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

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

                     For the fiscal year ended July 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 0-10061

                           AMERICAN VANTAGE COMPANIES
                 (Name of small business issuer in its charter)

           Nevada                                             04-2709807
           ------                                            -----------
(State or other jurisdiction                              (I.R.S. Employer
of incorporation or organization)                        Identification No.)

        4735 S. Durango Dr., Suite 105, Las Vegas, Nevada          89147
        -------------------------------------------------          -----
             (Address of principal executive offices)            (zip code)

Issuer's telephone number: (702) 227-9800

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, par value $.01 per share
                                (Title of Class)

         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. [ ]

         State issuer's revenues for its most recent fiscal year.  $576,000
                                                                   --------

         The  aggregate  market  value of the  shares  of Common  Stock  held by
non-affiliates  of the  registrant,  computed by  reference  to the closing sale


1
<PAGE>

price of $1.883 for the Company's  Common Stock, as reported by The NASDAQ Stock
Market,  Inc. on October 24, 2003 was  approximately  $9,842,000  (assuming  for
purposes of such  calculation  that all executive  officers and directors of the
issuer are affiliates and no other persons are affiliates of the issuer).

         The  number of  shares  outstanding  of the  issuer's  Common  Stock at
October 24, 2003 was 5,690,667.

Transitional Small Business Disclosure Format (check one): YES    No   X
                                                              ---    -----


                       DOCUMENTS INCORPORATED BY REFERENCE

None.














2
<PAGE>

PART I

ITEM 1.  DESCRIPTION OF BUSINESS
-------  -----------------------

RECENT DEVELOPMENTS

         On April  16,  2003,  American  Vantage  Companies  (the  "Company"  or
"Parent")  acquired  substantially all of the assets and business and certain of
the  liabilities  of YaYa,  LLC ("YaYa").  YaYa is an  "end-to-end"  interactive
solutions   provider,   specializing   in  the   creation   and   provision   of
advertiser-driven  interactive  games and  marketing  solutions.  In addition to
advertising  applications,  YaYa  creates  internet  games for its clients to be
utilized  in   employee-training   programs  and  for  internal   communications
solutions.  YaYa Media, Inc. ("YaYa Media") is a wholly-owned  subsidiary of the
Parent, formed specifically to acquire the YaYa assets, business and liabilities
purchased and to continue YaYa's business and operations.

         The  Company is  continuing  to review  opportunities  with the goal of
maximizing its resources in order to increase  stockholder  values.  The Company
believes that any increase in  stockholder  values will be obtained  through the
acquisition of other ongoing operations or through the Company entering into one
or more  businesses.  The  Company  may sell  certain  of its assets in order to
provide  additional  cash  resources  sufficient  to  effectuate  its merger and
acquisition strategy.

         The  Company is  continuing  to pursue  legal  remedies  related to its
casino consulting contract that was prematurely terminated.  See "Item 1 - Table
Mountain Casino".


DEVELOPMENT OF BUSINESS

         The Company was  incorporated  in Nevada in 1979 under the name Western
Casinos, Inc. The Company changed its name to American Casino Enterprises,  Inc.
in 1979 and then changed its name to American  Vantage  Companies in March 1997.
The Company was originally  formed to engage in the business of recreational and
leisure time activities,  including casino gaming.  In January 1991, the Company
completed  the purchase of all of the capital  stock of Millerton  Games,  Inc.,
which held a management  consulting  contract with Table Mountain Casino.  Table
Mountain  Casino is a tribal  gaming  enterprise  located  on a  Federal  Indian
Rancheria in Friant, California (the "Table Mountain Casino")

         The Company had been engaged in providing gaming consulting services to
Table  Mountain  Casino until May 1999 when its  contract to provide  consulting
services to the Table Mountain  Casino was  prematurely  terminated by the Table
Mountain Band of Indians (the "Table Mountain Tribe")  following a change in the
tribal  government.  See  "Item 1.  Description  of  Business  - Table  Mountain
Casino."

         In  February  1999,   Vantage  Bay  Group,  Inc.   ("Vantage  Bay"),  a
wholly-owned  subsidiary of the Company,  purchased a 49% interest in the Border
Grill (the "Border Grill"),  to develop a restaurant located in the Mandalay Bay
Hotel and Casino in Las Vegas,  Nevada.  The restaurant opened in June 1999. See
"Item 1. Description of Business - Border Grill Restaurant."

         In May 1999, Sitka Restaurant Group, Inc.  ("Sitka"),  a majority-owned
subsidiary of the Company, opened the WCW Nitro Grill (the "WCW Nitro Grill"), a
themed  restaurant,  in the Excalibur Hotel and Casino (the  "Excalibur") in Las
Vegas,  Nevada.  The Company  closed the WCW Nitro Grill in September  2000. See
"Item 1. Description of Business - WCW Nitro Grill Restaurant."

         All  references  herein to the  Company  refer to the  Company  and its
subsidiaries on a consolidated  basis,  unless the context otherwise  indicates.
The Company's  principal  executive  offices are located at 4735 S. Durango Dr.,
Suite  #105,  Las  Vegas,  Nevada,  89147,  and its  telephone  number  is (702)
227-9800.



3
<PAGE>
TABLE MOUNTAIN CASINO

         On February 1, 1996, the Company  entered into a termination  agreement
(the  "Termination  Agreement")  with the Table Mountain Tribe  terminating  the
Company's 1993 consulting  agreement (the "1993  Agreement") and  simultaneously
entering  into a new  consulting  agreement  (the "1996  Agreement").  Under the
conditions of the Termination Agreement,  commencing February 1, 1996, the Table
Mountain  Tribe was  required  to pay the  Company  48 monthly  installments  of
$350,000 in  consideration  for termination of the 1993 Agreement.  However,  no
payment was required for any month in which the net income of the Table Mountain
Casino did not equal or exceed $1 million. The term of the Termination Agreement
was to be automatically extended by one month for each month that no payment was
required thereunder, up to a maximum of 12 months.

         The 1996  Agreement  required  that the  Company  consult  and  provide
technical assistance, training and advice to the Table Mountain Tribe concerning
all matters  relating to the  operation  and  business  activities  of the Table
Mountain Casino, including, but not limited to, organization and administration,
planning and development,  gaming  activities,  internal controls and accounting
procedures, cage operations,  engineering and maintenance,  housekeeping,  human
resources,   management   information   services,   marketing  and  advertising,
purchasing,  surveillance,  security and food and beverage operations.  The 1996
Agreement was amended in both June 1997 and October  1997.  The term of the 1996
Agreement,  as amended,  was to expire on June 30, 2000.  For its services under
the 1996  Agreement,  as amended,  the Company  was to receive  minimum  monthly
payments  of  $50,000.  The Table  Mountain  Tribe was also  required to pay the
Company  additional  monies for certain  increments  of monthly  Table  Mountain
Casino net income in excess of the first $1.5  million of net  revenue  from the
operations of Table Mountain Casino.

         On May 20, 1999,  the Company  received  formal written notice from the
newly elected tribal government,  that the Table Mountain Tribe had unilaterally
terminated the Company's  contract to provide  consulting  services to the Table
Mountain  Casino,  and ceased  payments on the 1996  Agreement  and  Termination
Agreement.

         In June 1999,  the Company  brought a civil action in the United States
District Court,  Eastern District of California,  Fresno Division (the "District
Court")  against the Table Mountain Tribe for breach of the Company's  contracts
with the Table Mountain Tribe.  The lawsuit seeks to recover  payments  totaling
$3,150,000 due under the Termination  Agreement and an award of $790,000,  which
represents  only the base fees due under the 1996  Agreement.  The Company  also
seeks  interest,  court costs and additional  unspecified and "to be determined"
consulting  fees that would have been due during the remainder of the consulting
term.

         The Table  Mountain  Tribe  filed a  counterclaim  against  the Company
claiming the consulting contracts are invalid for several reasons and requesting
restitution for all consulting fees paid to the Company during the period of the
contracts.

         In September  2000, an order was filed by District  Court Judge Anthony
W. Ishii who dismissed the Company's claims against the Table Mountain Tribe due
to the District  Court's  lack of subject  matter  jurisdiction.  The order also
dismissed  the Table  Mountain  Tribe's  counterclaim  against the Company.  The
District Court made no ruling on the merits of the action.  The Company appealed
the order of the District  Court to the Ninth  Circuit  Court of Appeals,  which
upheld the District Court's dismissal.

         In December 2000, the Company filed a virtually  identical suit against
the Table  Mountain  Tribe in the Fresno County  Superior  Court of the State of
California. In April 2001, an order was filed by Superior Court Judge Stephen J.
Kane who  dismissed  the  Company's  civil  action  for lack of  subject  matter
jurisdiction  based on the  Superior  Court's  determination  that  federal  law
completely  preempts the field of Indian gaming.  The Superior  Court,  however,
made no ruling on the merits of the action.

          In July 2001,  the Company filed an appeal with the  California  State
Court of Appeals,  Fifth  District.  In October 2002,  the  California  Court of
Appeals reversed the April 2001 order of dismissal.  Both the California Supreme
Court and the United States Supreme Court subsequently denied the Table Mountain
Tribe's petition to review that appellate decision.

         In April  2003,  with  the  case  remanded  back to the  Fresno  County
Superior  Court,  the Table  Mountain  Tribe  filed a motion to dismiss the case

4

<PAGE>

based on the  Table  Mountain  Tribe's  assertion  that its  contracts  with the
Company were not properly authorized by tribal authorities,  and thereby did not
constitute a valid waiver of the Table Mountain Tribe's sovereign  immunity.  In
May 2003,  the Fresno  County  Superior  Court  determined  that the Company was
entitled to  discovery  on the  sovereign  immunity  issue,  and only after such
discovery would the Fresno County Superior Court conduct further  proceedings on
the sovereign immunity issue.

         As of October  24,  2003,  the  Company  and the Table  Mountain  Tribe
continue to conduct discovery proceedings. The Fresno County Superior Court will
likely conduct further proceedings on the sovereign immunity issue by the end of
December 2003.

         Since the Company is unable to determine its losses,  if any should the
Tribe's counterclaim be successful,  no accounting recognition has been given to
the matter in the accompanying financial statements.


BORDER GRILL RESTAURANT

         On November 12, 1998,  Vantage Bay entered into an operating  agreement
(the  "Operating  Agreement")  with TT&T,  LLC  ("TT&T") to develop a restaurant
named the  Border  Grill in the  Mandalay  Bay Hotel  and  Casino in Las  Vegas,
Nevada. The Operating Agreement provides that Vantage Bay, in exchange for a 49%
interest  in the  Nevada  limited  liability  company  that owns  Border  Grill,
contribute   $251,000  upon  the  execution  of  the  Operating  Agreement  and,
thereafter,  contribute further capital up to an aggregate of $2,750,000, all of
which had been  contributed  by the Company  prior to July 31, 2000, to fund the
development  of the  restaurant  subject  to the  terms  and  conditions  of the
Operating Agreement.  Vantage Bay also agreed to loan to TT&T up to $175,000 for
development  and  operation of the  restaurant.  The Company  further  agreed to
guarantee all payments due from Vantage Bay to TT&T.  The Border Grill opened on
June 17,  1999.  The  Company has no  day-to-day  management  responsibility  in
connection  with  the  restaurant  or  the  limited  liability  company.   Since
commencement of Border Grill's operations, with this investment, the Company has
received  periodic  distributions.   Such  distributions  totaled  $800,000  and
$650,000 during the fiscal years ended July 31, 2003 and 2002, respectively.


WCW NITRO GRILL RESTAURANT

         On November  12, 1998,  Sitka  entered  into a license  agreement  (the
"License Agreement") with World Championship  Wresting,  Inc. ("WCW") to develop
one or more  themed  restaurants  to be named the WCW Nitro  Grill.  The Company
agreed to guarantee all payments due from Sitka to WCW.

         On May 17, 1999, the first WCW Nitro Grill opened in the Excalibur.  On
September  28, 2000,  the Company  announced  its closing of the WCW Nitro Grill
effective  September 30, 2000 due to adverse historical  operating  results.  In
connection with the WCW Nitro Grill, the Company  recorded,  for the fiscal year
ended July 31, 2002 income from discontinued  restaurant  operations of $34,000,
net of income tax benefit totaling $18,000.


