`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 year ended May 31, 2003

                             Commission file number:
                                    333-68020

                            INTERNET RECREATION, INC.
        (Exact name of small business issuer as specified in its charter)

              Florida                                    65-0939305
    State or other jurisdiction of                     I.R.S. Employer
    incorporation or organization                     Identification No.

                                24 Locust Street
                             Quitman, Arkansas 72131
                     (Address of principal executive office)

                                 (501) 589-2362
                 (Issuer's telephone number including area code)

                             All Correspondence to:
                          Brenda Lee Hamilton, Esquire
                        Hamilton, Lehrer and Dargan, P.A.
                          2 East Camino Real, Suite 202
                            Boca Raton, Florida 33432
                                 (561) 416-8956

        Securities registered pursuant to Section 12(g) of the Act: None


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   [X] Yes   [ ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not 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-K
or any amendment to this Form 10-K. [ ]

Our revenues for most recent fiscal year were $67.

The aggregate market value of the voting and non-voting equity held by
non-affiliates computed by reference to the price at which common equity was
sold, or the average bid and asked price of such common equity (i.e., does not
include directors, executive officers or ten percent stockholders identified in
Item 11 hereof) of the issuer as of August 28, 2003 was approximately $0.

As of August 28, 2003, there were 12,625,000 shares of our common stock issued
and outstanding.

  APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                             PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.   Not Applicable

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Transitional Small Business Disclosure Format (check one)  Yes [ ]   No [X]

                                       1



                       TABLE OF CONTENTS TO ANNUAL REPORT
                                 ON FORM 10-KSB
                             YEAR ENDED MAY 31, 2003

                                     PART I

Item 1.     Description of Business........................................... 3
Item 2.     Description of Property........................................... 9
Item 3.     Legal Proceedings.................................................10
Item 4.     Submission of Matters to a Vote of Security Holders...............10

                                     PART II

Item 5.     Market for Common Equity and Related Stockholder Matters..........10
Item 6.     Management's Discussion and Analysis or Plan of Operation.........12
Item 7.     Financial Statements..............................................17
Item 8.     Changes in and Disagreements With Accountants on Accounting
            and Financial Disclosure..........................................30
Item 8A.    Controls and Procedures...........................................30

                                    PART III

Item 9.     Directors, Executive Officers, Promoters and Control Persons;
            Compliance With Section 16(a) of the Exchange Act.................31
Item 10.    Executive Compensation............................................32
Item 11.    Security Ownership of Certain Beneficial Owners
            and Management....................................................32
Item 12.    Certain Relationships and Related Transactions....................33
Item 13.    Exhibits and Reports on Form 8-K..................................34

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                       2


                                     PART I

Forward-Looking Statements:
This annual report on Form 10-KSB contains forward-looking statements. Internet
Recreation, Inc. is referred to in this report as "we", "us" or "our." The words
or phrases "would be," "will allow," "intends to," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements."
Actual results could differ materially from those projected in the
forward-looking statements as a result of a number of risks and uncertainties,
including the following: (a) we may be unable to continue as a going concern;
(b) because we are a development stage company with a limited operating history
and a poor financial condition, you will be unable to determine whether we will
ever become profitable; (c) if we fail to institute methods of retaining first
time users of our services, our revenues will be adversely affected; (d) because
our management has limited experience or background in our business, we may be
unable to develop profitable operations; and (e) because we have no full-time
employees and our management now devotes and may continue to devote limited time
to our business, we may never become profitable. These risks are discussed in
more detail in this 10-KSB.

Statements made in this report are as of the date of the filing of this Form
10-KSB with the Securities and Exchange Commission and should not be relied upon
as of any subsequent date. Unless otherwise required by applicable law, we do
not undertake, and we specifically disclaim any obligation, to update any
forward-looking statements to reflect occurrences, developments, unanticipated
events or circumstances after the date of such statements.

Item 1. Description of Business

Our principal executive offices are located at 24 Locust Street, Quitman,
Arkansas 72131. Our telephone number at this address is (501) 589-2362.

We were incorporated in Florida for the purpose of selling children's products
on the Internet. We have operated as a development stage company since our
inception. We are authorized to issue 100,000,000 shares of common stock, of
which 12,625,000 shares are issued and outstanding. We are authorized to issue
100,000,000 shares of preferred stock, of which no shares are issued and
outstanding.

                                       3



In approximately March 2001, we began implementing our business plan to sell
children's products on the Internet through third party Internet retailers. We
have developed additional third party links with retailers since March of 2001.

We operate a website at www.kidfuzion.com that consists of links to third party
Internet retailers. Originally our website was located at www.personalized
kidsstuff.com and consisted exclusively of children's products; however, in
April 2003, we expanded our product selections to include men's and women's
related products, such as vitamins, herbs, clothing, shoes, beauty aids,
cosmetics, perfumes, jewelry and other products. These retailers offer and sell
various products from which we are entitled to receive commissions if products
are sold as a result of linking to the retailer's website from our website.

To date, we have generated revenues of only $67, which is insufficient to
sustain our operations or in implementing all planned aspects of our business
plan; as a result of this we may in the future seek merger or acquisition
candidates. Any such merger or acquisition, however, involves various risks to
our future business operations and financial condition, including the following:
(a) we may fail to perform adequate due diligence regarding a company we acquire
or merge with, which may negatively affect our financial conditions and
operations; (b) we may be unable to negotiate acceptable terms of a merger or
acquisition; and (c) negotiating and completing a merger or acquisition as well
as integrating the merger or acquisition into our operations will divert
management time and resources away from our current operations and increase our
existing costs.

We have never been the subject of any bankruptcy or receivership action. We have
had no material reclassification, merger, consolidation, or purchase or sale of
a significant amount of assets outside the ordinary course of business.

PRINCIPAL PRODUCTS AND SERVICES
On our website located at kidfuzion.com, we sell and market products solely
through links that we have with third party Internet retailers. We do not
manufacture or sell products directly through our website. Sales of merchandise
are conducted solely through the links that we have established with other
Internet retailers.

                                       4



Through our agreements with Commission Junction, LinkShare, Keynetics, Inc., and
QuinStreet, Inc., we became "affiliate marketers"; in so doing we obtained a
license to establish links with retail merchants affiliated with these companies
with which they have established agreements. These companies operate "Merchant
Programs" on behalf of retail merchants. There are thousands of retail merchants
who have similar such arrangements with these companies. As an affiliate
marketer, we must apply for acceptance to a Merchant Program to earn financial
compensation referred to as "payouts" through sales, leads, or clicks made from
an affiliate website. When these companies accepted our participation in a
Merchant Program, we became an affiliate merchant and we agreed to the program
payout specifications of each retail merchant. Accordingly, the amount of the
payouts and the timing of the payouts pertaining to sales, links and clicks will
differ from merchant to merchant according to the respective agreement that an
individual merchant has with an affiliate marketer. These Internet retailers
sell a variety of products and represent a number of wholesalers or retailers of
the products that they sell.

OUR LINKS WITH INTERNET RETAILERS:

We have links with 101 Internet retailers which sell a variety of products and
services, including:
     o    Baby products;
     o    Children's toys;
     o    Children's arts and crafts;
     o    Children's clothing;
     o    Children's costumes;
     o    Children's school products;
     o    Allergy control products;
     o    Adult hair products;
     o    Jewelry;
     o    Men's and women's clothing;
     o    Adult sportswear;
     o    Athletic footwear;
     o    Women's fragrances;
     o    Cosmetics;
     o    Vitamins, herbs and nutritional products;
     o    Adult and children's books;
     o    Discounted movie tickets and video rentals;
     o    Party supplies; and
     o    Skin care products.

