company's  rental  expense for operating  leases was $15,646 and $14,930 for
the three months ended  September 30, 2002 and 2003,  respectively,  and $37,726
and $29,698 for the six months ended September 30, 2002 and 2003,  respectively.
Future minimum  payments under  non-cancelable  operating leases with initial or
remaining  terms of one year or more consist of the  following at September  30,
2003:

YEARS ENDING MARCH 31,
                                                                 AMOUNT
 2004 (six-months)                                             $   22,074
 2005                                                              28,804
 2006                                                              10,826
                                                               -----------

                                                                $  61,704
                                                                ===========



Employee Benefit Plans


As of  September  30,  2003,  the  Company's  employees  are covered by a profit
sharing plan qualified  under IRS section 401. The plan provides for the Company
to make discretionary profit contributions on behalf of eligible employees.  The
Company made no contributions  for the three and six months ended September 2002
and 2003.


NOTE 9 - RELATED PARTY TRANSACTIONS

As of  September  30,  2003,  the  Company  leases  office  space from a company
controlled by the Company's CEO.  Office rental rates  approximate  market value
for the size,  type and office  location.  Rents  paid under this lease  totaled
$7,938  and $7,938  for the three  months  ended  September  30,  2002 and 2003,
respectively,  and $15,585 and $15,876 for the six months  ended  September  30,
2002 and 2003, respectively.

From  time to time,  the  Company  uses an  outside  contractor  related  to the
Company's president. Rates paid for work provided are consistent with comparable
contractors. Fees paid during the three months ended September 30, 2002 and 2003


                                       F-87


                            HOLLYWOOD SOFTWARE, INC.
                          NOTES TO FINANCIAL STATEMENTS


amounted  to $5,018 and  $4,550,  respectively.  Fees paid during the six months
ended September 30, 2002 and 2003 amounted to $5,018 and $6,036, respectively.


NOTE 10 -- SUBSEQUENT EVENT


On July 17, 2003, the  shareholders  of the Company entered into an agreement to
sell all of the outstanding common stock to Access Integrated Technologies, Inc.
("Access").  On November 3, 2003, the shareholders entered into an amended stock
purchase  agreement  with Access.  The  agreement was amended to provide for the
payment of the purchase price in the form of a note payable. Access executed the
note payable and  purchased all of the  outstanding  common stock of the Company
effective November 3, 2003.




                                       F-88




           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and  Stockholders of Access  Integrated  Technologies,
Inc.:  We have  audited  the  accompanying  balance  sheet  of  FiberSat  Global
Services,  LLC as of December 31, 2003, and the related statements of operation,
members'  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 the standards of the Public
Company Accounting Oversight Board (United States). 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 provided a reasonable basis for our opinion. In our opinion, the financial
statements  referred to above  present  fairly,  in all material  respects,  the
financial position of FiberSat Global Services, LLC as of December 31, 2003, 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.  /s/ Singer Lewak  Greenbaum & Goldstein  LLP Los  Angeles,  California
January 28, 2005




                                       F-89








                          FIBERSAT GLOBAL SERVICES, LLC
                                  BALANCE SHEET
                                 (IN THOUSANDS)
                                             

ASSETS                                           December 31, 2003
                                                 -----------------
CURRENT ASSETS
   Cash and cash equivalents                         $   218
   Accounts receivable, net of allowance of $66          125
   Prepaids and other current assets                     314
                                                     -------
        Total current assets                             657

   Property and equipment, net                         3,765
   Security deposits                                       4
                                                     -------
       Total assets                                  $ 4,426
                                                     =======

LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES
   Accounts payable and accrued expenses             $   686
   Current portion of notes payable                      338
   Current portion due to contractor                     190
   Advances payable                                      100
   Current portion of customer security deposits          68
   Current portion of capital leases                     831
   Deferred revenue                                       18
   Other Liabilities                                     277
                                                      ------
       Total current liabilities                       2,508

   Due to contractor, net of current portion              80
   Other long term payable                                81
   Customer security deposits, net of current portion     56
   Capital leases, net of current portion                737
                                                      ------
       Total liabilities                               3,462
                                                      -------

   Members' Equity                                       964
       Total members' equity                             964

        Total liabilities and members'equity         $ 4,426
                                                     =======

See accompanying notes to financial statements




                                       F-90








                          FIBERSAT GLOBAL SERVICES, LLC
                             STATEMENT OF OPERATIONS
                                 (IN THOUSANDS)
                                                   

                                                      For theYear-Ended
                                                      December 31, 2003
                                                      -----------------
Revenues:                                             $ 3,408
Cost of revenues                                        1,093
                                                      -----------------
Gross profit                                            2,315

Operating Expenses:
Selling, general and administrative                     1,833
Depreciation and amortization                             884
                                                       ----------------
        Total operating expenses                        2,717

Loss from operations                                    (402)
                                                       ----------------

Interest income                                            51
Interest expense                                        (245)
                                                       ----------------
Net loss before income taxes                            (596)
Income tax expense                                        (3)
                                                       ----------------
Net loss                                              $  (599)
                                                      =================

See accompanying notes to financial statements





                                       F-91








                          FIBERSAT GLOBAL SERVICES, LLC
                          STATEMENT OF MEMBERS' EQUITY
                                 (IN THOUSANDS)
                                                          

                                                                           Total
                                 Class A      Class B      Class C    Members' Equity
                                 -------      -------      -------    ---------------
Balance at January 1, 2003
                                 $  1,916     $   (948)    $    158    $  1,126

Contributions                         400            -            -         400
Allocation of Loss                   (599)           -            -        (599)
Unpaid Priority Payments                -            -           37          37
                                 ---------    --------     --------    --------------

Balance at December 31, 2003     $  1,717     $   (948)    $    195    $    964
                                ==========    ========     ========    ===============


See accompanying notes to financial statements





                                       F-92





                          FIBERSAT GLOBAL SERVICES, LLC
                             STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
                                                        For the
                                                        Year-Ended
                                                        December 31, 2003
                                                        -----------------
                                                      
NET LOSS                                                 $    (599)

Adjustments to reconcile net income to
  net cash provided by operating activities:
  Depreciation and amortization                                884
  Loss on sale of equipment                                     85
 Change in assets - (increase) decrease:
  Accounts receivable                                           (8)
  Other receivables                                            367
  Prepaid expenses                                               5
  Deposits                                                       6
Change in liabilities - increase (decrease):
  Accounts payable                                             (38)
  Accrued expenses                                             (29)
  Income taxes payable                                          (5)
  Customer deposits                                             32
  Deferred revenue                                            (157)
  Due to contractor                                           (120)
                                                          -----------
Total adjustments                                            1,022

NET CASH PROVIDED BY OPERATING ACTIVITIES                      423
                                                          -----------
Cash flows from investing activities:
   Proceeds from sale of equipment                              15
  Purchases of equipment & improvements                        (45)
                                                          -----------

NET CASH USED BY INVESTING ACTIVITIES                          (30)
                                                          ------------
Cash flows from financing activities:
   Payments of cash advances                                  (139)
  Payments of lease payables                                  (573)
  Payments of notes payable                                   (197)
  Members' equity contributions/GP accruals                    437
                                                          ------------
NET CASH USED BY FINANCING ACTIVITIES                         (472)
                                                          ------------

NET DECREASE IN CASH EQUIVALENTS                               (79)
Cash and cash equivalents at beginning of period               297
                                                          ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $     218
                                                         =============
Supplemental cash flow information:
   Interest paid                                         $     167
   Taxes paid                                            $       7
See accompanying notes to financial statements


                                       F-93





                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
                     (FOR THE YEAR ENDED DECEMBER 31, 2003)
                                 (IN THOUSANDS)

NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

FiberSat Global Services,  LLC ("FiberSat" or the "Company"),  formerly known as
McKibben  Communications,  was organized in California in August 1998. FiberSat,
headquartered  in  Chatsworth,  California  provides  satellite-based  broadband
video,  data and  Internet  transmission  and  encryption  services for multiple
customers in the broadcast and cable television and  communications  industries,
and also operates an outsourced Networks Operations Center.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

FiberSat  considers all liquid assets with an initial maturity date that is less
than 3 months from the date of purchase to be cash equivalents.

Financial  instruments,  which potentially subject FiberSat to concentrations of
credit  risk,  to the extent they exceed  federal  depository  insurance  limits
consist of cash and cash equivalents,  and accounts receivable.  FiberSat places
its cash with high credit  quality  financial  institutions.  As of December 31,
2003, uninsured cash balances aggregated $148.

MAJOR CUSTOMERS

The Company's customer base is primarily  composed of businesses  throughout the
United  States.  Allowances  for doubtful  accounts  are recorded for  estimated
losses resulting from the inability of customers to make required payments.  The
amount  of the  reserve  is  based on  historical  experience  and  management's
analysis of the accounts  receivable  balances  outstanding.  As of December 31,
2003, three customers accounted for 55%, 25% and 4% of year-to-date revenues and
five customers accounted for 35%, 33%, 18%, 8% and 5% of accounts receivable.

PROPERTY AND EQUIPMENT

Property  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Depreciation is computed using the straight-line method over the useful lives of
the respective assets as follows:

                                  Useful Lives
                                  --------------
Computer equipment                 3 years
Technical equipment                5 to 15 years
Office furniture and equipment     5 years
Leasehold improvements             Lease term or useful life

Leasehold improvements are depreciated over the shorter of the lease term or the
estimated  useful  life of the  improvement.  Maintenance  and repair  costs are
charged to expense as incurred.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

The Company reviews the  recoverability  of its long-lived  assets on a periodic
basis in order to identify  business  conditions  which may  indicate a possible
impairment.  The assessment for potential  impairment is based  primarily on the
Company's  ability to recover the carrying value of its  long-lived  assets from


                                       F-94


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
                     (FOR THE YEAR ENDED DECEMBER 31, 2003)
                                 (IN THOUSANDS)


expected  future   undiscounted   cash  flows.  If  the  total  expected  future
undiscounted  cash flows are less than the carrying amount of the assets, a loss
is recognized for the difference between the fair value (computed based upon the
expected future  discounted cash flows) and the carrying value of the assets. No
impairment was recorded during the year ended December 31, 2003.

REVENUE RECOGNITION

FiberSat revenues are accounted for in accordance with Staff Accounting Bulletin
No. 104 "Revenue Recognition in Financial  Statements" ("SAB No. 104"). FiberSat
revenues  consist of satellite  network  monitoring and maintenance  fees. These
fees consist of monthly  recurring  billings  pursuant to  contracts,  which are
recognized  as  revenues  in the  month  earned,  and other  billings  which are
recognized  on a time and  materials  basis in the period in which the  services
were provided.

DEFERRED REVENUES

The  Company's  customers  occasionally  make payments in the month prior to the
month in which actual services are rendered.  FiberSat  records such payments as
Deferred Revenues.