YAYA MEDIA, INC.

         GENERAL.  On April 16, 2003, the Company acquired  substantially all of
the assets and business and certain of the  liabilities  of YaYa.  Consideration
paid in acquiring the YaYa assets, business and liabilities consisted of 824,811
shares of  Company  common  stock and the  assumption  of  liabilities  totaling
approximately  $2,500,000,  including loans aggregating  $1,110,000 in principal
amount made by the Company to YaYa, in December 2002 and March 2003. The 824,811
shares of  Company  common  stock  were  valued at $1.41 per share  based on the
closing  price of  Company  common  stock on  April  16,  2003.  YaYa  Media,  a
wholly-owned  subsidiary of the Company,  was formed specifically to acquire the
YaYa assets,  business and liabilities purchased and to continue YaYa's business
and operations.

         SERVICES. YaYa Media is an "end-to-end" interactive solutions provider.
Individual  projects are initiated  through advisory services that can lead to a
production  engagement,  followed  by  ongoing  technology  support.  All  three


5
<PAGE>

services are part of an overall  strategic  plan focused on the  development  of
innovative training, marketing, and/or communications solutions for YaYa Media's
clients.  Intrinsic to certain of its  marketing  strategies is the creation and
provision of  specialized  Web- or CD-based  interactive  games.  In addition to
advertising applications,  YaYa Media also creates internet games to be utilized
in its  client's  employee-training  programs  and for  internal  communications
solutions.

         Subsequent  to  April  16,  2003,  YaYa  generated   revenues  totaling
$576,000,  consisting of $422,000 for advisory services, $64,000 for development
of custom  software  products  and $90,000 for  hosting and  reporting  services
provided to its clients.  YaYa Media revenues are generated from  relatively few
contracts with primarily Fortune 1000 companies. A decline in the size or number
of these arrangements could adversely affect future operations.

         INTERNAL  LABOR  AND  INDEPENDENT  CONTRACTORS.  YaYa  Media  employees
provide  the  strategic   advisory   services,   solution   ideation,   creative
development,  and project management of YaYa  Media-developed  interactive games
production.  YaYa Media  employees  also provide the planning and  management of
follow-on  technology  support.  Certain game  production  services and advisory
services require specialized technical expertise that is generally outsourced to
independent contractors on a project-specific basis. Until June 2003, YaYa Media
also  provided its clients  with web  hosting,  data  extraction  and  reporting
through  YaYa  Media-developed  data  capture  technology  and  internally-owned
hardware.  These  services  were  subsequently  outsourced  to  various  outside
parties.  YaYa  Media is not  dependent  upon any  single  outsource  party  and
believes there are numerous  companies  readily available to provide services to
YaYa Media.

         COMPETITION.  YaYa  Media's  primary  competition  derives  from  other
games-based interactive solution developers. Most are of similar size or smaller
than YaYa Media and no company has established a dominant position in the field.
Two of YaYa Media's primary sources of differentiation are its ability to engage
its clients at a very early stage  through its strategic  advisory  services and
deliver deeply branded,  highly  customized  interactive  solutions  rather than
`light' rebranding of an off-the-shelf product.

         TRADEMARKS AND PATENTS.  YaYa Media holds various trademarks or patents
that relate primarily to development of its Consumer Dialog Technology  ("CDT").
CDT provides an integrated application to track and measure consumer involvement
during game play.  YaYa Media  clients use the  extracted  data to supplement or
direct their product marketing strategies. As discussed above, during June 2003,
YaYa Media discontinued its internal support of this product.


EMPLOYEES

         As of October 24, 2003,  the Company has 15  employees.  The Parent has
two employees,  its President and Chief Executive  Officer and Chief  Accounting
Officer.  YaYa employees  include a chief  executive  officer,  chief  operating
officer  and  chief  financial  officer,  chief  technology  officer  and  other
production and administrative staff.


ITEM 2.  DESCRIPTION OF PROPERTY
-------  -----------------------

         During the fiscal year ending July 31, 2003 and through  September  30,
2003, the Company's executive offices were located in approximately 1,000 square
feet of shared office space at 7674 West Lake Mead Blvd.,  Suite 108, Las Vegas,
Nevada 89128. The Company did not pay a monthly rent for use of the premises nor
was there an agreement for any future payments.  The fair value of the Company's
office space arrangement is believed not to be material.

         Effective  October 1, 2003, the Company relocated its executive offices
to approximately 1,500 square feet of office space at 4735 S. Durango Dr., Suite
#105, Las Vegas, Nevada, 89147. The lease agreement provides for a monthly lease
amount of approximately $2,300 and expires on August 31, 2007.

         YaYa's executive offices are located in approximately 4,600 square feet
of office space at 12300 Wilshire  Blvd.,  Suite #400, Los Angeles,  California,
90025. The month-to-month lease agreement provides for a monthly lease amount of


6
<PAGE>

approximately $10,500. YaYa also has a satellite sales office with approximately
1,000 square feet of office  space at 333 Hudson  Street,  Suite #104,  New York
City, New York, 10013. The New York City office  month-to-month  lease agreement
provides for a monthly lease amount of approximately $3,000.

         In May 1997, the Company acquired approximately 40 acres of undeveloped
land in North Las Vegas,  Nevada for  approximately  $3,500,000 in cash.  During
September  2003, the Company entered into an "Agreement for Purchase and Sale of
Real  Property  and  Escrow  Instructions"  (the  "Property  Agreement")  with a
national home building company  ("Buyer")  contemplating the sale by the Company
of the  approximately  40 acres of  undeveloped  land.  The  Property  Agreement
provides for a $7,000,000 purchase price with the Buyer responsible for the real
estate broker  commission  fees. The Buyer may terminate the  transaction at any
time prior to December  4, 2003 for any reason and on or prior to  December  31,
2003 if the Buyer is unable to obtain approval of the Buyer's "tentative map" by
the applicable zoning authorities.


ITEM 3.  LEGAL PROCEEDINGS
-------  -----------------

         For a discussion of the Company's  litigation  with the Table  Mountain
Tribe see "Item 1. Description of Business - Table Mountain Casino".

         Neither the Company nor any of its subsidiaries is a party to any other
material  legal  proceeding,  nor to the Company's  knowledge is any  litigation
threatened against the Company or its subsidiaries.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------   ---------------------------------------------------

         An Annual Meeting of  Stockholders  of the Company was held on July 18,
2003 to consider and act upon the  following  matters:  (i) to elect  Stephen K.
Bannon and Randolph C. Read as Class B directors of the Company to serve for the
ensuing three years or until their  successors  are duly elected and  qualified;
(ii) to  consider  and act upon a proposal  to amend the  Company's  Articles of
Incorporation  to  increase  the number of  authorized  shares of the  Company's
common stock to 100,000,000  from  10,000,000;  (iii) to consider and act upon a
proposal to amend the Company's  Articles of Incorporation to include provisions
concerning  a  classified  Board of  Directors;  (iv) to consider and act upon a
proposal  to approve  the  Company's  2003  Equity  Incentive  Plan;  and (v) to
consider and act upon a proposal submitted by a stockholder of the Company.

         The holders of  5,690,667  shares of Common  Stock of the Company  were
entitled to vote at the meeting,  of which 5,400,613 shares of common stock were
represented  in person or by  proxy.  The  stockholders  voted as  follows  with
respect to the:

o        Election of Class B Directors to terms expiring in 2006 --

                            Name             For            Withheld Authority
                            ----             ---            ------------------

                  Stephen K. Bannon       5,207,758               192,855
                  Randolph C. Read        5,339,273                61,340

o        4,910,214  shares in favor,  487,761 shares  against,  and 2,638 shares
         abstaining for the resolution  ratifying the amendment to the Company's
         Articles of Incorporation  to increase the number of authorized  shares
         of common stock to 100,000,000;

o        2,530,873 shares in favor,  1,365,230 shares against,  and 1,005 shares
         abstaining  for the  resolution  to amend  the  Company's  Articles  of
         Incorporation to create a classified Board of Directors;

o        2,292,161  shares in favor,  1,604,608  shares against,  and 339 shares
         abstaining  for the  resolution  ratifying the Company's  proposed 2003
         Equity Incentive Plan.

         The stockholder  proposal was withdrawn by the stockholder prior to the
Annual Meeting. No agreement was entered into with the stockholder in connection
with the withdrawal of his proposal.


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<PAGE>


PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
------   ----------------------------------------------------------------------

COMMON STOCK PRICES

         The  Company's  common  stock is traded on the  NASDAQ  SmallCap  Stock
Market under the symbol "AVCS".

         The  following  table sets forth the range of high and low  closing bid
prices of the Company's  common stock for each quarterly  period  indicated,  as
quoted  on  the  NASDAQ  SmallCap  Market.  The  prices  represent  inter-dealer
quotations,  without  retail  mark-up,  mark-down  or  commission,  and  may not
necessarily represent actual transactions:

<TABLE>
<CAPTION>
Period                                                                          High Bid        Low Bid
-------------------------------------------------------------------------------------------------------
Fiscal 2002

<S>                                                                             <C>              <C>
         First Quarter (August 1, 2001 - October 31, 2001)                      $1.78            $1.11
         Second Quarter (November 1, 2001 - January 31, 2002)                   $1.89            $1.02
         Third Quarter (February 1, 2002 - April 30, 2002)                      $2.50            $1.46
         Fourth Quarter (May 1, 2002- July 31, 2002)                            $1.78            $1.30

Fiscal 2003

         First Quarter (August 1, 2002 - October 31, 2002)                      $1.98            $1.24
         Second Quarter (November 1, 2002 - January 31, 2003)                   $2.00            $1.37
         Third Quarter (February 1, 2003 - April 30, 2003)                      $1.90            $1.32
         Fourth Quarter (May 1, 2003- July 31, 2003)                            $2.11            $1.55
</TABLE>


         On October 24, 2003, the closing sale price per share for the Company's
common stock was $1.883.


HOLDERS

         On October 24,  2003 there were 860 holders of record of the  5,690,667
shares of the Company's common stock outstanding.


DIVIDENDS

         The Company has not paid any cash  dividends  on its common stock since
its  incorporation.  Management  anticipates  that  in the  foreseeable  future,
earnings,  if  any,  will  be  retained  for use in its  business  or for  other
corporate purposes.

STOCKHOLDER PROPOSALS FOR INCLUSION IN NEXT YEAR'S PROXY STATEMENT

         To  be  considered  for  inclusion  in  next  year's  proxy  statement,
stockholder  proposals  must be received at the  Company's  principal  executive
offices no later than the close of  business  on November  25,  2003.  Proposals
should  be  addressed  to  Ronald  J.  Tassinari,  President,  American  Vantage
Companies, P.O. Box 89180, Las Vegas, Nevada 89128.


8
<PAGE>

OTHER STOCKHOLDER PROPOSALS FOR PRESENTATION AT NEXT YEAR'S ANNUAL MEETING

         For any proposal  that is not  submitted  for  inclusion in next year's
proxy statement,  but is instead sought to be presented  directly at next year's
annual  meeting,  SEC  rules  will  permit  management  to vote  proxies  in its
discretion if the Company:

o        receives  notice  of the  proposal  before  the  close of  business  on
         November 25, 2003 and advises its  stockholders  in the proxy statement
         for next year's  annual  meeting about the nature of the matter and how
         management intends to vote on such matter, or

o        does not receive  notice of the proposal prior to the close of business
         on November 25, 2003.

         Notices of intention to present proposals at next year's annual meeting
should  be  addressed  to  Ronald  J.  Tassinari,  President,  American  Vantage
Companies, P.O. Box 89180, Las Vegas, Nevada, 89128.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following  discussion  and analysis  should be read in  conjunction
with the  consolidated  financial  statements  and  notes  included  in "Item 7.
Financial Statements" of this report.