Distribution Methods of our Services:
We do not directly distribute any products. Distribution of our products occurs
directly through our third party linked retailers.

                                       5



Material Agreements:

COMMISSION JUNCTION AGREEMENT
We have an affiliate service agreement with Commission Junction in which we are
entitled to earn financial compensation through sales, leads and/or clicks made
from our website through a link to another website operated by a merchant. We
receive payout rates as determined by the individual merchants. The agreement
further provides that Commission Junction may terminate our agreement for, among
other things: (a) operation of an illegal business through our website; (b)
displaying illegal content on our website; (c) operating a website that contains
or promotes misleading, abusive, violent, bigoted or hate-oriented content; (d)
engaging in unsolicited commercial advertising emails; or (e) breach of the
Commission Junction agreement.

LINK SHARE AGREEMENT
We have a membership agreement with LinkShare which provides that we have a
personal, nonexclusive license to participate in their program. Through this
program we may earn financial compensation through sales, leads and/or clicks
made from our website through a link to another website operated by a merchant.
The agreement provides that we receive payout rates as determined by individual
merchants. The agreement further provides that LinkShare may terminate or
suspend our access to all or part of its service for any reason, including,
without limitation, if we breach or assign the agreement.

KEYNETICS, INC.
We have an agreement with Keynetics, Inc. which provides its services through
clickbank.com and clickbank.net. Through this agreement, we have the ability to
earn sales commissions by linking customers to products sold by individual
merchants affiliated with ClickBank. The agreement provides that we receive
payout rates as determined by individual merchants. The agreement further
provides that Keynetics, Inc. reserves the right to delay, suspend, or refuse
payment of any portion of our account balance at any time, close our account at
any time, and modify our contract at any time.

QUINSTREET MEMBERSHIP AGREEMENT
We have a membership agreement with QuinStreet, Inc. which provides us with
marketing links to use on our website. By clicking on a link, visitors to our
website will be diverted directly to product sales web pages served by
QuinStreet. The agreement provides that QuinStreet will determine which sales or
leads generated through merchants' websites originated from links on our
website. For each such sale or lead, QuinStreet will pay us the amounts due for
each transaction as specified by individual merchants. The agreement further
provides that QuinStreet, Inc. reserves the right to terminate the links
immediately upon written notice and terminate our participation in the program
for any of the following reasons: (a) if we breach any terms of the agreement;
(b) if our website promotes or exhibits sexually explicit material or violence,
promotes discrimination based on race, sex, religion, national origin, physical
disability, sexual orientation, or age; (c) promotes or engages in illegal
activities; (d) misrepresents the products or services offered by QuinStreet; or
(e) if we use any manual, technological, or promotional methods to
artificially inflate the numbers of leads generated.

                                       6



Revenues/Products Breakdown:
We currently do not manufacture, develop or directly market any products. Our
revenues will be derived solely from the commissions that we receive from our
third party linked retailers.

Our Customers:
Since our inception, we have had only a limited number of customers. Our
potential customers consist of the general public through our third party
Internet linked retailers.

Our Billing Practices:
Billing for products purchased through our website is conducted solely through
our third party linked retailers; accordingly, we do not independently bill
customers that purchase products through these retailers. Our commissions and
other financial compensation are paid according to the individual terms of our
agreements with our third party linked retailers.

Geographic Markets:
The third party linked retailers offer and sell their products throughout the
United States.

Marketing:
We have advertised and plan to continue to advertise in local and written
publications located in small communities as detailed in our "Plan of
Operations" below. In addition, we plan to list our website with various search
engines located on the Internet through which we will attempt to create
awareness of our website.

Competitive Business Conditions:
The Internet based products market is increasingly competitive, with hundreds of
Internet competitors that have similar businesses to ours. In addition, because
barriers to market entry are relatively low and new competitors can establish
new sites at a relatively low cost utilizing a variety of market available
software, we expect competition to become increasingly intensified in the
future. Therefore, competition is rapidly evolving and there are no assurances
that we can keep pace with such intense competition.

                                       7



Some of our biggest competitors are numerous large retailers with websites
including: Baby Universe, Target, WalMart, Baby Love, and Babies-R-Us.
These companies have longer operating histories, greater name recognition,
larger customer bases, and greater financial and technical resources than us.
Accordingly, these companies are able to conduct extensive marketing campaigns
that we are financially unable to accomplish. In addition, these companies may
create more attractive pricing than we are able to create. Also while our
competitors have an established brand name and reputation, we do not. There can
be no assurance that we will be able to compete in the sale of our products,
which could have a materially negative impact upon market awareness and
acceptance of our website and our third party linked retailers.

Sources and Availability of Raw Materials:
We do not use raw materials in our business. Any raw materials that are used in
the manufacture of products sold through our third party retailers are arranged
through them or manufacturers or submanufacturers of their products.

Principal Suppliers:
Because our suppliers are responsible for the manufacture and distribution of
their products, we have no suppliers.

Dependence on Major Customers:
Because the products sold through our third party linked retailers are sold to
the general public, we do not expect that any one customer will constitute more
than ten percent (10%) of our revenues; however, to date, we have only a limited
number of customers that have accounted for our revenues of $67.

Regulatory Matters:
We are not aware of the need for any governmental approval of our products.

Effect of Existing Governmental Regulations:
We are not aware of any governmental regulations that will affect our business
plan. However, due to increasing usage of the Internet, laws and regulations may
be adopted relating to the Internet, including user privacy, pricing, and
characteristics and quality of products and services. Furthermore, the growth
and development of Internet commerce may prompt more stringent consumer
protection laws which would impose additional burdens on companies conducting
business over the Internet. The adoption of any additional laws or regulations
may decrease the growth of the Internet, which, in turn, could decrease the
demand for Internet services and increase the cost of doing business on the
Internet. These factors may have an adverse effect on our business, results of
operations and financial condition.

                                       8



Cost of Compliance with Environmental Matters:
Our business does not involve the emission of hazardous substances. Because we
are not involved in manufacturing or delivery and distribution of the products
that are sold through our third party retailers, we have no costs associated
with environmental matters.

Research and Development:
During Fiscal Year 2003, we spent no funds on research and development.

Employees:
We currently have one part-time employee, our President, Kathleen (Patty)
Hackler. We have no full-time employees.

None of our employees are represented by a labor union for purposes of
collective bargaining. We consider our relations with our existing employees to
be satisfactory.

Reports to Security Holders:
We are subject to the reporting requirements of the Securities Exchange Act
of 1934. Accordingly, we file annual, quarterly and other reports and
information with the Securities and Exchange Commission. You may read and copy
these reports and other information we file at the Securities and Exchange
Commission's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Our filings are also available to the public from commercial
document retrieval services and the Internet website maintained by the
Securities and Exchange Commission at www.sec.gov.

Item 2. Description of Property.
From March 22, 2002 to present, we have operated out of 100 square feet of space
located at 24 Locust Street, Quitman, Arkansas 72131, which is the personal
residence of our current President, Kathleen (Patty) Hackler. Ms. Hackler does
not charge us for use of this space and she does not conduct any other business
from this space. The offices are sufficient to conduct our operations.