INCOME TAXES

The Company is a limited liability company,  which is a pass-through  entity for
federal and state income tax purposes.  The Company's income or loss is required
to be reported by the Company's members on their applicable income tax returns.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003,  the Federal  Accounting  Standards  Board (the "FASB") issued
Statement of Financial  Standards  ("SFAS") No. 149,  "Amendment of Statement
133 on Derivative  Instruments and Hedging  Activities."  SFAS No. 149 amends
and  clarifies  accounting  for  derivative  instruments,  including  certain
derivative  instruments  embedded  in  other  contracts,   and  for  hedging
activities   under  SFAS  No.  133.  SFAS  No.  149  clarifies   under  what
circumstances   a  contract  with  an  initial  net  investment   meets  the
characteristic of a derivative as discussed in SFAS No. 133. In addition,  it
clarifies  when a derivative  contains a financing  component  that  warrants
special  reporting in the statement of cash flows.  SFAS No. 149 is effective
for  contracts  entered  into or  modified  after  June 30,  2003,  except as
specifically  noted  in SFAS  No.  149.  SFAS  No.  149  should  be  applied
prospectively. The adoption of SFAS No. 149 did not have a material impact on
the Company's financial position, cash flows or results of operations.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 is effective for financial  instruments  entered into or modified  after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable


                                       F-95


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
                     (FOR THE YEAR ENDED DECEMBER 31, 2003)
                                 (IN THOUSANDS)


financial  instruments of nonpublic  entities and the provisions of paragraphs 9
and 10 of SFAS No. 150 (and related guidance in the  appendices),  as they apply
to mandatorily redeemable  non-controlling interests, which were deferred by the
FASB on October 29,  2003.  The adoption of SFAS No. 150 did not have a material
impact on the Company's financial position, cash flows or results of operations.

In  November  2002,  the  Emerging  Issues  Task  Force (the  "EITF")  reached a
consensus on EITF 00-21,  "Revenue  Arrangements  with  Multiple  Deliverables,"
related to the separation and allocation of consideration  for arrangements that
include  multiple  deliverables.  EITF 00-21 requires that when the deliverables
included  in this type of  arrangement  meet  certain  criteria  they  should be
accounted for separately as separate  units of accounting.  This may result in a
difference in the timing of revenue  recognition but will not result in a change
in the total amount of revenues  recognized in a bundled sales arrangement.  The
allocation  of revenues to the  separate  deliverables  is based on the relative
fair value of each item.  If the fair value is not  available  for the delivered
items then the  residual  method  must be used.  This method  requires  that the
amount allocated to the undelivered  items in the arrangement is their full fair
value.  This  would  result in the  discount,  if any,  being  allocated  to the
delivered  items.  This consensus is effective  prospectively  for  arrangements
entered into in fiscal  periods  beginning  after June 15, 2003. The adoption of
EITF 00-21 did not have a material impact on the Company's  financial  position,
cash flows or results of operations.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities -- an Interpretation  of Accounting  Research Bulletin No. 51." FIN No.
46 requires the primary  beneficiary to consolidate a variable  interest  entity
("VIE")  if it has a  variable  interest  that  will  absorb a  majority  of the
entity's  expected  losses if they  occur,  receive a majority  of the  entity's
expected residual returns if they occur, or both. FIN No. 46 applies immediately
to VIEs created after  January 31, 2003 and to VIEs in which the entity  obtains
an interest  after that date. In October 2003, the FASB deferred the latest date
by which all public  entities  must  apply FIN No. 46 to all VIEs and  potential
VIEs, both financial and  non-financial in nature, to the first reporting period
ending after  December 15, 2003. The adoption of FIN No. 46 in February 2003 did
not have a material impact on the Company's  financial  position,  cash flows or
results of operations.

On December 17, 2003, the SEC issued Staff Accounting  Bulletin ("SAB") No. 104,
"Revenue  Recognition,"  which supercedes SAB No. 101,  "Revenue  Recognition in
Financial  Statements."  SAB No. 104's primary purpose is to rescind  accounting
guidance   contained  in  SAB  No.  101  related  to  multiple  element  revenue
arrangements,  superceded as a result of the issuance of EITF 00-21, "Accounting
for Revenue Arrangements with Multiple Deliverables." Additionally,  SAB No. 104
rescinds  the "Revenue  Recognition  in Financial  Statements  Frequently  Asked
Questions  and Answers"  issued with SAB No. 101 that had been codified in Staff
Accounting Bulletin Topic 13, "Revenue Recognition." The adoption of SAB No. 104
did not have any  impact on the  Company's  financial  position,  cash  flows or
results of operations.


NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2003:

Technical equipment ...........................$ 7,149
Computer equipment ................................376
Leasehold improvements ............................565
Office furniture and equipment ................... 198
                                                 -------
                                                 8,288



                                       F-96


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
                     (FOR THE YEAR ENDED DECEMBER 31, 2003)
                                 (IN THOUSANDS)


Less: Accumulated depreciation..................(4,523)
Total property and equipment, net...............$3,765
                                                ======
Depreciation expense for the year ended December 31, 2003 was $884.


NOTE 4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses  consisted of the following as of December
31, 2003:

Accounts payable........................................$286
Accrued compensation and benefits........................392
Taxes payable...........................................   8
                                                        ----
Total accounts payable and accrued expenses.............$686

Accrued  compensation and benefits primarily relate to accrued employee bonuses,
payroll and vacation costs.


NOTE 5. NOTES PAYABLE

A summary of Notes Payable is as follows as of December 31, 2003:

10% note payable to member due in monthly installments of
$21 including principal and interest, maturing May 1, 2004,
and collateralized by various personal property .....................$176
10% note payable to member, due upon call.........................   $ 86
10% note payable to member, due upon call ........................ ..$ 48
10% note payable to member, due upon call .............. ............$ 28
Less: Current portion...............................................($338)
                                                                    ------
Notes payable, less current portion................................. $ -0-

During the year ended December 31, 2003,  FiberSat has not made any payments for
principal or interest on the notes due upon call.


NOTE 6. OTHER LIABILITIES

Other liabilities  represents amounts owed for certain equipment  purchased from
an entity that ceased its business.


NOTE 7. INCOME TAXES

The Company is a limited liability company,  which is a pass-through  entity for
federal and state income tax purposes.  The Company's income or loss is required
to be reported by the Company's members on their applicable income tax returns.




                                       F-97


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
                     (FOR THE YEAR ENDED DECEMBER 31, 2003)
                                 (IN THOUSANDS)


NOTE 8. MEMBERS' EQUITY

FiberSat's  Second  Amended and Restated  Limited  Liability  Company  Operating
Agreement dated October 1, 2002 provides for capital  contributions,  allocation
of net profits and net losses, distributions and priority (guaranteed) payments,
and other operating parameters for the Company.

The Company has three  classes of membership  units.  The Class A member has the
first liquidation preference. Class C units have an annual priority (guaranteed)
payment that will continue until the Class C unit holder's capital  contribution
amount is reduced to zero.  This  guaranteed  payment is calculated at the three
month LIBOR rate plus 250 basis points (determined monthly).  The Class C member
has a liquidation  preference subordinate to the Class A member. Class B members
have no priority payments and liquidation preferences are subordinate to Class A
and Class C members.  All members have voting rights,  and no member is required
to make any  additional  capital  contributions  to the Company.  The  Operating
Agreement  prescribes the  allocation of profits and losses among  Members.  Per
such provisions, the losses in the current accounting period have been allocated
to Members that have a positive balance in their Capital Account.


NOTE 9. COMMITMENTS

LEASES

The  Company  leases its  corporate  offices  and two sites  used for  satellite
transmission operations under noncancellable  operating lease agreements,  which
expire in March 2007,  June 2004 and September 2009,  respectively.  The Company
does not account for increasing base rentals using a  straight-line  method over
the lease term as the difference between the straight-line method and cash basis
is not material. FiberSat also leases certain equipment for use in its satellite
transmission and general business operations under  noncancelable  capital lease
agreements that expire through May 2006.

Minimum future  operating and capital lease payments as of December 31, 2003 are
summarized as follows:





                                                   Capital    Operating
                                                   Leases      Leases
                                                   --------   ----------
                                                         

Year ending December 31,
2004..............................................   $938       $222
2005..............................................    699        214
2006..............................................     77        214
2007..............................................      -        128
2008..............................................      -        101
Thereafter                                              -         67
                                                   --------   ----------

Total minimum lease payments                       $1,714       $946
                                                   ========   ==========

Less amount representing interest.................   145
                                                   ------

Present value of net minimum lease payments,
including current maturities of $833.............. $1,569
                                                   ======== 

Total rent expense was $320 for the period ended December 31, 2003.



                                       F-98


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
                     (FOR THE YEAR ENDED DECEMBER 31, 2003)
                                 (IN THOUSANDS)


As of December  31, 2003 assets  recorded  under  capitalized  lease  agreements
included in property and equipment consists of the following:

Computer equipment................................   $   70
Machinery and equipment...........................    2,895
                                                     -------
..................................................   $2,965

Less: Accumulated amortization....................   (1,309)
                                                     -------
Net assets under capital lease....................   $1,656
                                                     =======




OTHER

During the year ended  December 31, 2003,  FiberSat  made  payments of $120 to a
contractor  as a part of a  settlement  agreement  in  connection  with  certain
litigation  initiated  against  the Company in 2001.  At  December  31, 2003 the
Company had an outstanding balance of $270 payable to this contractor.



NOTE 10. EMPLOYEE BENEFIT PLAN

FiberSat maintains a 401(k) Plan that allows eligible employees to contribute up
to 15% of their compensation,  not to exceed the statutory limit.  FiberSat does
not match employee  contributions.  Employee  contributions and related earnings
vest immediately.



NOTE 11. RELATED PARTY TRANSACTIONS

During the year ended  December 31, 2003,  the Company had certain  transactions
with Globecomm  Systems,  Inc,  ("GSI"),  a member of FiberSat.  The Company had
revenues of $836 related to services  provided to GSI and its  subsidiary and at
December 31, 2003, the accounts  receivable balance included $63 owed by GSI and
its subsidiary.

GSI had sold certain  equipment to FiberSat  that was financed by a note payable
to GSI. The  remaining  balance at December 31, 2003 on this note was $176.  The
nominal  interest on this note was 10% and the company made payments of $338 for
principal and interest during the year. GSI also leased, at a 10% interest rate,
to  the  Company  certain  capital  equipment,  on  which  the  Company  had  an
outstanding  balance  of $526 at  December  31,  2003.  The  Company  made lease
payments of $50 during the year.

GSI had made certain cash advances to the Company in previous years via a series
of three  promissory notes bearing interest at 10%. The company has not made any
repayment  on these  notes  and the  total  balance  on these  notes,  including
interest was $162 at December 31, 2003.

GSI advanced to the Company $100 against  services to be provided by the Company
to GSI and its subsidiary  during 2002. There is no interest due on this advance
and the Company did not make  repayments on or receivable  offsets  against this
advance in 2003.

The Company had outstanding trade accounts payable to GSI of $64 at December 31,
2003.


                                      F-99


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
                     (FOR THE YEAR ENDED DECEMBER 31, 2003)
                                 (IN THOUSANDS)



NOTE 12. SEGMENT INFORMATION

FiberSat has adopted the provisions of SFAS No. 131,  "Disclosure about Segments
of an Enterprise and Related  Information." SFAS No. 131 requires disclosures of
selected  segment-related  financial information about products, major customers
and geographic areas. The Company is principally  engaged in the satellite-based
transmission of data from its two California locations. Accordingly, the Company
considers itself to operate in a single segment for purposes of disclosure under
SFAS  No.  131.  The  Company's   chief   operating   decision-maker   evaluates
performance,   makes  operating  decisions  and  allocates  resources  based  on
financial data consistent with the  presentation in the  accompanying  financial
statements.
Fourth Amended and Restated Certificate of Incorporation of Registrant. (4)

As of December 31, 2003, all of the Company's operations and assets were located
in California.



NOTE 13. SUBSEQUENT EVENTS

On November  17,  2004,  substantially  all of the assets,  customer  contracts,
business  operations,  and  certain  liabilities  of FiberSat  were  acquired by
FiberSat Global Services,  Inc., a wholly-owned  subsidiary of Access Integrated
Technologies,  Inc. ("AccessIT").  In connection with the acquisition,  AccessIT
issued 540,000 shares of its restricted Class A Common Stock to the members, and
paid $381 in cash to settle certain obligations of FiberSat.



