**UNITED STATES****SECURITIES AND EXCHANGE COMMISSION****Washington****,****D.C.****20549****Form 10-KSB**

| [X]       | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934               For the fiscal year ended **December 31, 2003**                         |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| [  ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934               For the transition period from ________________ to ________________ |

**Commission file number 000-33327**

| **CONSOLIDATED PICTURES CORP.**                                                                    |
|----------------------------------------------------------------------------------------------------|
| a Delaware corporation                                                                             | I.R.S. Employer Identification No.               13-4151225 |
| 2789 NE 5th Street               Pompano Beach, FL 33062               Telephone No.: 954/661-4554 |
| Securities registered under Section 12(b) of the Exchange Act:                                     |
| Title of each class:*None*                                                                         | Name of each exchange on which registered:*Not applicable* |
|                                                                                               |
| Securities registered under Section 12(g) of the Exchange Act:                                     |
| *Common Stock, Class A and Class B Warrants*                                                       |

| Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No               Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]               Issuer did not have any revenue for the fiscal year ended December 31, 2003.               The issuer's stock is not trading; therefore there is no aggregate market value of the common stock.

As of March 29, 2004, there were 4,579,900 shares of the issuer's common stock outstanding. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **CONSOLIDATED PICTURES CORP.               FORM 10-KSB               TABLE OF CONTENTS** |
|-------------------------------------------------------------------------------------------|
| PART I                                                                                    |
| Item 1                                                                                    |   | Description of Business |
| Item 2                                                                                    |   | Description of Property |
| Item 3                                                                                    |   | Legal Proceedings |
| Item 4                                                                                    |   | Submission of Matters to a Vote of Security Holders |
|                                                                                      |   |   |
| PART II                                                                                   |
| Item 5                                                                                    |   | Market for Common Equity and Related Stockholder            Matters |
| Item 6                                                                                    |   | Management's Discussion and Analysis and Plan of Operation |
| Item 7                                                                                    |   | Financial Statements |
| Item 8                                                                                    |   | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
| Item 8A                                                                                   |   | Controls and Procedures |
|                                                                                      |   |   |
| PART III                                                                                  |
| Item 9                                                                                    |   | Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act |
| Item 10                                                                                   |   | Executive Compensation |
| Item 11                                                                                   |   | Security Ownership of Certain Beneficial Owners and Management |
| Item 12                                                                                   |   | Certain Relationships and Related Transactions |
| Item 13                                                                                   |   | Exhibits and Reports on Form 8-K |
| Item 14                                                                                   |   | Principal Accountant Fees and Services |
|                                                                                      |   |   |
| Signatures                                                                                |
| Index to Financial Statements****                                                         |
| Exhibit 14                                                                                |
| Exhibit 31.1                                                                              |
| Exhibit 32.1                                                                              |

----

**PART I**

**Item 1 - Description of Business**             We were incorporated in Delaware on January 16, 2001. We are a development stage, independent motion picture studio that plans to develop, produce, market, and distribute low-budget films.  We plan to employ existing and emerging, consumer priced, digital video technologies and an amateur talent pool to create these low-budget "B-movies."  We plan to distribute our films to the international and domestic markets on in-house produced DVDs to be sold on our website, www.consolidatedpictures.com.  Although we plan to make previews available in a streaming video or downloadable format on our website, we do not plan to distribute our films in this manner.

**Competition**             The motion picture industry is intensely competitive. Competition comes from companies within the same business and companies in other entertainment media that create alternative forms of leisure entertainment. In addition to competing with the major film studios that dominate the motion picture industry, we will also compete with numerous independent motion picture production companies, television networks, and pay-television systems. Virtually all of our competitors are larger than we are, have been in business longer than we have, and have more resources at their disposal.