We do not own any property or intend to have any property in the future. We do
not intend to renovate, improve or develop properties. We are not subject to any
competitive conditions for property and currently have no property to insure. We
have no policy with respect to investments in real estate or interests in real
estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.

                                       9
Item 3. Legal Proceedings.
We have not been served with any legal process providing us with legal notice of
any pending proceedings. We are not a plaintiff in any pending action. We are
not aware of any contemplated legal proceeding by a governmental authority in
which we may be involved.

Item 4. Submission of Matters to a Vote of Security Holders.
None.



                                    PART II

Item 5. Market for Common Equity and Related Stockholder Matters.
Our common stock has been quoted on the Over-the-Counter Bulletin Board
("OTCBB") under the symbol "IRNI" since March 28, 2002. There is currently no
active trading market for our common stock. The high and low bid information for
each quarter, if applicable, for the last two fiscal years is presented below.
The quotations are interdealer prices without adjustment for retail markups,
markdowns or commissions and do not necessarily represent actual transactions.
These prices may not necessarily be indicative of any reliable market value.

          Quarter                   High                           Low
  Fiscal Year Ended 5/31/02
      First Quarter               Not Applicable.                Not Applicable.
      Second Quarter              Not Applicable.                Not Applicable.
      Third Quarter               $   0                          $   0
      Fourth Quarter              $   0                          $   0

  Fiscal Year Ended 5/31/03
      First Quarter               $   0                          $   0
      Second Quarter              $   0                          $   0
      Third Quarter               $   0                          $   0
      Fourth Quarter              $   0                          $   0

Holders:
As of May 31, 2003 and as of August 28, 2003, we had 32 holders of record.

Issued and Outstanding Stock:
As of May 31, 2003 and as of August 28, 2003, there were 12,625,000 shares of
common stock issued and outstanding. Each share of common stock entitles the
holder to one vote on each matter that may come before a meeting of the
shareholders. We currently have one class of common stock outstanding.

                                       10



Options:
We have not issued any options since our inception.

Warrants:
We have not issued any warrants since our inception.

Dividends:
We have not declared any cash dividends on our common stock since our inception
and do not anticipate paying such dividends in the foreseeable future. We plan
to retain future earnings, if any, for use in our business operations. Any
decisions as to future payment of dividends will depend on our earnings and
financial position and such other factors, as the Board of Directors deems
relevant.

Recent Sales of Unregistered Securities:
The following is the information for all securities we sold within the past
three years without registration under the Securities Act.

On January 12, 2001, we issued 250,000 shares of our common stock to Hamilton,
Lehrer & Dargan P.A. in exchange for legal services rendered to us.

On May 31, 2001, we issued 10,000 shares of our common stock to Barbara Lawton
in return for bookkeeping services she rendered to us.

On May 31, 2001, we issued 20,000 shares of our common stock to Howard Dargan
P.A. for legal services rendered to us.

On May 21, 2001, we issued 50,000 shares of our common stock to our former
president, Cathy Williamson, for services rendered as our president at that
time.

On August 10, 2001, we issued 7,000 shares of our common stock to Equity
Technology Group, Inc., a Florida corporation, for Edgar services.

On December 4, 2001, we issued 100,000 restricted shares of our common stock to
Kevin Steil for website development services.

On February 5, 2002, we sold 8,000 restricted shares of our common stock at a
price of $0.25 per share to a shareholder.

On February 12, 2003, we issued 3,000,000 shares of our common stock to our
Chief Executive Officer for services rendered as our sole officer and director.

                                       11



Between April 26, 2001 and August 7, 2001, we sold 30,000 shares of our common
stock to 24 investors at a price of $0.25 per share raising total proceeds of
$7,500. None of these issuances involved underwriters, underwriting discounts or
commissions.

For all of the above sales and issuances, we relied upon Section 3(b) of the
Securities Act of 1933, as amended, and Rule 504 of Regulation D in offering
these shares. We believed these exemptions were available because:
     o    We are not a blank check company;
     o    Total sales did not exceed $1,000,000;
     o    We filed a Form D, Notice of Sales, with the Securities and Exchange
          Commission;
     o    Sales were not made by general solicitation or advertising;
     o    All certificates had restrictive legends; and
     o    Sales were made to investors who were either accredited investors or
          who represented that they were sophisticated enough to evaluate the
          risks of the investment.

Item 6. Plan of Operations.
We can continue to satisfy our current cash requirements for a period of twelve
months through obtaining loans from our President. We anticipate total estimated
capital expenditures of $10,000 over the next twelve months, as follows:
     o    $5,000 for advertising in infant and children's magazines;
     o    $350 for paying our Internet website server over the next twelve
          months; and
     o    $4,650 for working capital.

As of May 31, 2003, we had only $533.00 of cash; however, we will need an
estimated $10,000 to accomplish our operational goals. Accordingly, we will be
unable to fund our expenses through our existing assets or cash. Although our
President plans to loan us funds to conduct our operations, we have no agreement
with our President to do so and our President is under no obligation to loan us
funds. Accordingly, there are no assurances that we will receive loans from our
President. Moreover, there are no assurances that our President will have
sufficient funds to make these loans. In addition, we have no compensation
agreements to our President in connection with any loans she may provide to us.
If our President is unable or unwilling to make loans to us necessary to
implement our plan of operations, we will need additional financing through
traditional bank financing or a debt or equity offering; however, because we are
a development stage company with no operating history and a poor financial
condition, we may be unsuccessful in obtaining such financing or the amount of
the financing may be minimal and therefore inadequate to implement our plan of
operations. In addition, if we only have nominal funds by which to conduct our
operations, we may have to curtail our plan of operations which would negatively
impact development of our brand name and reputation. We have no alternative
operations. In the event that we do not receive financing or our financing is
inadequate or if we do not adequately implement an alternative plan of
operations that enables us to conduct operations without having received
adequate financing, we may have to liquidate our business and undertake any or
all of the following actions:
     o    Sell or dispose of our assets, if any;
     o    Pay our liabilities in order of priority, if we have available cash to
          pay such liabilities;
     o    If any cash remains after we satisfy amounts due to our creditors,
          distribute any remaining cash to our shareholders in an amount equal
          to the net market value of our net assets;
     o    File a Certificate of Dissolution with the State of Florida to
          dissolve our corporation and close our business;
     o    Make the appropriate filings with the Securities and Exchange
          Commission so that we will no longer be required to file periodic and
          other required reports with the Securities and Exchange Commission,
          if, in fact, we are a reporting company at that time; and
     o    Make the appropriate filings with the National Association of Security
          Dealers to affect a delisting of our common stock, if, in fact, our
          common stock is trading on the OTCBB at that time.

                                       12



Based upon our current assets, however, we will not have the ability to
distribute any cash to our shareholders.

If we have any liabilities that we are unable to satisfy and we qualify for
protection under the U.S. Bankruptcy Code, we may voluntarily file for
reorganization under Chapter 11 or liquidation under Chapter 7. Our creditors
may also file a Chapter 7 or Chapter 11 bankruptcy action against us. If our
creditors or we file for Chapter 7 or Chapter 11 bankruptcy, our creditors will
take priority over our shareholders. If we fail to file for bankruptcy under
Chapter 7 or Chapter 11 and we have creditors, such creditors may institute
proceedings against us seeking forfeiture of our assets, if any.

We do not know and cannot determine which, if any, of these actions we may be
forced to take.

If any of these foregoing events occur, you could lose your entire investment in
our shares.