STATEMENT ON FORWARD-LOOKING STATEMENTS

         In addition to historical  information,  this report  contains  certain
forward-looking  statements.  Such statements include those concerning  American
Vantage Companies and its controlled subsidiaries (collectively,  the "Company")
expected  financial  performance  and the Company's  strategic  and  operational
plans,  as well as all  assumptions,  expectations,  predictions,  intentions or
beliefs about future events. Although the Company believes that its expectations
are  based  on  reasonable  assumptions,  there  can be no  assurance  that  the
Company's financial goals or expectations will be realized. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results,  performance,  or achievements of the Company,  or
industry results, to be materially  different from future results,  performance,
or  achievements  expressed  or  implied  by  such  forward-looking  statements.
Numerous  factors may affect the Company's  actual results and may cause results
to differ materially from those expressed in forward-looking  statements made by
or on behalf of the Company.  These risks and uncertainties include, but are not
limited to, those relating to dependence on existing  management and federal and
state  regulation  of the  restaurant  industry,  any  unforeseen  change in the
markets for advertising applications or computer and internet "gaming", domestic
and global economic  conditions and changes in federal and state tax laws or the
administration  of such laws.  The Company  assumes no  obligation  to update or
revise  any such  forward-looking  statements  or the  factors  listed  below to
reflect events or  circumstances  that may arise after this report is filed, and
that may have an effect on the Company's overall performance.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The discussion  and analysis of the financial  condition and results of
operations  following  are  based  upon  the  Company's  consolidated  financial
statements,  which have been prepared in accordance  with  principles  generally
accepted in the United States of America.  The  preparation  of these  financial
statements  requires the Company to make estimates and judgments that affect the
reported  amounts of assets,  liabilities,  revenues and  expenses,  and related
disclosure of contingent assets and liabilities.

         The Company  believes  that the  estimates,  assumptions  and judgments
involved in the accounting  policies described below have the greatest potential
impact on the consolidated  financial statements,  so these are considered to be
the critical accounting  policies.  Because of the uncertainty inherent in these
matters,  actual  results could differ from the  estimates  used in applying the
critical  accounting  policies.  Certain of these critical  accounting  policies
affect  working  capital  account  balances,  including the policies for revenue
recognition and accounts receivable.


9
<PAGE>

         Within the context of these critical accounting policies and estimates,
the  Company  is  not  currently  aware  of  any  reasonably  likely  events  or
circumstances that would result in materially different amounts being reported.

         REVENUE  RECOGNITION.   Revenues,  entirely  derived  from  YaYa  Media
operations,  consist of  licensing,  advisory  services  and games  hosting  and
reporting.  Licensing  revenues from long-term  contracts that include producing
licensed  custom  software  applications  are  generally  recognized  using  the
percentage-of-completion  method,  except when  collectibility is not reasonably
assured in which case  profit is  realized  using the  installment  method.  The
percentage of completion is determined based upon labor hours expended  compared
to total expected  development  hours.  Development  hours  associated  with the
production of the core software is included in the measurement of the contract's
progress   toward   completion   as   the   software   is   customized.    Hours
contemporaneously  expended  for  routine  enhancements  of the  core  software,
however,  are excluded from the  calculation.  Revenue from less  significant or
short-term   arrangements  to  develop  software  modifications   typically  for
recurring customers are generally recognized when the services are complete.

         Advisory  service fees are recognized  based on contract  milestones as
time is incurred.  Licensing fee revenue is recognized  ratably over the term of
the license except that they are recognized  immediately when the Company has no
further  services  to  provide  to the  licensee.  Technical  service  fees  are
recognized ratably over the term of the contract.

         Net  revenues  represent  sales  to  external  customers.  Intercompany
revenues, if any, are eliminated and are immaterial for separate disclosure.

         RESERVE FOR UNCOLLECTIBLE  ACCOUNTS  RECEIVABLE.  YaYa Media's accounts
receivable balances are based on contractual  agreements that are primarily with
Fortune 1000 companies.  As such,  YaYa Media does not make an ongoing  estimate
relating to the collectibility of its accounts  receivable or maintain a reserve
for any  estimated  losses  resulting  from the inability of its clients to make
required  payments.  However,  YaYa Media does periodically  analyze each client
account, and, when it becomes aware of a specific client's inability to meet its
financial   obligations,   such  as  in  the  case  of  bankruptcy   filings  or
deterioration in the client's overall financial condition,  YaYa Media records a
specific  provision for uncollectible  accounts to reduce the related receivable
to the amount that is estimated to be collectible.

         GOODWILL AND OTHER INTANGIBLE  ASSETS. In accordance with the Statement
of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible
Assets,"  periodic  impairment  tests for  goodwill  and other  indefinite-lived
intangible  assets  are based on a  comparison  of the  estimated  fair value of
goodwill  and other  intangible  assets to the carrying  value.  If the carrying
value exceeds the estimate of fair value, impairment is calculated as the excess
of the  carrying  value over the estimate of fair value.  The  estimates of fair
value utilized in goodwill and other indefinite-lived intangible asset tests may
be based upon a number of  factors,  including  assumptions  about the  expected
future operating performance of the reporting units.

         The  Company's  periodic  impairment  assessments  of  indefinite-lived
assets is an integral  part of the  Company's  ongoing  strategic  review of its
business  operations.  Therefore,  the Company's  estimates may change in future
periods due to, among other things,  technological change,  economic conditions,
changes in business  plans or an inability to  successfully  implement  business
plans. Such changes may result in impairment charges recorded in future periods.

         During  the  fiscal  year ended July 31,  2003,  no  impairment  charge
related to goodwill or other indefinite-lived intangible assets was recorded.

         Intangible assets,  such as patents or trademarks,  that are determined
to have definite  lives continue to be amortized over their useful lives and are
measured for  impairment  only when events or  circumstances  indicate  that the
carrying value may be impaired. In these cases,  Management estimates the future
undiscounted cash flows to be derived from the asset to determine whether or not
a potential  impairment  exists.  If the carrying  value exceeds the estimate of
future  undiscounted  cash flows,  the impairment is calculated as the excess of
the  carrying  value of the  asset  over the  estimate  of its fair  value.  Any
impairment  charges would be classified as other expense within the consolidated
statement of operations.


10
<PAGE>

         OTHER  CONTINGENCIES.  In the ordinary course of business,  the Company
may be  involved  in legal  proceedings  regarding  contractual  and  employment
relationships,  trademark  or patent  rights,  and a variety  of other  matters.
Contingent liabilities are recorded if resulting from claims against the Company
when it is probable  that a liability  has been  incurred  and the amount of the
loss is reasonably estimable.  The Company discloses contingent liabilities when
there is a reasonable  possibility that the ultimate loss will materially exceed
the recorded liability. Estimating probable losses requires analysis of multiple
factors,  in some cases including judgments about the potential actions of third
party  claimants and courts.  Therefore,  actual losses in any future period are
inherently  uncertain.  Currently,  the Company  believes  that no pending legal
proceedings or claims, in the ordinary course of business,  will have a material
impact on the Company's financial position or results of operations. However, if
actual or estimated  probable  future losses  exceed the recorded  liability for
such  claims,  additional  charges may be  recorded as an other  expenses in the
Company's  consolidated  statement of operations  during the period in which the
actual loss or change in estimate occurred.


RESULTS OF OPERATIONS

YEAR ENDED JULY 31, 2003 ("FISCAL  2003")  COMPARED WITH THE YEAR ENDED JULY 31,
2002 ("FISCAL 2002")

         SALES  AND  SERVICES.   On  April  16,  2003,   the  Company   acquired
substantially  all of the assets and business and certain of the  liabilities of
YaYa, LLC ("YaYa").  YaYa is an  "end-to-end"  interactive  solutions  provider,
specializing  in the creation and  provision  of  advertiser-driven  interactive
games and marketing  solutions.  In addition to advertising  applications,  YaYa
creates  internet  games for its  clients to be  utilized  in  employee-training
programs and for internal  communications  solutions.  YaYa Media,  Inc.  ("YaYa
Media") is a wholly-owned subsidiary of the Company that was formed specifically
to assume the YaYa  assets,  business  and  liabilities  and to continue  YaYa's
business and operations.

         The YaYa business  generates revenue from relatively few contracts with
certain  Fortune 1000  companies.  The results of operations for YaYa Media from
April 16, through July 31, 2003, are included in the following discussions.

         Subsequent  to  April  16,  2003,  YaYa  generated   revenues  totaling
$576,000,  consisting of $422,000 for advisory services, $64,000 for development
of custom  software  products  and $90,000 for  hosting and  reporting  services
provided to its clients.

         COSTS AND EXPENSES.  General and administrative expenses decreased from
$4,149,000 for Fiscal 2002 to $2,120,000 for Fiscal 2003 for an overall decrease
of $2,029,000 or 48.9%.  Included in the Fiscal 2002 general and  administrative
expenses  is  a  one-time   charge  of  $1,539,000   related  to  the  Company's
restructuring  program to downsize and minimize corporate overhead.  As a result
of the restructuring  program, the Company retained only the Company's President
and Chief  Executive  Officer and  significantly  reduced  other  administrative
expenses.

         During  the fiscal  years  ended July 31,  2003 and 2002,  the  Company
incurred  payroll and  payroll-related  costs totaling  $816,000 and $2,482,000,
respectively.  Fiscal 2002  payroll and  payroll-related  costs  included  costs
related to the Company's  restructuring  program  totaled  $1,324,000.  Although
Fiscal Year 2003  payroll  costs  decreased  overall due to the Fiscal Year 2002
restructuring  program, this decrease was offset by the April 2003 hiring of the
Company's Chief Accounting Officer and $464,000 relating to YaYa Media's general
and administrative payroll costs from April 16, through July 31, 2003.

         The decrease in payroll and  payroll-related  costs for the fiscal year
ended July 31, 2003 were also  partially  offset by increased  accounting  fees.
Under the direction of the Chief Executive Officer,  during August 2002 to April
2003,  the Company  outsourced its internal  accounting and financial  reporting
functions  resulting in $63,000 of accounting  fees expense,  excluding  amounts
paid to its independent auditor.

         Consulting fees totaled $97,000 for Fiscal 2003 and $383,000 for Fiscal
2002, for an overall  decrease of $286,000 or 74.7%.  The Fiscal 2002 consulting
fees were principally paid to investment  advisors for due diligence relating to
three potential acquisition  candidates.  For various reasons, none of the three
proposed transactions was successfully completed.


11
<PAGE>

         Legal fees  decreased  from  $613,000  for Fiscal 2002 to $328,000  for
Fiscal 2003 for an overall decrease of $285,000 or 46.5%. As discussed above for
consulting fees, the Fiscal 2002 legal expenses were primarily  related to legal
fees, due diligence and other related  services  rendered in connection with the
Company's  ongoing merger and  acquisition  efforts.  Legal fees for Fiscal 2003
primarily  relate to monthly  retainers for general SEC and  corporate  matters,
preparation of documents relating to the Company's formation of YaYa Media, YaYa
Media trademark and patent matters, and the Table Mountain Casino litigation.

         Rental  expense for Fiscal 2003 totaled  $41,000 and $93,000 for Fiscal
2002, for an overall decrease of $52,000 or 55.9%.  During May 2002, the Company
terminated its  month-to-month  lease for its former executive  offices.  During
Fiscal 2003,  the Company did not pay a monthly  rent for its current  executive
offices nor was there an  agreement  between the parties for any future  monthly
rental.  However,  YaYa  Media's  executive  office,  located  in  Los  Angeles,
California and its satellite  sales office in New York City incur monthly rental
charges of $11,000 and $3,000,  respectively.  The  Company  has  relocated  its
executive  offices  as of October 1, 2003,  and will incur  rental  expenses  of
$2,300 per month through the remainder of the fiscal year ending July 31, 2004.

         Directors  fees  increased from $93,000 for Fiscal 2002 to $202,000 for
Fiscal 2003,  for a total  increase of $109,000 or 117.2%.  On October 25, 2002,
the Company  granted to Jeanne Hood,  Steven G. Barringer and Stephen K. Bannon,
non-qualified stock options to purchase 20,000, 20,000 and 25,000, respectively,
of the Company's common stock shares at an exercise price of $1.26 per share. In
addition,   on  May  20,  2003,  the  Company   granted  to  Randolph  C.  Read,
non-qualified  stock options to purchase  25,000 of the  Company's  common stock
shares at an exercise price of $1.58.  The options were granted as  compensation
for  serving  on the  Company's  board of  directors  or as a  chairperson  of a
committee of the Company's  board.  Based on the  Black-Scholes  option  pricing
model,  the  Company  recorded  compensation  expense,  included  in general and
administrative  as directors  fees  expense,  totaling  $119,000 for these stock
options.