                                      F-100






                          FIBERSAT GLOBAL SERVICES, LLC
                                  BALANCE SHEET
                                 (IN THOUSANDS)
                                   (UNAUDITED)


                                                          September 30, 2004
                                                         --------------------
ASSETS
CURRENT ASSETS
                                                       
Cash and cash equivalents                                     $    421
Accounts receivable, net of allowance of $44                        49
Prepaids and other current assets                                   61
                                                          ------------
  Total current assets                                             531

Property and equipment, net                                      2,693
Security deposits                                                    4
                                                          ------------
     Total assets                                             $  3,228
                                                          ============
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES
  Accounts payable and accrued expenses                       $    557
  Current portion of notes payable                                 171
  Current portion due to contractor                                150
  Advances payable                                                  63
  Current portion of customer security deposits                     82
  Current portion of capital leases                                773
  Deferred revenue                                                  56
  Other liabilities                                                277
                                                          -------------
    Total current liabilities                                    2,129

  Other long term payable                                           77
  Customer security deposits, net of current portion                30
  Capital leases, net of current portion                           181
                                                          -------------
    Total liabilities                                            2,417
                                                          -------------


Members' Equity                                                    811
                                                          -------------
  Total members' equity                                            811

    Total liabilities and members' equity                     $  3,228
                                                          ============

See accompanying notes to financial statements



                                      F-101






                          FIBERSAT GLOBAL SERVICES, LLC
                             STATEMENT OF OPERATIONS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

                                    For the Nine Months Ended
                                        September 30, 2004
                                    --------------------------    
                                     
Revenues:                               $  2,567
Cost of revenues                             740
                                        --------
Gross profit                               1,827
                                        --------
Operating Expenses:
Selling, general and
administrative                               981
Depreciation and amortization                548
Impairment loss                              358
                                        --------
Total operating expenses                   1,887
                                        --------
Loss from operations                         (60)
                                        --------
Interest income                                2
Interest expense                            (120)
                                        --------
Net loss before income taxes                (178)
Income tax expense                            (5)
                                        --------
Net loss                                $   (183)
                                        ========
See accompanying notes to
financial statements




                                      F-102










                          FIBERSAT GLOBAL SERVICES, LLC
                          STATEMENT OF MEMBERS' EQUITY
                                 (IN THOUSANDS)
                                   (UNAUDITED)

                                                                        Total
                                                                        Members'
                                Class A     Class B     Class C         Equity
                                -------    ---------   ---------       ---------
                                                            

Balance at January 1, 2004      $1,717      $ (948)     $  195           $  964

Contributions                        -           -           -                -
Allocation of Loss                (183)          -           -             (183)
Unpaid Priority Payments             -           -          30               30
                                -------    ---------   ---------       ---------

Balance at September
30, 2004                        $1,534      $ (948)     $  225           $  811
                                =======    =========   =========       =========


See accompanying notes to financial statements


==============================================================================



                                      F-103






                          FIBERSAT GLOBAL SERVICES, LLC
                             STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)
                                                   For the 
                                               Nine Months Ended
                                               September 30, 2004
                                              ---------------------
                                             
NET LOSS                                           $  (183)

Adjustments to reconcile net income to
  net cash provided by operating activities:
  Depreciation and amortization                         548
  Impairment loss                                       358
Change in assets - (increase) decrease:
  Accounts receivable                                    77
  Other receivables                                     256
  Prepaid expenses                                       (3)
Change in liabilities - increase (decrease):
  Accounts payable                                     (118)
  Accrued expenses                                       (9)
  Income taxes payable                                   (2)
  Customer deposits                                     (12)
  Deferred revenue                                       38
  Due to contractor                                    (120)
                                                     ------
Total adjustments                                     1,013
                                                     ------
NET CASH PROVIDED BY OPERATING ACTIVITIES               830
                                                     ------
Cash flows from investing activities:
   Return of equipment to lessor                        176
  Purchases of equipment & improvements                 (11)
                                                     ------
NET CASH USED BY INVESTING ACTIVITIES                   165
                                                     ------
Cash flows from financing activities:
  Payments of cash advances                             (41)
  Payments of lease payables                           (614)
  Payments of notes payable                            (167)
  Members' equity contributions/GP accruals              30
                                                     ------
NET CASH PROVIDED BY FINANCING ACTIVITIES              (792)
                                                     ------
NET INCREASE IN CASH EQUIVALENTS                        203
Cash and cash equivalents at beginning of period        218
                                                     ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD         $    421
                                                   ========
Supplemental cash flow information:
   Interest paid                                   $     72
   Taxes paid                                      $      7


See accompanying notes to financial statements



                                      F-104





                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
          (For the Nine Months Ended September 30, 2004, Unaudited)
                                 (In thousands)


NOTE 1. ORGANIZATION AND NATURE OF OPERATIONS

FiberSat Global Services,  LLC ("FiberSat" or the "Company"),  formerly known as
McKibben  Communications,  was organized in California in August 1998. FiberSat,
headquartered  in  Chatsworth,  California  provides  satellite-based  broadband
video,  data and  Internet  transmission  and  encryption  services for multiple
customers in the broadcast and cable television and  communications  industries,
and also operates an outsourced Networks Operations Center.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

FiberSat  considers all liquid assets with an initial maturity date that is less
than 3 months from the date of purchase to be cash equivalents.

Financial  instruments,  which potentially subject FiberSat to concentrations of
credit  risk,  to the extent they exceed  federal  depository  insurance  limits
consist of cash and cash equivalents,  and accounts receivable.  FiberSat places
its cash with high credit quality  financial  institutions.  As of September 30,
2004, uninsured cash balances aggregated $370.

MAJOR CUSTOMERS

The Company's customer base is primarily  composed of businesses  throughout the
United  States.  Allowances  for doubtful  accounts  are recorded for  estimated
losses resulting from the inability of customers to make required payments.  The
amount  of the  reserves  is based on  historical  experience  and  management's
analysis of the accounts  receivable balances  outstanding.  As of September 30,
2004,  three customers  accounted for 49%, 11% and 11% of year-to-date  revenues
and four customers accounted for 50%, 42%, 4%, and 3% of accounts receivable.

PROPERTY AND EQUIPMENT

Property  and  equipment  are  stated at cost,  less  accumulated  depreciation.
Depreciation is computed using the straight-line method over the useful lives of
the respective assets as follows:

                                      Useful Lives
                                     --------------
Computer equipment                    3 years
Technical equipment                   5 to 15 years
Office furniture and equipment        5  years
Leasehold improvements                Lease term or useful life

Leasehold improvements are depreciated over the shorter of the lease term or the
estimated  useful  life of the  improvement.  Maintenance  and repair  costs are
charged to expense as incurred.



IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

The Company reviews the  recoverability  of its long-lived  assets on a periodic
basis in order to identify  business  conditions  which may  indicate a possible
impairment.  The assessment for potential  impairment is based  primarily on the
Company's ability to recover the carrying value of its long-lived assets from



                                      F-105




                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
          (FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, UNAUDITED)
                                 (IN THOUSANDS)

expected  future   undiscounted   cash  flows.  If  the  total  expected  future
undiscounted  cash flows are less than the carrying amount of the assets, a loss
is recognized for the difference between the fair value (computed based upon the
expected  future  discounted  cash flows) and the carrying  value of the assets.
During the period ended  September  30, 2004,  the Company  decided to close its
Sylmar, California teleport facility due to a reduction in the type of satellite
transmission  services  provided  from that  location.  The Company  recorded an
impairment loss for $358, reflecting the writedown of the Sylmar assets.



REVENUE RECOGNITION

FiberSat revenues are accounted for in accordance with Staff Accounting Bulletin
No. 104 "Revenue Recognition in Financial  Statements" ("SAB No. 104"). FiberSat
revenues  consist of satellite  network  monitoring and maintenance  fees. These
fees consist of monthly  recurring  billings  pursuant to  contracts,  which are
recognized  as  revenues  in the  month  earned,  and other  billings  which are
recognized  on a time and  materials  basis in the period in which the  services
were provided.



DEFERRED REVENUES

The  Company's  customers  occasionally  make payments in the month prior to the
month in which actual services are rendered.  FiberSat  records such payments as
Deferred Revenues.



INCOME TAXES

The Company is a limited liability company,  which is a pass-through  entity for
federal and state income tax purposes.  The Company's income or loss is required
to be reported by the Company's members on their applicable income tax returns.


USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.


RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003,  the Federal  Accounting  Standards  Board (the "FASB") issued
Statement of Financial  Accounting  Standards ("SFAS") No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149
amends and clarifies accounting for derivative instruments, including certain
derivative  instruments  embedded  in  other  contracts,   and  for  hedging
activities   under  SFAS  No.  133.  SFAS  No.  149  clarifies   under  what
circumstances   a  contract  with  an  initial  net  investment   meets  the
characteristic of a derivative as discussed in SFAS No. 133. In addition,  it
clarifies  when a derivative  contains a financing  component  that  warrants
special  reporting in the statement of cash flows.  SFAS No. 149 is effective
for  contracts  entered  into or  modified  after  June 30,  2003,  except as
specifically  noted  in SFAS  No.  149.  SFAS  No.  149  should  be  applied
prospectively. The adoption of SFAS No. 149 did not have a material impact on
the Company's financial position, cash flows or results of operations.

                                      F-106


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
          (FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, UNAUDITED)
                                 (IN THOUSANDS)


In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 is effective for financial  instruments  entered into or modified  after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning  after  June  15,  2003,  except  for  mandatorily  redeemable
financial  instruments of nonpublic  entities and the provisions of paragraphs 9
and 10 of SFAS No. 150 (and related guidance in the  appendices),  as they apply
to mandatorily redeemable  non-controlling interests, which were deferred by the
FASB on October 29,  2003.  The adoption of SFAS No. 150 did not have a material
impact on the Company's financial position, cash flows or results of operations.

In  November  2002,  the  Emerging  Issues  Task  Force (the  "EITF")  reached a
consensus on EITF 00-21,  "Revenue  Arrangements  with  Multiple  Deliverables,"
related to the separation and allocation of consideration  for arrangements that
include  multiple  deliverables.  EITF 00-21 requires that when the deliverables
included  in this type of  arrangement  meet  certain  criteria  they  should be
accounted for separately as separate  units of accounting.  This may result in a
difference in the timing of revenue  recognition but will not result in a change
in the total amount of revenues  recognized in a bundled sales arrangement.  The
allocation  of revenues to the  separate  deliverables  is based on the relative
fair value of each item.  If the fair value is not  available  for the delivered
items then the  residual  method  must be used.  This method  requires  that the
amount allocated to the undelivered  items in the arrangement is their full fair
value.  This  would  result in the  discount,  if any,  being  allocated  to the
delivered  items.  This consensus is effective  prospectively  for  arrangements
entered into in fiscal  periods  beginning  after June 15, 2003. The adoption of
EITF 00-21 did not have a material impact on the Company's  financial  position,
cash flows or results of operations.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities -- an Interpretation  of Accounting  Research Bulletin No. 51." FIN No.
46 requires the primary  beneficiary to consolidate a variable  interest  entity
("VIE")  if it has a  variable  interest  that  will  absorb a  majority  of the
entity's  expected  losses if they  occur,  receive a majority  of the  entity's
expected residual returns if they occur, or both. FIN No. 46 applies immediately
to VIEs created after  January 31, 2003 and to VIEs in which the entity  obtains
an interest  after that date. In October 2003, the FASB deferred the latest date
by which all public  entities  must  apply FIN No. 46 to all VIEs and  potential
VIEs, both financial and  non-financial in nature, to the first reporting period
ending after  December 15, 2003. The adoption of FIN No. 46 in February 2003 did
not have a material impact on the Company's  financial  position,  cash flows or
results of operations.