Our Operations from Our Inception to May 31, 2003.
We were incorporated on March 10, 1999. We began our operations in May 2001.
Since our inception to May 31, 2003, we accomplished the following:
1. Raised Capital - On January 7, 2002 we raised an additional $2000 for our
     operations through the sale of private placement securities.
2. Changes in Website - From December 2001 through January 2002, our website
     was redesigned and reformatted to:
     o    Make our website faster;
     o    Create more specific, self-explanatory product categories; and
     o    Create a new logo and navigational layout.
Our updated website at www.personalizedkidsstuff.com became operational on
February 1, 2002.

3. New Retailer Links - During March 2002, in order to offer our users a greater
product and service selection, we added approximately 15 new retailer links that
market: a) children and infant clothing; b) infant products such as diaper bags,
strollers, and cribs; c) children and infant toys and games; and d) books, music
and videos.

4. New Website Format and Additional Retailer Links
In April 2003, in order to offer our users a greater product and service
selection, and in our attempt to generate revenues, we incorporated
approximately 50 additional Internet retailer links into our website. In
conjunction with our adding these links, we conducted an analysis of our
previous website format which had consisted of general categories, sub
categories and retailer links associated with those categories. On the basis
of our analysis, we concluded that this format was cumbersome and not user
friendly, and we adopted a new "scrolling" type format with our retailer links
in alphabetical order. Our new format permits users to make their selection
based on the Internet retailer name, which typically denotes the type products
or services sold by that retailer. We believe that this format is more user
friendly than our previous format.

                                       13
5. Advertisements: We have paid for the following advertisements to advertise
the products that we offer through our website:
     o    The Sun Times, a Heber Springs, Arkansas based newspaper publication
          which appeared during 2003 on approximately April 16, 18, 23, and 25;
          and
     o    The Log Cabin, a Conway, Arkansas based newspaper publication which
          appeared during 2003 on approximately April 15 and 22, and on Log
          Cabin's website, www.thecabin.net, during the period from
          approximately April 15 to April 22, 2003.

6. New Website Name: On April 15, 2003, we reserved the website name
www.kidfuzion.com through Network Solutions, a domain registration service. We
conduct our operations through www.kidfuzion.com. We have terminated our use
of the website name, www.personalizedkidsstuff.com. Our new website name is:
     o    more descriptive of our business;
     o    shorter and therefore possibly more recognizable to prospective
          Internet users; and
     o    possibly more appealing to prospective Internet users in our
          attempt to increase the level of visitation to our website.


Our Future Plan of Operations.
We will attempt to accomplish the following in our plan of operations over the
next twelve months:

1. Update Website. Continually update our website to add new product categories
and products within existing categories. Because management will add these
categories and products, we do not anticipate any cost affiliated with this
aspect of our operations.

2. New Retailer Links. We will continually attempt to add additional Internet
links. We do not anticipate any cost affiliated with this aspect of our
operations.

3. New Affiliate Merchant Programs. We plan to add at least one affiliate
merchant program, which will not entail any additional cost.

4. Advertising. We expect to advertise in local and written publications located
in small communities. These advertisements will cost between $25 and $500. We
expect to spend approximately $1,500 for these type advertisements. If and only
if we have sufficient revenues or financing from other sources, we will obtain
half page advertisements in national publications. We estimate that these
advertisements will cost between $1,500 and $10,000 depending upon the
publication, number of advertisements and length of advertisements.

                                       14
5. Offering Coupons or Incentives on our Website. In March 2002, we had planned
to negotiate with retailers to provide coupons and other incentives to potential
purchasers; however, to date we have not accomplished this step in our plan of
operations due to our failure to generate revenues. We now plan to accomplish
this step sometime during 2003, if we generate sufficient revenues to attract
retailers to provide us with such incentives and coupons. These coupons and
incentives will be individually offered at our site to purchase products from
our linked retailers. At the present time, we do not anticipate any cost
affiliated with this aspect of our operations.

Revenues.
We cannot determine whether our revenues will ever be sufficient to produce a
positive cash flow or result in net profits. You should carefully consider the
discussion appearing below under "Liquidity and Capital Resources". Since our
inception through May 31, 2003, we have had only $67 of revenues. We do not
expect to earn significant operating revenue in the foreseeable future. Our
losses are expected to continue, principally as a result of general and
administrative expenses and advertising costs.

Liquidity and Capital Resources.

As of May 31, 2003, we had limited cash resources of only $533. Other than
our existing working capital, we do not have any other internal sources of
working capital.

We expect to make the following capital expenditures of $10,000 over the next
twelve months which consists of $5,000 for advertising in infant and children's
magazines, $350 for paying our Internet website server over the next twelve
months, and $4,650 for working capital.

Since our inception, our operating expenses have exceeded our revenues, which
has been $67. Because of the continued need for substantial amounts of working
capital to fund our planned growth and ongoing operating expenses, we expect to
continue to experience significant negative operating cash flow for the
foreseeable future. Our existing working capital will not be sufficient to fund
the continued implementation of our plan of operations during the next 12 months
and to meet our general operating expenses. We are unable to predict at this
time the exact amount of additional working capital we will require; however, in
order to provide any additional working capital which we may require, in all
likelihood we will be required to raise additional capital through the sale of
equity or debt securities. We currently have no commitments to provide us with
any additional working capital. If we do not have sufficient working capital to
implement our plan of operations described above, it is likely that we will have
to cease operations.

                                       15



In addition, our business is subject to the following risks:
We may be unable to continue as a going concern.
Our auditors, Stark Winter Schenkein & Co., LLP, stated in Note 4 to our
financial statements for the Fiscal Year ended May 31, 2003, that: (a) we have
experienced a loss from operations during our development stage as a result of
our investment necessary to achieve our operating plan, which is long range in
nature; (b) for the period from inception to May 31, 2003, we incurred a net
loss of $41,775; (c) we have no significant assets or revenue generating
operations; (d) our ability to continue as a going concern is contingent upon
our ability to attain profitable operations by securing financing and
implementing our business plan; and (e) our ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which we operate.

Because we are a development stage company with a limited operating history and
a poor financial condition, you will be unable to determine whether we will ever
become profitable. An investor cannot determine if we will ever become
profitable due to our limited operating history, poor financial condition, and
the developmental nature or our business. Future losses are likely before our
operations will become profitable, if ever. We are a development stage company
with limited operations and revenues of only $67 through May 31, 2003. From our
inception to May 31, 2003, we had continuously increasing losses and we
anticipate our losses to accumulate for the foreseeable future. From our
inception to May 31, 2003, we incurred operating losses of ($41,775.00).

We may experience a poor customer retention rate; accordingly, if we fail to
institute methods of retaining first time users of our services, our revenues
will be adversely affected.
Because our first time purchasers of products purchased at our linked sites will
discover that they can purchase products directly through our linked websites or
elsewhere, rather than through our website, they may never utilize our website
again. Accordingly, it is essential that we institute methods of retaining first
time users to our website; however, there are no assurances that our plans to
advertise in children's magazines or small community publications or to
establish agreements with wholesalers of children's products will be successful
in retaining first time users. If we fail to implement effective means of
retaining first time users, we will not become profitable.

Because our management has no relevant experience or background in our business,
we may be unable to develop profitable operations. Our management has no
experience in a retail or Internet-based business. We may be unable to compete
effectively or develop profitable operations against companies that have
management with retail or Internet experience.