**Industry Overviews**             *The motion picture industry*             The "major" studios dominate the motion picture industry in the United States by controlling the distribution of films that they produce as well as films that are produced by "independent" studios. These major studios include among others: The Walt Disney Company, Paramount Pictures Corporation, Warner Brothers, Inc., MCA, Twentieth Century Fox, Columbia Pictures, Tri-Star Pictures and MGM/UA.             Beginning in 1996, the distribution of independent films brought increasing commercial success to the major studios that were distributing them. We believe that the increasing commercial success of independent films is an indication that consumer tastes have proven broader than what the major studios can fulfill, and a greater demand exists for low-budget, independent films in both the international and domestic markets.             Although The Writer's Guild of America defines a low-budget motion picture as one produced for less than $2.5 million, the vast majority of "B-movies" are produced with considerably smaller budgets. Historically, "B-movie" referred to a film's status as a cheaply produced, second film of a double bill, following the "A-movie," or feature attraction. Today, "B-movies," sometimes referred to as "genre films," are independent motion pictures, which for budgetary, thematic, and aesthetic reasons, deviate from the accepted cinematic mainstream, conforming to a different standard of production quality. Commonly, B-movies fall into the realm of the horror, science fiction, action/adventure, urban, or exploitation genres -- thus referred to as genre films. We plan to concentrate on the production and distribution of B-movies that will range between $10,000 and $25,000 in production costs. We believe that by employing digital video technologies and an amateur talent pool, we can create unique and viable B-movies in this budget range.             *The Digital Video Industry*             The availability of affordable digital video has created the possibility for unprecedented low-budget motion picture productions, alleviating many technical and financial burdens of filmmaking. Digital video ("DV") is a high-resolution video format that treats video and audio as digital information. In this format, the data can be stored, manipulated, and relayed just like any other computer data.             *The DVD Industry*             DVD, which once stood for digital video disc or digital versatile disc, is a form of optical disc storage technology. DVDs can hold cinema-like video and audio that is better than CD-quality, as well as computer data. DVD aims to encompass home entertainment, computers, and business information with a single digital format, eventually replacing audio CD, videotape, laserdisc, CD-ROM, and video game cartridges. DVD has widespread support from all major electronics companies, all major computer hardware companies, and all major music and movie studios. According to the DVD Entertainment Group, a Los Angeles-based, industry-funded nonprofit corporation that exists expressly to promote consumer awareness of the benefits of DVD, DVD has become the most successful consumer electronics product of all time in less than four years of its introduction.**Our Production Strategy**             From development to post-production, we plan to use various strategies, in addition to the use of digital technologies, so that the budgets of our motion pictures remain within our proposed range of $10,000 to $25,000.             We plan to use a combination of paid and voluntary, amateur talent for all aspects of production: actors and stunt men, production staff including photographic and sound crews and set workers, as well as wardrobe, makeup, and special effects personnel. We believe that we can create our productions with the use of creative and technical personnel that are willing to contribute their talents, for less than standard industry compensation, out of an enthusiasm to participate in the productions, the opportunity to gain experience in various aspects of motion picture and digital video production, or to promote their particular skill, such as wardrobe design, special effects, or makeup, in one of our motion pictures. We plan to create an informal and collaborative working environment, in which all personnel will have the potential to offer significant contributions to the productions. We will promote our productions as a venue for emerging creative talent, or those seeking a production environment receptive to experimental ideas. We plan to advertise position openings and solicitations for talent on our websites and in trade publications as well as local publications, schools, and universities in areas in which we will shoot on location. There is no assurance that we will be able to attract talented personnel to contribute to our productions.             Whenever practical, we plan to shoot our productions on location, at an existing site, eliminating the cost of constructing an elaborate set or artificial environment. When shooting on location, we will employ local talent for various positions so that we are not entirely responsible for travel and living expenses of personnel. The mobility and flexibility of the digital technologies would allow for easy set-ups, on location, under a wide variety of conditions and lessen the general need for controlled environments.**Item 2 - Description of Property**

      Our offices are presently located at 2789 NE 5th Street, Pompano Beach, FL 33062, which space is provided to us by Mr. Avery Pack without charge.  We plan to relocate to expanded facilities within the next six months.

**Item 3 - Legal Proceedings**             We are not subject to any pending litigation, legal proceedings or claims.**Item 4 - Submission of Matters to a Vote of Security Holders**             No matters were submitted to a vote of security holders during the fiscal year covered by this report.

----

**PART II**

**Item 5** - **Market for Common Equity and Related Stockholder Matters**             Our common stock is not listed or quoted at the present time. A sponsoring market maker has filed Form 211 with the National Association of Securities Dealers for approval to have our securities quoted on the OTC Bulletin Board. We plan to request that our common stock trade under the symbol "CPIX," if available. There is no assurance that approval will be granted so that our securities will be permitted to trade on the OTC Bulletin Board. Therefore, there can be no assurance that a public market for our common stock will ever develop.**Item 6** - **Management's Discussion and Analysis and Plan of Operation****General**             We have been organized with the intent to operate in the entertainment industry, specifically, in connection with the development, production, marketing and distribution of low-budget digital films. Our activities to date have consisted primarily of organizational and equity fund-raising activities.

**Initial Public Offering**

      On September 4, 2003, we closed our public offering of units of securities. Each unit was offered at $0.50 and consisted of one share of common stock; one Class A and one Class B warrant. Upon the closing of the offering, we had sold a total of 27,900 units consisting of 27,900 shares of common stock; 27,900 Class A warrants and 27,900 Class B warrants and received net proceeds of $10,909 after offering expenses of $3,041. Of this total, $7,400, net of expenses of $350, was recorded in 2002 and $3,509, net of expenses of $431 and deferred offering costs of $2,260, was recorded in 2003. A total of $500 was used for repayment of loans payable, and the balance of $10,409 was retained for working capital.

