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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K

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

For the fiscal year ended December 31, 2000
Commission File Number 1-9014

Chyron Corporation ("Chyron" or the "Company") was incorporated under the laws of the State of New York on April 8, 1966 under the name The Computer Exchange, Inc., which was changed to the present name on November 28, 1975. On April 12, 1996, Chyron acquired Pro-Bel Limited ("Pro-Bel"). The Company's principal executive offices are located at 5 Hub Drive, Melville, New York 11747 and its telephone number is (631) 845-2000. Its executive offices in the United Kingdom are located at Danehill, Lower Earley, Reading, Berkshire RG6 4PB and its telephone number is 44-118-986-6123.

Serving the television industry for three decades, we believe that we have established ourselves as a leading innovator in the development of television graphics and distribution systems, including products intended to meet the demands of digital and high definition television mandated by the U.S. Federal Communications Commission (the "FCC") in 1996. Chyron Graphics Division provides a broad range of hardware and software products that enhance the presentation of live and pre-recorded video and other data. Our Pro-Bel Division provides signal distribution systems, master control switchers, automation and media management packages and routers that are acclaimed in the broadcasting industry for superior performance and reliability. Our products enable customers to:

• create and manipulate text, logos and other graphic images using special effects such as 3D transforming, compositing and painting;
• manage, monitor and distribute video, audio and other data signals; and
• control edit processes and automate broadcast equipment.

The transition from analog to digital signals in the video and audio world has created a plethora of new opportunities to deliver interactive video and audio content to the consumer. These range from High Definition Television ("HDTV") to the Internet where the ability to deliver video without a broadcast license has attracted a growing number of companies who plan to integrate streamed video and audio media onto their web sites. We believe that many of these new entrants have little understanding of the technologies involved and little interest in acquiring such skills but see considerable value in the prospect of delivering high quality video to their customers.

We have a major presence in the broadcasting industry as one of the premier suppliers of software solutions in the fields of television broadcast and post production. As such, we believe we are well positioned to take advantage of these opportunities both as an equipment manufacturer and a solutions provider and have launched two new divisions targeted at streaming media and interactive TV.

Chyron Streaming Services Division ("CSS") has been established to provide complete turnkey solutions for streaming media technology and content management. The division's expertise focuses on the delivery and management of broadcast media including video, audio and meta data, as well as hardware, software and consulting services for streaming media applications, enabling businesses and institutions to provide streaming media through a comprehensive range of solutions.

As an integrated application, CSS addresses the critical areas of:

• Consulting: to provide full-service streaming media consultants and technical support.
• Encoding: to compress and prepare audio and video source materials for Internet streaming.
• Acquisition: to provide automated encoding of source materials at client locations.
• Scheduling: to automatically control live and pre-recorded streaming with simultaneous, multiple stream capabilities.
• Monitoring: to employ a monitoring system that provides an instant tracking program to identify the key point of a problem.
• Archiving: to store video and audio source materials for future use and quick accessibility.

CSS will specifically target larger non-broadcast corporate customers, e.g. newspaper and magazine publishers, sport and betting companies, retailers and the financial services sector. Indeed, all large corporations with ambitions to enhance their Internet presence with streamed media represent CSS's target market. On January 16, 2001, we completed the acquisition of Interocity Development Corporation ("Interocity"). Interocity's expertise in creative design and systems engineering, specializing in rich media design and development, will complement CSS's core capabilities of streaming, hosting, encoding, storage and media asset management.

The Chyron Interactive Division was created to provide hardware and software tools and products, combined with value-added service to broadcast clients, cable and network operators, independent television and Internet producers, production and post-production providers, and the interactive content community. Chyron products offer true interactivity, even during live broadcasts. The technology is expected to generate additional revenues for broadcast stations, cable companies, the television production community and the advertising community, introducing consumers to a new experience in television viewing.

The Interactive Division draws upon Chyron's 30 years of comprehensive experience in the delivery of on-air broadcast graphics and the Company's expertise in delivering tools and services aimed at live television. This technology, combined with the broadcast automation experience of Chyron's Pro-Bel Division, allows this division to provide a vast installed base of TV stations and networks with the ability to make interactive TV production routine, with minimal additional cost, using existing equipment and personnel. The software solution enables interactive content creation for a wide range of interactive platforms with a PC-based application. Chyron's tools also allow customers to repurpose existing television graphic assets.

Within its manufacturing divisions, Pro-Bel will continue to develop key enabling products which link high bandwidth and Internet streamed media. We are well positioned to benefit from the emergence of large and medium sized corporate customers as new originators of media who wish to "webcast" proprietary video and audio content. Our Pro-Bel subsidiary is a leader in video routers and other equipment enabling the management and delivery of high bandwidth digital video signals. It is also well established in the global broadcast community and recognized for the high quality and reliability of its products. Pro-Bel has recently developed the Clari· net product family specifically for web streaming applications.

Chyron Graphics will build on its leading brand image and large installed base in the broadcast graphics market by emphasizing the development of advanced web authoring and interactive graphics tools. We believe Chyron Graphics is the world leader in the "real-time" character generator market. It dominates the live, "on-air" TV graphics segment and its customers include most major broadcast, cable, satellite and post production facilities in the U.S. and Europe. Technical excellence, combined with a large installed base, has made Chyron the natural partner of Microsoft in its development of interactive graphics tools. On November 28, 2000 Chyron and Microsoft signed a joint development and cooperation agreement to integrate Chyron's interactive television production and streaming media products and services with Microsoft's TV platform and Windows Media technologies on a best efforts basis.

The Company offers a broad range of products that address the needs of the video and audio production, post-production and distribution markets. In addition, the Company is extending its product range to address the Internet market. The convergence of traditional media and the Internet is providing opportunities for the Company to develop new products and services to address customers' needs in the e-commerce, interactive TV, security and streaming media markets.

The Company's line of high performance graphics systems is used by many of the world's leading broadcast stations to display news flashes, election results, sports scores, stock market quotations, programming notes and weather information. The Company's signal management systems interconnect video, audio and data signals to and from equipment within a studio's control room or edit suite, as well as to and from signal transmission sites. The Company's line of control and automation systems is used to automate the steps used in the management, editing and distribution of video and audio content. In the area of new media, the Company is leveraging its expertise as a provider of broadcast tools to promote solutions for the creation and delivery of interactive content. In addition, an Internet coder has been launched that will enable companies to encode video and audio on the Internet.

Clari· net is a broadcast-compliant streaming media coder used to encode video and audio for use on the Internet, providing a simple solution  for  applications such as webcasting a broadcast station's output or an on-line corporate briefing for shareholders. Unlike conventional PC's, Clari· net's reliability is guaranteed with the provision of dual power supplies, solid state disk storage and a Microsoft Embedded NT operating system.  This compact unit provides scaleable 'headless operation' with an LCD display for configuration and status monitoring.  In addition, the optional DSP audio pre-processor greatly improves the audio quality and eliminates the need for external signal processing equipment.  For larger streaming facilities, Clari· net DualStream offers enhanced functionality together with a centralized control platform and the unique ability to stream two separate video feeds or share the same input for dual format streaming. 

DuetÔ and Duet HD: Duet/Duet HD is a real-time 2D/3D serial digital video graphics processing platform that integrates open standards, a Windows NTÒ front end, and provides real-time performance for a variety of television graphics applications. Configurable as digital standard definition or digital HDTV, it is the most significant new graphics product introduction from Chyron since the iNFiNiT! ^Ò , representing the next generation of video graphics engines. Currently shipped with LyricÔ graphics composition application, Duet HD offers the first ever serial digital high definition character generator capability. Lyric provides full text, graphics and object oriented animation capabilities in a Windows NT application. Lyric may be used on-line for real-time applications when installed on Chyron Duet hardware, or off-line for composition and preview purposes when installed on standard PCs. New features of Lyric 3.0, released in 2001, include full screen video squeeze-back, advanced effects (blinds, assemble, explosion, matrix, page turns, ripple), iNFiNiT! file export, zoom function for timeline editing, and Windows 2000 support. Lyric is a fast and easy-to-use package, with familiar features such as preference menus, undo/re-do and spell-checking. Import of numerous formats are supported, including True TypeÒ fonts, TIFF and TGA bitmaps as well as iNFiNiT! messages, making Lyric a universal graphics tool.