NON-OPERATING INCOME

         Income from the Company's  unconsolidated  restaurant  investee (Border
Grill  Restaurant)  increased from $404,000 in Fiscal 2002 to $659,000 in Fiscal
2003.  This  increase  is  primarily  due to lower  revenues in Fiscal 2002 that
resulted from the events of September 11, 2001 and its effects on tourism in Las
Vegas,  Nevada  and the  January  2003  opening  of the  Mandalay  Bay Hotel and
Casino's  approximately  one million square foot convention  center.  The Border
Grill  Restaurant  is located in a main traffic area near the Mandalay Bay Hotel
and Casino's convention center.

         Net  interest  income  decreased  from  $255,000  at July  31,  2002 to
$106,000 at July 31,  2003.  This  decrease is primarily  attributable  to lower
interest  rates on the  Company's  money market and U.S.  Treasury bill accounts
(included as "cash and cash equivalents" and "U.S.  treasury  securities" on the
consolidated  balance sheets).  Also, to facilitate immediate cash liquidity for
the Company's  acquisition and merger  activities,  funds were  transferred from
longer-term  higher interest bearing  investments to shorter-term lower interest
bearing  investment  accounts.  The Company's cash and cash equivalents and U.S.
treasury  securities balances also decreased from $9,345,000 at July 31, 2002 to
$8,454,000  at July 31,  2003.  The  decrease  in the Fiscal  2003 cash and cash
equivalents  balance is primarily a result of the consideration  paid and direct
costs relating to the acquisition of the YaYa business that totaled  $1,317,000.
Interest income was also offset by $14,000 in interest expense accrued on a note
payable from YaYa Media to YaYa.


DISCONTINUED OPERATIONS

         On September  28, 2000,  the Company  announced  its closing of the WCW
Nitro Grill restaurant.  As a result,  during Fiscal 2001 the Company recorded a
provision to capture costs related to the discontinued operations. During Fiscal
2002,  the Company  wrote-off the remaining  provision in the amount of $34,000,
net of the income tax benefit totaling $18,000.



12
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of July 31, 2003, the Company had cash and cash equivalents totaling
$8,454,000. Of this amount, the Company holds $7,546,000 in various money market
accounts.  The Company also had  consolidated  working  capital of $8,714,000 at
July 31, 2003, as compared with its working  capital of  $10,667,000 at July 31,
2002.  As  discussed  previously,  the decrease in the Fiscal 2003 cash and cash
equivalents balance is primarily a result of the YaYa acquisition.  In addition,
until  April 16,  2003,  the Company had no current  operating  revenue  source.
Hence,  recurring  operating  costs  decreased  the Company's  working  capital.
Interest  income and capital  distributions  from its investment in Border Grill
partially offset this effect.  However, it should be noted that the Border Grill
Operating  Agreement  does not provide  for  guaranteed  capital  distributions.
Therefore, such distributions are subject to fluctuation.

         On  September  5, 2003,  American  Care  Group,  Inc.,  a  wholly-owned
subsidiary of the Company,  entered into an "Agreement  for Purchase and Sale of
Real Property and Escrow  Instructions"  (the  "Agreement") with a national home
building  company   ("Buyer"),   contemplating   the  sale  by  the  Company  of
approximately  40 acres of undeveloped  land owned by the Company and located in
North Las Vegas,  Nevada. The Agreement provides for a $7,000,000 purchase price
with the Buyer responsible for the real estate broker commission fees. The Buyer
may  terminate  the  transaction  at any time prior to  December 4, 2003 for any
reason  and on or prior to  December  31,  2003 if the Buyer is unable to obtain
approval of the Buyer's "tentative map" by the applicable zoning authorities.

         Upon signing the Agreement, the Buyer funded an escrow account with its
initial deposit of $100,000.  An additional  $100,000 deposit is due on December
5, 2003.  The  deposits are  refundable  until  December  31, 2003.  The Company
expects  to  recognize  a  pre-tax  gain  of   approximately   $3,500,000   upon
consummation of this land sale transaction.

         The  Company  intends  to fund  its  operating  costs  and  merger  and
acquisition  activities from its existing working capital resources,  as well as
the  potential  land sale  proceeds.  It is  possible  that  future  merger  and
acquisition  opportunities  may require  additional  resources.  The Company may
provide for such requirements with financing from financial  institutions and/or
the issuance of equity securities.


LONG-TERM FINANCIAL OBLIGATIONS

         In connection with the April 16, 2003 acquisition of the YaYa business,
YaYa Media assumed a $523,000  promissory note payable to certain YaYa partners.
Provided that YaYa Media has  available  cash  resources,  the  promissory  note
provides  for annual  interest-only  payments  commencing  on December  31, 2003
through  maturity date. The interest rate on the promissory note is 9% per annum
with a  maturity  date of the later of (i) May 1,  2006,  or (ii) the first date
that YaYa Media has sufficient cash resources  available to repay the balance of
the promissory note and all accrued but unpaid interest.


IMPACT OF INFLATION

         The Company  believes that  inflation has not had a material  impact on
costs and expenses.


FACTORS THAT MAY AFFECT FUTURE RESULTS

         From the April 16, 2003 YaYa  acquisition  through the Company's fiscal
year end at July 31, 2003, YaYa Media incurred a net loss of $525,000.  Prior to
July 31, 2003, YaYa Media reviewed its current revenue streams and determined to
focus  primarily on its advisory  services and  development  of custom  software
applications.  As a result, during July 2003, YaYa Media decreased its full-time
employee staffing levels to 12 with the intent to outsource a specific project's
required technical expertise to independent  contractors as needed. Despite YaYa
Media's  efforts to  significantly  decrease labor costs,  there is no assurance
that YaYa Media will be  successful  in its efforts to attain  profitability  in
Fiscal 2004.


13
<PAGE>

         YaYa Media also  generates  revenue from  relatively few contracts with
certain  companies.  A decline in the size or number of these arrangements could
adversely affect its future operations.

         As discussed previously, on September 5, 2003, the Company entered into
an agreement  contemplating  the sale of  approximately  40 acres of undeveloped
land owned by one of the Company's wholly-owned  subsidiary and located in North
Las Vegas, Nevada. The failure to consummate the sale could adversely affect the
Company's cash and cash equivalents.


QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET AND INTEREST RATE RISK

         Except for exceeding insured deposit limits  (approximately  $8,300,000
at July 31,  2003),  the  Company  is exposed  to  minimal  market  risks as its
investment  policy allows only short-term,  high-rated  securities.  The Company
does not hold or issue derivatives,  derivative  commodity  instruments or other
financial  instruments,  for trading  purposes.  At July 31, 2003, the Company's
cash and cash  equivalents  approximate  their fair values due to the short-term
nature of these instruments.

         During the next 12 months,  the Company  does not  anticipate  entering
into financing arrangements which would expose it to interest rate risk.


ITEM 7.  FINANCIAL STATEMENTS
-------  --------------------

         Management  of  American  Vantage  Companies  is  responsible  for  the
information  and  representations  contained  in this report.  The  consolidated
financial  statements of the Company have been  prepared in conformity  with the
generally  accepted  accounting   principles   considered   appropriate  in  the
circumstances  and include some amounts based on best  estimates and  judgments.
Other  financial  information in this report is consistent  with these financial
statements.

         The Audit Committee of the Board of Directors,  presently consisting of
three  independent  directors,   is  responsible  for  the  appointment  of  the
independent  accountants  and  reviews  with  the  independent  accountants  and
management,   the  scope  and  the  results  of  the  annual  examination,   the
effectiveness of the accounting control system and other matters relating to the
financial  affairs of the  Company  as they deem  appropriate.  The  independent
accountants  have full  access  to the  Audit  Committee,  with or  without  the
presence of management, to discuss any appropriate matters.




14
<PAGE>






                          INDEPENDENT AUDITORS' REPORT




Board of Directors and Audit Committee
American Vantage Companies
Las Vegas, Nevada


We have audited the accompanying consolidated balance sheets of American Vantage
Companies and  Subsidiaries  (the Company) as of July 31, 2003 and 2002, and the
related consolidated  statements of operations,  changes in stockholders' equity
and cash flows for the years then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated 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 consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of American Vantage
Companies as of July 31, 2003 and 2002,  and the results of its  operations  and
cash flows for the years then ended in  conformity  with  accounting  principles
generally accepted in the United States of America.


/s/  PIERCY BOWLER TAYLOR & KERN
Certified Public Accountants and Business Advisors,
A Professional Corporation


September 19, 2003




15
<PAGE>




AMERICAN VANTAGE COMPANIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                               JULY 31,
                                                                 -------------------------------------
                                                                        2003              2002
                                                                 -------------------------------------
<S>                                                              <C>                     <C>
ASSETS
Current assets:
     Cash and cash equivalents                                   $ 8,454,000             $ 1,560,000

     U.S. treasury securities                                           --                 7,785,000

     Accounts receivable, net                                        767,000                    --

     Refundable income taxes                                            --                 1,448,000

     Other                                                           395,000                  63,000
                                                                 -----------             -----------

                                                                   9,616,000              10,856,000

Land held for development or sale                                  3,544,000               3,544,000
Investment in unconsolidated investees                             1,537,000               1,615,000
Goodwill                                                           2,926,000                    --
Deferred income tax                                                  214,000                    --
Furniture, equipment and other assets                                296,000                   9,000
                                                                 -----------             -----------
                                                                 $18,133,000             $16,024,000
                                                                 ===========             ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                            $   295,000             $    50,000

     Accrued liabilities                                             172,000                    --
     Deferred income tax                                              33,000                 139,000
     Deferred revenue                                                106,000                    --
     Customer deposits                                               296,000                    --
                                                                 -----------             -----------
         Total current
         liabilities                                                 902,000                 189,000
                                                                 -----------             -----------


Long-term debt                                                       523,000                    --
Commitments and contingencies

Stockholders' equity:
     Preferred stock, $.01 par; 10,000,000 shares authorized;
       0 shares issued and outstanding                                  --                      --
     Common stock, $.01 par; 100,000,000 shares authorized;
       5,690,667 and 4,865,856 shares issued and outstanding          57,000                  49,000
     Additional paid-in capital                                    4,963,000               3,324,000
     Retained earnings                                            11,688,000              12,462,000
                                                                 -----------             -----------

                                                                  16,708,000              15,835,000
                                                                 -----------             -----------
                                                                 $18,133,000             $16,024,000
                                                                 ===========             ===========
</TABLE>



                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



16
<PAGE>



AMERICAN VANTAGE COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                YEAR ENDED JULY 31,
                                                                         -----------------------------------
                                                                               2003             2002
                                                                         -----------------------------------

<S>                                                                      <C>                     <C>
SALES AND SERVICES                                                       $   576,000            $      --
COST OF SALES AND SERVICES                                                   337,000                   --
                                                                         -----------            -----------


GROSS MARGIN                                                                 239,000                   --
                                                                         -----------            -----------

COSTS AND EXPENSES
     General and administrative                                            2,120,000              2,610,000
     Corporate restructuring                                                    --                1,539,000
                                                                         -----------            -----------


                                                                           2,120,000              4,149,000

NON-OPERATING INCOME
     Income from unconsolidated investees, net                               682,000                404,000
     Interest, net                                                           106,000                255,000
     Miscellaneous                                                              --                   10,000
                                                                         -----------            -----------

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX BENEFIT                  1,093,000              3,480,000


INCOME TAX BENEFIT                                                           319,000              1,308,000
                                                                         -----------            -----------

LOSS FROM CONTINUING OPERATIONS                                              774,000              2,172,000

DISCONTINUED OPERATIONS
     Income from discontinued restaurant operations, net of income
       tax benefit totaling $18,000                                             --                   34,000
                                                                         -----------            -----------

NET LOSS                                                                 $   774,000            $ 2,138,000
                                                                         ===========            ===========

INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED
      Continuing operations                                              $     (0.15)           $     (0.45)
      Discontinued operations                                                   --                     0.01
                                                                         -----------            -----------

      Net loss                                                           $     (0.15)           $     (0.44)
                                                                         ===========            ===========

 WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND
    COMMON SHARE EQUIVALENTS                                               5,106,000              4,866,000
                                                                         ===========            ===========
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>