**Results of Operations**             The following discussion and analysis provides information our management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and footnotes that appear elsewhere in this report.*Year ended**December 31, 2003**and Year ended December31, 2002 and from inception,**January 16, 2001**, through**December 31, 2003**:*             **Sales -** We are presently in the development stage of our motion picture production business. We have not had any sales since inception on January 16, 2001 through December 31, 2003, the end of our fiscal year.             **Costs of Sales -** The costs of sales since inception were $0.             **Expenses -** Selling, general and administrative expenses for the year ended December 31, 2003 were $3,915, which is a decrease of $1,127, or 22.4% from $5,042 in the year ended December 31, 2002. In 2003, the two largest categories of expenses accounted for more than 60% of our total expenses; $1,386 for communications expenses and $1,000 for audit expense. In 2002, communications expenses were $1,562 and stationery and supplies, our second largest category of expense was $1,044. Since inception, our selling, general and administrative expenses have totaled $12,982.                          **Losses -** Our net loss, before taxes, for the year ended December 31, 2003 was $3,915 compared to $5,042 in the year ended December 31, 2002. Since inception, our total losses have been $12,982.             We have not reduced our net loss, for the fiscal years ended December 31, 2003 and December 31, 2002, by any tax benefit and, therefore, our net loss after taxes is the same as the net loss before taxes.             Our loss per share for the years ended December 31, 2003 and December 31, 2002 and from inception through December 31, 2003 was $ (NIL) in all periods. The loss per share was based on 4,570,053 weighted average common shares outstanding for the year ended December 31, 2003; 4,556,010 for the fiscal year ended December 31, 2002 and 4,558,825 since inception.**Liquidity and Capital Resources**             As of December 31, 2002, we had cash in the amount of $8,025, compared to $5,432 at the end of 2002.             We have not generated cash flow from our operations. In fact, our operating activities consumed $4,226 for the year ended December 31, 2003; $5,414 for the year ended December 31, 2002 and $12,877 since inception.             We intend to meet our cash needs over the next 12 months through borrowings or through the sale of our securities in either a public or private offering.**Capital Expenditures**

      Since inception, we have not made any capital expenditures. Assuming we have the funds or credit available, we plan to purchase digital video and audio production and post-production equipment and software.  We estimate the total equipment expenses will be less than $12,500.  The equipment will include cameras, lighting and sound equipment as well as software-based post-production tools.

 **Plan of Operation**             We presently do not have enough cash with which to satisfy any future cash requirements. We will need a minimum of $50,000 from either borrowings or private stock offerings to satisfy our cash requirements for the next 12 months. With this minimum funding, we intend to produce our film properties and develop our websites.             We plan to produce as many film properties as permitted by the proceeds available, as received. We anticipate that the cost of development of each of our film properties will be approximately $25,000. Production of a film property includes the completion of all stages of production: development, pre-production, production, and post-production.             We plan to develop our websites so that customers can place orders for our DVDs on our websites. We anticipate that the cost to develop our websites, to a point so that they are aesthetically and functionally sufficient, for the next 12 months, will be a minimum of $5,000.             We do not expect any significant changes in the number of employees, as we will utilize independent contractors, consultants, and other non-employee creative personnel to assist in developing, producing and promoting our motion pictures and Internet properties.             We depend upon capital to be derived from future private offerings. There can be no assurance that we will be successful in raising the capital we require. We believe that, if we raise a minimum of $50,000, we will be able to generate revenue from sales and thereby achieve sufficient liquidity from the resultant sales within the next 12 months.             We have not generated any revenue since our inception. We are considered to be a development stage company, and are dependent upon the raising of capital through placement of our securities. There can be no assurance that we will be successful in raising the capital we require through the sale of our securities.**Employees**             We currently have one employee, our president and chief executive officer, Mr. Avery Pack. We will utilize independent contractors, consultants, and other creative personnel to occasionally assist in developing, producing and promoting our motion pictures and Internet properties. Independent contractors are generally paid on a commission, hourly or job-related basis, depending on the services being performed.**Item 7 - Financial Statements**             Our financial statements and the related notes are set forth at pages F-1 through F-9 attached hereto.**Item 8 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**             We have not changed our accountant nor have we had disagreements with him on accounting or financial disclosure.

**Item 8A - Controls and Procedures**

      (a) Evaluation of disclosure controls and procedures

      Within the 90 days prior to the date of this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  Based upon that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures are effective in alerting us in a timely manner to material information relating to our company which is required to be included in our periodic SEC filings.

      (b) Changes in internal controls.

      Not applicable.

----

**PART III**

**Item 9 - Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act**             The following lists our only current executive officer, key employee and director; and a brief description of his background.

| **Name**   | **Age** | **Position**           |
|------------|---------|------------------------|
| Avery Pack | 26      | President and director |

      **Avery Pack** has served as our president and chief executive officer since our incorporation in January 2001. From September 1996 to May 2000, he was a student at Columbia University where he received his Bachelor of Arts degree in Visual Arts.