Chyron Aprisa Clip/Stillstore Systems: The Aprisa family of DDR's and Stillstores has evolved further with the Aprisa SSX 601 digital multi-channel SSX Stillstore server, which offers up to six channels each with key, all in a single chassis. In addition, a number of new feature sets are available across the Aprisa line, including the iAprisa Web Streaming Option, which allows users easy access to high quality streaming on the web. The Aprisa CG Playback Option allows broadcast graphic artists and directors to playback Lyric-generated rolls, crawls and flipbooks in an independent frame buffer. Aprisa DDR Software Client brings remote capabilities and increased flexibility to asset management. The Aprisa 100 is a Windows NT based family of clip and stillstore systems. Providing sophisticated database functions, the Chyron Aprisa 100 allows play list creation and playback with effects, search, sort and editing. The Aprisa 250 Integrated Clip/Stillstore, provides the combined functionality of a 90-minute, dual-stream digital disk recorder and a single channel Aprisa 100 Stillstore in one chassis. This combo offers an affordable and feature-packed solution for delivering animated on-air graphics. Finally, the Aprisa Video Graphics Server SAN enables true real-time sharing of media resources, either locally or across a SAN.

Signal Routing and Control:

Pro-Bel provides a vast range of routing and control solutions for matrix systems which process and distribute multimedia signals.

Eclipse: A family of high performance, large-scale routing switchers, providing cost effective and compact serial digital video, mixed format SDV/HDTV as well as AES audio routing. Incorporating sophisticated power supply monitoring and internal cooling, the Eclipse routers also have extensive in-field expansion capabilities, ensuring an easy path to the future.

Freeway:  Offering the most comprehensive and flexible architecture, Freeway is a true multi-format system, enabling in-field upgrades from analog to digital, and even allowing format conversion of audio within the router.  With support for RS422 control and telecom signals, together with a powerful internal control system, Freeway is the number one choice for small to medium scale applications in the broadcast, transmission, post production and outside broadcast environments.

MADI: Offering solutions for a diverse range of applications from large scale broadcast center routing to live theatre sound reinforcement, Pro-Bel's MADI family (Multiplexed Audio Digital Interface) combines advanced digital technology with precision format conversion techniques. 

TS & TM Series:  For the smaller requirement, such as monitoring, bypass or preview selection, a wide range of self contained products are available, from TS16 - for 16 x 4 applications, to the TM 16 for more sophisticated 16 x 16 requirements.

Aurora Router Control: Aurora encompasses a range of hardware and software control elements.  Each can be used as a control system in its own right, permitting users to choose either hardware or software based control.  However, when used together they provide an incredibly powerful, integrated control platform.

Control Panels:  A wide range of pushbutton and keypad control panels are available to suit various requirements and budgets.

Modular Interfacing:

Pro-Bel has two modular products families covering an extensive range of functions; ICON, recommended for new installations, comprises an innovative and flexible rackframe and accommodates advanced signal processing functions.  In addition, the ICON range includes traditional system components such as distribution amplifiers and small switchers.  The 6063 range is based around an economic rackframe architecture, ideally suited to general purpose distribution applications.

Automation & Asset Management Systems:

Pro-Bel offers the complete solution for television station transmission automation.  The broadcast automation product line is partnered with MAPP, a powerful modular asset management system. The systems are designed to work across the three main areas of the broadcast operation: Ingest, Storage and Playout.  In each area a range of fully integrated software components are available, depending on the complexity of the operation.

Asset  Management  -  MAPP is a Windows based, video server management and control system, allowing an unlimited number of users on a network or even wide area network to record, track, browse, cache and replay broadcast material according to a user-defined schedule.  MAPP easily interfaces with disk based video servers manufactured by many different vendors.

Meridian:  The fast-track to station automation, Meridian incorporates many of the advantages available in larger systems by integrating a number of key applications for ingest and playout.

Compass and Sextant: Provides comprehensive station automation for single and multi-channel operations, with Compass controlling a larger number of devices including large cart machines. Sextant can be upgraded to Compass functionality.  Unique real-time hardware platform with redundant controllers and power supplies provides reliability.  Users edit schedules and interface to traffic systems via standard NT workstations that provide familiar and intuitive operation.

COSMOS is Pro-Bel's workflow management system, providing status information and reconfiguration capability for a complete broadcast installation over a computer network. Even off-site engineers, alerted via e-mail or SMS messages can log into the central server, find out the nature of the reported fault and carry out any reconfiguration required.  The system embraces not only processing and routing hardware but software products, including integration with a growing number of COSMOS partners.

TX 320 and TX 310: Compact and cost effective, these switchers process serial digital video and digital analog or embedded audio inputs. For sophisticated transitions, an optional 3D DVE may be added. TX Series master control switchers provide unique built-in integration with Pro-Bel Compass/Sextant automation and maximum flexibility, where one panel can control many channels, or a number of panels can share channels. With its multi-channel capability, the TX Series panels can control HDTV channels along side standard definition digital channels, permitting a seamless migration to high definition operation.

The Company markets its products and systems to traditional broadcast, production and post-production facilities, government agencies, educational institutions and telecommunications and corporate customers.

In order to maintain and increase awareness of its products, the Company displays its products at the major domestic and international trade shows of the broadcast and computer graphics industries. In the United States, the Company exhibits at the National Association of Broadcasters (NAB) and Society of Motion Picture and Television Engineers (SMPTE) conventions. It also exhibits at the International Broadcasters Convention (IBC) in Europe. The Company uses direct-mail campaigns and places advertisements in broadcast, post-production and computer industry publications.

Sales of the Company's products in the United States and the United Kingdom are made through Company direct sales personnel, dealers, independent representatives, systems integrators and OEMs. Direct sales, marketing and product specialists serving these markets act as links between the customer and the Company's development teams.

Sales of the Company's products outside of the United States and United Kingdom are made through dealers and sales representatives covering specific territories. The Company maintains sales offices in Hong Kong, China and Paris, France in an effort to increase foreign sales. In some territories, dealers sell products from all of the Company's product categories; in other territories, dealers handle only specific products.

The Company offers comprehensive technical service, support and training to its customers through 24 hours per day, seven days per week access to trained service and support professionals.

Training courses are available through the Company and range in length from a few days to a few weeks and consist of a mix of classroom discussions and hands-on training. The Company offers training courses for many of its products at its Melville (New York) headquarters and its Reading (United Kingdom) and Atlanta (Georgia) centers. The Company also conducts on-site training. Installation assistance, hardware and software maintenance contracts and spare parts are made available by the Company. The Company believes support contracts and a responsive spare parts supply service facilitate customer satisfaction. Service is provided both domestically and internationally by the Company or its appointed dealers and representatives. The Company also provides sales and service support to its dealers from time to time. The Company provides warranties on all of its products ranging from ninety days to two years.

The Company's research and product development, conducted primarily in Melville, New York and Reading, United Kingdom, is focused on the continued enhancement of its existing products and the development of new ones. Recent efforts have focused on products and services to serve the new media marketplaces of the Internet and Interactive TV. Product development efforts also include both graphic products and routers and switchers which will comply with the FCC ruling of October 1996. The Company believes this ruling will affect the broadcast industry across the next decade and beyond, specifically the adoption of digital television. Historically, the Company has focused its efforts toward the development of complete systems rather than of either hardware or software standing alone.

During 2000, 1999 and 1998, the Company expensed approximately $6.9 million, $7.3 million and $9.5 million, respectively, for research and development. Amounts are net of amounts capitalized with respect to software development costs incurred in connection with the development of new products and the modification and enhancement of existing products.

The Company has final assembly and system integration operations located in Melville and Reading. The Company primarily uses third-party vendors to manufacture and supply all of the hardware components and sub-assemblies utilized in the Company's graphics systems and relies upon a combination of third-party vendors and internal manufacturing for components and sub-assemblies utilized in the Company's signal management systems. The Company designs many of its system components to its own specifications, including metal and electronic parts and components, circuit boards and certain sub-assemblies. It assembles such items and standard parts, together with internally-developed software, to create final products. The Company then performs testing and quality inspections of each product.