Because we have no full-time employees and our management now devotes and may
continue to devote limited time to our business, we may never become profitable.
We have no full-time employees. Our President, who is our only officer, director
and employee, spends approximately 10 to 20 hours monthly on our business. The
limited amount of time management devotes to our business activities may be
inadequate to implement our plan of operations or become profitable.

                                       16
Item 7. Financial Statements.




                            Internet Recreation, Inc.
                          (A Development Stage Company)






                            Internet Recreation, Inc.
                                Table of Contents

                                                                    Page

         Reports of Independent Auditors ...........................18-19

         Balance Sheet ............................................. 20

         Statements of Operations .................................. 21

         Statements of Stockholders' Equity ........................ 22

         Statements of Cash Flows .................................. 23

         Notes to Financial Statements .............................24-29



                                       17




                         REPORT OF INDEPENDENT AUDITORS


Stockholders and Board of Directors
Internet Recreation, Inc.

We have audited the accompanying balance sheet of Internet Recreation, Inc. (A
Development Stage Company) as of May 31, 2003, and the related statements of
operations, stockholders' equity and cash flows for the years ended May 31, 2003
and 2002. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Internet Recreation, Inc. (A
Development Stage Company) as of May 31, 2002, and results of its operations and
its cash flows for the years ended May 31, 2003 and 2002, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has suffered losses from operations and is in
the development stage. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are also discussed in Note 4. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/Stark Winter Schenkein & Co., LLP
Stark Winter Schenkein & Co., LLP


Denver, Colorado
August 4, 2003


                                       18




                               DURLAND & COMPANY
                          Certified Public Accountants
                           A Professional Association
                              232A Royal Palm Way
                              Palm Beach, FL 33480
                         (561) 822-9995 o FAX 822-9942

                          INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders
Internet Recreation, Inc.
(A Development Stage Enterprise)
Boca Raton, Florida

We have audited the accompanying balance sheet of Internet Recreation, Inc., a
development stage enterprise, as of May 31, 2001 and the related statements of
operations, changes in stockholders' equity and cash flows for the period from
March 10, 1999 (Inception) through May 31, 2001. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Internet Recreation, Inc. as of
May 31, 2001 and the results of its operations and its cash flows for the period
from March 10, 1999 (Inception) through May 31, 2001 in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company has experienced a loss since inception. The
Company's financial position and operating results raise substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 5. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


                                                /s/Durland & Company, CPAs, P.A.
                                                   Durland & Company, CPAs, P.A.
Palm Beach, Florida
July 26, 2001

                                       19





                            INTERNET RECREATION, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                  MAY 31, 2003

                  ASSETS

CURRENT ASSETS
   Cash                                                        $        533
                                                               ------------
OTHER ASSETS
   Web site                                                          12,500
                                                               ------------
                                                               $     13,033
                                                               ============


                  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Total current liabilities                                $        -
                                                               ------------

STOCKHOLDERS' EQUITY
  Preferred stock, $.0001 par value, 100,000,000

   shares authorized, none issued and outstanding                       -
  Common stock, $.0001 par value, 100,000,000
   shares authorized, 12,625,000 shares
   issued and outstanding                                             1,263
  Additional paid in capital                                         53,545
  (Deficit) accumulated during the development stage                (41,775)
                                                               ------------
                                                                     13,033
                                                               ------------

                                                               $     13,033
                                                               ============

            See the accompanying notes to the financial statements.

                                       20




                            INTERNET RECREATION, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
                      YEARS ENDED MAY 31, 2003 AND 2002 AND
           THE PERIOD FROM INCEPTION (MARCH 10, 1999) TO MAY 31, 2003


                                                   Year         Year       Inception
                                                  Ended        Ended          to
                                                  May 31,      May 31,      May 31,
                                                   2003         2002         2003
                                                -----------  -----------  -----------

REVENUE
   Net sales                                    $        67  $       -    $        67
                                                -----------  -----------  -----------

OPERATING COSTS AND EXPENSES
   General and administrative                        19,808       19,354       41,842
                                                -----------  -----------  -----------

NET (LOSS)                                      $   (19,741) $   (19,354) $   (41,775)
                                                ===========  ===========  ===========

PER SHARE INFORMATION (basic and fully diluted)

Weighted average common shares outstanding       10,611,301    9,618,482    9,693,051
                                                ===========  ===========  ===========

(Loss) per share                                $    (0.00)  $     (0.00) $     (0.00)
                                                ===========  ===========  ===========

            See the accompanying notes to the financial statements.

                                       21




                            INTERNET RECREATION, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDERS' EQUITY
             PERIOD FROM INCEPTION (MARCH 10, 1999) TO MAY 31, 2003

                                                                    (Deficit)
                                                                   Accumulated
                                                        Additional During the
                                       Common Stock      Paid in   Development
                                      Shares    Amount   Capital     Stage        Total
                                     ---------  ------  ---------- -----------  ---------
Balance at inception                       -    $    -   $      -  $        -   $       -

Common shares issued for services
  at inception at $.0001 per share   9,250,000     925          -           -         925
Net (loss) for the period                  -         -          -         (925)      (925)
                                     ---------  ------  ---------- -----------  ---------
Balance December 31, 1999 and
 December 31, 2000                   9,250,000     925          -         (925)         -

Common shares issued for services
  at $.0001 per share                  330,000      33          -           -          33
Common shares issued for cash
  at $.25 per share                     22,000       2      5,498           -       5,500
Net (loss) for the period                  -         -          -       (1,755)    (1,755)
                                     ---------  ------  ---------- -----------  ---------
Balance May 31, 2001                 9,602,000     960      5,498       (2,680)     3,778

Common shares issued for services
  at $.25 per share                      7,000       1      1,749           -       1,750
Common shares issued for cash
  at $.25 per share                     16,000       2      3,998           -       4,000
Common shares issued for web site
 at $.25 per share                     100,000      10     24,990           -      25,000
Return of common shares for no
 consideration by an officer          (100,000)    (10)        10                       -
Contribution of services by officer        -         -      6,000           -       6,000
Cash contribution by an officer            -         -        100           -         100
Net (loss) for the year                    -         -          -      (19,354)   (19,354)
                                     ---------  ------  ---------- -----------  ---------
Balance May 31, 2002                 9,625,000     963     42,345      (22,034)    21,274


Contribution of services by officer        -         -      1,500           -       1,500
Cash contribution by an officer            -         -      5,500           -       5,500
Common shares issued for services
  at $.0015 per share                3,000,000     300      4,200                   4,500
Net (loss) for the year                    -         -          -      (19,741)   (19,741)
                                     ---------  ------  ---------- -----------  ---------
Balance May 31, 2003                12,625,000  $1,263   $ 53,545  $   (41,775) $  13,033
                                    ==========  ======  ========== ===========  =========

            See the accompanying notes to the financial statements.