**Audit Committee**

     We do not have an audit committee. Our Board of Directors functions as our audit committee. As we add directors to our board, we plan to consider the formation of an audit committee. We have no committees of the Board of Directors.**Compliance with Section 16(a) of the Securities Exchange Act of 1934**             Section 16(a) of the Securities Exchange Act of 1934 requires that our directors and executive officers and persons who own more than 10% of our equity securities file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership. As of March 29, 2004, Mr. Avery Pack is current on all required filings.

**Code of Ethics**

      In December 2004, our Board of Directors adopted a Code of Business Conduct for our employees and management. Our Code of Business Conduct is included as an Exhibit to this Report.

**Item 10 - Executive Compensation**             There has been no executive compensation paid or accrued since inception.**Employment Agreements**             We have not entered into any employment agreements. All employment arrangements are subject to the discretion of our board of directors.**Stock Option Plan**             On January 31, 2001, our shareholder and director adopted the 2001 Consolidated Pictures Corp. stock option plan. The plan authorizes the granting of options to purchase up to 500,000 shares of our common stock. The board's responsibility will include the selection of option recipients, as well as, the type of option granted and the number of shares covered by the option and the exercise price. No options have been granted under the plan.             Plan options may either qualify as non-qualified options or incentive stock options under Section 422 of the Internal Revenue Code. Any incentive stock option granted under the plan must provide for an exercise price of at least 100% of the fair market value on the date of such grant and a maximum term of ten years. If the employee owns more than 10% of our stock, the exercise price of any incentive option granted must be at least 110% of fair market value and must be exercised within five years after the grant.             All of our officers, directors, key employees and consultants will be eligible to receive non-qualified options under the plan. Only officers, directors and employees who are formally employed by Consolidated Pictures Corp. are eligible to receive incentive options.             All incentive options are non-assignable and non-transferable, except by will or by the laws of descent and distribution. If an optionee's employment is terminated for any reason other than death, disability or termination for cause, the stock option will lapse on the earlier of the expiration date or three months following the date of termination. If the optionee dies during the term of employment, the stock option will lapse on the earlier of the expiration date of the option or the date one-year following the date of death. If the optionee is permanently and totally disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code, the plan option will lapse on the earlier of the expiration date of the option or one year following the date of such disability.**Item 11 - Security Ownership of Certain Beneficial Owners and Management**             Our authorized capital stock consists of 50,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share.             As of March 29, 2004, there were 4,579,900 shares of our common stock issued and outstanding and held by 82 shareholders. None of our preferred stock has been issued.             The following table presents certain information regarding beneficial ownership of our common stock as of March 29, 2004, by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, (ii) each of our directors, (iii) each named executive officer and (iv) all directors and executive officers as a group. Unless otherwise indicated, each person in the table has sole voting and investment power as to the shares shown.

| **Name of beneficial owner**            | **Shares beneficially               owned** | **Percentage** |
|-----------------------------------------|---------------------------------------------|----------------|
| Avery Pack                              | 4,500,000                                   | 98.3%          |
| Officers and directors (-1-) as a group | 4,500,000                                   | 98.3%          |

      The address of the director and executive officer is 2789 NE 5th Street, Pompano Beach, Florida 33062.

**Warrants**

      As of March 29, 2004, there were 27,900 Class A warrants and 27,900 Class B warrants outstanding. Each Class A warrant entitles the holder to purchase one share of common stock at $1.00 per share and each Class B warrant entitles the holder to purchase one share of common stock at $1.50 per share. The Class A warrants expire on September 4, 2004 and the Class B warrants, on September 4, 2005. We may decide to extend the expiration dates of the warrants.

**Indemnification of Directors and Officers**             Our certificate of incorporation and by-laws indemnify our directors and officers to the fullest extent permitted by Delaware corporation law. Insofar as indemnification for liability arising under the Securities Act may be permitted to directors, officers, and controlling persons, we are aware that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act of 1933 and is unenforceable.**Item 12 - Certain Relationships and Related Transactions**             In connection with organizing our company, on January 16, 2001, we issued 4,500,000 shares of restricted common stock to Avery Pack, our president, for $1,000. The shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933.             Commencing in April 2001 and continuing through December 31, 2003, Avery Pack advanced to us $6,993. The advances are non-interest bearing, unsecured and due on January 31, 2005.**Item 13 - Exhibits and Reports on Form 8-K**

      (a)  We are including the following exhibits with this report:
|   | **Exhibit No.** |   | **Description**                                                                                                                                                                                                    |
|--------|-----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Exhibit 14      |   | Code of Business Conduct                                                                                                                                                                                           |
|   | Exhibit 31.1    |   | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and Chief Financial Officer of the Corporation               |
|   | Exhibit 32.1    |   | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant        to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive        Officer and Chief Financial Officer of the Corporation |

      (b) There were no Reports on Form 8-K filed during the last quarter of the period covered by this report.