On December 17, 2003, the SEC issued Staff Accounting  Bulletin ("SAB") No. 104,
"Revenue  Recognition,"  which supercedes SAB No. 101,  "Revenue  Recognition in
Financial  Statements."  SAB No. 104's primary purpose is to rescind  accounting
guidance   contained  in  SAB  No.  101  related  to  multiple  element  revenue
arrangements,  superceded as a result of the issuance of EITF 00-21, "Accounting
for Revenue Arrangements with Multiple Deliverables." Additionally,  SAB No. 104
rescinds  the "Revenue  Recognition  in Financial  Statements  Frequently  Asked
Questions  and Answers"  issued with SAB No. 101 that had been codified in Staff
Accounting Bulletin Topic 13, "Revenue Recognition." The adoption of SAB No. 104
did not have any  impact on the  Company's  financial  position,  cash  flows or
results of operations.




                                      F-107


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
          (FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, UNAUDITED)
                                 (IN THOUSANDS)


NOTE 3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of September 30, 2004:

Technical equipment ............................... $ 6,788
Computer equipment ................................     376
Leasehold improvements ............................     566
Office furniture and equipment ....................     198
                                                      -----
                                                      7,928

Less: Accumulated depreciation ....................  (5,235)
                                                    -------- 
Total property and equipment, net ................. $ 2,693
                                                    ======== 

Depreciation expense for the nine months ended September 30, 2004 was $548.


NOTE 4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES


Accounts payable and accrued expenses consisted of the following as of September
30, 2004:

Accounts payable ..................................    $169
Accrued compensation and benefits .................     382
Taxes payable .....................................       6
                                                      ------
Total accounts payable and accrued expenses .......    $557
                                                      ======

Accrued  compensation and benefits primarily relate to accrued employee bonuses,
payroll and vacation costs.


NOTE 5. NOTES PAYABLE


A summary of Notes Payable is as follows as of September 30, 2004:


10% note payable to member, due upon call .............     $  91
10% note payable to member, due upon call .............     $  51
10% note payable to member, due upon call .............     $  29
Less: Current portion .................................     ($171)
                                                           --------


Notes payable, less current portion ...................      $ -0-
                                                           =========
 
During the period ended  September 30, 2004,  FiberSat has not made any payments
for principal or interest on the notes due upon call.


NOTE 6. OTHER LIABILITIES

Other liabilities  represents amounts owed for certain equipment  purchased from
an entity that ceased its business.


NOTE 7. INCOME TAXES

The Company is a limited liability company,  which is a pass-through  entity for
federal and state income tax purposes.  The Company's income or loss is required
to be reported by the Company's members on their applicable income tax returns.

                                      F-108


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
          (FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, UNAUDITED)
                                 (IN THOUSANDS)


NOTE 8. MEMBERS' EQUITY

FiberSat's  Second  Amended and Restated  Limited  Liability  Company  Operating
Agreement dated October 1, 2002 provides for capital  contributions,  allocation
of net profits and net losses,  distributions and priority (guaranteed) payments
and other operating parameters for the Company.

The Company has three  classes of membership  units.  The Class A member has the
first liquidation preference. Class C units have an annual priority (guaranteed)
payment that will continue until the Class C unit holder's capital  contribution
amount is reduced to zero.  This  guaranteed  payment is calculated at the three
month LIBOR rate plus 250 basis points (determined monthly).  The Class C member
has a liquidation  preference subordinate to the Class A member. Class B members
have no priority payments and liquidation preferences are subordinate to Class A
and Class C members.  All members have voting rights,  and no member is required
to make any  additional  capital  contributions  to the Company.  The  Operating
Agreement  prescribes the  allocation of profits and losses among  Members.  Per
such provisions, the losses in the current accounting period have been allocated
to Members that have a positive balance in their Capital Account.

NOTE 9. COMMITMENTS


LEASES

The  Company  leases its  corporate  offices  and two sites  used for  satellite
transmission operations under noncancellable  operating lease agreements,  which
expire in March 2007,  June 2004 and September 2009,  respectively.  The Company
does not account for increasing base rentals using a  straight-line  method over
the lease term as the difference between the straight-line method and cash basis
is not material. FiberSat also leases certain equipment for use in its satellite
transmission and general business operations under  noncancelable  capital lease
agreements that expire through May 2006.

Minimum future operating and capital lease payments as of September 30, 2004 are
summarized as follows:





                                                      Capital Operating
                                                      Leases   Leases
                                                     -------- ----------
                                                         
Year ending September 30,
2005..............................................     $642     $235
2006..............................................      196      235
2007..............................................        -      177
2008..............................................        -      121
2009..............................................        -      108
Thereafter                                                -        -
                                                     -------- ----------

Total minimum lease payments......................     $838     $876
                                                     ======== ==========

Less amount representing interest.................       44
                                                     -------- 

Present value of net minimum lease payments, 
including current maturities of $601..............     $794
                                                     ======== 

Total rent expense was $170 for the nine months ended September 30, 2004.

                                      F-109


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
          (FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, UNAUDITED)
                                 (IN THOUSANDS)


As of September 30, 2004 assets  recorded  under  capitalized  lease  agreements
included in property and equipment consists of the following:

Computer equipment.................................... $ 70
Machinery and equipment...............................2,895
                                                     -------
                                                      2,965

Less: Accumulated amortization......................(1,590)
                                                     -------
Net assets under capital lease...................... $1,375
                                                     ======== 



EMPLOYMENT AGREEMENTS

FiberSat has an employment  agreement  with one executive  which provides for
compensation and certain other benefits. These agreements provides for a base
salary as well as for completion bonus payments.


OTHER

During the period ended September 30, 2004,  FiberSat made payments of $120 to a
contractor  as a part of a  settlement  agreement  in  connection  with  certain
litigation  initiated  against the Company in 2001.  At  September  30, 2004 the
Company had an outstanding balance of $150 payable to this contractor.


NOTE 10. EMPLOYEE BENEFIT PLAN

FiberSat maintains a 401(k) Plan that allows eligible employees to contribute
up to 15% of their compensation,  not to exceed the statutory limit. FiberSat
does not match employee  contributions.  Employee  contributions  and related
earnings vest immediately.


NOTE 11. RELATED PARTY TRANSACTIONS

During  the  period  ended  September  30,  2004,  the  Company  had  certain
transactions with Globecomm Systems, Inc, ("GSI"), a member of FiberSat.  The
Company  had  revenues of $584  related to  services  provided to GSI and its
subsidiary  and at  September  30,  2004,  the  accounts  receivable  balance
included $0 owed by GSI and its subsidiary.

GSI had sold  certain  equipment  to  FiberSat  that was  financed  by a note
payable to GSI. The remaining  balance at September 30, 2004 on this note was
$0. The nominal  interest on this note was 10% and the company made  payments
of $179 for  principal  and interest  during the period ended  September  30,
2004. GSI also leased, to the Company certain capital equipment, on which the
Company had an outstanding balance of $175 at September 30, 2004. The Company
made lease  payments of $34 during the period ended  September 30, 2004.  The
Company also had a liability totaling $151 related to an equipment lease with
GSI, which was terminated during the period ended September 30, 2004.

GSI had made certain cash advances to Company in previous  years via a series
of three  promissory  notes bearing interest at 10%. The company has not made
any repayment on these notes and the total balance on these notes,  including
interest was $171 at September 30, 2004.

                                      F-110


                          FIBERSAT GLOBAL SERVICES, LLC
                          NOTES TO FINANCIAL STATEMENTS
          (FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004, UNAUDITED)
                                 (IN THOUSANDS)


GSI advanced to the Company $100 against  services to be provided by the Company
to GSI and its subsidiary  during 2002. There is no interest due on this advance
and the Company made  repayments  of $37 against this advance  during the period
ended September 30, 2004.

The Company had outstanding trade accounts payable to GSI of $77 at September
30, 2004.


NOTE 12. SEGMENT INFORMATION

FiberSat  has  adopted  the  provision  of SFAS No.  131,  "Disclosure  about
Segments of an  Enterprise  and Related  Information."  SFAS No. 131 requires
disclosures of selected segment-related financial information about products,
major customers and geographic  areas. The Company is principally  engaged in
the  satellite-based  transmission  of data from its two  California  locations.
Accordingly,  the Company  considers  itself to operate in a single  segment for
purposes  of  disclosure  under SFAS No.  131.  The  Company's  chief  operating
decision-maker  evaluates  performance,  makes operating decisions and allocates
resources  based on  financial  data  consistent  with the  presentation  in the
accompanying financial statements.

As of  September  30,  2004,  all of the  Company's  operations  and assets were
located in California.


NOTE 13. SUBSEQUENT EVENTS

On November  17,  2004,  substantially  all of the assets,  customer  contracts,
business  operations,  and  certain  liabilities  of FiberSat  were  acquired by
FiberSat Global Services,  Inc., a wholly-owned  subsidiary of Access Integrated
Technologies,  Inc. ("AccessIT").  In connection with the acquisition,  AccessIT
issued 540,000 shares of its restricted Class A Common Stock to the members, and
paid $381 in cash to settle certain obligations of FiberSat.


                                      F-111




                      ACCESS INTEGRATED TECHNOLOGIES, INC.
        PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
   FOR THE FISCAL YEAR ENDED MARCH 31, 2004 AND FOR THE NINE MONTHS ENDED
                                DECEMBER 31, 2004
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

The following  selected  unaudited  financial data should be read in conjunction
with the  historical  consolidated  financial  statements  of Access  Integrated
Technologies,  Inc. ("AccessIT"),  Hollywood Software, Inc. ("Hollywood SW") and
FiberSat Global Services,  LLC  ("FiberSat"),  including the notes thereto,  and
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations". The following unaudited pro forma condensed combined information is
presented for  illustrative  purposes only and is not necessarily  indicative of
the results of operations that would have occurred if the  transactions had been
actually completed at the dates indicated,  nor is it necessarily  indicative of
future results of operations of the combined companies.  The unaudited pro forma
condensed combined statement of operations for the year ended March 31, 2004 has
been prepared to reflect the acquisitions of Hollywood SW and FiberSat as if the
transactions  had  occurred  as of  April  1,  2003 by  combining  the  separate
historical  statements  of operations of Hollywood SW for the seven months ended
November 3, 2003,  FiberSat for the fiscal year ended  December  31,  2003,  and
AccessIT  for the fiscal  year ended March 31,  2004.  The  unaudited  pro forma
condensed  combined  statement of operations  for the nine months ended December
31,  2004 has been  prepared to reflect  the  acquisition  of FiberSat as if the
acquisition  had  occurred  as of  April  1,  2004  by  combining  the  separate
historical statements of operations of FiberSat and AccessIT for the nine months
ended December 31, 2004.

In the  pro-forma  Statement of  Operations  for the Fiscal Year ended March 31,
2004, the AccessIT column presents  results of operations of the Company for the
full year ended March 31, 2004,  which  includes the  operations of Hollywood SW
from its date of  acquisition  on November 3, 2003,  and the Hollywood SW column
presents unaudited results of operations for the portion of the year ended March
31, 2004 prior to its date of acquisition.

On November 17, 2004,  AccessIT completed the acquisition of FiberSat by issuing
540,000 shares of restricted Class A common stock and paying  approximately $381
in cash.  AccessIT also incurred direct  transaction costs of approximately $180
related to the FiberSat  acquisition.  In addition,  AccessIT may be required to
pay a  contingent  purchase  price  for any of the  three  years  following  the
acquisition in which certain earnings targets are achieved. The Company has also
agreed to a one-time issuance of up to additional  100,000 Class A Shares if, in
accordance with an agreed upon formula,  the market value of the Company's Class
A Shares is less than 80% of the closing  trading price on the closing date. The
acquisition has been accounted for as a purchase in accordance with Statement of
Financial Accounting Standards No. 141.