                                       22



                            INTERNET RECREATION, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
                      YEARS ENDED MAY 31, 2003 AND 2002 AND
           THE PERIOD FROM INCEPTION (MARCH 10, 1999) TO MAY 31, 2003

                                                Year       Year     Inception
                                               Ended      Ended        to
                                               May 31,    May 31,    May 31,
                                                2003       2002       2003
                                             ---------   --------   ---------
Cash flow from operations:
Net (loss)                                   $ (19,741)  $(19,354)  $ (41,775)
Adjustments to reconcile net (loss) to net
 cash used in operating activities:
Amortization                                     8,333      4,167      12,500
Common shares issued for services                4,500      1,750       7,208
Contribution of services to capital              1,500      6,000       7,500
                                             ---------   --------   ---------
  Net cash (used in) operating activities       (5,408)    (7,437)    (14,567)
                                             ---------   --------   ---------

Cash flows from investing activities:
  Net cash (used in) investing activities           -          -           -
                                             ---------   --------   ---------

Cash flows from financing activities:
Common shares issued for cash                       -       4,000       9,500
Cash contribution by officer                     5,500        100       5,600
                                             ---------   --------   ---------
  Net cash provided by financing activities      5,500      4,100      15,100
                                             ---------   --------   ---------

Increase (decrease) in cash                         92     (3,337)        533

Cash -  beginning of period                        441      3,778          -
                                             ---------   --------   ---------
Cash - end of period                         $     533   $    441   $     533
                                             =========   ========   =========
Supplemental Cash Flow Disclosures:
Cash paid for:
 Interest                                    $      -    $     -    $      -
                                             =========   ========   =========
 Income taxes                                $      -    $     -    $      -
                                             =========   ========   =========

Non Cash Investing and Financing Activities:

 Issuance of common shares for web site      $      -    $ 25,000   $  25,000
                                             =========   ========   =========

             See the accompanying notes to the financial statements.

                                       23



                           INTERNET RECREATION, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                         NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was incorporated on March 10, 1999 in the State of Florida. The
Company is in the development stage and its intent is to conduct business as a
seller of children's products on the internet. The Company had chosen December
31, as a year-end, changed its year-end to May 31 during June 2001 and had no
significant activity from inception to May 31, 2003.

Reclassifications

Certain items presented in the previous periods financial statements have been
reclassified to conform to current year presentation.

Revenue Recognition

The Company recognizes revenue when services are provided or products are
shipped.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of May 31, 2003. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash. Fair
values were assumed to approximate carrying values for these financial
instruments because they are short term in nature and their carrying amounts
approximate fair values.

Net Income (Loss) Per Common Share

The Company calculates net income (loss) per share as required by Statement of
Financial Accounting Standards (SFAS) 128, "Earnings per Share." Basic earnings
(loss) per share is calculated by dividing net income (loss) by the weighted
average number of common shares outstanding for the period. Diluted earnings
(loss) per share is calculated by dividing net income (loss) by the weighted
average number of common shares and dilutive common stock equivalents
outstanding. During periods in which the Company incurs losses common stock
equivalents, if any, are not considered, as their effect would be anti-dilutive.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

                                       24




                           INTERNET RECREATION, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                         NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

Segment Information

The Company follows SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information." Certain information is disclosed, per SFAS 131, based on
the way management organizes financial information for making operating
decisions and assessing performance. The Company currently operates in a single
segment and will evaluate additional segment disclosure requirements as it
expands its operations.

Income Taxes

The Company follows SFAS 109 "Accounting for Income Taxes" for recording the
provision for income taxes. Deferred tax assets and liabilities are computed
based upon the difference between the financial statement and income tax basis
of assets and liabilities using the enacted marginal tax rate applicable when
the related asset or liability is expected to be realized or settled. Deferred
income tax expenses or benefits are based on the changes in the asset or
liability each period. If available evidence suggests that it is more likely
than not that some portion or all of the deferred tax assets will not be
realized, a valuation allowance is required to reduce the deferred tax assets to
the amount that is more likely than not to be realized. Future changes in such
valuation allowance are included in the provision for deferred income taxes in
the period of change.

Web Site Development Costs

The Company's web site will comprise multiple features and offerings. It is
anticipated that the offerings will require future development and refinement.
In connection with the development of its site, the Company will incur external
costs for hardware, software, and consulting services, and internal costs for
payroll and related expenses of its technology employees directly involved in
the development. All hardware costs will be capitalized. Purchased software
costs will be capitalized in accordance with Statement of Position 98-1
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use". All other costs will be reviewed for determination of whether
capitalization or expense as product development cost is appropriate in
accordance with Statement of Position 98-1. The Company's web site is being
amortized over its estimated useful life of 3 years and is stated net of
accumulated amortization of $12,500.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees for services
based on the fair value of the equity instruments issued and accounts for equity
instruments issued to other than employees based on the fair value of the
consideration received or the fair value of the equity instruments, whichever is
more reliably measurable.

The Company accounts for stock based compensation in accordance with SFAS 123,
"Accounting for Stock-Based Compensation." The provisions of SFAS 123 allow
companies to either expense the estimated fair value of stock options or to
continue to follow the intrinsic value method set forth in APB Opinion 25,
"Accounting for Stock Issued to Employees" (APB 25) but disclose the pro forma
effects on net income (loss) had the fair value of the options been expensed.
The Company has elected to continue to apply APB 25 in accounting for its stock
option incentive plans.

                                       25




                           INTERNET RECREATION, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                         NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

Recent Pronouncements

In May 2003, the Financial Accounting Standards Board ("FASB") issued SFAS 150,
"Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity." SFAS 150 changes the accounting guidance for certain
financial instruments that, under previous guidance, could be classified as
equity or "mezzanine" equity by now requiring those instruments to be classified
as liabilities (or assets in some circumstances) on the balance sheet. Further,
SFAS 150 requires disclosure regarding the terms of those instruments and
settlement alternatives. SFAS 150 is generally effective for all financial
instruments entered into or modified after May 31, 2003, and is otherwise
effective at the beginning of the first interim period beginning after June 15,
2003. The adoption of SFAS 150 in the first quarter of fiscal 2004 is not
expected to have any material impact on the Company's financial position,
results of operations or cash flows.

In December 2002, the FASB issued SFAS 148 "Accounting for Stock-Based
Compensation -- Transition and Disclosure--an amendment of SFAS 123." SFAS 148
provides alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation from the
intrinsic value-based method of accounting prescribed by APB 25. As allowed by
SFAS 123, the Company has elected to continue to apply the intrinsic value-based
method of accounting, and has adopted the disclosure requirements of SFAS 123.
The Company currently does not anticipate adopting the provisions of SFAS 148.

In July 2002, the FASB issued SFAS 146, "Accounting for Costs Associated with
Exit or Disposal Activities." SFAS 146 provides new guidance on the recognition
of costs associated with exit or disposal activities. The standard requires
companies to recognize costs associated with exit or disposal activities when
they are incurred rather than at the date of commitment to an exit or disposal
plan. SFAS 146 supercedes previous accounting guidance provided by the EITF
Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." EITF Issue No. 94-3 required recognition of costs at the date
of commitment to an exit or disposal plan. SFAS 146 is to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
Early application is permitted. The adoption of SFAS 146 by the Company is not
expected to have a material impact on the Company's financial position, results
of operations, or cash flows.

In April 2002, the FASB issued SFAS 145, "Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
Among other things, this statement rescinds FASB Statement No. 4, "Reporting
Gains and Losses from Extinguishment of Debt" which required all gains and
losses from extinguishment of debt to be aggregated and, if material, classified
as an extraordinary item, net of related income tax effect. As a result, the
criteria in APB Opinion No. 30, "Reporting the Results of Operations --
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual and Infrequently Occurring Events and Transactions," will now be used to
classify those gains and losses. The provisions of SFAS 145 related to the
classification of debt extinguishment are effective for years beginning after
May 15, 2002. The adoption of SFAS 145 by the Company is not expected to have a
material impact on the Company's financial position, results of operations, or
cash flows.