The markets for graphics imaging, editing and animation systems, signal routing systems and media storage systems are highly competitive and are characterized by rapid technological change and evolving industry standards. Rapid obsolescence of products, frequent development of new products and significant price erosion are all features of the industry in which the Company operates. The FCC's recent ruling requiring broadcasters to utilize DTV transmission by 2006 will require large future capital expenditures by the broadcast industry. Management recognizes this as an opportunity for the Company in the market place, but, as a result, the Company also anticipates increased competition from both existing companies and new market entrants. The Company is currently aware of several major and a number of smaller competitors. In the graphics area, the Company believes its primary competitors are Aston Electronic Designs Limited, Pixel Power, Pinnacle Systems Inc., and Inscriber. In the signal management area, the Company believes its primary competitors are nVision, Leitch Incorporated, Philips Electronics N.V., and Grass Valley Group. In the control and automation area, the Company believes its primary competitors are Drake, Louth Automation, Philips Electronics N.V., Sony Corporation and Omnibus. In the area of streaming services, the Company believes its primary competitors are Loudeye Technologies, Akamai Technologies and Razorfish. Many of these companies have significantly greater financial, technical, manufacturing and marketing resources than the Company. In addition, certain product categories and market segments, on a region-by-region basis, in which the Company does or may compete, are dominated by certain vendors.

As of December 31, 2000, the Company employed 326 persons on a full-time basis, including 60 in sales and marketing, 120 in manufacturing and testing, 32 in customer support, service and training, 46 in finance and administration and 68 in research and development. None of these employees are represented by a labor union.

The Company's success depends upon its ability to protect its proprietary software technology and operate without infringing the rights of others. It relies on a combination of patent, trademark and trade secret laws to establish and protect its proprietary rights in its technology.

The names Chyron, Scribe, Chyron Scribe, Chyron Scribe Junior, Chyron SuperScribe, iNFiNiT!, MAX!>, MAXINE!, CODI, I², Chyron Care, Intelligent Interface, Intelligent Interface (I²), CMX, CMX AEGIS, CMX OMNI, Aurora, Liberty and Liberty Aurora and Design are registered trademarks of the Company. The Company also has rights in trademarks and service marks which are not federally registered. The Company does not have registered copyrights on any of its intellectual property.

The telecommunications and television industries are subject to extensive regulation in the United States and other countries. For example, The United States Federal Communications Commission has issued regulations relating to shielding requirements for electromagnetic interface in electronic equipment. The Company's products are in compliance with these regulations. Furthermore, television operators are subject to extensive government regulation by the FCC and other federal and state regulatory agencies.

The executive offices and principal office of the Company and its graphics business are located in Melville, New York pursuant to a lease that expires on June 30, 2004. This facility consists of approximately 47,000 square feet and is used for manufacturing, research and development, marketing and the executive offices. The Company also maintains a sales office in Dunwoody, Georgia of 2,700 square feet, and in Hong Kong of 2,000 square feet pursuant to leases which expire on November 30, 2002 and April 26, 2001, respectively. In the United Kingdom, the Company's executive office is located in Reading, United Kingdom where it owns a facility of approximately 19,000 square feet. This facility is used for manufacturing, research and development and marketing. The Company occupies additional facilities in the United Kingdom in Reading and Andover, used primarily for research and development and manufacturing, which total approximately 28,000 square feet pursuant to leases which expire from December 25, 2012 through September 29, 2020. The Company currently utilizes 90% to 100% of the space of all of its facilities. Management currently believes that each facility is suitable for its existing operations and does not foresee the need for any significant expansion of its current facilities.

The Company from time to time is involved in routine legal matters incidental to its business. In the opinion of management, the ultimate resolution of such matters will not have a material adverse effect on the Company's financial position, results of operations or liquidity.

During the fourth quarter of the year ended December 31, 2000, there were no matters submitted to a vote of the Chyron shareholders through the solicitation of proxies or otherwise.

Chyron's common stock is traded on the New York Stock Exchange ("NYSE") under the ticker symbol "CHY." The approximate number of holders of record of the Company's common stock at March 1, 2001 was 5,200.

The following table sets forth the high and low reported sales price for the Company's common stock:

On March 1, 2001, the closing price of the Company's common stock as reported on the NYSE was $1.26.

In August 1999, the Company received a notice from the NYSE indicating that it did not currently meet the new continued listing standards issued in late July 1999. The new criteria revised and raised the minimum requirement of stockholders' equity to $50 million, from $12 million of net tangible assets and global market capitalization to $50 million from $12 million. Companies below these levels were required to submit a business plan to the NYSE demonstrating how the company anticipates meeting the new standards within an eighteen-month period. The Company submitted its plan to the NYSE and received approval on December 28, 1999. In January 2001, the NYSE filed a proposed rule change with the SEC which would clarify how the exchange would deal with certain circumstances presented by companies operating under a plan. The proposal indicates that the exchange may continue to list a company for up to an additional year if it has re-established itself under one of the measurement tests and appears likely to re-establish the other shortly. The exchange would continue to monitor a company during any extension and would be able to take action if it became clear that the measurement would not be re-established. The Company remains in regular communication with the exchange and is waiting to hear from the exchange as to what new rules, if any, will be adopted. In the event no new rule is adopted, or the Company is not approved for an extension, the Company would seek an alternative method of trading for its securities.

The Company has not declared or paid any cash dividend since November 27, 1989. The Company currently plans to retain its future earnings, if any, for use in the operation and expansion of its business and does not anticipate paying cash dividends on the common stock in the foreseeable future. In connection with the Company's term loan and revolving credit facility, the Company is prohibited from paying dividends in excess of 25% of its net income in any fiscal year.

During late 1998 and 1999 the Company raised $7.7 million through the issuance of Series A and Series B 8% subordinated convertible debentures, due December 31, 2003, to certain persons and entities, including certain directors, affiliates and shareholders of the Company. The Series A debentures, totaling $1.2 million, are convertible, at any time, at the option of the holders thereof, into Common stock of the Company at a conversion price of $2.466 per share. The Series A debentures may be redeemed by the Company at any time after December 31, 1999 for a price equal to the principal and accrued but unpaid interest on the debentures at the redemption date.

The Series B debentures, totaling $6.5 million, are convertible, at any time, at the option of the holders thereof, into common stock of the Company at a conversion price of $1.625 per share. The Series B debentures may be redeemed by the Company, commencing one year from issue date, for a price equal to the principal and accrued but unpaid interest at the redemption date. Interest, which is payable quarterly, may be paid in the form of additional debentures until July 15, 2001. Through December 31, 2000, approximately $0.3 million of interest was paid in the form of additional debentures issued by the Company.

The debentures have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The sales of the debentures were made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Section 4(2) thereof and/or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. To the best of the Company's knowledge, the purchasers of the debentures acquired them for their own accounts, and not with a view to any distribution thereof.

In April 2000, the Company raised gross proceeds of $20 million in connection with a private placement of 3,076,923 shares of its common stock at a price of $6.50. The offering price per share was determined based on negotiations between the Company and its placement agents taking into account the historical trading history of the common stock and market conditions at such time. The price of the common stock, as listed on the NYSE, ranged between 5 7/16 and 9 7/16 on the various closing dates. The Company is utilizing the net proceeds, of approximately $18.2 million, to fund expenditures in the area of sales, marketing, the pursuit of strategic alliances and research and development in connection with its new media business. The private placement was made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Section 4(2) thereof and/or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. To the best of the Company's knowledge, the purchasers acquired them for their own accounts, and not with a view to any distribution thereof. In connection with the private placement, the Company issued 151,914 warrants to the placement agents and 60,000 warrants to a consulting company to purchase common stock of the Company at an exercise price of $6.50. These warrants, which are immediately exercisable, will expire in April 2005.

In November 2000, Microsoft purchased 3,096,774 shares of common stock of the Company at a price of $1.9375, totaling $6 million. As a result, Microsoft owns approximately 8% of the Company. The stock purchase agreement provides that for as long as Microsoft holds securities in excess of 1% of the outstanding shares of common stock of the Company, Microsoft will have the right to participate in future sales of equity securities by the Company in accordance with it's pro rata share of ownership immediately prior to the issuance of the equity securities. The Company is using the proceeds from the sale to fund the development of interactive tools and the growth of the Company's streaming services division.