                                       P-1





                        ACCESS INTEGRATED TECHNOLOGIES, INC.
           PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
                      FOR THE FISCAL YEAR ENDED MARCH 31, 2004
                   (in thousands, except share and per share data)



                               HISTORICAL                     PRO-FORMA
                      (1)         (1)        (1)
                               HOLLWOOD
                               SOFTWARE
                               SEVEN
                               MONTHS                 HOLLYWOOD
                               ENDED       FIBERSAT   SOFTWARE       FIBERSAT
                               NOVEMBER    GLOBAL     PRO-FORMA      PRO-FORMA
                     ACCESSIT   3, 2003    SERVICES   ADJUSTMENT     ADJUSTMENT     COMBINED
                     --------   -------    --------   ----------     ----------     --------
                                                                 
Revenues             $  7,201   $   972    $  3,408   $        -      $       -      $11,581

Cost of revenues        3,667       157       1,093         161(2)            -        5,078
                     --------   -------    --------   ----------     ----------     --------

Gross profit            3,534       815       2,315        (161)              -        6,503
                     --------   -------    --------   ----------     ----------     --------

Operating Expenses
  Selling, General and
   Administrative        3,277       683       1,833             -             -       5,793

Research and
  Development              55       218           -             -             -          273

Non-Cash
  Stock-Based
  Compensation             15       455           -             -             -          470

Depreciation
  and
  Amortization          2,692        15         884         234( 3)       (247)(6)     3,578
                     --------   -------    --------   ----------     ----------     --------

Total Operating
  Expenses              6,039     1,371       2,717        (395)          (247)       10,114
                     --------   -------    --------   ----------     ----------     --------

Loss From
Operations             (2,505)     (556)       (402)        (395)          247        (3,611)
                     --------   -------    --------   ----------     ----------     --------

Interest Income             6          -         51            -              -           57

Loss on early
  extinguish-
  ment of debt           (126)         -           -           -              -         (126)

Interest Expense         (542)         -       (245)       (139)( 4)       124 (5)      (802)

Non-Cash
  Interest
  Expense              (1,823)         -           -           -             -        (1,823)

Other Expense,
Net                       (52)         -           -           -             -           (52)
                     --------   -------    --------   ----------     ----------     --------

Net Loss Before
  Income Taxes
  and minority
  interest in
  subsidiary           (5,042)     (556)       (596)       (534)           371        (6,357)

Income Tax
  Benefit
  (Expense)               212      (48)          (3)                          -          161
                     --------   -------    --------   ----------     ----------     --------




                                      P-2




Net Loss before
  minority
  interest in
                                                                 
  subsidiary           (4,830)     (604)       (599)       (534)           371        (6,196)

Minority
  Interest in
  subsidiary               25         -           -            -              -           25
                     --------   -------    --------   ----------     ----------     --------

Net Loss               (4,805)     (604)       (599)       (534)           371        (6,171)

Accretion
  Related to
  Redeemable
  Convertible
  Preferred
  Stock                (1,588)         -           -             -            -       (1,588)

Accretion of
  Preferred
  Dividends              (220)         -           -             -            -         (220)
                     --------   -------    --------   ----------     ----------     --------

Net Loss
  Available to
  Common
  Stockholders        $(6,613)   $ (604)    $  (599)   $...........   $...........   $(7,979)

Net Loss
  Available to
  Common
  Stockholders
  Per Common
  Share Basic
  and Diluted        $  (1.37)  $     -     $      -   $       -      $       -       $(1.42)

Weighted
  Average                                                                                  2
  Number of
  Common Shares
  Outstanding
  Basic and
  Diluted            4,826,776  $     -     $      -    243,716        540,000      5,610,49







(1)   Statement of Operations presented for AccessIT are for the year ended
      March 31, 2004,  which include results of operations for Hollywood SW from
      its date of  acquisition.  Statement of Operations for Hollywood SW is for
      the period  from April 1, 2003  through  November  3, 2003.  Statement  of
      Operations presented for FiberSat is for the year ended December 31, 2003.

(2)   Represents amortization of $161 related to the appraised value of
      Hollywood  SW  capitalized  software  costs of $1,350,  amortized  over an
      estimated useful life of 5 years.

(3)   Represents amortization of $234 related to the appraised value of
      Hollywood  SW  intangible  assets  of  $1,550,  $500 and  $120,  including
      non-competition  agreements,  customer contracts and corporate trade name,
      respectively,  amortized over  estimated  useful lives of 5,5 and 10 years
      respectively.

(4)   Represents adjustment for additional interest expense from the issuance
      of $3,000 in 8% notes related to the Hollywood SW acquisition.

(5)   Represents an adjustment  to exclude  depreciation  on assets that were
      retained by the seller.

(6)   Represents a reduction of interest expense due to certain leases and
      notes payable retained by the seller.




                                      P-3






         UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
                   FOR THE NINE MONTHS ENDED DECEMBER 31, 2004
                                 (IN THOUSANDS)

                                             HISTORICAL          PRO FORMA
                                             ----------          ---------
                                            (1)      (1)
                                                   FIBERSAT
                                                   GLOBAL   ACQUISITION
                                         ACCESSIT  SERVICES ADJUSTMENT  COMBINED
                                         --------  -------- ----------- --------
Revenues                                 $ 7,135   $ 2,567  $     -     $ 9,702
Cost of revenues                           4,014       740        -       4,754
                                         --------  -------- ----------- --------
Gross Profit                               3,121     1,827        -       4,948
                                         --------  -------- ----------- --------

Operating Expenses
   Selling, General and Administrative     3,588       981        -       4,569
   Provisions for doubtful accounts          598         -        -         598
   Research and Development                  288         -        -         288
   Non-Cash Stock-Based Compensation           4         -        -           4
   Depreciation and Amortization           2,457       548     (108) (3)  2,897
   Impairment Loss                             -       358     (358) (4)      -
                                         --------  -------- ----------- --------
      Total Operating Expenses             6,935     1,887     (466)      8,356
                                         --------  -------- ----------- --------

Loss From Operations                      (3,814)      (60)     466      (3,408)
                                         --------  -------- ----------- --------

Interest Income                                -         2                    2
Interest Expense                            (279)     (120)      58  (2)   (341)
Non-Cash Interest Expense                   (155)        -        -        (155)
Other Expense, Net                            17         -        -          17
                                         --------  -------- ----------- --------

Net Loss Before Income Taxes and          (4,231)     (178)     524      (3,885)
minority interest in subsidiary
Income Tax Benefit (Expense)                 233        (5)       -         228
                                         --------  -------- ----------- --------

Net Loss before minority interest in      (3,998)     (183)     524      (3,657)
subsidiary

Minority Interest in subsidiary               10         -        -          10
                                         --------  -------- ----------- --------

Net Loss                                  (3,988)     (183)     524      (3,647)

Accretion Related to Redeemable                -         -        -           -
Convertible Preferred Stock
Accretion of Preferred Dividends               -         -        -           -
                                         --------  -------- ----------- --------

Net Loss Available to Common
Stockholders                             $(3,988)  $  (183) $   524     $(3,647)
                                         ========  ======== =========== ========

Net Loss Available to Common
Stockholders Per Common Share
   Basic and Diluted                     $ (0.42)  $     -  $     -     $ (0.39)
                                         ========  ======== =========== ========

Weighted Average Number of Common
Shares Outstanding
   Basic and Diluted                     9,432,380       -        -    9,432,380
                                         --------  -------- ----------- --------


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

(1)  Statements  of  Operations  presented  for AccessIT are for the nine months
     ended  December 31, 2004 and include the results of  operations of FiberSat
     since the acquisition  date of November 17, 2004.  Statements of Operations
     presented for FiberSat are for the nine months ended September 30, 2004.


(2)  Represents a reduction of interest  expense due to certain leases and notes
     payable retained by the seller.

(3)  Represents  an  adjustment  to  exclude  depreciation  on assets  that were
     retained by the seller.

                                      P-4




(4)  Represents the exclusion of the impairment loss related to assets that were
     retained by the seller. The underlying assets were  contractually  excluded
     from the  acquisition,  therefore the related  impairment  loss was removed
     from the pro forma statement of operations.



                                      P-5






You should rely only on the information  contained in this  prospectus.  We have
not authorized  anyone to provide you with any  information  different from that
contained in this  prospectus.  We are offering to sell,  and seeking  offers to
buy, shares of our Class A Common Stock only in jurisdictions  where such offers
and sales  are  permitted.  The  information  contained  in this  prospectus  is
accurate  only as of the  date of this  prospectus,  regardless  of the  date of
delivery of this  prospectus or of any sale of our Class A Common Stock. In this
prospectus,  "Access Integrated Technologies,  Inc.," "we," "us", "the company",
"AccessIT" and "our company" refer to Access Integrated Technologies, Inc.


                                TABLE OF CONTENTS


                                                              PAGE
                                                              ----
Prospectus summary...........................................   2
Risk factors.................................................   8
Forward-looking statements...................................  18
Use of proceeds..............................................  18
Capitalization...............................................  19
Price Range of Common Stock..................................  20
Dividend policy..............................................  20
Selected historical and pro forma financial data.............  21
Management's discussion and analysis of financial
condition and results of operations..........................  26
Business.....................................................  47
Employees....................................................  57
Property.....................................................  57
Legal Proceedings............................................  58
Management...................................................  60
Related party transactions...................................  73
Principal stockholders.......................................  77
Description of securities....................................  79
Plan of Distribution.........................................  84
Transfer agent...............................................  84
Legal matters................................................  84
Experts......................................................  84
Changes in and disagreements with accountants and
accounting and financial disclosure..........................  84
Where you can find more information..........................  85
Index to financial statements................................  F-1
Pro Forma Financial Information .............................  P-1




                                 120,000 Shares



                              Class A Common Stock

                                   PROSPECTUS


                                 _________, 2005










                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

   The amended and restated  certificate of incorporation  and the bylaws of the
Registrant  provide that the Registrant shall indemnify its officers,  directors
and certain  others to the fullest  extent  permitted  by the  Delaware  General
Corporation  Law.  Section 145 of the Delaware  General  Corporation Law, or the
DGCL, provides in pertinent part as follows:

   (a) A  corporation  may  indemnify  any  person  who was or is a party  or is
threatened to be made a party to any  threatened,  pending or completed  action,
suit or proceeding,  whether civil,  criminal,  administrative  or investigative
(other  than an action by or in the right of the  corporation)  by reason of the
fact  that  he  is or  was  a  director,  officer,  employee  or  agent  of  the
corporation,  or is or was  serving  at the  request  of  the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by him in connection  with such action,  suit or proceeding if he acted
in good faith and in a manner he reasonably  believed to be in or not opposed to
the best interests of the corporation,  and, with respect to any criminal action
or proceeding,  had no reasonable cause to believe his conduct was unlawful. The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction,  or upon a plea of nolo contendere or its equivalent,  shall not, of
itself,  create a presumption that the person did not act in good faith and in a
manner  which  he  reasonably  believed  to be in or not  opposed  to  the  best
interests  of the  corporation,  and,  with  respect to any  criminal  action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

   (b) A  corporation  may  indemnify  any  person  who was or is a party  or is
threatened to be made a party to any threatened,  pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director,  officer,  employee or agent of
the  corporation,  or is or was serving at the request of the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other enterprise against expenses (including attorneys' fees)
actually  and  reasonably  incurred  by him in  connection  with the  defense or
settlement  of such  action or suit if he acted in good faith and in a manner he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
corporation and except that no  indemnification  shall be made in respect of any
claim,  issue or matter as to which such person  shall have been  adjudged to be
liable  to the  corporation  unless  and only to the  extent  that the  Court of
Chancery or the court in which such action or suit was brought  shall  determine
upon application that,  despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably  entitled to
indemnity  for such  expenses  which the Court of  Chancery  or such other court
shall deem proper.