In November 2001, the EITF of the FASB issued EITF 01-9 "Accounting for
Consideration Given by a Vendor to a Subscriber (Including a Reseller of the
Vendor's Products)." EITF 01-9 provides guidance on when a sales incentive or
other consideration given should be a reduction of revenue or an expense and the
timing of such recognition. The guidance provided in EITF 01-9 is effective for
financial statements for interim or annual periods beginning after December 15,
2001. The adoption of EITF 01-9 by the Company did not have a material impact on
the Company's financial statements.

                                       26




                           INTERNET RECREATION, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                         NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

In August 2001, the FASB issued SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS 144 provides new guidance on the
recognition of impairment losses on long-lived assets with definite lives to be
held and used or to be disposed of and also issued the definition of what
constitutes a discontinued operation and how the results of a discontinued
operation are to be measured and presented. SFAS 144 is effective for fiscal
years beginning after December 15, 2001. The adoption of SFAS 144 did not have a
material impact on the Company's financial position, results of operations, or
cash flows.

In June 2001, the FASB issued SFAS 143, "Accounting for Asset Retirement
Obligations." SFAS 143 requires the fair value of a liability for an asset
retirement obligation to be recognized in the period that it is incurred if a
reasonable estimate of fair value can be made. The associated asset retirement
costs are capitalized as part of the carrying amount of the long-lived asset.
SFAS 143 is effective for fiscal years beginning after June 15, 2002. The
adoption of SFAS 143 is not expected to have a material impact on the Company's
financial position, results of operations or cash flows.

In June 2001, the FASB issued SFAS 142, "Goodwill and Other Intangible Assets,"
which provides for non-amortization of goodwill and intangible assets that have
indefinite useful lives, annual tests of impairments of those assets and interim
tests of impairment when an event occurs that more likely than not has reduced
the fair value of such assets. The statement also provides specific guidance
about how to determine and measure goodwill impairments, and requires additional
disclosure of information about goodwill and other intangible assets. The
provisions of this statement are required to be applied starting with fiscal
years beginning after December 15, 2001, and applied to all goodwill and other
intangible assets recognized in the financial statements at that date. Goodwill
and intangible assets acquired after June 30, 2001 will be subject to the
non-amortization provisions of the statement. Early application is permitted for
entities with fiscal years beginning after March 15, 2001, provided that the
first interim financial statements had not been issued previously. The Company's
adoption of the provisions of SFAS 142 did not have a material impact on the
Company's financial position, results of operations or cash flows.

In June 2001, the FASB issued SFAS 141, "Business Combinations," which is
effective for all business combinations initiated after June 30, 2001. SFAS 141
requires companies to account for all business combinations using the purchase
method of accounting, recognize intangible assets if certain criteria are met,
as well as provide additional disclosures regarding business combinations and
allocation of purchase price. The adoption of SFAS 141 did not have a material
impact on the Company's financial position, results of operations or cash flows.


Note 2. STOCKHOLDERS' EQUITY

At inception, the Company issued 9,000,000 shares of its common stock for
services provided to the Company to an officer and 250,000 shares of its common
stock for legal services. These shares have been valued at $.0001 per share,
which approximates the fair market value of the services provided. Accordingly,
the Company has recorded a charge to operations of $925 during the period.

                                       27




                           INTERNET RECREATION, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                         NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

During January and May 2001 the Company issued 330,000 shares of common stock
for services valued at $.0001 per share, which approximates the fair market
value of the shares issued. Accordingly, the Company has recorded a charge to
operations of $33 during the period.

During May 2001 the Company issued 22,000 shares of common stock for cash
aggregating $5,500.

During August 2001 the Company issued 8,000 shares of common stock for cash
aggregating $2,000.

During August 2001 the Company issued 7,000 shares of common stock for services
valued at $.25 per share, which approximates the fair market value of the shares
issued. Accordingly, the Company has recorded a charge to operations of $1,750
during the period.

During December 2001 the Company issued 100,000 shares of common stock valued at
$.25 per share, which approximates the fair market value of the shares issued,
in exchange for the construction of its web site. In addition, during December
2001 an officer of the Company returned 100,000 shares of common stock to the
Company for no consideration.

During February 2002 the Company issued 8,000 shares of common stock for cash
aggregating $2,000.

During the year ended May 31, 2002 an officer of the Company contributed
services valued at $6,000 and cash of $100 to the capital of the Company.

During the year ended May 31, 2003 an officer of the Company contributed $5,500
in cash and services valued at $1,500 to the capital of the Company. In
addition, during February 2003 the Company issued 3,000,0000 shares of common
stock in consideration for services provided by its president valued at $4,500.
Management believes that this represents the fair market value of the shares
issued and the services provided.

Note 3. INCOME TAXES

The Company accounts for income taxes under SFAS 109, "Accounting for Income
Taxes", which requires use of the liability method. SFAS 109 provides that
deferred tax assets and liabilities are recorded based on the differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes, referred to as temporary differences. Deferred tax
assets and liabilities at the end of each period are determined using the
currently enacted tax rates applied to taxable income in the periods in which
the deferred tax assets and liabilities are expected to be settled or realized.

The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The sources and tax effects of the differences are as follows:

         Income tax provision at
          the federal statutory rate             34 %
         Effect of operating losses             (34)%
                                               ------
                                                  -


                                       28




                           INTERNET RECREATION, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                         NOTES TO FINANCIAL STATEMENTS
                                  MAY 31, 2003

As of May 31, 2003, the Company has a net operating loss carryforward of
approximately $42,000. This loss will be available to offset future taxable
income. If not used, this carryforward will expire in 2023. The deferred tax
asset relating to the operating loss carryforward has been fully reserved at May
31, 2003.

Note 4. BASIS OF REPORTING

The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.

The Company has experienced a loss from operations during its development stage
as a result of its investment necessary to achieve its operating plan, which is
long-range in nature. For the period from inception to May 31, 2003, the Company
incurred a net loss of $41,775. In addition, the Company has no significant
assets or revenue generating operations.

The Company's ability to continue as a going concern is contingent upon its
ability to attain profitable operations by securing financing and implementing
its business plan. In addition, the Company's ability to continue as a going
concern must be considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the competitive
environment in which the Company operates.

The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.

                                       29
Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure.
Since inception, we have not had any disagreements with our accountants.

On March 18, 2002, we changed accountants from Durland & Company, CPAs, P.A. to
Stark Winter Schenkein & Co., LLP. In connection with this change in accountants
we disclosed in our Form 8-K dated March 19, 2002 that:
(a) The financial statements reported on by Durland & Company, CPAs, P.A. were
not subject to an adverse or qualified opinion, or a disclaimer of opinion, and
were not modified as to uncertainty, audit scope or accounting principles during
the past two fiscal years, and the interm period through March 18, 2002, except
that the financial statements for the years ended December 31, 2000 and 1999
contained going concern qualifications; (b) the decision to change accountants
was approved by the Registrant's Board of Directors; (c) there were no
disagreements related to accounting principles or practices, financial statement
disclosure, or auditing scope or procedure during the past two fiscal years and
the interim period through March 18, 2002; (d) on March 18, 2002, we engaged
Stark Winter Schenkein & Co., LLP as our independent accountants; and (e) we did
not consult with Stark Winter Schenkein & Co., LLP regarding any matter prior to
its engagement.

Item 8A. Controls and Procedures.
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our sole member of management, who is our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure based closely on the definition of "disclosure controls and
procedures" in Rule 13a-14(c). In designing and evaluating the disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. Within 90 days prior to the date of this
report, we carried out an evaluation, under the supervision and with the
participation of Kathleen (Patty) Hackler, the sole member of our management and
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures. Based on the
foregoing, Kathleen (Patty) Hackler concluded that our disclosure controls and
procedures are effective. There have been no significant changes in our internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date we completed our evaluation.