In November 2000, the Company purchased a 20% interest in Video Technics, Inc. ("Video Technics") for $500,000 and 300,000 shares of common stock. The value of the stock on the date of purchase was $582,000 or $1.94 per share.

The issuance of stock in the Microsoft and Video Technics transactions was made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Section 4(2) thereof and/or Regulation D promulgated thereunder.

The following table sets forth selected data regarding the Company's operating results and financial position. The data should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and Notes thereto, all of which are contained in this Annual Report on Form 10-K.

(In thousands, except per share amounts)

The following is a discussion of the consolidated financial condition and results of operations of the Company for the periods indicated. This discussion should be read in conjunction with the Company's consolidated financial statements and the notes thereto included in this Annual Report. Results for the periods reported herein are not necessarily indicative of results that may be expected in future periods.

Net Sales. Net sales for the year 2000 were $56.3 million, a decrease of $4.4 million, or 7.3% from the $60.7 million reported in 1999. Net sales during the years ended December 31, 2000 and 1999 consisted of $26.9 million and $28.0 million, respectively, from the graphics division and $29.4 million and $32.7 million, respectively, from the signal distribution and automation division.

The graphics division is experiencing a transition. Sales continue to be impacted by the shift from the high-end iNFiNiT! products to the lower priced Windows NT-based Duet and Aprisa clip/stillstore products. Duet is gaining acceptance in the U.S. and in Europe and sales in 2000 were double those in 1999. The Company's clip/stillstore product, Aprisa, also gained momentum in 2000 by doubling its revenues. In the year 2000 the Company recorded revenues associated with the Sydney Olympics of approximately $1 million. Sales in 1999 reflect a substantial number of system upgrades, in part to insure that customers were Y2K compliant.

Sales in the signal distribution and automation division were lower primarily as a result of a disappointing rollout of digital television in Europe and unfilled orders resulting from disruptions caused by the implementation of the division's new inventory-management system. Differences in exchange rates accounted for over $1 million of the decline.

The Company generated nominal revenues in 2000 in connection with its new media division. This division, which was formally launched in November 2000, has begun to build a customer base in the U.K. and U.S. Streaming media services such as consultancy, equipment installation, encoding and webcasting, are now being offered.

Gross Profit. Gross margins for the year ended December 31, 2000 and 1999, were 46% and 47%, respectively, exclusive of a $2.2 million write-down of inventory in 1999. Margins in the graphics sector improved, in large part, to products provided to the Olympics and lower overhead costs. Margins in the signal distribution and automation division have declined as a result of product mix due to the relative proportion of hardware versus software products, reduced pricing in the international market due to competition and the reduced value of the Euro, but were offset, to a lesser degree by lower costs associated with product redesigns.

Selling, General and Administrative Expenses. Selling, general and administrative (SG&A) expenses increased by $1.7 million, or 6%, to $29.9 million in 2000 compared to $28.2 million in 1999. SG&A expenses in the core businesses declined as a result of the 1999 restructuring and have continued to be reduced, primarily in the area of personnel as the reduction in personnel year over year is 8%. These savings have been offset by the Company's expenditures, of approximately $6.3 million in 2000, associated with the efforts relative to its new media division.

Research and Development Expenses. Research and development (R&D) costs decreased during 2000 compared to 1999 by $0.5 million. The revised product strategy implemented at the end of the second quarter of 1999 resulted in the elimination of effort associated with non-strategic products, thereby reducing costs. Recently, efforts in this area have been redirected to graphics and signal distribution and automation products for the Internet and Interactive TV.

Gain on Sale of Investments. During 2000, the Company sold approximately 23% of its remaining investment in RT-Set. This transaction resulted in a net gain of approximately $0.6 million. During 1999, the Company sold approximately 18% of its original investment in RT-Set. This transaction resulted in a net gain of approximately $0.5 million.

Interest and Other Expenses. Interest and other expense, net, increased $0.5 million during 2000 as compared to 1999. This increase was due primarily to a non-cash charge of $0.5 million resulting from the Company's decision to satisfy an interest obligation related to its subordinated debentures. Overall, interest rates were higher in 2000 as compared to 1999 but were offset by lower average borrowings. During 2000, the Company recognized interest income on investments of approximately $0.7 million. A loss of $0.3 million was recognized in 2000 as a result of foreign exchange rates as compared to a gain of $0.3 million in 1999.

Provision/Benefit for Income Taxes. The Company did not record a tax benefit in 2000 relative to its operating loss. In the second quarter of 1999 the Company established a full valuation allowance against its U.S. deferred tax assets to recognize the uncertainty surrounding its realizability. Until the Company has U.S. taxable income, no additional benefit will be realized.

Net Sales. Net sales were $60.7 million in 1999, a decrease of $23.0 million, or 27%, over the $83.7 million reported in 1998. The decrease resulted from the lower volume of U.S. and international graphics and Pro-Bel product sales resulting from the industry-wide softness in equipment purchases by broadcasters, primarily as a result of the delay in the rollout of HDTV and their reluctance to purchase analog equipment. The Company believes that the later part of 1999 was also impacted by customer concerns over Y2K. Sales in international markets have also been lower in 1999 as compared to 1998 primarily due to weak economic conditions in Eastern Europe and Asia. Like their American counterparts, many international broadcasters have postponed purchases of equipment. Sales in 1999 were also impacted by the loss in revenues, which totaled $3.0 million in 1998, associated with the Trilogy division which was sold in August 1998.

Gross Profit. Gross margins as a percentage of sales decreased to 43% in 1999 versus 47% in 1998. The margins in 1999 were not as favorable as the comparable margins in 1998 primarily due to the inventory write-downs of $2.2 million taken in the second quarter of 1999 and reduced margins in the graphics business due to a lower level of absorption of overhead costs resulting from lower sales volumes. These factors were offset, to a lesser degree, by reduced material costs of mature products and improved project management.

Selling, General and Administrative Expenses. Selling, general and administrative (SG&A) expenses decreased by $3.2 million or 10%, to $28.2 million in 1999 compared to $31.4 million in 1998. SG&A expenses in 1999 were lower due to the elimination of operating costs associated with the Trilogy and Concerto divisions and the reduced level of expenses as a result of the restructuring that occurred in the second quarter of 1999. Overall headcount in 1999 has been reduced by approximately 20%.

Research and Development Expenses. Research and development (R&D) costs decreased by $2.2 million, or 23%, during 1999 as compared to $9.5 million in 1998. The decrease in R&D expenses is directly related to the elimination of R&D efforts associated with the Trilogy and Concerto divisions, reduced material costs of new projects and reduced headcount as a result of the 1999 second quarter restructuring.

Non-recurring Charges. In the second quarter of 1999, the Company adopted a more focused strategy on products that serve a broader spectrum of delivery options and eliminated certain non-producing products. Consequently, included in the results for 1999 were non-recurring charges totaling $6.7 million, of which $5.0 million was directly related to this change in strategy. These primarily non-cash restructuring and non-recurring charges included the write-down of certain capitalized software, inventory write-downs due to changes in product strategy, severance costs resulting from staff reductions and the write-down of an equity investment.

During 1998, management determined that it would be in the Company's best interest to implement a restructuring plan and refocus its efforts on its core products of graphics, routing and automation for television broadcast, cable and post production industries. This product line restructuring included the sale of Trilogy; the modification of the Company's investment in RT-SET; the reorganization of Chyron's sales and marketing organization; and the disposition of the Concerto Division. As a result, the Company recorded restructuring and other non-recurring charges of approximately $4.0 million during 1998.

Gain on Sale of Investments. In November 1999, the Company sold approximately 18% of its investment in RT-SET. This transaction resulted in a net gain of approximately $0.5 million. During 1998, the Company completed the sale of Trilogy to its management. This transaction resulted in an overall gain of approximately $1.2 million.