   (c) To  the  extent  that a  present  or  former  director  or  officer  of a
corporation  has been  successful  on the merits or  otherwise in defense of any
action,  suit  or  proceeding  referred  to in  subsections  (a) and (b) of this
Section,  or in  defense  of any  claim,  issue or matter  therein,  he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

   (d) Any indemnification under subsections (a) and (b) of this Section (unless
ordered by a court) shall be made by the  corporation  only as authorized in the
specific case upon a determination that indemnification of the present or former
director,  officer,  employee or agent is proper in the circumstances because he
has met the applicable  standard of conduct set forth in subsections (a) and (b)
of this Section.  Such determination  shall be made with respect to a person who
is a director  or officer  at the time of such  determination  (1) by a majority
vote of directors who are not parties to such action,  suit or proceeding,  even


                                      II-1


though less than a quorum,  (2) by a committee of such  directors  designated by
majority vote of such  directors,  even though less than a quorum,  (3) if there
are no such  directors,  or if such directors so direct,  by  independent  legal
counsel in a written opinion or (4) by the stockholders.

   (e) Expenses  (including  attorneys' fees) incurred by an officer or director
in defending any civil,  criminal,  administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such  action,  suit or  proceeding  upon receipt of an  undertaking  by or on
behalf of such  director or officer to repay such amount if it shall  ultimately
be determined  that he is not entitled to be indemnified  by the  corporation as
authorized in this section.  Such expenses (including  attorneys' fees) incurred
by former  directors  and officers or other  employees and agents may be so paid
upon such terms and conditions, if any, as the corporation deems appropriate.

   (f) The  indemnification  and advancement of expenses provided by, or granted
pursuant to, the other subsections of this Section shall not be deemed exclusive
of any other rights to which those seeking  indemnification  or  advancement  of
expenses may be entitled under any bylaw,  agreement,  vote of  stockholders  or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.

   (g) A  corporation  shall have power to purchase  and  maintain  insurance on
behalf of any person,  who is or was a director,  officer,  employee or agent of
the  corporation,  or is or was serving at the request of the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other enterprise  against any liability  asserted against him
and incurred by him in any such capacity,  or arising out of his status as such,
whether or not the  corporation  would have the power to  indemnify  him against
such liability under this Section.

   (h) For  purposes of this  Section,  references  to "the  corporation"  shall
include, in addition to the resulting corporation,  any constituent  corporation
(including  any  constituent of a constituent)  absorbed in a  consolidation  or
merger which, if its separate existence had continued,  would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any  person  who is or was a  director,  officer,  employee  or  agent  of  such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director,  officer,  employee or agent of another  corporation,
partnership,  joint venture, trust or other enterprise,  shall stand in the same
position  under  this  Section  with  respect  to  the  resulting  or  surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.

   (i) For purposes of this  Section,  references to "other  enterprises"  shall
include employee  benefit plans;  references to "fines" shall include any excise
taxes  assessed on a person  with  respect to any  employee  benefit  plan;  and
references  to  "serving at the request of the  corporation"  shall  include any
service as a  director,  officer,  employee or agent of the  corporation,  which
imposes duties on, or involves services by, such director, officer, employee, or
agent of the corporation, which imposes duties on, or involves services by, such
director,  officer, employee, or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a
manner he  reasonably  believed to be in the  interest of the  participants  and
beneficiaries  of an  employee  benefit  plan shall be deemed to have acted in a
manner "not opposed to the best interests of the  corporation" as referred to in
this Section.

   (j) The  indemnification  and advancement of expenses provided by, or granted
pursuant to, this Section shall,  unless  otherwise  provided when authorized or
ratified,  continue  as to a person  who has ceased to be a  director,  officer,
employee  or agent and shall inure to the  benefit of the heirs,  executors  and
administrators of such a person.

                                      II-2


   As  permitted  by  Section  102(b)(7)  of the DGCL,  Article  Sixteen  of the
Registrant's  amended and restated  certificate of incorporation  eliminates the
personal  liability  of the  Registrant's  directors to the  Registrant  and its
stockholders  for monetary  damages for breaches of their fiduciary  duties as a
director except, as set forth in said Section  102(b)(7),  for (i) any breach of
the director's duty of loyalty to the Registrant and its stockholders,  (ii) any
act or omission not in good faith or which involves intentional  misconduct or a
knowing  violation of law,  (iii)  illegal  dividend  payments,  redemptions  or
repurchases under Section 174 of the DGCL or (iv) any transaction from which the
director derives an improper personal benefit.


   Reference  is made to Section 7 of the  Underwriting  Agreement  (Exhibit 1.1
hereto),  which provides for certain  indemnification  (or  contribution) by the
underwriters of the Registrant and certain of its officers and directors.



ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.


     The  following  table  presents  the costs and  expenses  payable  by us in
connection  with the sale of our  Class A common  stock  being  registered.  All
amounts are estimates except for the SEC registration fee and the American Stock
Exchange listing fee.

     SEC registration fee....................    $     60.68*

     American Stock Exchange listing fee.....      46,500.00*
     Printing expenses.......................      13,000.00*
     Legal fees and expenses.................      15,000.00
     Accounting fees and expenses............      15,000.00
     Miscellaneous fees and expenses.........       5,000.00
                                                  -----------
     Total:                                      $ 94,560.68

                                   * Previously paid in connection with our IPO


ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.






From August 2000 to May 2002, the Registrant entered into stock purchase
agreements with certain investors and issued 369,000 shares of Class A common
stock for an aggregate purchase price of $4,425,250.  The Registrant received
an executed Accredited Investor Certification from each of the investors and
relied on  registration  exemptions  under Rule 506 of  Regulation D under,  and
Section 4(2) of, the Securities Act.

      In March and April of 2001,  the  Registrant  entered into stock  purchase
agreements  with Simon D. Figg,  Ronald C.  Finley,  Jr. and Chad A.  Littleton,
issuing 1,600, 400 and 400 shares of Class A common stock, respectively,  valued
at $12.50 per share in exchange for certain  commissions owed by the Registrant,
or having an aggregate value of $30,000.  The Registrant  relied on registration
exemptions  under  Rule 506 of  Regulation  D under,  and  Section  4(2) of, the
Securities Act.

      The  Registrant  and Midmark  entered  into a Preferred  Stock and Warrant
Purchase Agreement, dated as of October 10, 2001, whereby MidMark purchased from
the  Registrant  (i)  3,226,538  shares of Series A  Preferred  Stock and (ii) a
contingent  warrant to purchase up to 430,205 shares of the Class A common stock
for  an  aggregate  purchase  price  of $2  million.  In  connection  with  this
transaction,  four of the Registrant's  founders returned 400,000 shares, in the
aggregate,  of the Registrant's  common stock outstanding  consisting of 246,667


                                      II-3


shares of Class A common stock and 153,333  shares of Class B common stock.  The
Registrant received an executed  Accredited Investor  Certification from MidMark
and relied on registration  exemptions under Rule 506 of Regulation D under, and
Section 4(2) of, the Securities Act.

      The  Registrant  and MidMark  entered into a Preferred  Stock and Warrants
Purchase  Agreement,  dated as of November 27, 2002,  whereby MidMark  purchased
from the Registrant  (i) 4,976,391  shares of Series B Preferred  Stock,  (ii) a
contingent  warrant  to  purchase  up  to  381,909  shares  (and,  upon  certain
conditions,  an additional  38,526 shares) of the Class A common stock,  (iii) a
contingent  warrant  to  purchase  up  to  144,663  shares  (and,  upon  certain
conditions, an additional 14,593 shares) of the Class A common stock, and (iv) a
contingent warrant to purchase up to 100,401 shares of the Class A common stock,
for an aggregate  purchase  price of $2.5 million.  The  Registrant  received an
executed   Accredited   Investor   Certification  from  MidMark  and  relied  on
registration  exemptions  under Rule 506 of Regulation D under, and Section 4(2)
of, the Securities Act.

      From December 2001 to February  2002,  the  Registrant  borrowed from, and
issued one-year  promissory  notes (each bearing interest at 8% per year) to, A.
Dale Mayo,  Brett E. Marks,  CMNY,  MidMark,  and several  other  investors  the
aggregate  principal amount of $1.345 million. In connection with these one-year
notes, the Registrant granted to such investors ten-year warrants to purchase up
to an  aggregate  of 25,305  shares of our Class A common  stock at an  exercise
price of $.05 per warrant share,  or $1,265.27 in the aggregate.  The Registrant
received  an  executed  Accredited  Investor  Certification  from  each  of such
investors and relied on registration  exemptions  under Rule 506 of Regulation D
under, and Section 4(2) of, the Securities Act.

      From March 2002 to August 2002, the  Registrant  borrowed from, and issued
five-year  promissory  notes (each bearing  interest at 8% per year) to, A. Dale
Mayo, Brett E. Marks, CMNY, and several other investors the aggregate  principal
amount  of $3.175  million.  In  connection  with  these  five-year  notes,  the
Registrant  granted to such  investors  ten-year  warrants  to purchase up to an
aggregate of 317,500  shares of our Class A common stock at an exercise price of
$.05 per warrant share, or $15,875 in the aggregate.  The Registrant received an
executed  Accredited  Investor  Certification  from each of such  investors  and
relied on  registration  exemptions  under Rule 506 of  Regulation D under,  and
Section 4(2) of, the Securities Act.

      On May 9, 2002,  one of the  investors of the five-year  promissory  notes
exercised  his warrants to purchase  5,000 shares of our Class A common stock by
paying $250.

      In December 2002, the Registrant granted the following shares of its Class
A common stock as compensation for services  rendered:  Gary Loffredo -- 20,000;
Jeff Butkovsky -- 15,000;  Brian Pflug -- 20,000;  and Dale Morris -- 5,000.  In
connection with the granting of these shares, four of the Registrant's  founders
returned  60,000 shares,  in the  aggregate,  of the  Registrant's  common stock
outstanding,  consisting  of 30,000  shares of Class A common  stock and  30,000
shares of Class B common stock.

      In June and July 2003, we borrowed from, and issued  five-year  promissory
notes to,  several  other  investors  the  aggregate  principal  amount of $1.23
million.  In connection with these five-year notes, we granted to such investors
ten-year  warrants to purchase up to an aggregate of 123,000 shares of our Class
A common stock at an exercise price of $.05 per warrant share, or $6,150 in the
aggregate.

      In August 2003,  one of the  investors of the  one-year  promissory  notes
exercised its attached  warrants to purchase  6,902 shares of our Class A common
stock by paying $345, and two of the investors of the five-year promissory notes
exercised  their  attached  warrants to purchase  106,000  shares of our Class A
common stock by paying $5,300.

                                      II-4


      In September  2003,  several  holders of our one-year and five- year notes
exercised  the  warrants  attached  thereto to purchase an  aggregate of 307,787
shares of Class A common stock by paying $15,389.

      In October  2003,  several  holders of our  one-year and  five-year  notes
exercised  the  warrants  attached  thereto to purchase an  aggregate  of 40,118
shares of Class A common stock by paying $2,006.