                                       30



                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.
Each of our directors is elected at the annual meeting of stockholders and
serves until the next annual meeting and until his or her successor is elected
and qualified, or until his or her earlier death, resignation or removal. No
compensation is currently paid to our sole officer or director for her services.

No Committees of the Board of Directors.
We do not currently have standing audit, nominating and compensation committees
of our Board of Directors or committees performing similar functions.

Significant Employees.
There are no significant employees other than our president.

Family Relationships.
There are no family relationships among our officers, directors, or persons
nominated for such positions.

Legal Proceedings.
None of our officers, directors, or persons nominated for such positions and
none of our promoters or significant employees have been involved in legal
proceedings that would be material to an evaluation of our management.

The following table sets forth the names and ages of our directors and officers,
the principal offices and positions with us held by such persons. Our executive
officers are elected annually by our Board of Directors. Our Directors serve one
year terms until their successors are elected. The executive officers serve
terms of one year or until their death, resignation or removal by the Board of
Directors.
------------------- ------- ---------------------------------- -----------------
NAME                AGE     POSITION                           TERM
------------------- ------- ---------------------------------- -----------------
Kathleen (Patty)    35      President/Secretary/Chairman of    1 year
Hackler                     the Board
------------------- ------- ---------------------------------- -----------------

                                       31
Item 10.  Executive Compensation.
The following table sets forth certain summary information concerning the
compensation that we have paid to our executive officers or which has been
accrued for each of our last three completed fiscal years as of May 31, 2003.

                           SUMMARY COMPENSATION TABLE

                                                   Other         Restricted Securities   LTIP    All Other
                                                   Annual        Stock      underlying   payouts Compensation
Name and Principal Position   Year  Salary  Bonus  Compensation  award(s)  options/SARs   ($)      ($)
        (a)                    (b)   (c)     (d)      (e)          (f)          (g)       (h)      (i)
Kathleen (Patty) Hackler -    2001    0       0        0            0            0         0        0
Director                      2002    0       0        0            0            0         0        0
                              2003    0       0        0        3,000,000        0         0        0

We do not currently have any committees of our Board of Directors, including an
audit committee. Because our common stock is quoted on the OTC Bulletin Board,
and we do not intend on applying for a listing on any national security exchange
or other exchange, we are not required to comply with the audit committee
requirements of the federal securities laws.


Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following tables set forth the ownership as of May 31, 2003 and as of August
28, 2003 by:
     o    Each shareholder known by us to own beneficially more than five
          percent (5%) of our common stock;
     o    Each executive officer;
     o    Each director or nominee to become a director; and
     o    All directors and executive officers as a group.


(i) BENEFICIAL OWNERS OF MORE THAN 5%:

Security Ownership of Certain Beneficial Owners:
--------------- ------------------------- --------------------- ----------------
Title Of Class  Name and Address of       Amount and Nature of  Percent of Class
                Beneficial Owner          Beneficial Owner
--------------- ------------------------- --------------------- ----------------
Common          Kathleen (Patty) Hackler  11,900,000             94.3%
                24 Locust Street          Direct
                Quitman, Arkansas 72131
--------------- ------------------------- --------------------- ----------------

                                       32



(ii) DIRECTORS AND NOMINEES:

Security Ownership of Management:
--------------- ------------------------- --------------------- ----------------
Title Of Class  Name and Address          Amount and Nature of  Percent of Class
                                          Ownership
--------------- ------------------------- --------------------- ----------------
Common          Kathleen (Patty) Hackler  11,900,000             94.3%
                24 Locust Street          Direct
                Quitman, Arkansas 72131
--------------- ------------------------- --------------------- ----------------

This table is based upon information derived from our stock records. Unless
otherwise indicated in the footnotes to this table, we believe that each of the
shareholders named in this table has sole or shared voting and investment power
with respect to the shares indicated as beneficially owned. Except as otherwise
noted herein, we are not aware of any arrangements which may result in a change
in our control.

Item 12. Certain Relationships and Related Transactions.
On March 10, 1999, we issued 9,000,000 shares of our common stock to our
director, Kathleen (Patty) Hackler, for services rendered in connection with our
corporate formation.

On May 21, 2001, we issued 50,000 shares of our common stock to our former
president, Cathy Williamson, for services rendered as our president.

On February 12, 2003, we issued 3,000,000 shares of our common stock to Kathleen
Hackler for services rendered as our sole officer and director.

Other than the above transactions, we have not entered into any material
transactions with any director, executive officer, and nominee for director,
beneficial owner of five percent (5%) or more of our common stock, or family
member of such persons with a value of over $60,000. We are not a subsidiary of
any company.

                                       33



                                    PART IV

Item 13. Exhibits and Reports on Form 8-K.
(a)      Exhibits
------ --------------------------------------------------
 3.1     Articles of Incorporation*
----- ---------------------------------------------------
 3.2     Amendment to Articles of Incorporation*
----- ---------------------------------------------------
 3.3     Bylaws*
----- ---------------------------------------------------
 5.      Opinion of Hamilton, Lehrer & Dargan, P.A.*
----- ---------------------------------------------------
10.1     Agreement with Cathy Williamson*
----- ---------------------------------------------------
10.2     Agreement with Commission Junction*
----- ---------------------------------------------------
10.3     Agreement with Link Share*
----- ---------------------------------------------------
10.4     Agreement with QuinStreet, Inc.**
----- ---------------------------------------------------
10.5     Agreement with Keynetics, Inc.**
----- ---------------------------------------------------
31.1     Certification pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002.
----- ----------------------------------------------------
32.1     Certification pursuant to 18 U.S.C. Section
         1350, as adopted  pursuant to Section 906 of
         the Sarbanes-Oxley Act of 2002.
----- ----------------------------------------------------
*Denotes exhibits previously filed in our Form SB-2 on August 21, 2001, File
number 333-68020, which is hereby incorporated by reference.
** Denotes exhibits previously filed in our Form SB-2/A on November 7, 2001,
File number 333-68020, which is hereby incorporated by reference.

We hereby incorporate the following additional documents by reference: (a) our
Forms 10-KSB for the year ended May 31, 2002 which was filed on August 22, 2002;
(b) our Registration Statement on Form SB-2 and all amendments thereto which was
filed on August 21, 2001 and amended on November 7, 2001; (c) our Forms 10-QSB
for the periods ended: November 30, 2001 which was filed on January 14, 2002;
February 28, 2002 which was filed on April 3, 2002; August 31, 2002 which was
filed on October 15, 2002; November 30, 2002 which was filed on January 14, 2003
and amended on January 16, 2003; and February 28, 2003 which was filed on April
21, 2003.

(b)      Reports on Form 8-K
None.


                                       34




                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                           INTERNET RECREATION, INC.
                                  (Registrant)

Date: September 3, 2003           By:  /s/ Kathleen (Patty) Hackler,
                                       President (Principal Executive Officer)
                                       Chief Financial Officer, Secretary,
                                       Chairman of the Board


                                   SIGNATURES

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.


Signature                      Title                           Date
---------------------------------------------------------------------------------
/s/ Kathleen (Patty) Hackler   President (Principal Executive  September 3, 2003
                               Officer), Chief Financial
                               Officer, Secretary, Chairman
                               of the Board




                                       35`