**Item 14 - Principal Accountant Fees and Services**

            The only professional services rendered by Michael F. Cronin, CPA to our company for the fiscal years ended December 31, 2003 and December 31, 2002 were audit services, the fees for which were $1,000 for each year. Michael F. Cronin, CPA did not provide audit-related services, tax services or other services during either fiscal year.

----

**SIGNATURES**

      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|   |   | Consolidated Pictures Corp.                                    |
|--------|--------|----------------------------------------------------------------|
|   |   |                                                                |
|   |   | (Registrant)                                                   |
|   |   |                                                           |
| By:    |   | /s/ Avery Pack                                                 |
|   |   |                                                                |
|   |   | Avery Pack               President and Chief Executive Officer |
|   |   |                                                           |
| Date:  |   | March 29, 2004                                                 |

             In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

| By:    |   | /s/ Avery Pack                                                                                                                                           |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                          |
|   |   | Avery Pack               Principal Executive Officer, Director,               Principal Accounting Officer and               Principal Financial Officer |
|   |   |                                                                                                                                                     |
| Date:  |   | March 29, 2004                                                                                                                                           |

----

**Consolidated Pictures Corp.**       (a development stage company)

**INDEX TO FINANCIAL STATEMENTS**

| Independent Auditor's Report                                                                                                                                                                                                             |   | F2 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----|
| Financial Statements:               Balance Sheet                     December 31, 2003 and December 31, 2002                                                                                              |   | F3 |
| Statement of Operations                     For the Years ended December 31, 2003 and 2002                     Period from January 16, 2001 (inception) through December 31, 2003 |   | F4 |
| Statement of Cash Flows                     For the Years ended December 31, 2003 and 2002                     Period from January 16, 2001 (inception) through December 31, 2003      |   | F5 |
| Statement of Stockholders' Equity                     Period from January 16, 2001 (inception) through December 31, 2003                                                                                   |   | F6 |
| Notes to Financial Statements                                                                                                                                                                                                            |   | F7 |

----

**MICHAEL F. CRONIN**       Certified Public Accountant**687 Lee Road, #210A****Rochester****,****New York****14606**

Board of Directors and Shareholders       Consolidated Pictures Corp.       Pompano Beach, Florida       I have audited the accompanying balance sheet of Consolidated Pictures Corp. (a development stage company) as of December 31, 2003 and December 31, 2002 and the related statements of operations, cash flows and stockholders' equity for the years then ended and for the period January 16, 2001 (inception) to December 31, 2003. The financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.       I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that my audit provides a reasonable basis for my opinion.       In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Consolidated Pictures Corp. (a development stage company) as of December 31, 2003 and December 31, 2002 and the results of its operations, its cash flows and changes in stockholders' equity for the years then ended and for the period January 16, 2001 (inception) to December 31, 2003 in conformity with generally accepted accounting principles.               March 27, 2004
| /s/ Michael F. Cronin                                     |
|-----------------------------------------------------------|
|                                                           |
| Michael F. Cronin             Certified Public Accountant |

----

| **Consolidated Pictures Corp.**               (a development stage company)               Balance Sheet |
|---------------------------------------------------------------------------------------------------------|
|                                                                                                    |   |   |   |   | **December 31, 2003** |   | **December 31, 2002** |
|                                                                                                    |   |   |   |   |  |   |  |
| **ASSETS**                                                                                              |
| Current Assets:                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                    |   | Cash and Cash Equivalents |   | $ | 8,025 |   |   | $ | 5,432 |   |
|                                                                                                    |   | Deferred Offering Costs |   |   | 0 |   |   |   | 2,260 |   |
|                                                                                                    |   |   |   |   |  |   |   |  |   |
|                                                                                                    | Total Current Assets |   |   | 8,025 |   |   |   |  7,692 |   |
|                                                                                                    |   |   |   |   |  |   |   |  |   |
| Total Assets                                                                                            |   |   | 8,025 |   |   |   | 7,692 |   |
|                                                                                                    |   |   |   |   |  |   |   |  |   |
| **LIABILITIES and  STOCKHOLDERS' EQUITY**                                                          |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |
| Current Liabilities:                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                    |   | Accounts Payable |   |   | 105 |   |   |   | 416 |   |
|                                                                                                    |   | Loans Payable |   |   | 0 |   |   |   | 1,000 |   |
|                                                                                                    |   |   |   |  |   |   |  |   |
|                                                                                                    | Total Current Liabilities |   |   | 105 |   |   |   | 1,416 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |
| Advances from Stockholder                                                                               |   |   | 6,993 |   |   |   | 5,943 |   |
|                                                                                                    |   |   |   |   |  |   |   |  |   |
| Total Liabilities                                                                                       |   |   | 7,098 |   |   |   | 7,359 |   |
|                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders' Equity:                                                                                   |   |   |   |   |   |   |   |   |
|                                                                                                    |   | Preferred Stock, par value $0.0001 |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   | Authorized 5,000,000, none issued and outstanding |   |   | 0 |   |   |   | 0 |   |
|                                                                                                    |   | Common Stock, par value $0.0001 |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   | Authorized 50,000,000, issued and outstanding               4,579,900 at December 31, 2003;               4,565,500 at December 31, 2002 |   |   | 458 |   |   |   | 457 |   |
|                                                                                                    |   | Additional Paid-in Capital |   |   | 13,451 |   |   |   | 8,943 |   |
|                                                                                                    |   | Deficit Accumulated during Development Stage |   |   | (12,982 | ) |   |   | (9,067 | ) |
|                                                                                                    |   |   |   |   |  |   |   |  |   |
| Total Stockholders' Equity                                                                              |   |   | 927 |   |   |   | 333  |   |
|                                                                                                    |   |   |   |   |  |   |   |  |   |
| Total Liabilities and Stockholders' Equity                                                              |   |  $ | 8,025 |   |   |  $ | 7,692 |   |
|                                                                                                    |   |   |   |   |  |   |   |  |   |
| See Notes to Financial Statements                                                                       |