In September 2003, we and MidMark entered into an Exchange Agreement, whereby
we agreed to issue, upon and subject to the completion of our IPO, 2,207,976
shares of Class A common stock to MidMark in exchange for its agreement to
(i) convert all of its shares of Series A and Series B preferred stock into
shares of Class A common stock, (ii) exchange warrants exercisable for shares
of Class A common stock for 320,000 shares of Class A common stock, (iii)
exercise a warrant to  purchase  up to  144,663  shares of Class A common  stock
(143,216 shares on a cashless-exercise  basis) and (iv) to accept 104,175 shares
of Class A common  stock as payment of accrued  dividends  on shares of Series A
and Series B preferred stock held by such stockholder.

In November  2003, we issued 400,000  unregistered  shares of our Class A common
stock as partial  consideration  for our  acquisition of all of the  outstanding
common stock of Hollywood SW.

On January 9, 2004, we issued 100,000  unregistered shares of our Class A common
stock as partial  consideration  for our  acquisition for all of the outstanding
common stock of Core.

On March  24,  2004,  we  exchanged  $2.5  million  and $1.7  million  aggregate
principal amount of five-year  promissory notes for shares of our Class A common
stock and for convertible  notes,  convertible into shares of our Class A common
stock, respectively.  Pursuant to this transaction,  we issued 707,477 shares of
Class A common stock and $1.7 million aggregate  principal amount of convertible
notes,  which as of March 1, 2005 were  convertible  into a maximum  of  310,857
shares of Class A common stock.

On March 29, 2004, we entered into an Asset  Purchase  Agreement  with Boeing to
acquire  certain  assets  of  Boeing  Digital,  a unit  of  Boeing.  As  partial
consideration for the acquired assets, we issued 53,534  unregistered  shares of
our Class A common stock to Boeing.

On May 26, 2004, we entered into an agreement  with the holder of 750,000 shares
of AccessDM.  AccessDM's common stock to exchange all of their shares for 31,300
unregistered shares of our Class A common stock.

On June 4, 2004, we issued 1,217,500  unregistered  shares of our Class A common
stock pursuant to a private  placement with  institutional  and other accredited
investors.  Additionally, we issued warrants to the investors,  exercisable upon
receipt, to purchase up to 243,500 shares of Class A common stock at an exercise
price of $4.80 per share and warrants to the placement  agent,  exercisable upon
receipt,  to purchase up to 60,875 shares of Class A common stock at an exercise
price of $4.80 per share.

On October 19, 2004, we entered into an Asset  Purchase  Agreement with FiberSat
to acquire substantially all of the assets of FiberSat. As partial consideration
for the acquired assets, we initially issued 500,000  unregistered shares of our
Class A common  stock and repaid  certain  liabilities  of FiberSat  with 40,000
unregistered shares of Class A common stock and $381,000 in cash.

On October 26, 2004,  we entered into a stock  purchase  agreement  with certain
investors,  whereby we issued 282,776  unregistered shares of our Class A common
stock at $3.89 per share for gross proceeds of $1.1 million.

                                      II-5


On  February  10,  2005,  we  issued  Convertible   Debentures  to  a  group  of
institutional   investors  for  aggregate   proceeds  of  $7.6  million,   which
convertible  debentures are initially  convertible  into 1,867,332 shares of our
Class A common stock,  based upon an initial conversion price of $4.07 per share
subject  to  adjustment  from  time to  time.  Additionally,  we  issued  to the
investors warrants to purchase up to 560,197 shares of our Class A common stock,
at an initial  exercise price of $4.44 per share,  subject to  adjustments  from
time to time. Such warrants are exercisable beginning on September 9, 2005 until
5 years thereafter.

On February 11, 2005, we consummated the acquisition of substantially all of the
assets of the Pavilion Theatre, including certain leased property. In connection
therewith, we issued 40,000 unregistered shares of our Class A common stock to a
landlord such leased property as consideration  for the landlord's waiver of our
requirement to make a security deposit under the lease.


      The sales of the  above  securities  were  determined  to be  exempt  from
registration  under  the  Securities  Act in  reliance  on Rule  701  under  the
Securities  Act,  Section  4(2)  of  the  Securities  Act  and/or  Regulation  D
promulgated  thereunder  as  transactions  by an issuer not involving any public
offering or transactions under compensation benefit plans and contracts relating
to  compensation  as provided  under Rule 701. In addition,  the  purchasers  of
securities in each such transaction  represented their intentions to acquire the
securities for investment  only and not with a view to or for sale in connection
with any distribution  thereof and appropriate legends were affixed to the share
certificates  issue in these  transactions.  All purchasers had adequate access,
through  their  relationships  with us,  to  information  about  us.  The  above
transactions do not reflect the one-for-five reverse stock split effective as of
September 18, 2003.



ITEM 27.  EXHIBITS.


EXHIBIT
NUMBER         DESCRIPTION OF DOCUMENT




1.1      --    Form of Underwriting Agreement between the Registrant and the
               underwriter to the Registrant's November 10, 2003 Public
               Offering. (3)
2.1      --    Stock Purchase Agreement, dated July 17, 2003, between the
               Registrant and Hollywood Software, Inc. and its stockholders.
               (1)
2.2      --    Exchange Agreement, dated as of September 17, 2003, between
               the Registrant and MidMark Equity Partners II, L.P. (2)
2.3      --    Amendment No. 1 to Stock Purchase Agreement, dated as of
               November 3, 2003, between and among the Registrant, Hollywood
               Software, Inc., the selling stockholders and Joseph Gunnar &
               Co., LLC. (3)
2.4      --    Stock Purchase Agreement, dated as of December 22, 2003, among
               the Registrant, Concurrent Technologies, Inc. and Erik B.
               Levitt. (4)
2.5      --    Asset Purchase Agreement, dated as of March 29, 2004, between
               the Registrant and The Boeing Company. (5)
2.6      --    Form of Exchange Agreement (debt for equity), dated as of
               March 24, 2004, between the Registrant and each Investor
               taking part in the March 24, 2004 exchange offering. (6)
2.7      --    Form of Exchange Agreement (debt for debt), dated as of March
               24, 2004, between the Registrant and each Investor taking part
               in the March 24, 2004 exchange offering. (6)
2.8      --    Securities Purchase Agreement, dated as of June 2, 2004, among
               the Registrant and certain investors. (7)


                                      II-6


2.9      --    Asset Purchase Agreement, dated as of October 19, 2004, among
               the Registrant, FiberSat Global Services, Inc., FiberSat
               Global Services LLC, Richard Wolfe, Ravi Patel, McKebben
               Communications, Globecomm Systems, Inc., Timothy Novoselski,
               Scott Smith and Farina. (10)
2.10     --    Asset Purchase Agreement, dated as of December 23, 2004, among
               ADM Cinema Corporation, Pritchard Square Cinema, LLC and
               Norman Adie. (12)
2.11     --    Stock Purchase Agreement, dated October24, 2004, among the
               Registrant and the purchasers identified therein. (12)
2.12     --    Securities Purchase Agreement, dated as of February 9, 2005,
               among the Registrant and certain investors. (11)
3.1      --    Fourth Amended and Restated Certificate of
               Incorporation of Registrant. (4)
3.2      --    Bylaws of the Registrant. (1)
4.1      --    Form of Warrant Agreement (with Warrant Certificates) between
               the Registrant and the lead underwriter. (3)
4.2      --    Specimen certificate representing Class A common
               stock. (3)
4.3      --    Promissory note issued by the Registrant to ColoSolutions,
               Inc., dated November 27, 2002. (1)
4.4      --    Promissory note issued by the Registrant to holders of
               ten-year warrants. (1)
4.5      --    Form of note to be issued by the Registrant to the selling
               stockholders of Hollywood Software, Inc. (1)
4.6      --    Form of Pledge and Security Agreement between the Registrant,
               the selling stockholders of Hollywood Software, Inc. and the
               pledge agent. (1)
4.7      --    Promissory note dated November 3, 2003 issued by the
               Registrant to David Gajda. (3)
4.8      --    Promissory note dated November 3, 2003 issued by the
               Registrant to Robert Jackovich. (3)
4.9      --    Pledge and Security Agreement, dated as of November 3, 2003,
               between the Registrant and the selling stockholders of
               Hollywood Software, Inc. (3)
4.10     --    Registration Rights Agreement, dated as of January 9, 2004,
               between the Registrant and Erik B. Levitt. (4)
4.11     --    Promissory note dated March 29, 2004 issued by the Registrant
               to The Boeing Company. (5)
4.12     --    Registration Rights Agreement, dated as of March 29, 2004,
               between the Registrant and The Boeing Company. (5)
4.13     --    Form of Subordinated Convertible Promissory Note, dated March
               24, 2004, issued by the Registrant to each Investor taking
               part in the March 24, 2004 exchange offering. (6)
4.14     --    Form of Registration Rights Agreement, dated as of March 24,
               2004, between the Registrant and each Investor taking part in
               the March 24, 2004 exchange offering. (6)
4.15     --    Form of Warrant, dated June 2004, issued to purchasers
               pursuant to Securities Purchase Agreement, dated as of June 1,
               2004, among the Registrant and certain investors. (7)
4.16     --    Form of Warrant, dated June 2004, issued to placement agent in
               connection with Securities Purchase Agreement, dated as of
               June 1, 2004, among the Registrant and certain investors. (7)
4.17     --    Registration Rights Agreement, dated as of June 2004, among
               the Registrant and certain investors. (7)
4.18     --    Promissory Note, dated November 14, 2003, issued by the
               Company to David Gajda. (8)
4.19     --    Promissory Note, dated November 14, 2003, issued by the
               Company to Robert Jackovich.(8)


                                      II-7


4.20     --    Registration Rights Agreement, dated as of November 8, 2004,
               among the Registrant and certain investors. (12)
4.21     --    Form of Subsidiary Guarantee to be entered  into by certain
               subsidiaries of the registrant pursuant to the Securities
               Purchase Agreement, dated as of February 9, 2005 among the
               registrant and the several investors party thereto. (11)
4.22     --    Form of Debenture  to be issued  to the  Purchasers  pursuant
               to the Securities Purchase Agreement,  dated as of February 9,
               2005 among the registrant and the several investors party
               thereto. (11)
4.23     --    Form of Warrant  to be  issued  to the  Purchasers  pursuant
               to the Securities Purchase Agreement,  dated as of February 9,
               2005 among the registrant and the several investors party
               thereto. (11)
4.24     --    Form of Registration  Rights  Agreement, among the registrant
               and certain investors pursuant to the Securities Purchase
               Agreement, dated as of February 9, 2005 among the registrant
               and the several investors party thereto. (11)
5.1      --    Opinion of Kirkpatrick & Lockhart LLP. (3)
5.2      --    Opinion of Gary S. Loffredo, Esq., Senior Vice President,
               General Counsel, Secretary and Director of the Registrant. *
10.1     --    Employment Agreement, dated as of July 1, 2000 (as amended),
               between the Registrant and A. Dale Mayo. (1)
10.2     --    Employment Agreement, dated as of April 10, 2000, between the
               Registrant and Kevin Farrell. (1)
10.3     --    Form of Employment Agreements between Hollywood Software, Inc.
               and David Gajda/Robert Jackovich. (1)
10.4     --    Amendment to No. 1 to the First Amended and Restated 2000
               Stock Option Plan of the Registrant. (2)
10.5     --    Asset Purchase Agreement, dated as of November 16, 2001,
               between the Registrant and BridgePoint International (USA),
               Inc. (1)
10.6     --    Asset Purchase Agreement, dated as of October 10, 2002,
               between the Registrant, R.E. Stafford, Inc. d/b/a
               ColoSolutions and Cob Solutions Global Services, Inc. (1)
10.7     --    Services Distribution Agreement, dated July 17, 2001, between
               the Registrant and Managed Storage International, Inc. (1)
10.8     --    License Agreement between the Registrant and AT&T Corp., dated
               July 31, 2001. (1)
10.9     --    Master Agreement for Colocation Space between the Registrant
               (by assignment from Cob Solutions Global Services, Inc.)
               and KMC Telecom VI LLC dated April II, 2002. (1)
10.10    --    License Agreement between the Registrant (by assignment from
               Bridgepoint International (USA), Inc.) and Zone Telecom, Inc.
               dated February 27, 2001. (1)
10.11    --    Lease Agreement, dated as of May 23, 2000, between the
               Registrant (formerly Fibertech & Wireless, Inc.) and 55
               Madison Associates, LLC. (1)
10.12    --    Agreement of Lease, dated as of July 18, 2000, between the
               Registrant and 1-10 Industry Associates, LLC. (1)
10.13    --    Lease Agreement, dated as of August 28, 2000, between the
               Registrant (formerly Fibertech & Wireless, Inc.) and RFG Co.
               Ltd. (1)
10.14    --    Letter Amendment to the Lease Agreement, dated August 28,
               2000, between the Registrant (formerly Fibertech & Wireless,
               Inc.) and RFG Co. Ltd. (1)
10.15    --    First Amendment to the Lease, dated August 28, 2000 between
               the Registrant (formerly Fibertech & Wireless, Inc.) and RFG
               Co. Ltd. dated October 27, 2000. (1)
10.16    --    Agreement of Lease, dated as of January 18, 2000, between the
               Registrant (by assignment from BridgePoint International
               (Canada), Inc.) and 75 Broad, LLC. (1)