AMERICAN VANTAGE COMPANIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                        ADDITIONAL
                                                              COMMON STOCK                PAID-IN          RETAINED
                                                    ---------------------------------
                                                         SHARES         PAR VALUE         CAPITAL          EARNINGS
                                                    ---------------  ---------------- ---------------- -----------------

<S>                                                    <C>             <C>              <C>               <C>
BALANCE, JULY 31, 2001                                 4,865,856       $     49,000     $  3,218,000      $ 14,600,000

Issuance of options under plans                             --                 --             75,000              --

Issuance of warrants under plan                             --                 --             31,000              --


Net loss                                                    --                 --               --          (2,138,000)
                                                       ---------       ------------     ------------      ------------


BALANCE, JULY 31, 2002                                 4,865,856             49,000        3,324,000        12,462,000

Shares issued related to YaYa acquisition                824,811              8,000        1,155,000              --

Issuance of options under plans                             --                 --            484,000              --


Net loss                                                    --                 --               --            (774,000)
                                                       ---------       ------------     ------------      ------------

BALANCE, JULY 31, 2003                                 5,690,667       $     57,000     $  4,963,000      $ 11,688,000
                                                       =========       ============     ============      ============
</TABLE>


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17
<PAGE>







AMERICAN VANTAGE COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                   YEAR ENDED JULY 31,
                                                                            ---------------------------------
                                                                                 2003              2002
                                                                            ---------------------------------

<S>                                                                          <C>                 <C>
OPERATING ACTIVITIES
     Net cash used in operating activities                                   $  (355,000)        $(2,875,000)
                                                                             -----------         -----------

INVESTING ACTIVITIES
     Purchase of furniture and equipment                                         (27,000)             (1,000)
     Proceeds from sale of furniture and equipment                                  --                 6,000
     Advances to YaYa, LLC                                                    (1,110,000)               --
     Direct YaYa acquisition costs                                              (207,000)               --
     Capitalization of YaYa Media, Inc.                                           (1,000)               --
     Cash proceeds acquired from YaYa LLC                                          9,000                --
     Net proceeds from redemption of U.S. treasury bills, at maturity          7,785,000                --
     Purchased U.S. treasury bills and certificates of deposit                      --            (1,940,000)
     Cash distribution from unconsolidated restaurant subsidiary                 800,000             650,000
                                                                             -----------         -----------

     Net cash provided by (used in) investing activities                       7,249,000          (1,285,000)
                                                                             -----------         -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           6,894,000          (4,160,000)

CASH AND CASH EQUIVALENTS, AT BEGINNING OF YEAR                                1,560,000           5,720,000
                                                                             -----------         -----------


CASH AND CASH EQUIVALENTS, AT END OF YEAR                                    $ 8,454,000         $ 1,560,000
                                                                             ===========         ===========
</TABLE>





                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


19
<PAGE>


AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         NATURE OF BUSINESS. Prior to April 16, 2003, American Vantage Companies
and  its   wholly-owned   subsidiaries   (collectively,   the  "Company")   were
substantially  inactive.  As discussed  in Note 2, on April 16,  2003,  American
Vantage  Companies (the "Parent")  acquired  substantially all of the assets and
business  and  certain of the  liabilities  of YaYa,  LLC  ("YaYa").  YaYa is an
"end-to-end"  interactive  solutions provider,  specializing in the creation and
provision of  advertiser-driven  interactive games and marketing  solutions.  In
addition  to  advertising  applications,  YaYa  creates  internet  games for its
clients  to  be  utilized  in   employee-training   programs  and  for  internal
communications  solutions.  YaYa Media,  Inc.  ("YaYa  Media") is a wholly-owned
subsidiary  of the  Parent,  formed  specifically  to acquire  the YaYa  assets,
business  and  liabilities   purchased  and  to  continue  YaYa's  business  and
operations.

         The  Company  continues  to  review  opportunities  with  the  goal  of
maximizing its resources in order to increase stockholder values. Effective July
29, 2002, the Company initiated a complete corporate restructuring that resulted
in the severance of all executive and  administrative  staff, with the exception
of its  Chief  Executive  Officer.  In  addition,  the  Company  terminated  its
month-to-month  lease for its executive offices and significantly  reduced other
administrative expenses. The cost of this restructuring was a one-time charge of
$1,539,000, including primarily severance pay and a $95,000 loss on the disposal
or abandonment of certain property and equipment.

         The Company,  through a  wholly-owned  subsidiary,  also has a minority
interest in an unconsolidated investee (the "Restaurant Investee") that owns and
operates a restaurant  in a casino hotel located on the Las Vegas  "Strip".  The
Company has no day-to-day  management  responsibilities  in connection  with the
Restaurant Investee and its operations.

         Through  YaYa  Media,  the  Company  has  a  minority  interest  in  an
unconsolidated  investee (the "YaYa Investee") that promotes "video game touring
festivals".  The Company has no day-to-day  responsibilities  in connection with
the YaYa Investee and its operations.

         Until May 1999,  the  Company  had been  engaged  in  providing  gaming
consulting  services  to a  tribal  gaming  enterprise  when  its  contract  was
prematurely terminated (see Note 7- Commitments and contingencies).

         PRINCIPLES OF  CONSOLIDATION.  The  consolidated  financial  statements
include  the  accounts  of  American  Vantage  Companies  and  its  wholly-owned
subsidiaries.  All significant  intercompany accounts and transactions have been
eliminated.

         The Company  excludes  the  accounts  of its  Restaurant  Investee  and
instead records its investment  using the equity method of accounting  (based on
its equity in the  Restaurant  Investee's  net assets,  which is 49%) subject to
certain contractual  adjustments until the Restaurant Investee attains sustained
profitability.  The effect of the adjustments is that the Company has recognized
100% of the  initial  losses  from  the  Restaurant  Investee's  operations  and
subsequent  income and will continue to do so until the initial losses have been
offset.

         The Company also excludes the accounts of its YaYa Investee and instead
records its investment using the equity method of accounting based on its equity
in the YaYa Investee's net assets, which is 36% at July 31, 2003.



20
<PAGE>




AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


         USE OF ESTIMATES. The preparation of financial statements in conformity
with  accounting  principles  generally  accepted in the United States  requires
management to make estimates and  assumptions  that affect the reported  amounts
and disclosures,  some of which may require revision in future periods.  For the
Company,  the most  significant  estimate  is  goodwill  as it may be subject to
impairment within the next year if there are changes in circumstances.

         CASH EQUIVALENTS.  The Company considers all highly liquid  instruments
purchased  with  an  original  maturity  of  three  months  or  less  to be cash
equivalents. These include primarily money market funds.

         U.S. TREASURY  SECURITIES.  U.S.  treasury  securities at July 31, 2002
have an original maturity of six months and are classified as held-to-maturity.

         CONCENTRATION OF CREDIT RISK. The Company is subject to  concentrations
of credit risk associated with cash and equivalents and accounts receivable. The
Company places cash and equivalents with financial  institutions with investment
grade credit ratings. The financial  institutions are FDIC insured on amounts up
to $100,000.  In  aggregate,  such insured  limits are exceeded by $8,300,000 at
July 31, 2003.

         The  Company  considers  its  concentration  risk  related to  accounts
receivable to be mitigated as project  contracts are primarily with Fortune 1000
companies.

         REVENUE  RECOGNITION.   Revenues,  entirely  derived  from  YaYa  Media
operations,  consist of  licensing,  advisory  services  and games  hosting  and
reporting.  Licensing  revenues from long-term  contracts that include producing
licensed  custom  software  applications  are  generally  recognized  using  the
percentage-of-completion  method,  except when  collectibility is not reasonably
assured in which case profit is recognized  using the  installment  method.  The
percentage of completion is determined based upon labor hours expended  compared
to total expected  development  hours.  Development  hours  associated  with the
production of the core software is included in the measurement of the contract's
progress   toward   completion   as   the   software   is   customized.    Hours
contemporaneously  expended  for  routine  enhancements  of the  core  software,
however,  are excluded from the  calculation.  Revenue from less  significant or
short-term   arrangements  to  develop  software  modifications   typically  for
recurring customers are generally recognized when the services are complete.

         Advisory  service fees are recognized  based on contract  milestones as
time is incurred.  Licensing fee revenue is recognized  ratably over the term of
the license except that they are recognized  immediately when the Company has no
further  services  to  provide  to the  licensee.  Technical  service  fees  are
recognized ratably over the term of the contract.

         Net  revenues  represent  sales  to  external  customers.  Intercompany
revenues,  if  any,  have  been  eliminated  and  are  immaterial  for  separate
disclosure.

         CONCENTRATIONS.  As the Company's wholly owned  subsidiary,  YaYa Media
generates  revenue from  relatively  few  contracts  with certain  companies,  a
decline  in the size or  number of these  arrangements  could  adversely  affect
future operations.

         LAND HELD FOR  DEVELOPMENT OR SALE.  Land held for  development or sale
consists  of  approximately  40 acres of  undeveloped  land in North Las  Vegas,
Nevada,  that is valued at the lower of cost or estimated  fair value less costs
to sell. See Note 11 - Subsequent events.


21
<PAGE>

AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


         GOODWILL.   In  accordance  with  SFAS  No.  142  "Goodwill  and  Other
Intangible  Assets" (SFAS 142),  goodwill and intangible  assets with indefinite
lives  are no  longer  being  amortized  but  instead  are  being  measured  for
impairment  periodically,  or when events indicate that an impairment exists. As
required by SFAS 142, in the  Company's  impairment  test of goodwill,  the fair
value of the applicable reporting unit is compared to its carrying value. If the
carrying  value of the  reporting  unit exceeds the estimate of fair value,  the
Company  calculates  the  impairment  as the  excess  of the  carrying  value of
goodwill over its estimated fair value.

         At July 31,  2003,  the Company  has  recorded  $2,926,000  in goodwill
related to the April 16, 2003 acquisition of the YaYa operations.  No impairment
test of goodwill was performed at July 31, 2003 given the three and a half month
YaYa Media operating period.

         FURNITURE,  EQUIPMENT  AND  DEPRECIATION.  Furniture  and equipment are
recorded  at cost  (excluding  furniture  and  equipment  acquired  in the  YaYa
acquisition which was recorded at its fair market value on date of acquisition).
Depreciation for financial  reporting  purposes is determined on a straight-line
basis over three to seven years.

         STOCK-BASED COMPENSATION. The Company accounts for stock-based employee
compensation  (see Note 5 -  Stockholders'  equity)  using the  intrinsic  value
method in  Accounting  Principles  Board  Opinion No. 25,  Accounting  for Stock
Issued to Employees. Historically, the Company has granted stock options with an
exercise price equal to the market value at the date of grant,  and accordingly,
no compensation expense is recognized.

         INCOME (LOSS) PER COMMON SHARE.  The computation of basic income (loss)
per  common  share are based on the  weighted  average  number of common  shares
outstanding.  Options  and  warrants to  purchase  737,000 and 25,000  shares of
common  stock in Fiscal  2003 and  452,000  and  25,000 in Fiscal  2002 were not
included  in the  computation  of diluted  income  (loss) per share  because the
effect would be anti-dilutive.

         DISCONTINUED  OPERATIONS.  All  discontinued  operations were initiated
prior to the effective date of Statement of Financial  Accounting  Standards No.
144,  Accounting  For The Impairment or Disposal of Long-Lived  Assets,  and are
accounted for in accordance with Accounting  Principles Bulletin Opinion No. 30,
Reporting  the Results of  Operations  - Reporting  the Effects of Disposal of a
Segment of a  Business,  and  Extraordinary,  Unusual and  Infrequent  Occurring
Events and Transactions.


NOTE 2 - YAYA ASSET PURCHASE

         Consideration   paid  in  acquiring  the  YaYa  assets,   business  and
liabilities  consisted of 824,811  shares of the Company's  common stock and the
assumption of liabilities  totaling  approximately  $2,500,000,  including loans
aggregating  $1,110,000  in  principal  amount  made by the  Company  to YaYa in
December 2002 and March 2003.  The 824,811  shares of Company  common stock were
valued at $1.41 per share based on the closing price of Company  common stock on
April 16, 2003.

         The following  table  summarizes the allocated  estimated fair value of
YaYa's  assets and  liabilities  at July 31, 2003 and  calculates  the resulting
goodwill  balance.  Certain  valuation  assumptions  are still being assessed by
management.   The  goodwill  calculation  and  measurement  may  be  subject  to
refinement over the next fiscal year following the acquisition.