Interest and Other Expense, Net. Interest and other expense, net, decreased by $0.5 million in 1999 as compared to 1998. This decrease is primarily due to foreign exchange gains included in 1999 as a result of favorable rates between the U.S. dollar and the British pound sterling. This was offset, somewhat, by an increase in interest expense during 1999 due to slightly higher rates and greater average borrowings.

Provision/Benefit for Income Taxes. The Company's 1999 provision for income taxes increased by $14.6 million from the $1.6 million benefit recorded in 1998. This is primarily due to the establishment, in the second quarter, of a valuation reserve against its net deferred tax assets in the U.S. of $14.1 million.

At December 31, 2000, the Company had cash on hand of $15.3 million and working capital of $31.0 million. Subsequent to the close of the year, the Company acquired Interocity Development Corporation for $6 million, inclusive of $5 million in cash.

In April 2000, as discussed in the notes to the financial statements, the Company raised $20 million in connection with a private placement of 3,076,923 shares of common stock. In addition, Microsoft purchased 3,096,774 shares of common stock of the Company, at a price of $1.9375, totaling $6 million. As a result, Microsoft owns approximately 8% of the Company. The Company is utilizing the net proceeds of these transactions, of approximately $24 million, to invest in efforts associated primarily with sales, marketing, research and development and the pursuit of strategic alliances in connection with its new media divisions.

As set forth in the Consolidated Statements of Cash Flows, the Company used $8.8 million in cash from operations during 2000 as compared to providing cash of $1.2 million for the comparable 1999 period. The utilization of cash from operations during 2000 results primarily from the realization of the net loss and increases in accounts receivable, accounts payable and inventory balances. The increase in accounts receivable results from the timing of receipt of certain milestone payments. Inventory balances at the end of 2000 were higher due to procurement of additional critical parts and product required for demonstration purposes.

Cash used to acquire property and equipment in 2000 totaled $2.0 million of which $1.2 million related to the infrastructure established to support the Company's new media initiatives. The Company also utilized $3.9 million in cash to pay down its credit facility, received $0.7 million from the issuance of common stock as a result of exercises of options and warrants and $0.8 million from the sales of investments.

The Company provides signal distribution and graphics products to the broadcast industry for use in digital television. Currently, its customers are facing capital budget constraints in anticipation of a slowdown in the U.S. economy, and there are few signs of growth in its traditional markets. In addition, the Company has sustained losses from operations in each of the three years ended December 31, 2000, and has failed its financial covenant under its credit agreement for which it obtained waivers and/or amendments. The Company plans to approach 2001 with caution, adopting a modest outlook for growth, and sizing the business accordingly. The Company plans to size the core businesses to a level that will not significantly reduce its cash resources while continuing to invest prudently in its new initiatives. The Company operates in a rapidly changing environment and it must remain responsive to changes as they occur. The Company has configured its business with a substantial level of variable costs, giving it the flexibility to reduce costs if economic conditions deteriorate. The Company has the ability and intention to reduce or delay discretionary expenditures such that it will have sufficient cash resources through December 31, 2001, however, there can be no assurance that the Company will be able to adjust its variable costs in sufficient time to respond to revenue shortfalls or obtain waivers and/or amendments should defaults occur.

Although the Company cannot accurately determine the precise effect of inflation, the Company has experienced increased costs of materials, supplies, salaries and benefits and increased general and administrative expenses. The Company attempts to pass on increased costs and expenses by developing more useful and cost effective products for its customers that can be sold at more favorable profit margins.

As discussed above, in October 1996, the FCC adopted a new digital television standard. Conversion to the new standard will produce a potentially great opportunity to companies involved in the broadcast industry and related business; however, this change has caused uncertainty, hesitation and confusion for broadcasters and other customers in their decisions on capital spending. The delay in capital spending by broadcasters has affected the level of the Company's sales. The method and timing of broadcasters' conversion to digital television is very important to the future operating results of the Company.

The Company is exposed to currency risk in the normal course of business related to investments in its foreign subsidiaries and the level of sales to foreign customers. For the years ended December 31, 2000 and 1999, sales to foreign customers were 39% and 44% of total sales, respectively. Substantially all sales generated outside of the U.S. are denominated in British pounds sterling. The net impact of foreign exchange transactions for the years ended December 31, 2000 and 1999 were a loss of $0.3 million and a gain of $0.3 million, respectively.

To the Board of Directors and

Shareholders of Chyron Corporation

In our opinion, the consolidated financial statements listed in the index appearing under Items 14(a)(1) and (2) on page 47 present fairly, in all material respects, the financial position of Chyron Corporation and its subsidiaries at December 31, 2000 and 1999 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule 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 auditing standards generally accepted in the United States which 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 the opinion expressed above.

/s/PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Melville, New York

March 9, 2001

See Notes to Consolidated Financial Statements

					Accumulated
			Additional		Other
			Paid-In	Retained	Comprehensive
	Shares	Amount	Capital	Earnings	Income(loss)	Total
Balance at January 1, 1998	32,591	$ 326	$44,016	$ 9,237	$ 383	$53,962
Net loss				(4,447)		(4,447)
Cumulative translation adjustment					255	255
Total comprehensive loss						(4,192)
Contingent shares canceled	(533)	(5)	5
Balance at December 31, 1998	32,058	321	44,021	4,790	638	49,770
Net loss				(29,784)		(29,784)
Cumulative translation adjustment					(284)	(284)
Unrealized gain on available for
sale securities					2,647	2,647
Total comprehensive loss						(27,421)
Issuance of common stock
as compensation	35		52			52
Warrants issued for consulting services
and in connection with debenture
issuance			111			111
Balance at December 31, 1999	32,093	321	44,184	(24,994)	3,001	22,512
Net loss				(11,908)		(11,908)
Cumulative translation adjustment					(768)	(768)
Unrealized loss on available
for sale securities					(2,781)	(2,781)
Total comprehensive loss						(15,457)
Settlement of interest liability			409			409
Exercise of stock options	233	2	595			597
Conversion of debentures	20		49			49
Sale of common stock to Microsoft, net	3,097	31	5,922			5,953
Issuance of stock in connection with
investment in Video Technics	300	3	578			581
Sale of common stock in connection
with private placement, net	3,077	31	18,126			18,157
Warrants issued and exercised	50	1	159			160
Balance at December 31, 2000	38,870	$389	$70,022	$(36,902)	$ (548)	$32,961

Chyron Corporation and its wholly-owned subsidiaries ("Chyron" or the "Company") develop, manufacture, market and support a broad range of equipment, software and systems, including paint and animation systems, character generators, signal distribution systems, master control switchers and broadcast automation and media management packages. The worldwide market for equipment, software and systems used in the production and presentation of video and audio content encompasses major television networks, cable television broadcasters, direct to home satellite program distributors, production companies and post-production houses, as well as organizations and individuals creating materials such as corporate and specialized video and audio presentations. The Company has recently expanded its efforts toward developing new products and services that will address the Internet and interactive marketplaces.

The Company provides signal distribution and graphics products to the broadcast industry for use in digital television. Currently, its customers are facing capital budget constraints in anticipation of a slowdown in the U.S. economy, and there are few signs of growth in its traditional markets. In addition, the Company has sustained losses from operations in each of the three years ended December 31, 2000, and has failed its financial covenant under its credit agreement for which it obtained waivers and/or amendments. The Company plans to approach 2001 with caution, adopting a modest outlook for growth, and sizing the business accordingly. The Company plans to size the core businesses to a level that will not significantly reduce its cash resources while continuing to invest prudently in its new initiatives. The Company operates in a rapidly changing environment and it must remain responsive to changes as they occur. The Company has configured its business with a substantial level of variable costs, giving it the flexibility to reduce costs if economic conditions deteriorate. The Company has the ability and intention to reduce or delay discretionary expenditures such that it will have sufficient cash resources through December 31, 2001, however, there can be no assurance that the Company will be able to adjust its variable costs in sufficient time to respond to revenue shortfalls or obtain waivers and/or amendments should defaults occur.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany amounts have been eliminated. Investments in affiliates of less than 20% are stated at cost. Investments in companies representing ownership interests of 20% to 50% are accounted for by the equity method in accordance with Accounting Principles Board No. 18, "The Equity Method of Accounting for Investments in Common Stock" ("APB 18").