F-3

----

| **Consolidated Pictures Corp.**               (a development stage company)               Statement of Operations |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                              |   |   |   |   | **Year ended** |   | **January 16,               2001****(inception) to****December 31,               2003** |
|                                                                                                              |   |   |   |   | **December 31,               2003** |   | **December 31,               2002** |   |
|                                                                                                              |   |   |   |   |  |   |  |   |  |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Sales                                                                                                         |   | $ | 0 |   |   | $ | 0 |   |   |   | $ | 0 |   |
| Costs Applicable to Sales and Revenue                                                                             |   |   | 0 |   |   |   | 0 |   |   |   |   | 0 |   |
|                                                                                                              |   |  |   |   |  |   |   |   |  |   |
| Gross Profit                                                                                                      |   |   | 0 |   |   |   | 0 |   |   |   |   | 0 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, General and Administrative Expenses                                                                      |   |   | 3,915 |   |   |   | 5,042 |   |   |   |   | 12,982 |   |
|                                                                                                              |   |  |   |   |  |   |   |   |  |   |
| Loss before Income Taxes                                                                                          |   |   | (3,915 | ) |   |   | (5,042 | ) |   |   |   | (12,982 | ) |
| Income Taxes                                                                                                      |   |   | 0 |   |   |   | 0 |   |   |   |   | 0 |   |
|                                                                                                              |   |  |   |   |  |   |   |   |  |   |
| Net Loss                                                                                                          |   | $ | (3,915 | ) |   | $ | (5,042 | ) |   |   | $ | (12,982 | ) |
|                                                                                                              |   |  |   |   |  |   |   |   |  |   |
| Basic Net Loss per Share                                                                                          |   | $ | (NIL | )  |   | $ | (NIL | )  |   |   | $ | (NIL | )  |
|                                                                                                              |   |  |   |   |  |   |   |   |  |   |
| Weighted Average Common Shares Outstanding                                                                        |   |   | 4,570,053 |   |   |   | 4,556,010 |   |   |   |   | 4,558,825 |   |
|                                                                                                              |   |  |   |   |  |   |   |   |  |   |
| See Notes to Financial Statements                                                                                 |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

F-4

----

| **Consolidated Pictures Corp.**               (a development stage company)               Statement of Cash Flows |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                              |   |   |   |   | **Year ended** |   |   | **January 16,               2001****(inception) to****December 31,               2003** |   |   |
|                                                                                                              |   |   |   |   | **December 31,               2003** |   | **December 31,               2002** |   |   |   |   |
|                                                                                                              |   |   |   |   |  |   |  |   |   |  |   |   |
| Operating Activities                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              | Net Loss |   | $ | (3,915 | ) |   | $ | (5,042 | ) |   | $ | (12,982 | ) |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustments to Reconcile Net   Loss to Cash                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              | Change in Operating Assets and Liabilities: |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   | Accounts Payable |   |   | (311 | ) |   |   | (372 | )  |   |   | 105 |   |   |
|                                                                                                              |   |   |  |   |   |  |   |   |  |   |   |
| Cash Consumed by Operating Activities                                                                             |   |   |   | (4,226 | ) |   | (5,414 | ) |   |   | (12,877 | ) |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financing Activities                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              | Net Proceeds from the Issuance of Common Stock |   |   |   | 6,769 |   |   |   | 7,400 |   |   |   | 13,909 |   |   |
|                                                                                                              | Advance from Stockholder |   |   |   | 1,050 |   |   |   | 2,377 |   |   |   | 6,993 |   |   |
|                                                                                                              | Repayment of Loans Payable |   |   |   | (1,000 | ) |   |   | (1,500 | )  |   |   | 0 |   |   |
|                                                                                                              |   |   |   |   |  |   |   |  |   |   |  |   |   |
| Cash Generated from Financing Activities                                                                          |   |   | 6,819 |   |   |   | 8,277 |   |   |   | 20,902 |   |   |
|                                                                                                              |   |   |   |   |  |   |   |  |   |   |  |   |   |
| Change in Cash                                                                                                    |   |   | 2,593 |   |   |   | 2,863 |   |   |   | 8,025 |   |   |
| Cash – Beginning                                                                                            |   |   | 5,432 |   |   |   | 2,569 |   |   |   | 0 |   |   |
|                                                                                                              |   |   |   |   |  |   |   |  |   |   |  |   |   |
| Cash – End                                                                                                  |   | $ | 8,025 |   |   | $ | 5,432 |   |   | $ | 8,025 |   |   |
|                                                                                                              |   |   |   |   |  |   |   |  |   |   |  |   |   |
| See Notes to Financial Statements                                                                                 |