22
<PAGE>


AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


<TABLE>
<CAPTION>

PURCHASE PRICE:
<S>                                                                                     <C>
         Issuance of 824,811 shares of Company common stock (note 4)                    $ 1,163,000
         Pre-acquisition advances to YaYa, LLC, including $26,000 in accrued
           interest receivable                                                            1,136,000
         Cash capitalization of YaYa Media, Inc. (100% interest)                              1,000
                                                                                        -----------
Total purchase price                                                                      2,300,000

ACQUISITION DIRECT COSTS:
         Issuance of common stock options as investment banking fee (note 4)                100,000
         Legal, accounting and other miscellaneous direct acquisition costs                 207,000
                                                                                        -----------
Total costs                                                                               2,607,000
                                                                                        -----------


FAIR VALUE OF YAYA'S ASSETS AND LIABILITIES:
         Assets
                  Furniture and equipment                                                   207,000
                  Investments and other assets (including $64,000 in
                    identifiable intangibles)                                               131,000
                  Current assets (including $751,000 in net accounts receivable)            776,000
                                                                                        -----------

                                                                                          1,114,000
                                                                                        -----------
         Liabilities
                  Note payable to YaYa, LLC members                                         523,000
                  Current liabilities                                                       910,000
                                                                                        -----------

                                                                                          1,433,000
                                                                                        -----------
Fair value of identifiable net liabilities assumed                                         (319,000)
                                                                                        -----------

Goodwill (costs plus fair value of net liabilities assumed)                             $ 2,926,000
                                                                                        ===========
</TABLE>

         The  results of  operations  for YaYa Media have been  included  in the
consolidated financial statements of the Company since the date of acquisition.

         The following unaudited pro forma information represents the results of
operations  of the Company as if YaYa had  occurred at the  beginning  of fiscal
year 2002:

                                                               Year Ended
                                                                 July 31,
                                                       2003               2002
                                                       ----               ----

Net revenues                                       $1,859,000         $5,422,000
Net loss                                           $3,067,000         $3,080,000

Loss per common share - basic and diluted              $0.54               $0.54


23
<PAGE>


AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


         The unaudited pro forma  information  does not purport to be indicative
of the results  that would  actually  have been  achieved  had the  acquisitions
occurred as of the date of the periods  indicated or that may be obtained in the
future.


NOTE 3 - INVESTMENTS IN UNCONSOLIDATED INVESTEES

         The  Company,  through a wholly  owned  subsidiary,  has a 49% minority
interest in an unconsolidated  investee that owns and operates a restaurant in a
casino hotel  located on the Las Vegas  "Strip".  The Company has no  day-to-day
management  responsibilities  in connection with the Restaurant Investee and the
Restaurant  Investee's  operations.  The Company  excludes  the  accounts of the
Restaurant  Investee and instead records its investment  using the equity method
of accounting  subject to certain  contractual  adjustments until the Restaurant
Investee attains sustained profitability.  The effect of the adjustments is that
the  Company has  recognized  100% of the  initial  losses  from the  Restaurant
Investee's operations and its subsequent income and will continue to do so until
the initial losses have been offset.

         The following  summarizes the condensed  balance sheet at July 31, 2003
and the  statement  of  operations  for the twelve  months  ended July 31,  2003
(unaudited) of the Restaurant Investee:


         Assets                                               $1,890,000
         Liabilities                                             417,000
                                                               ----------

         Members' capital                                     $1,473,000
                                                               =========


         Revenues                                             $5,510,000
         Expenses                                              4,851,000
                                                               ---------
         Income from operations                               $  659,000
                                                               =========


         In addition,  as a result of the YaYa asset  acquisition,  the Company,
through YaYa Media, Inc.,  obtained a non-controlling  interest (36% at July 31,
2003) in an unconsolidated  investee that has entered into an in-substance joint
venture  arrangement  to create a promotional  event called a video game touring
festival.  The Company has no capital  requirement in connection with this joint
venture and is not obligated to provide future financing of the activities.  If,
after  good faith  efforts  by the  members,  there are  insufficient  corporate
sponsors to cover all costs and expenses of staging the initial event, the joint
venture shall dissolve and liquidate, unless the members agree to the contrary.

         The following  summarizes the condensed  balance sheet at July 31, 2003
and the statement of operations from the April 16, 2003 acquisition date through
July 31, 2003 (unaudited) of the YaYa Investee:

         Assets                                               $  38,000
         Liabilities                                             97,000
                                                                --------

         Members' deficit                                     $ (59,000)
                                                                =======


24
<PAGE>

AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


         Revenues                                    $ 145,000
         Expenses                                      101,000
                                                       -------

         Income from operations                      $  44,000
                                                      ========


NOTE 4 - LONG-TERM DEBT

         From the April 16, 2003  acquisition  of the YaYa  business the Company
assumed a $523,000  promissory  note payable to certain YaYa partners.  Provided
that YaYa Media has available cash  resources,  the promissory note provides for
annual  interest-only  payments commencing on December 31, 2003 through maturity
date. The interest rate on the promissory note is 9% with a maturity date of the
later of (i) May 1, 2006, or (ii) the first date that YaYa Media has  sufficient
cash available to repay the balance of the  promissory  note and all accrued but
unpaid interest.


NOTE 5 - STOCKHOLDERS' EQUITY

         PREFERRED  STOCK.  The  Board  of  Directors  has  authority,   without
additional  shareholder  approval, to issue up to 10,000,000 shares of preferred
stock and to set the  various  terms  including,  without  limitation,  dividend
rates,  conversion  rights,  voting rights,  terms of redemption and liquidation
preferences.  Conversion  rights  associated with a future issuance of preferred
stock could dilute the interest of the holders of common  stock.  Voting  rights
and liquidation  preferences  could also be senior to the rights and preferences
of the common stockholders.

         COMMON  STOCK.  Effective  July 18, 2003,  the  Company's  stockholders
ratified an increase in the Company's authorized common stock from 10,000,000 to
100,000,000 shares.

          In  connection  with the April 16,  2003 asset  acquisition  agreement
between  YaYa,  YaYa Media and the Company,  the Company  issued to YaYa 824,811
shares of Company  common stock valued at $1.41 per share,  based on the closing
price of Company common stock on April 16, 2003. The agreement  provides for the
Company's  right to repurchase the 824,811 shares of common stock issued to YaYa
as the  acquisition  consideration.  This right is  exercisable in the Company's
sole  discretion if YaYa Media fails to produce net income  (determined  without
giving effect to any interest  charges on the Company's prior loans to YaYa) for
the period  commencing on April 16, 2003 and  terminating on April 30, 2004. The
right is exercisable at the purchase price of $1.40 per share and is exercisable
in whole or in part.

         YaYa and the Company also entered into a Voting Agreement,  dated as of
April 16, 2003. This agreement provides that YaYa will vote all of the shares of
the  Company's  common  stock that it owns,  including  the 824,811  shares YaYa
acquired in the acquisition  transaction,  as directed by the Company's board of
directors,  except in connection with any (a) tender offer by a party other than
YaYa or an affiliate  of YaYa,  (b)  transaction  which is subject to Rule 13e-3
promulgated under the Securities Exchange Act of 1934, as amended, or (c) merger
involving the Company where, as a result of such merger,  the then  stockholders
of the Company would, upon consummation of such merger, own less than 50% of the
total voting power of the entity  surviving such merger.  The agreement  further
provides  that it is  terminable on the later of: (x) the day following the 20th
consecutive  trading day where the closing price of the  Company's  common stock
exceeds $7.50 per share or (y) April 16, 2010.


25
<PAGE>


AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


         STOCK  REPURCHASE   PROGRAM.   From  time  to  time,  the  Company  may
repurchase,  without  additional  shareholder  approval,  up to an  aggregate of
$2,000,000  of its common  stock in the open market or in  privately  negotiated
transactions,  with the timing and terms of such  purchases to be  determined by
management  based on  market  conditions.  There is no  expiration  date for the
repurchase program.  The Company repurchased no shares in Fiscal 2003 and Fiscal
2002 and has  purchased a total of 387,027  shares  ($415,000)  through July 31,
2003.

         STOCK OPTIONS.  At July 31, 2003,  the Company has two separate  active
stock option plans with 1,583,334  shares  reserved for employees,  officers and
directors  of the  Company  and  others  who  are  involved  in  the  continuing
development  and success of the Company or its  subsidiaries.  In addition,  the
Company has two expired stock option plans adopted with 500,000 shares  reserved
for  officers  of the Company and 833,334  shares  reserved  for key  employees,
including officers.  The options,  under all plans, are granted at not less than
100% of the market value of the Company's common stock on the date of grant.

         The  following is a summary of activity of  outstanding  stock  options
under the four plans:

<TABLE>
<CAPTION>
                                                                                                            EMPLOYEES,
                                               OFFICERS                      KEY EMPLOYEES              OFFICERS / DIRECTORS

COMMON SHARES RESERVED FOR ISSUANCE             500,000                        833,334                       1,583,334
                                                ========                       ========                      =========

Shares / weighted average exercise
price
<S>                                        <C>             <C>           <C>           <C>             <C>           <C>
   Outstanding, July 31, 2001               52,726         $   1.86      586,943       $   2.65        304,172       $  3.51
   Granted                                    --                --           --             --          65,000           --
   Canceled / expired                      (41,030)            2.07     (410,971)          3.06       (105,000)          --
                                          --------         --------      --------       -------       --------        -----

   Outstanding, July 31, 2002               11,696             1.13      175,972           1.48        264,172          3.51
   Granted                                    --                --           --             --         427,500          1.37
   Canceled / expired                         --                --       (58,668)           --         (83,337)         3.48
                                          --------         --------     --------        -------       --------         -----

   Outstanding, July 31, 2003               11,696         $   1.13      117,304       $   1.29        608,335        $ 2.08
                                          ========         ========     ========       ========       ========         =====

WEIGHTED AVERAGE REMAINING
  CONTRACTUAL LIFE (YEARS) / RANGE
  OF EXERCISE PRICES                          6.5            $1.13          6.6   $1.13 - $1.63         8.8   $1.13  - $3.57
                                              ===            =====          ===   =============         ===   ==============
</TABLE>


         Under  the  intrinsic  value  method,  no  compensation  cost  has been
recognized   for  employee   stock-based   compensation   under  the  applicable
circumstances.  Had the Company used the fair  value-based  method of accounting
and  recognized  compensation  expense as provided for in Statement of Financial
Accounting  Standards No. 123, Stock-Based  Compensation,  net loss and net loss
per share for years ended July 31, 2003 and 2002 would have been as follows:

<TABLE>
<CAPTION>
                                                            2003               2002
                                                            ----               ----

<S>                                                     <C>               <C>
Pro forma net loss                                      $878,000          $2,138,000

Pro forma net loss per share - basic and diluted           $0.17               $0.44
</TABLE>


26
<PAGE>

AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


         The weighted-average  grant-date fair value of the options and warrants
granted was $1.37 and $1.57 per option for 2003 and 2002, respectively.

         The closing of the YaYa  acquisition  transaction  also resulted in the
contingent option previously  granted to a director on July 12, 2002 to purchase
up to 175,000  shares of the  Company's  common stock at $1.41 per share and the
contingent option previously  granted to the Company's outside corporate counsel
on July 12, 2002 to purchase up to 87,500 shares of the  Company's  common stock
at $1.41 per share to each become fully exercisable.  These options were granted
as compensation for serving on the Company's special advisory group to the board
of directors.  The special  advisory  group was  established on July 12, 2002 to
identify,  review and perform initial due diligence services of potential merger
and acquisition candidates on behalf of the Company. The options have a ten-year
exercise  term and an exercise  price  equal to the closing  price of the common
stock on July 12, 2002.  Based on the  Black-Scholes  option pricing model,  the
Company    initially    capitalized    approximately    $365,000    as   prepaid
acquisition/investment  fee  costs.  As a result  of the YaYa  acquisition,  the
Company reclassified  $100,000 or approximately 4% of the overall purchase price
of these capitalized prepaid acquisition/investment fee costs as direct costs of
the acquisition.