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, costs and expenses during the periods presented. Actual results could differ from those estimates.

Cash includes cash on deposit and amounts invested in highly liquid money market funds. Cash equivalents consist of short term investments with original maturities of three months or less. The carrying amount of cash and cash equivalents approximates their fair value. For the year ended December 31, 2000, interest income received on investments approximated $0.7 million.

Inventories are stated at the lower of cost or market, cost being determined on the first-in, first-out method. The need for inventory obsolescence provisions is evaluated by the Company and, when appropriate, reserves for technological obsolescence, non-profitability of related product lines and excess quantities are established.

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are provided on the straight line method over the following estimated useful lives:

Building	35 years
Machinery and equipment	3-10 years
Furniture and fixtures	5-10 years
Leasehold improvements	Shorter of the life of improvement or remaining life of the lease

The Company continually evaluates whether changes have occurred that would require revision of the remaining estimated useful life of the assigned excess of cost over the value of net tangible assets acquired (goodwill) or its carrying amount. In making such determinations, the Company evaluates undiscounted cash flows of the underlying business which gave rise to such amount. Costs in excess of net assets are being amortized over 3-12 years using the straight line method. Amortization in 2000, 1999 and 1998 amounted to $0.6 million, $0.5 million and $0.6 million, respectively.

The Company accounts for its investments in accordance with the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (SFAS No. 115). This standard requires that certain debt and equity securities be adjusted to market value at the end of each accounting period. Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. At December 31, 2000, all securities covered by SFAS No. 115 were designated as available for sale. Accordingly, these securities are stated at fair value, with unrealized gains and losses reported as a separate component of comprehensive income, net of tax. Realized gains and losses on sales of investments, as determined by the specific identification method, are included in the Consolidated Statement of Operations.

Certain software development costs are capitalized when incurred. Capitalization of software development costs begins upon the establishment of technological feasibility in excess of management defined threshold amounts. The establishment of technological feasibility and the ongoing assessment of recoverability of capitalized software development costs are continually monitored by management with respect to anticipated future revenues and estimated economic life. Amortization of capitalized software development costs is provided on a product-by-product basis using the straight line method over each product's estimated economic life, which ranges from 2-3 years.

The Company continually evaluates whether changes have occurred that would require revisions to the carrying amounts of its long-lived assets. In making such determination, the Company reassesses market value, assesses recoverability and replacement values and evaluates undiscounted cash flows of the underlying business. Currently, management does not believe any of its long-lived assets are impaired.

Net sales, which include revenue derived from product sales and upgrades, as well as service revenue, are recorded upon shipment of product or performance of service. Service revenue is generally recognized ratably over a period of twelve months. Customer service costs are included in selling, general and administrative expenses and are not material. Revenues and costs associated with long-term contracts are recognized on the percentage-of-completion method, subject to substantive customer acceptance. Revisions in profit estimates are reflected in the period in which the facts that give rise to the revision become known. Provisions for anticipated losses are charged to earnings when identified.

In the fourth quarter of 2000, the Company adopted Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements, which provides guidance in applying generally accepted accounting principles to certain revenue recognition issues. The adoption of SAB 101 did not have a material impact on the Company's financial position or overall trends in results of operations.

In the first quarter of 1998, the Company adopted AICPA Statement of Position 97-2 ("SOP 97-2"), "Software Revenue Recognition." This SOP provides guidance on when revenue should be recognized for licensing, selling, leasing, or otherwise marketing computer software. The adoption of SOP 97-2 did not have a material effect on the results of operations of the Company for the years ended December 31, 2000, 1999 and 1998, respectively.

The Company accounts for income taxes in accordance with the provisions of Statement of Financial Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes." Under SFAS 109, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end.

Assets and liabilities of the Company's foreign subsidiaries are translated into U.S. dollars at the current rate of exchange, while revenues and expenses are translated at the average exchange rate during the year. Adjustments from translating foreign subsidiaries' financial statements are reported as a separate component of shareholders' equity. Transaction gains or losses are included in interest and other expenses. The net impact of foreign exchange transactions for the years ended December 31, 2000, 1999 and 1998 were a loss of $0.3 million, a gain of $0.3 million and a loss of $0.3 million, respectively.

The Company reports its net loss per share in accordance with Financial Accounting Standards Board Statement No. 128, "Earnings Per Share." Basic net loss per common share is computed based on the weighted average number of common shares outstanding during the year. Diluted net loss per common share is computed based on the weighted average number of common shares outstanding during the year plus, when dilutive, additional shares issuable upon the assumed exercise of outstanding common stock equivalents. For 2000, 1999 and 1998 common stock equivalents of 8,434,264, 7,197,176 and 2,765,304, respectively, were not included in the computation of diluted net (loss) income per common share because their effect would have been anti-dilutive.

The Company accounts for its stock compensation plans in accordance with the provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and its related interpretations, which requires that compensation cost be recognized on the date of grant for stock options issued based on the difference, if any, between the fair market value of the Company's stock and the exercise price. The Company has adopted the disclosure requirements of SFAS 123, "Accounting for Stock-Based Compensation," which allows entities to continue to apply the provisions of APB 25 for transactions with employees and provides pro-forma earnings disclosures for employee stock grants as if the fair value based method of accounting in SFAS No. 123 had been applied to these stock grants. The Company accounts for equity instruments issued to non-employees in accordance with the provisions of SFAS No. 123 and EITF No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services."

In 1998, the Company adopted Statement of Financial Accounting Standards No. 131 ("SFAS 131"), Disclosures about Segments of an Enterprise and Related Information. SFAS 131 replaces the "industry segment" approach with the "management" approach. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company's reportable segments. SFAS 131 also requires disclosures about products and services, geographic areas, and major customers.

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income." As required by SFAS 130, the Company displays the accumulated balance of other comprehensive income or loss separately in the equity section of the consolidated balance sheets. Total comprehensive loss, which is comprised of net loss and other comprehensive income (loss), amounted to approximately $(15.4) million, $(27.4) million and $(4.2) million for the years ended December 31, 2000, 1999, and 1998, respectively.

During the second quarter of 1999 the Company critically evaluated its product lines and its position in the industry. The results of this evaluation were a more focused strategy on products that serve a broader spectrum of delivery options and the elimination of certain non-producing products which will allow the Company to be in a better position to remain competitive through the difficult times facing the industry. In connection therewith, the Company recorded non-recurring charges totaling $6.7 million, of which $5.0 million was directly related to the change in strategy. These primarily non-cash restructuring and non-recurring charges include the write-down of certain capitalized software of $3.6 million, inventory write-downs due to changes in product strategy of $1.0 million, severance costs of $0.4 million resulting from staff reductions, the write-down of $1.0 million of an equity investment and other charges related to an adjustment to deferred maintenance revenue totaling $0.7 million. The only component of the charge that required a cash outlay was severance of approximately $0.4 million. As of December 31, 2000, all cash outlays have been made.

During the second quarter of 1998, management determined that it would be in the Company's best interest to implement a restructuring plan and refocus its efforts on its core products of graphics, routing and automation for the television broadcast, cable and post production industries. As a result, the Company recorded restructuring and other non-recurring charges of $4.0 million. The restructuring charge includes the write-down of Concerto assets, accrued severance, legal costs and costs of disposition of such division totaling $2.9 million. Other non-recurring charges relate to management's initiative to refocus on the Company's core products and total $1.1 million. Included in other non-recurring charges are costs related to the sales reorganization, accrued severance of $0.2 million and other miscellaneous costs of $0.3 million, all of which required cash outlays. Additional accruals have been made for litigation and other legal costs. As of December 31, 2000, all cash outlays have been made.

The Company has an investment in RT-Set which has been reflected in the Company's balance sheet at December 31, 2000 and 1999 at fair market value of $0.6 million and $3.6 million, respectively. An unrealized loss of $2.8 million and an unrealized gain of $2.6 million is reported as a component of shareholders' equity and other comprehensive income at December 31, 2000 and 1999, respectively. During 2000 and 1999, the Company recognized gains on the sale of a portion of such security of $0.6 million and $0.5 million, respectively.