F-5

----

| **Consolidated Pictures Corp.**            (a development stage company)            Statement of Changes in Stockholders' Equity            For the period January 16, 2001 (inception) to December 31, 2003 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                         |   | **Common Stock** |   | **Additional            Paid-in Capital** |   | **Accumulated            Deficit** |   | **Total** |
|                                                                                                                                                                                                         |   | **Shares** |   | ** Amount ** |   |   |   |
|                                                                                                                                                                                                         |   |  |   |  |   |  |   |  |   |  |
| Issued to founder,            January 16, 2001                                                                                                                                                               |   | 4,500,000 |  | $ | 450 |  |  | $ | 550 |  |  | $ |  |  |  | $ |  |   |
|                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issued for services                                                                                                                                                                                          |   | 50,000 |   |   | 5 |   |   |   | 995 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss for the year ended            December 31, 2001                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   | (4,025 | ) |   |   |   |   |
|                                                                                                                                                                                                         |   |  |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Balance December 31, 2001                                                                                                                                                                                    |   | 4,550,000 |   |   | 455 |   |   |   | 1,545 |   |   |   | (4,025 | ) |   |   | (2,025 | ) |
|                                                                                                                                                                                                         |   |  |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Issued for cash in public offering                                                                                                                                                                           |   | 15,500 |   |   | 2 |   |   |   | 7,398 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                         |   |  |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Net loss for the year ended            December 31, 2002                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   | (5,042 | ) |   |   |   |   |
|                                                                                                                                                                                                         |   |  |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Balance December 31, 2002                                                                                                                                                                                    |   | 4,565,500 |   |   | 457 |   |   |   | 8,943 |   |   |   | (9,067 | ) |   |   | 333 |   |
|                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issued for cash in public offering                                                                                                                                                                           |   | 12,400 |   |   | 1 |   |   |   | 3,508 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issued  for cash in private sale                                                                                                                                                                        |   | 2,000 |   |   |   |   |   |   | 1,000 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended            December 31, 2003                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   | (3,915 | ) |   |   |   |   |
|                                                                                                                                                                                                         |   |  |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Balance December 31, 2003                                                                                                                                                                                    |   | 4,579,900 |   | $ | 458 |   |   | $ | 13,451 |   |   | $ | (12,982 | ) |   | $ | (927 | ) |
|                                                                                                                                                                                                         |   |  |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| See Notes to Financial Statements                                                                                                                                                                            |

F-6

----

**Nature of Development Stage Operations**

Consolidated Pictures Corp., (the "Company") was formed on January 16, 2001 as a Delaware corporation. The Company has been organized with the intent to operate in the entertainment industry, specifically, in connection with the development, production, marketing and distribution of low-budget digital films. The Company's activities to date have consisted primarily of organizational and equity fund-raising activities.

**Fiscal Year**

The Company has chosen December 31 as the end of its fiscal year.

**Use of Estimates**

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.

**Cash and Cash Equivalents**

For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents.

**Revenue and Expense Recognition**

Revenue is recognized when earned rather than when received. Sales are recognized when a product is delivered or shipped to the customer and all material conditions relating to the sale have been substantially performed. Expenses are charged to operations as incurred.

**Stock-based Compensation**

Stock-based compensation is accounted for by using the intrinsic value based method in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"). The Company has adopted Statements of Financial Accounting Standards No. 123, "Accounting for Stock-based Compensation," ("SFAS 123") which allows companies to either continue to account for stock-based compensation to employees under APB 25, or adopt a fair value based method of accounting. The Company has elected to continue to account for stock-based compensation to employees under APB 25 but will make the required SFAS 123 pro forma disclosures in accordance with SFAS 123.

**Earnings per Common Share**

The Company has adopted the provisions of Statement of Financial Accounting Standards No. 128 "Earnings per Share" ("SFAS 128"). SFAS 128 replaces the previous "primary" and "fully-diluted" earnings per share with "basic" and "diluted" earnings per share. Unlike "primary" earnings per share that included the dilutive effects of options, warrants and convertible securities, "basic" earnings per share reflects the actual weighted average of shares issued and outstanding during the period. "Diluted" earnings per share are computed similarly to "fully diluted" earnings per share. In a loss year, the calculation for "basic" and "diluted" earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.