                                      II-8


10.17    --    Additional Space and Lease Modification to the Agreement of
               Lease, dated as of January 18, 2000, between the Registrant
               (by assignment from BridgePoint International (Canada), Inc.)
               and 75 Broad, LLC dated May 16, 2000. (1)
10.18    --    Second Additional Space and Lease Modification to the
               Agreement of Lease, dated as of January 18, 2000, between the
               Registrant (by assignment from BridgePoint International
               (Canada), Inc.) and 75 Broad, LLC dated August 15, 2000. (1)
10.19    --    Lease Agreement, dated as of January 17, 2001, as amended,
               between the Registrant (by assignment from R. E. Stafford,
               Inc. d/b/a ColoSolutions) and Union National Plaza I, Inc. (1)
10.20    --    Lease Agreement, dated as of February 6, 2001, between the
               Registrant (by assignment from R. E. Stafford, Inc. d/b/a
               ColoSolutions) and Granite -- Wall Street Limited Partnership
               (successor in interest to Duffy Wall Street L.L.C.). (1)
10.21    --    Indenture Agreement, dated as of May 22, 2001, between the
               Registrant (by assignment from R. E. Stafford, Inc. d/b/a
               ColoSolutions) and Research Boulevard Partnership. (1)
10.22    --    Lease Agreement, dated as of January 22, 2001, between the
               Registrant (by assignment from ColoSolutions L.L.C.) and 340
               Associates, L.L.C. (1)
10.23    --    Lease Agreement, dated as of September 29, 2002, between the
               Registrant (by assignment from R. E. Stafford, Inc. d/b/a
               ColoSolutions) and Jerry J. Howard and Eddy D. Howard. (1)
10.24    --    Office Lease, dated as of February 22, 2001, between the
               Registrant (by assignment from R. E. Stafford, Inc. d/b/a
               ColoSolutions) and One Liberty Place, L.C. (1)
10.25    --    Commercial Property Lease between Hollywood Software, Inc. and
               Hollywood Media Center, LLC, dated January 1, 2000. (1)
10.26    --    Lease, dated as of February 1, 1999, between Hollywood
               Software, Inc. and Spieker Properties, L. P. (1)
10.27    --    First Amendment to Lease, dated as of February 1, 1999,
               between Hollywood Software, Inc. and Spieker Properties, L.P.
               dated May 10, 2000. (1)
10.28    --    Second Amendment to Lease, dated as of February 1, 1999,
               between Hollywood Software, Inc. and Spieker Properties, L.P.
               dated February 16, 2001. (1)
10.29    --    Third Amendment to Lease, dated as of February 1, 1999,
               between Hollywood Software, Inc. and EOP-BREA Park Centre,
               L.P. (successor in interest to Spieker Properties, L.P.),
               dated June 27, 2002. (1)
10.30    --    Consulting Agreement between the Registrant (formerly
               Fibertech & Wireless, Inc.) and Harvey Marks dated June 2000.
               (1)
10.31    --    Independent Contractor Agreement, dated July 31, 2003, between
               the Registrant and Kevin Booth. (1)
10.32    --    Universal Transport Exchange License and Option Agreement,
               dated August 13, 2003, by and between the Registrant and
               Universal Access, Inc. (2)
10.33   --     Employment Agreement, dated as of January 9, 2004, between the
               Registrant and Erik B. Levitt. (4)
10.34   --     Confidentiality, Inventions and Noncompete Agreement, dated as
               of January 9, 2004, between the Registrant and Erik B. Levitt.
               (4)
10.35   --     Employment Agreement, dated as of November 21, 2003, between
               the Registrant and Russell Wintner.  (8)
16.1    --     Letter from PricewaterhouseCoopers LLP, dated September 10,
               2004 regarding change in certifying accountants. (9)
21.1    --     List of Subsidiaries. (13)
23.1    --     Consent of Kirkpatrick & Lockhart
               LLP (included in Exhibit 5.1). (3)
23.2    --     Consent of Gary S. Loffredo, Esq.(included in Exhibit 5.1). *
23.3    --     Consent of PricewaterhouseCoopers LLP.*


                                      II-9


23.4    --     Consent of BDO Seidman, LLP.*
23.5     --    Consent of Singer Lewak Greenbaum & Goldstein LLP. *
24.1     --    Power of Attorney (included on signature page). (1)


* Filed herewith.

Documents Incorporated Herein by Reference:

(1) Previously  filed with the  Securities and Exchange  Commission on August 6,
2003 as an exhibit to the Registrant's Registration Statement on Form SB-2 (File
No. 333-107711).

(2) Previously  filed with the  Securities and Exchange  Commission on September
22,  2003 as an  exhibit to the  Registrant's  Amendment  No. 1 to  Registration
Statement on Form SB-2 (File No. 333-107711).

(3) Previously filed with the Securities and Exchange  Commission on November 4,
2003 as an exhibit to the Registrant's Amendment No. 3 to Registration Statement
on Form SB-2 (File No. 333-107711).

(4) Previously filed with the Securities and Exchange Commission on February 17,
2004 as an exhibit to the Registrant's Form 10-QSB (File No. 001-31810).

(5) Previously  filed with the  Securities  and Exchange  Commission on April 2,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).

(6) Previously  filed with the  Securities and Exchange  Commission on April 29,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).

(7) Previously filed with the Securities and Exchange Commission on June 2, 2004
as an exhibit to the Registrant's Form 8-K (File No. 001-31810).

(8) Previously  filed with the  Securities  and Exchange  Commission on June 25,
2004 as an exhibit to the Registrant's Form 10-KSB (File No. 001-31810).

(9) Previously  filed with the Securities  Exchange  Commission on September 14,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).

(10)  Previously  filed with the Securities  Exchange  Commission on November 8,
2004 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).

(11) Previously  filed with the Securities  Exchange  Commission on February 10,
2005 as an exhibit to the Registrant's Form 8-K (File No. 001-31810).

(12) Previously  filed with the Securities  Exchange  Commission on February 14,
2005 as an exhibit to the Registrant's Form 10-QSB (File No. 001-31810).

(13) Previously filed with the Securities  Exchange Commission on March 14, 2005
as an exhibit to the Registrant's  Registration Statement on Form SB-2 (File No.
333-117115).


ITEM 28. UNDERTAKINGS.

   UNDERTAKINGS REQUIRED BY REGULATION S-B, ITEM 512(A).

        The undersigned Registrant hereby undertakes:

                                     II-10


   (1) To file,  during  any  period in which it offers or sells  securities,  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 set forth in
     the Registration Statement.  Notwithstanding the foregoing, any increase or
     decrease  in volume of  securities  offered (if the total  dollar  value of
     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  Securities  and
     Exchange  Commission  pursuant  to Rule  424(b) if, in the  aggregate,  the
     changes in volume and price  represent no more than a 20 percent  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 such  securities  at that time to be the initial  bona fide
offering.

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





   UNDERTAKING REQUIRED BY REGULATION S-B, ITEM 512(E).

   Insofar as indemnification  for liabilities  arising under the Securities Act
of 1933,  as amended (the "Act"),  may be permitted to  directors,  officers and
controlling persons of the Registrant pursuant to any arrangement,  provision 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 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 Act and will
be governed by the final adjudication of such issue.


   UNDERTAKINGS REQUIRED BY REGULATION S-B, ITEM 512(F).

   The undersigned Registrant hereby undertakes that:

   (1) For  determining  any  liability  under the  Securities  Act of 1933,  as
amended (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  under 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.

                                     II-11


   (2) For the purpose of determining  any liability  under the Securities  Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration  statement for the securities offered therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering of these securities.





                                     II-12






                                   SIGNATURES



   In  accordance  with the  requirements  of the  Securities  Act of 1933,  the
Registrant  hereby  certifies that it has reasonable  grounds to believe that it
meets  all of the  requirements  for  filing on Form  SB-2 and  authorized  this
post-effective  amendment  to this  registration  statement  to be signed on its
behalf by the undersigned,  in the City of Morristown,  State of New Jersey,  on
the 31st day of March, 2005.


                                          ACCESS INTEGRATED TECHNOLOGIES, INC.

                                            By:  /S/ A. DALE MAYO
                                                 ----------------------------
                                                 A. Dale Mayo, President and
                                                 Chief Executive Officer


   In  accordance  with the  requirements  of the  Securities  Act of  1933,  as
amended, this post-effective amendment to this registration statement was signed
by the following persons in the capacities and on the date(s) stated:



                                                                     
/s/ A. Dale Mayo       Chairman of the Board and                             March 31, 2005
-------------------    President and Chief Executive Officer
A. Dale Mayo           (Principal Executive Officer)

         *
-------------------    Senior Vice President -- Accounting and Finance       March 31, 2005
Brian D. Pflug         (Principal Financial and Accounting Officer)

         *
-------------------    Senior Vice President -- Data Center Operations       March 31, 2005
Kevin J. Farrell       and director

         *
-------------------    Senior Vice President -- Business Development         March 31, 2005
Brett E. Marks         and director

         *
-------------------    Senior Vice President -- Business Affairs;            March 31, 2005
Gary S. Loffredo       General Counsel; Secretary and director

         *
-------------------    Director                                              March 31, 2005
Robert Davidoff

         *
-------------------    Director                                              March 31, 2005
Wayne L. Clevenger

         *
-------------------    Director                                              March 31, 2005
Matthew W. Finlay

         *
-------------------    Director                                              March 31, 2005
Gerald C. Crotty.



*  By: /S/ A. DALE MAYO
       ---------------------------------
       A. Dale Mayo
       Attorney-In-Fact for such persons



                                     II-13






INDEX TO EXHIBITS

EXHIBIT
NUMBER         DESCRIPTION OF DOCUMENT


5.2      --    Opinion of Gary S. Loffredo, Esq., Senior Vice President,
               General Counsel, Secretary and Director of the Registrant.
23.2     --    Consent of Gary S. Loffredo, Esq.(included in Exhibit 5.1).
23.3     --    Consent of PricewaterhouseCoopers LLP.
23.4     --    Consent of BDO Seidman, LLP.
23.5     --    Consent of Singer Lewak Greenbaum & Goldstein LLP.


                                     II-14