4. INVESTMENT IN VIDEO TECHNICS

In November 2000, the Company purchased a 20% interest in Video Technics, Inc. ("Video Technics"), which develops and manufactures Chyron Aprisa clip/stillstore systems. The purchase price consisted of $500,000 in cash and 300,000 shares of the Company's common stock. The value of the stock issued on the date of purchase was $582,000 or $1.94 per share. The investment is accounted for under the equity method of accounting. The excess of the aggregate purchase price over the fair market value of net assets acquired, of approximately $1.1 million, is being amortized over three years.

On August 19, 1998, the Company completed the sale of Trilogy, a wholly-owned subsidiary of Pro-Bel, to its management. The Company received gross proceeds of 2.0 million BPS ($2.7 million at the exchange rate at closing), an interest bearing note for 300,000 BPS ($0.5 million at December 31, 2000) due August 2003 with interest payable quarterly at LIBOR and a 19% interest in the new company that results from this transaction. This transaction resulted in an overall gain of approximately $1.2 million.

As a result of this sale, the Company's assets and liabilities decreased by approximately $2.9 million and $0.8 million, respectively. For the year ended December 31, 1998, Trilogy contributed sales, gross profit and operating income of $2.9 million, $1.6 million and $.02 million, respectively.

Accounts receivable are stated net of an allowance for doubtful accounts of $2.3 million and $3.3 million at December 31, 2000 and 1999, respectively. Accounts receivable are principally due from customers in, and dealers serving, the broadcast video industry and non-broadcast display markets. At December 31, 2000 and 1999, receivables included approximately $4.6 million and $6.3 million, respectively, due from foreign customers. Accounts receivable also includes costs and estimated earnings in excess of billings on uncompleted contracts accounted for on the percentage of completion method of approximately $3.1 million and $0.4 million at December 31, 2000 and 1999, respectively. Such amounts represent revenue recognized on a long-term contract that have not been billed pursuant to contract terms.

The provision for doubtful accounts amounted to $0.9 million, $0.4 million and $1.2 million in 2000, 1999 and 1998, respectively. The Company periodically evaluates the credit worthiness of its customers and determines whether collateral (in the form of letters of credit or liens on equipment sold) should be taken or whether reduced credit limits are necessary. Credit losses have consistently been within management's expectations. The carrying amounts of accounts receivable approximate their fair values.

Inventories consist of the following (in thousands):

	December 31,
	2000	1999
Finished goods	$ 5,330	$ 6,262
Work-in-progress	1,133	1,228
Raw material	8,040	6,276
	$14,503	$13,766

Property and equipment consist of the following (in thousands):

	December 31,
	2000	1999
Land	$ 733	$ 782
Building	1,589	1,712
Machinery and equipment	23,402	22,532
Furniture and fixtures	2,724	2,177
Leasehold improvements	912	920
	29,360	28,123
Less: Accumulated depreciation
and amortization	20,086	17,540
	$ 9,274	$10,583

Machinery and equipment at December 31, 2000 and 1999 includes $2.1 million and $1.8 million, respectively, of assets held under capital lease obligations. Accumulated depreciation and amortization at December 31, 2000 and 1999 includes $1.3 million and $1.0 million, respectively, attributable to assets held under capital lease obligations.

Depreciation expense, which includes amortization of assets under capital lease, was $2.6 million, $3.5 million and $2.5 million in 2000, 1999 and 1998, respectively.

The following amounts were capitalized, amortized and written off (in thousands):

Accumulated amortization at December 31, 2000 and 1999 was $9.2 million and $7.9 million, respectively.

Accounts payable and accrued expenses consist of the following (in thousands):

11. LONG-TERM DEBT

Long term debt consists of the following (in thousands):

(a) On March 29, 1999, the Company entered into a new $12 million credit facility which expires March 31, 2002. Under this facility, the Company borrowed $2 million in the form of a term loan and can obtain revolving credit loans based on its eligible accounts receivable and inventory for the balance of the facility. Total borrowings at closing were $8.7 million. These borrowings were used primarily to pay down the outstanding balance under the expiring credit facility of $8.5 million, including $0.5 million outstanding on a term loan.

The term loan required no principal payments through September 30, 1999, $25,000 per month for the period October 1, 1999 through September 30, 2000, $75,000 per month for the period October 1, 2000 through September 30, 2001 and $133,333 per month from October 1, 2001 through March 31, 2002. Interest is payable monthly at LIBOR plus 2.125% (8.575% at December 31, 2000), or at a rate based on Prime, at the Company's option. The Company must pay a monthly commitment fee equal to one half of 1% per annum on the daily unused portion of the facility.

The entire facility is secured by Chyron's accounts receivable and inventory and the Common stock of Pro-Bel. The agreement contains requirements for levels of earnings and prohibits the Company from paying dividends in excess of 25% of net income in any fiscal year. At various times during 2000, the Company was in violation of its financial covenant with its lender for which its agreement was amended.

(b) Pro-Bel has a commercial mortgage term loan with a bank. The loan is secured by a building and property located in the United Kingdom. Interest is equal to LIBOR plus 2% (8.45% at December 31, 2000). The loan is payable in quarterly installments of 22,000 BPS ($33,000, converted at the December 31, 2000 exchange rate) plus interest.

(c) Pro-Bel has an agreement with a bank for an overdraft facility that has been renewed on an annual basis and expires on December 31, 2001. This agreement, provides for an overdraft facility of 2 million BPS. Total borrowings are limited to amounts computed under a formula for eligible accounts receivable. Interest is equal to the bank's base rate plus 1.5% (7.85% at December 31, 2000) and is payable quarterly. It is currently the Company's intention to refinance this facility prior to its expiration date.

(d) On March 31, 1997, the Company issued promissory notes of $667,000, with interest at 6%, to certain shareholders, in conjunction with an acquisition. As of December 31, 2000 all notes have been satisfied.

Aggregate maturities of long term debt are as follows (in thousands):

2001	2,141
2002	5,393
2003	142
2004	142
2005	142
2006 and thereafter	752

The carrying amounts of long-term debt instruments approximate their fair values.

Net interest expense was $2.1 million, $1.6 million and $1.5 million in 2000, 1999 and 1998, respectively.

During late 1998 and 1999 the Company raised $7.7 million through the issuance of Series A and Series B 8% subordinated convertible debentures, due December 31, 2003, to certain persons and entities, including certain directors, affiliates and shareholders of the Company. The Series A debentures, totaling $1.2 million, are convertible, at any time, at the option of the holders thereof, into Common stock of the Company at a conversion price of $2.466 per share (which was equal to 120% of the average of the closing selling prices of the Common stock for the 90 trading days immediately preceding the issue date of the debentures). The Series A debentures may be redeemed by the Company at any time after December 31, 1999 for a price equal to the principal and accrued but unpaid interest on the debentures at the redemption date.

The Series B debentures, totaling $6.5 million, are convertible, at any time, at the option of the holders thereof, into common stock of the Company at a conversion price of $1.625 per share. The Series B debentures may be redeemed by the Company, commencing one year from issue date, for a price equal to the principal and accrued but unpaid interest at the redemption date. Interest, which is payable quarterly, may be paid in the form of additional debentures until July 15, 2001. Through December 31, 2000, approximately $0.3 million of interest was paid in the form of additional debentures issued by the Company. In connection with this fund raising, costs of $0.4 million are being amortized over a five year period. Included in such costs are 123,631 warrants to purchase common stock of the Company at a price of $1.625 that were issued to the placement agent. The warrants will expire in September 2004.

The debentures have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. The sales of the debentures were made in reliance upon the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Section 4(2) thereof and/or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. To the best of the Company's knowledge, the purchasers of the debentures acquired them for their own accounts, and not with a view to any distribution thereof.

In May 1999, the Company's shareholders approved the 1999 Incentive Compensation Plan (the "Plan"). The Plan allows for a maximum of 1,500,000 shares of common stock to be available with respect to the grant of awards under the Plan, plus the number of shares remaining available under pre-existing plans. The Plan allows for the award of incentive and non-incentive options to employees and non-incentive options to non-employee members of the Company's Board of Directors ("BOD"). The Plan allows for a committee, designated by the BOD, to determine the time and circumstances under which an employee option may be exercised. The terms of all previously granted options remained. All options granted under the Plan have a term of ten years.