         WARRANTS.  In 2002, the Company granted to an investment banking firm a
warrant to purchase  25,000 shares of Company common stock,  at a purchase price
of $1.65 per share expiring in five years,  in exchange for  investment  banking
services.

         The  weighted-average  grant-date fair value of each non-employee award
and the  pro  forma  presentation  for  employee  stock-based  compensation  was
determined by using the Black-Scholes option pricing model and the following key
assumptions:

                                                  2003               2002
                                                  ----               ----

Expected stock price volatility               144% to 146%        131% to 132%
Expected option lives (years)                      10                   3
Expected dividend yield                             0                   0
Risk-free interest rates                          1.3%             3.9% to 4.0%


NOTE 6 - INCOME TAXES

Income tax benefit (expense) is comprised as follows:

                                                  2003                  2002
                                                  ----                  ----

Current                                       $        --           $1,447,000
Deferred                                           319,000          (  139,000)
                                                 ---------          -----------

                                              $    319,000          $1,308,000
                                                 =========          =========




27
<PAGE>


AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002

         The income tax benefit (expense) for the years ending July 31, 2003 and
2002 differs from the amount of income tax determined by applying the applicable
U.S.  statutory  federal  income  tax rate to  pre-tax  loss as a result  of the
following differences:

<TABLE>
<CAPTION>
                                      2003           %             2002                 %
                                      ----           -             ----                 -

<S>                               <C>                <C>        <C>                    <C>
Statutory federal tax rate        $ 372,000          34         $ 1,183,000            34
Stock options and warrants          (40,000)         (4)           (36,000)            (1)
Employment tax credits                 --            --              37,000             1
Valuation allowances                   --            --             114,000             3
Other                               (13,000)         (1)             10,000             1
                                  ---------         ---         -----------           ---

Effective tax benefit             $ 319,000          29         $ 1,308,000            38
                                  =========         ===         ===========           ===
</TABLE>

         The  components of deferred net tax assets and  liabilities at July 31,
2003 and 2002 are comprised of:

<TABLE>
<CAPTION>
                                                                              2003               2002
                                                                              ----               ----
<S>                                                                     <C>               <C>
Deferred net tax assets (liabilities):
   Operations of unconsolidated investee                                  $   (62,000)      $   (222,000)
   Tax attributes of unconsolidated investee                                 (145,000)            71,000
   Net operating loss                                                         382,000                --
   Discontinued operations                                                        --              12,000
   Other                                                                        6,000                --
                                                                           ----------        -------------


Total deferred net tax assets (liabilities)                               $   181,000        $  (139,000)
                                                                           ==========        ==============
</TABLE>


NOTE 7 - COMMITMENTS AND CONTINGENCIES

         LITIGATION.  In  connection  with  the  premature  termination  of  the
Company's   contracts  to  provide  consulting  services  to  an  Indian  gaming
enterprise,  the Company brought a civil action against the Table Mountain Tribe
(the "Tribe").  The lawsuit seeks to recover  payments  totaling  $3,150,000 due
under one of the agreements  and $790,000 under another.  The Company also seeks
interest, court costs and additional unspecified and to-be-determined consulting
fees that would have been due during the  remainder of the  consulting  contract
term.

         In October  2002,  the Company was  successful  in its appeal,  and the
California  Superior Court of Appeals reversed a California Superior Court order
dismissing  the case for lack of  jurisdiction.  The  California  Supreme  Court
subsequently denied the Tribe's petition to review that appellate decision.

         In April  2003,  the Tribe  filed a motion to dismiss the case based on
its assertion that its contracts  with the Company were not properly  authorized
by Tribal  authorities,  and thereby did not  constitute  a valid  waiver of the
Tribe's sovereign immunity to suit.

         In May 2003, the California  Superior Court determined that the Company
was  entitled to  discovery  on the  sovereign  immunity  issue,  and after such
discovery,  the California  Superior Court would conduct further  proceedings on
the  sovereign  immunity  issue.  Also in May 2003,  the  Tribe  filed a Writ of
Certiorari with the United States Supreme Court, who will decide in the next few
months whether or not to hear the Tribe's appeal.


28
<PAGE>

AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


         Since the Company is unable to determine its losses, if any, should the
Tribe's counterclaim be successful,  no accounting recognition has been given to
these matters in the accompanying financial statements.

         LEASE  COMMITMENTS.  The Company  leases  space for its  offices  under
agreements with terms ranging from month-to-month to 48 months. Rent expense was
$41,000 and $0 for the fiscal years ended July 31, 2003 and 2002,  respectively.
Amounts  of  minimum  future  annual  rental  commitments  under   noncancelable
operating  leases in each of the five fiscal  years ending July 31, 2004 through
2009 are $19,000, $29,000, $29,000, $30,000, $5,000 and $0, respectively.


NOTE 8 - RELATED PARTY TRANSACTIONS

         Non-employee  directors  receive  $15,000  per annum for serving on the
Board of Directors of the Company. During the year ended July 31, 2002, employee
directors received $11,250 for serving on the Board of Directors.  Effective May
1, 2002, the Company no longer compensates employee directors for serving on the
Board.  However, all directors are reimbursed for expenses incurred in attending
meetings of the Board and other Company related expenses.

         Two  non-employee  directors also received  $10,000 each for serving as
the chairpersons for the audit and compensation committees.

         In consideration for consulting  services,  the Company paid a director
$60,000 during Fiscal 2003 and $20,000 during Fiscal 2002.

         In  consideration  for corporate  legal and  consulting  services,  the
Company paid a minority  shareholder  approximately  $90,000 and $93,000  during
Fiscal 2003 and 2002,  respectively  (see Note 5 -  Stockholders'  equity (stock
options)).


NOTE 9 - RETIREMENT PLAN

         Company employees meeting certain eligibility  requirements participate
in a simplified  employee pension plan.  Employer  contributions to the plan are
made on a discretionary  basis and were $49,000 and $207,000 for the years ended
July 31, 2003 and 2002, respectively.




29
<PAGE>



AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002



NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                                              YEAR ENDED JULY 31,
                                                                                     ------------------------------------
                                                                                            2003                  2002
                                                                                     ------------------------------------

<S>                                                                                  <C>                      <C>
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES
     Net loss                                                                        $  (774,000)             $(2,138,000)
     Income from unconsolidated investees                                               (682,000)                (404,000)
     Depreciation and amortization                                                        39,000                   23,000
     Loss on disposal of furniture and equipment                                            --                     95,000
     Compensation expense from issuance of stock options                                 119,000                     --
     Expenses paid with stock options and warrants **                                       --                    106,000
     Deferred income tax benefit                                                          28,000                  139,000
     Change in operating assets and liabilities, net of amounts acquired
         or assumed in the YaYa LLC acquisition:
             Accounts receivable, net                                                    (16,000)                    --
             Refundable income taxes                                                   1,100,000                 (424,000)
             Other assets                                                                (76,000)                  11,000
             Accounts payable                                                           (103,000)                (103,000)
             Accrued liabilities                                                         (29,000)                (180,000)
             Deferred revenue                                                             93,000                     --
             Customer deposits                                                           (54,000)                    --
                                                                                     ------------             -----------

                                                                                     $  (355,000)             $(2,875,000)
                                                                                     ============             ===========

     **  Denotes significant non-cash financing activity

Supplemental schedule of noncash investing and financing activities:
   Cost of acquisition in excess of fair market value of net
     assets received                                                                 $ 2,926,000              $      --
   Liabilities assumed                                                                 1,433,000                     --
   Common stock issued in connection with acquisition                                  1,163,000                     --
   Tangible assets acquired in connection with acquisition                             1,114,000                     --
</TABLE>






30
<PAGE>




AMERICAN VANTAGE COMPANIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JULY 31, 2003 AND 2002


NOTE 11 - SUBSEQUENT EVENTS

         LAND  SALE.  On  September  5,  2003,  American  Care  Group,  Inc.,  a
wholly-owned  subsidiary of the Company  entered into an "Agreement for Purchase
and Sale of Real  Property and Escrow  Instructions"  (the  "Agreement")  with a
national home building company ("Buyer"),  contemplating the sale by the Company
of  approximately  40 acres of undeveloped land owned by the Company and located
in North Las Vegas,  Nevada.  The Agreement  provides for a $7,000,000  purchase
price with the Buyer responsible for the real estate broker commission fees. The
Buyer may  terminate the  transaction  at any time prior to December 4, 2003 for
any reason and on or prior to December 31, 2003 if the Buyer is unable to obtain
approval of the Buyer's "tentative map" by the applicable zoning authorities.

         Upon signing the Agreement, the Buyer funded an escrow account with its
initial deposit of $100,000.  An additional  $100,000 deposit is due on December
5, 2003.  The  deposits are  refundable  until  December  31, 2003.  The Company
expects  to  recognize  a  pre-tax  gain  of   approximately   $3,500,000   upon
consummation of this land sale transaction.

         BAD DEBT RECOVERY. During 1998, the Company wrote-off a note payable in
the amount of $413,000 related to casino  predevelopment costs. During September
2003, the Company received $606,000  representing the note payable principal and
accrued interest of $193,000.




31
<PAGE>



ITEM  8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
--------  ---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

         On September  10, 2002,  the Company  appointed  Piercy Bowler Taylor &
Kern  ("Piercy"),   Certified  Public  Accountants  and  Business  Advisors,   a
professional corporation,  as its new auditor for its fiscal year ended July 31,
2002. The change resulted from  notification by the Company's  former  auditors,
Bradshaw,  Smith & Co., LLP ("Bradshaw")  that it was  discontinuing  its public
company  practice  and would  discontinue  its  audit  services  to the  Company
following  the audit of the  Company  financial  statements  for its fiscal year
ended July 31,  2002.  The audit  committee of the Company  recommended  and the
Board of Directors of the Company authorized the termination of Bradshaw and the
engagement of Piercy as the Company's  independent  auditors for its fiscal year
ended July 31, 2002.

         During  the  Company's  two most  recent  fiscal  years,  there were no
disagreements  between the Company and Piercy,  whether or not resolved,  on any
matter of accounting principles or practices, financial statement disclosure, or
auditing  scope or procedure,  which,  if not resolved to Piercy's  satisfaction
would  have  caused  Piercy  to make  reference  to the  subject  matter  of the
disagreement(s) in connection with its reports.

ITEM 8A.  CONTROLS AND PROCEDURES

         An evaluation was performed, as of July 31, 2003, under the supervision
and with the participation of our management,  including its President and Chief
Executive  Officer and Chief  Accounting  Officer,  of the  effectiveness of the
design and operation of our disclosure  controls and  procedures,  as defined in
Rules 13a-14(c) and 15d-14(c) under the Securities  Exchange Act of 1934.  Based
on such  evaluation,  our management has concluded that its disclosure  controls
and procedures were effective as of July 31, 2003.

         There have been no significant  changes in our internal  controls or in
other factors that could  significantly  affect our internal controls subsequent
to July 31, 2003.

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
------   -------------------------------------------------------------
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
-------------------------------------------------

         Set  forth  below  are the  names of all the  directors  and  executive
officers of the Company along with certain information  relating to the business
experience of each of the listed directors and officers.

<TABLE>
<CAPTION>
Name                                Age                       Position
----                                ---                       --------

<S>                                 <C>                       <C>
Ronald J. Tassinari                 60                        Chief Executive Officer, President, Director

Stephen K. Bannon                   49                        Vice-Chairman and Director

Audrey K. Tassinari                 63                        Director

Jeanne Hood                         76                        Director (Chairwoman of the Audit Committee)

Steven G. Barringer                 47                        Director

Randolph C. Read                    50                        Director (Chairman of the Compensation Committee)

Anna M. Morrison                    47                        Chief Accounting Officer
</TABLE>

         RONALD J. TASSINARI has been Chairman of the Board of Directors,  Chief
Executive  Officer and  President of the Company  since its  inception in August
1979.