F-7

----

**Income Taxes**

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," ("SFAS 109") which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carryforwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.       The Company has approximately $13,000 in net operating loss carryforwards available to reduce future taxable income. These carryforwards expire at various dates beginning in 2022 through 2024. Generally Accepted Accounting Principles require the recognition of deferred tax assets resulting from the future reduction in taxes as this net operating loss is applied against future taxable income. Management has elected not to recognize this asset due to its estimate of the uncertainty of the realization of its future financial benefit

A summary of the deferred tax asset presented on the accompanying balance sheets is as follows:

|   |                                                                          | December 31, 2003                                                                      |   |   | December 31, 2002                                                                      |   |   |
|--------|-------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------|--------|--------|
|   |                                                                          |                                                                                        |   |   |                                                                                        |   |   |
|   | Federal Deferred Tax Asset Relating to Net Operating Losses    | $         1,850                                |   |   | $       1,300                                            |   |   |
|   | State Deferred Tax Asset Relating to Net Operating Losses                     | 650                                                                                    |   |   | 450                                                                                    |   |   |   |
|   | Less: Valuation Allowance                                                     | (2,500                                                                                 | )      |   | (1,750                                                                                 | )      |   |
|   |                                                                          |                                                                                        |   |   |                                                                                        |   |   |
|   | Total Deferred Tax Asset                                                      | $              0 |   |   | $              0 |   |   |
|   |                                                                          |                                                                                        |   |   |                                                                                        |   |   |

**Start-up Costs**

In April 1998, the American Institute of Certified Public Accountants issued Statement of Position No. 98-5, "Reporting for Costs of Start-up Activities" ("SOP 98-5"). Pursuant to this statement, the Company is required to expense all start-up costs related to new operations. Accordingly, the Company has expensed organization costs of $375.

**Recent Accounting Pronouncements**

The Company's management has reviewed the recent accounting pronouncements issued by the Financial Accounting Standards Board and determined that they are not applicable to the Company's present operations. The Company plans to reconsider the impact of adoption of the new standards upon change of the Company's circumstances. 

F-8

----

**CONSOLIDATED PICTURES CORP.**       (a development stage company)       Notes to Financial Statements       December 31, 2003

**Note 1 - Stockholders' Equity**

**            Stock Issued for Services**

In September 2001, the Company issued 50,000 shares of restricted common stock for legal services in connection with the Company's public offering of securities. The shares were valued at $1,000.

**            Initial Public Offering**

On September 4, 2003, the Company closed its public offering of units of securities. Each unit was offered at $0.50 and consisted of one share of common stock; one Class A and one Class B warrant. Upon the closing of the offering, the Company had sold a total of 27,900 units consisting of 27,900 shares of common stock; 27,900 Class A warrants and 27,900 Class B warrants and received net proceeds of $10,909 after offering expenses of $3,041. Of this total, $7,400, net of expenses of $350, was recorded in 2002 and $3,509, net of expenses of $431 and deferred offering costs of $2,260, was recorded in 2003. 

**Note 2 - Deferred Offering Costs**

Deferred offering costs consists of filing fees, legal fees, and printing expenses incurred through September 4, 2003 that were directly related to a public offering described more fully in Note 1 - *Stockholders' Equity, Initial Public Offering*. Upon closing of the public offering on September 4, 2003, all deferred offering costs of $2,260 were reclassified and treated as a reduction of Additional Paid-in Capital.

**Note 3 - Warrants**

As of December 31, 2003, the Company had 27,900 Class A warrants and 27,900 Class B warrants outstanding. Each warrant entitles the holder to acquire one share of common stock. The Class A warrants are exercisable at $1.00 per share and their expiration date has been extended to September 4, 2004. The Class B warrants are exercisable at $1.50 per share and their expiration date has been extended until September 4, 2005. Due to the limited size of the Company's initial public offering of common stock and warrants, and considering the expiration dates and exercise prices of the warrants, no value was assigned to the warrants.

**Note 4 - Stock Option Plan**

On January 31, 2001, the Company adopted the 2001 Consolidated Pictures Corp. Stock Option Plan ("Plan"). The Plan provides for the issuance of up to 500,000 shares for options over a ten-year period. Under provisions of the Plan, the purchase price for a share of stock subject to the options shall not be less than 100% of the fair market value of the stock at the date of grant. As of December 31, 2003, no options had been granted.

**Note 5 - Related Party Transactions**

Commencing in April 2001 and continuing through December 31, 2003, the Company's controlling stockholder advanced $6,933 to the Company. The advances are non-interest bearing, unsecured and due on January 31, 2005.

**Note 6 - Litigation and Commitments**

The Company is not a party to any litigation and does not have any commitments or contingent liabilities.

F-9