In December 1998, the Company offered option holders who were current employees of the Company the opportunity to exchange certain of their existing options for new options. As a result, options to purchase shares of Common stock were granted with the following terms: (a) fifty percent of such new stock options were granted with an exercise price of $2.125 and shall vest in equal installments over three years; and (b) the remaining fifty percent of such new stock options were granted with the same exercise price; all of such stock options shall vest in their entirety on December 15, 2003; provided, however, that such options shall vest earlier upon the attainment of certain Company performance criteria related to earnings per share. All other options issued to employees, other than the Company's current and former Chief Executive Officer ("CEO") and another officer, vest over a three year period. Certain options issued to the current and former CEO and the other officer vest one third at issuance, with the remaining two thirds vesting over two years.

Transactions involving stock options are summarized as follows:

	Stock Options	Range of Option	Weighted Average
	Outstanding	Price per Share	Exercise Price Per Share
Balance, January 1, 1998	2,458,423	$4.25 - $16.13	$5.14
Granted	2,227,070	$2.00 - $ 4.00	3.46
Canceled	(1,920,189)	$3.94 - $ 5.88	4.20
Balance, December 31, 1998	2,765,304	$2.00 - $16.13	2.86
Granted	1,161,012	$0.75 - $ 2.00	1.34
Exercised	(4,500)	$ 1.63	1.63
Canceled	(1,521,892)	$1.63 - $ 5.38	2.91
Balance at December 31, 1999	2,399,924	$0.75 - $16.13	2.09
Granted	1,345,499	$1.88 - $ 4.00	2.48
Exercised	(233,962)	$0.75 - $ 9.38	1.00
Canceled	(157,634)	$0.75 - $ 5.38	1.88
Balance at December 31, 2000	3,353,827	$0.75 - $16.13	2.23

The following table summarizes information concerning currently outstanding and exercisable stock options:

Exercise Price	Outstanding at December 31, 2000	Weighted Average Contractual Life	Exercisable at December 31, 2000
$ 4.88	11,500	4.56 years	11,500
5.63	23,331	4.74 years	23,331
9.38	3,333	5.15 years	3,333
16.13	23,331	5.58 years	23,331
12.75	3,333	5.72 years	3,333
5.88	6,667	6.18 years	6,667
4.50	16,665	6.58 years	16,665
5.38	14,500	6.83 years	14,500
3.75	25,000	7.18 years	16,665
3.94	2,000	7.37 years	1,333
2.00	323,671	7.84 years	212,426
2.13	635,247	7.96 years	423,456
1.94	300,000	8.44 years	99,990
1.63	136,500	8.56 years	45,495
1.38	30,000	8.58 years	10,000
2.50	40,500	8.58 years	16,665
0.75	432,000	8.82 years	143,986
3.06	75,000	9.03 years	-
4.00	13,500	9.11 years	-
2.94	15,000	9.41 years	-
2.75	25,000	9.43 years	-
3.13	10,000	9.45 years	-
3.19	10,000	9.49 years	-
2.38	40,000	9.58 years	-
2.25	10,000	9.59 years	-
3.38	313,333	9.64 years	-
2.19	407,500	9.82 years	-
1.88	406,916	9.88 years	-
	3,353,827		1,072,676

If the Company had elected to recognize compensation expense based upon the fair values at the grant date for awards under this plan consistent with the methodology prescribed by SFAS No. 123, "Accounting for Stock Based Compensation," the Company's net loss and net loss per share would be reduced to the pro forma amounts indicated below:

These pro forma amounts may not be representative of future disclosures since the estimated fair value of stock options is amortized to expense over the vesting period for purposes of future pro forma disclosures, and additional options may be granted in future years. The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for 2000, 1999 and 1998: dividend yield of 0; expected volatility of 50% and expected life of 4 years in 2000 and 4-5 years in 1999 and 1998. The weighted average risk free interest rates for 2000, 1999 and 1998 were 6.04%, 5.96% and 4.20%, respectively.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of employee stock options.

The provision (benefit) for income taxes consists of the following (in thousands):

	2000	1999	1998
Current:
Federal and State	$ 28	$ 45	$(65)
Foreign			142
	28	45	77
Deferred:
Federal and State	(28)	(4,865)	(1,777)
Foreign		(503)	79
Valuation reserve		18,272
		12,904	(1,698)
Total provision (benefit)	$ 0	$12,949	$(1,621)

The effective income tax rate differed from the Federal statutory rate as follows (in thousands):

The components of the Company's deferred tax assets and deferred tax liabilities are presented in the tables below.

	December 31,
	2000	1999
Post-reorganization net operating loss carryforward	$11,175	$ 6,427
Pre-reorganization net operating loss carryforward	4,461	4,631
Pre-reorganization deductible temporary differences	2,218	3,067
Other	4,579	4,508
Total deferred tax assets	22,433	18,633
Pre-reorganization taxable temporary differences	83	83
Other	418	213
Total deferred tax liabilities	501	296
Deferred tax valuation allowance	21,932	18,272
Net deferred tax asset	$ 0	$ 65

At December 31, 2000, the Company had net operating loss carryforwards ("NOLs") of approximately $40.0 million expiring between the years 2003 through 2020. In connection with the Company's emergence in 1991 from its reorganization under Chapter 11 of the U.S. Bankruptcy Code, the benefit of the Company's pre-reorganization NOLs were not reflected in net income, but rather recorded as an increase to paid-in capital. In addition, such NOLs ($13.1 million) are subject to annual limitations under U.S. income tax rules as a result of the changes in control of the Company.

In the second quarter of 1999, the Company established a full valuation allowance of $14.1 million against its net deferred tax assets. The Company's net deferred tax assets include substantial amounts of net operating loss carryforwards. Inability to generate taxable income within the carryforward period would affect the ultimate realization of such assets. Consequently, management determined that sufficient uncertainty exists regarding the realization of these assets to warrant the establishment of the allowance.

Chyron Corporation has a domestic defined benefit pension plan (the "U.S. Pension Plan") covering substantially all U.S. employees meeting minimum eligibility requirements. Benefits paid to retirees are based upon age at retirement, years of credited service and average compensation. Pension expense is actuarially determined using the projected unit credit method. The Company's policy is to fund the minimum contributions required under the Employee Retirement Income Security Act. The assets of the U.S. Pension Plan at December 31, 2000 include government bonds, equities, mutual funds and cash and cash equivalents.

Effective July 1, 1998, the Company amended its defined benefit plan for its U.S. operations. The amendment included a change in the determination of average annual compensation for the calculation of the defined pension benefit. In addition, the vesting period has decreased from 6 to 5 years of service.

Benefit plan information for the U.S. Pension Plan is as follows (in thousands):

Pro-Bel has a non-contributory defined benefit pension plan (the "U.K. Pension Plan") covering all its permanent employees. Contributions are determined on the basis of valuations using the projected unit method. Pro-Bel's policy is to fund minimum contributions required pursuant to U.K. rules and regulations. The assets of the U.K. Pension Plan at December 31, 2000 and 1999 include cash equivalents and land and a building.

Benefit plan information for the U.K. Pension Plan is as follows (in thousands):

The Company has adopted a 401(k) Plan exclusively for the benefit of participants and their beneficiaries. All U.S. employees of Chyron Corporation are eligible to participate in the 401(k) Plan. Effective July 1, 1998, the Company amended its 401(k) Plan by increasing the matching contribution of the Company to 20% and changing its matching contributions from cash to Company common stock and the vesting period for the matching contribution to three years. An employee may elect to contribute a percentage of his or her current compensation to the 401(k) Plan, subject to a maximum of 20% of compensation or the Internal Revenue Service annual contribution limit ($10,500 in 2000 and $10,000 in 1999), whichever is less. Total compensation that can be considered for contribution purposes is limited to $170,000.

Chyron Corporation can elect to make a contribution to the 401(k) Plan on behalf of those participants who have made salary deferral contributions. During 2000, 1999 and 1998, the Company contributed $0.06 million, $0.1 million and $0.09 million, respectively, to the 401(k) Plan.

At December 31, 2000, the Company was obligated under operating and capital leases covering facility space and equipment as follows (in thousands):