32
<PAGE>

         STEPHEN K. BANNON has been a director  of the  Company  since May 2002.
Since early 2002, Mr. Bannon has been Head, Strategic Advisory Services, for The
Firm,  a  leading  talent  management  company  in the  entertainment  and media
industries. From July 2000 to early 2002, Mr. Bannon was a Managing Director and
head of media and entertainment investment banking at Jefferies & Company, Inc.,
an  institutional  brokerage  and  investment  bank  for  middle  market  growth
companies.  From April 1990 through July 1998,  Mr.  Bannon  served as the Chief
Executive Officer of Bannon & Co., Inc., an investment banking firm specializing
in the entertainment, media and communications industries. Mr. Bannon has been a
director and a member of the Executive Committee of First Look Media, Inc. since
its  inception  in December  1993.  First Look Media,  Inc.  specializes  in the
acquisition  and direct  distribution  of,  and  worldwide  license  and sale of
distribution rights to,  independently  produced feature films in a wide variety
of genres. From October 1996 to June 2000, Mr. Bannon served as Vice-Chairman of
the Board of  Directors  and Chairman of the  Executive  Committee of First Look
Media,  Inc. In addition,  Mr.  Bannon serves on the Board of Directors of Axiom
Navigation  Inc., a privately held company in the global  positioning  satellite
communications industry.

         AUDREY K.  TASSINARI  has been a director  of the  Company  since March
1985. Ms. Tassinari served as the Company's  Executive Vice President from April
1986 until July 2002,  when she resigned such  position in  connection  with the
Company's corporate  restructuring.  During her tenure with the Company, she was
responsible for the Company's management and employee training programs at Table
Mountain  Casino  that grew  from  approximately  45  employees  in 1989 to 850
employees  in  1999.  From  1973 to 1985,  Ms.  Tassinari  held  key  management
positions in the hotel/casino  industry.  Ms. Tassinari is the wife of Ronald J.
Tassinari, the Company's Chief Executive Officer and President.

         JEANNE HOOD has been a director of the Company since  February 1994 and
was a gaming  consultant to the Company from  February  1994 to April 2000.  Ms.
Hood served as a director of Pioneer  Citizens  Bank (a Nevada  statewide  bank)
until its merger during 2000 with Zions,  a large  regional bank with offices in
seven states.  Since January 2000,  she has served on the board of Southwest USA
Bank.  From 1985 to 1993,  Ms.  Hood  served as  President  and Chief  Executive
Officer of Elsinore Corporation,  a publicly traded gaming company. From 1977 to
1993, Ms. Hood served as President and Chief  Executive  Officer of Four Queens,
Inc., a wholly-owned  subsidiary of Elsinore Corporation,  which subsidiary owns
and operates the Four Queens Hotel Casino in Las Vegas, Nevada.

         STEVEN G.  BARRINGER has been a director of the Company since  February
1998. Mr.  Barringer has been a member of the government  relations firm of MGN,
Inc. in Washington,  D.C. since November 2000. Mr. Barringer also has maintained
his own law practice, Steven G. Barringer,  P.L.L.C., in Washington,  D.C. since
November 2000.  From April 1999 to October 2000,  Mr.  Barringer was a member of
the law firm of Dickstein  Shapiro Morin & Oshinsky,  LLP, in Washington,  D.C.,
practicing  natural resources and environmental  law. From January 1996 to April
1999, he was a member of the law firm of Singer, Brown and Barringer, Las Vegas,
Nevada, practicing natural resources and environmental law.

         RANDOLPH C. READ was elected to the Company's board of directors on May
20, 2003.  He has been the  President  and Chief  Executive  Officer of American
Strategic  Investments,  L.P.,  an investment  fund that focuses on  established
commercial business operations and investing in both debt and/or equity of those
entities,  since 2002.  Mr.  Read  served as  President  of  Knowledge  Universe
Business  Group and  President  of Knowledge  Universe  Capital Co. from 1999 to
2002. Mr. Read currently is a consultant to certain Knowledge  Universe entities
and  their  affiliated  companies.  In 1999,  he was  Chairman  of the  Board of
Shopping.com,  Inc., an internet retailer,  prior to its sale to Compac Computer
Corp.  From 1996 to 1998,  he was Senior Vice  President,  Chief  Financial  and
Planning Officer of Stone Container Corp., an integrated  producer of paperboard
and paper-based  packaging  products.  Since 2002, Mr. Read has also served as a
director of Brands Shopping  Network,  Inc. and serves as a director of The Read
Foundation.

         ANNA M. MORRISON was appointed Chief Accounting  Officer of the Company
in April  2003.  From  August 2002 to April 2003,  she  provided  financial  and
accounting  services  for the  Company  as an  outside  consultant.  She was the
President of Morrison Business  Resources,  Inc. and an associate with Resources
Connection,  Inc. and Robert Half International,  Inc. from 1997 to August 2002.
Ms.  Morrison  served as Vice  President - Accounting of Gentle  Dental  Service
Corporation  during 1996 and as a manager and an associate for Price  Waterhouse
LLP, a predecessor of PricewaterhouseCoopers LLP from 1987 to 1992 and from 1993
to 1996. Ms. Morrison is a Certified Public Accountant and received B.S. degrees
in business  administration - accounting and speech communications from Southern
Oregon University in 1987.


33
<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's officers and directors, and persons who own more than ten percent of a
registered  class  of the  Company's  equity  securities,  to  file  reports  of
ownership and changes in ownership with the Securities and Exchange  Commission.
Officers,  directors  and persons who own more than ten percent of the Company's
equity  securities are required by regulation to furnish the Company with copies
of all Section 16(a) forms they file.

         Based  solely on the  Company's  review of the copies of those  reports
received by it, or written  representations  from certain reporting persons that
no other  reports were required for those  persons,  the Company is not aware of
any failures to file reports or report  transactions  in a timely  manner during
the Company's fiscal year ended July 31, 2003.

CODE OF ETHICS

         At July 31, 2003, the Company  adopted a written code of ethics for its
President and Chief Executive  Officer and Chief Accounting  Officer.  A copy of
the Company's code of ethics is attached hereto as Exhibit 14.1 to this report.


ITEM 10.  EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table sets forth,  with respect to our fiscal years ended
July 31, 2003,  2002 and 2001, all  compensation  earned by our Chief  Executive
Officer and our other officers who were serving as executive officers at the end
of our 2003 fiscal year and whose total annual  salary and bonus  earned  during
our 2003 fiscal year exceeded $100,000.

<TABLE>
<CAPTION>
                                          Annual Compensation                           Long-Term Compensation Awards
                                  ------------------------------------        --------------------------------------------------
Name and                   Fiscal                   Other Annual                   Restricted               Securities
Principal Position          Year   Salary ($)     Compensation ($)              Stock Awards ($)      Underlying Options (#)
-------------------------   ----   ----------     ----------------              ----------------      ----------------------

<S>                         <C>    <C>            <C>                          <C>                            <C>
Ronald J. Tassinari,        2003   $ 272,473      $      40,000   (1)          $          --                  25,000      (2)
Chief Executive             2002   $ 408,140      $      40,000   (1)          $          --                  28,470      (3)
 Officer and President      2001   $ 451,500      $      84,177   (4) (5)      $          --                     --
</TABLE>

------------------------
(1)      Includes  SAR/SEP  retirement plan  contributions  totaling $40,000 the
         Company made on the named executive officer's behalf.

(2)      Represents an option  granted to the named  executive  officer in April
         2003, with an exercise price of $1.41 per share.

(3)      This option was voluntarily  canceled by the named  executive  officer,
         effective as of July 31, 2002.

(4)      Includes SARP/SEP  retirement plan  contributions  totaling $24,000 the
         Company made on the named executive officer's behalf.

(5)      Includes  $20,496  relating  to  the  carrying  cost  of an  automobile
         transferred to the named executive officer.


34
<PAGE>


OPTION GRANTS IN LAST FISCAL YEAR

         The following table sets forth:

o        The number of shares underlying  options the Company granted during its
         fiscal year ended July 31, 2003 to each of the named executive officers
         listed in the Summary  Compensation  Table  contained in the "Executive
         Compensation" subsection of this Form 10-KSB.

o        The  percentage  that the option grant  represents of the total options
         granted to all of the Company's employees during its 2003 fiscal year,

o        The per share exercise price of each option,

o        and the expiration date of each option.

<TABLE>
<CAPTION>
-------------------------- -------------------------- --------------------------- ----------------- ------------------
                                                            Percentage of
                             Number of Securities      Total Options Granted to
Name                          Underlying Options       All Employees in Fiscal                         Expiration
                                    Granted                      Year              Exercise Price         Date
-------------------------- -------------------------- --------------------------- ----------------- ------------------

<S>                                 <C>                         <C>                    <C>          <C>
Ronald J.  Tassinari                25,000                      33.3%                  $1.41        April 15, 2013
-------------------------- -------------------------- --------------------------- ----------------- ------------------
</TABLE>


AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES TABLE

         The table  below  includes  the  number  and value of  exercisable  and
unexercisable  stock  options  granted to the  executive  officers  named in the
Summary Compensation Table at the fiscal year ended July 31, 2003.

<TABLE>
<CAPTION>
----------------------------------- ------------------- -------------------- -------------------- --------------------
                                    Shares Acquired     Value Realized       Number of            Value of
                                    on Exercise                              Securities           Unexercised
                                                                             Underlying           In-The-Money
Name                                                                         Unexercised          Options at FY-End
                                                                             Options at FY-End    ($)
                                                                             Exercisable /        Exercisable /
                                                                             Unexercisable        Unexercisable
                                                                              (1)                 (1)
----------------------------------- ------------------- -------------------- -------------------- --------------------
<S>                                             <C>               <C>           <C>                <C>
Ronald J. Tassinari                               0                 $0            80,555 / 0          $98,133 / 0
----------------------------------- ------------------- -------------------- -------------------- --------------------
</TABLE>

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

(1)      The closing price for the Company's  common shares on July 31, 2003 was
         $1.75 per share.

COMPENSATION OF DIRECTORS

         Non-employee  directors  receive  $15,000  per annum for serving on the
Board of Directors of the Company.

         Jeanne Hood and Steve Barringer also received  $10,000 each for serving
as the chairpersons for the audit and compensation committees, respectively.


35
<PAGE>
EMPLOYMENT AND SEVERANCE AGREEMENTS

         The Company entered into  employment  agreements with each of Ronald J.
Tassinari, Audrey K. Tassinari and Roy K. Keefer in March 1995. These agreements
were amended as of July 20, 1995 and on December  21, 2001.  Each of these prior
agreements,  as  amended,  had terms  expiring  on March 31,  2002,  subject  to
extension for an unlimited  number of additional  one year terms,  unless either
the executive or the Company provided 30 days' prior written notice to the other
party prior to the date of  termination  of the then current  term.  The Company
entered into substantially  similar new employment agreements with each of these
executive officers,  each effective as of April 1, 2002. The agreements with Ms.
Tassinari  and Mr.  Keefer  were  terminated,  effective  as of July  31,  2002,
pursuant to separate  severance  agreements  entered into in connection with the
Company's corporate restructuring.

         The April 2002  employment  agreements  each provided for the grants of
options to the  executives  -- an option to purchase  28,470 shares by Ronald J.
Tassinari;  an option to purchase 10,726 shares by Audrey K.  Tassinari;  and an
option to purchase 9,269 shares by Mr. Keefer. These option grants were intended
to compensate  the executives for not receiving  additional  compensation  under
their  prior  employment   agreements  relating  to  increases  in  a  specified
cost-of-living  index.  Each of these options were  voluntarily  canceled by the
respective optionee as of July 31, 2002.

         Ronald J. Tassinari's April 2002 employment  agreement,  which provided
for him to serve as the Company's  Chief  Executive  Officer and President,  was
intended to serve as an interim  agreement with an expiration  date of September
30, 2002, subject to extension to March 31, 2005 under specified  circumstances.
The initial term was extended to November  30, 2002 and,  thereafter  to January
31, 2003,  pursuant to letter agreements  between Mr. Tassinari and the Company.
The April 2002 agreement with Mr. Tassinari provided,  among other matters,  for
(a) an annual base salary of $240,000,  subject to  adjustments  in the event of
increases  the Company  gives to any of its other  executives  or increases in a
specified  cost-of-living  index, (b)  reimbursement  for his personal legal and
financial  consulting  expenses to a maximum of 3% of his prior calendar  year's
base salary,  (c) his right to designate  the  beneficiary  on a $2 million term
life policy on his life and (d) reimbursement of all normal expenses relating to
the use of his personal  automobile.  The Company also retained the right in the
April 2002  employment  agreement to otherwise  increase  Mr.  Tassinari's  base
salary  and grant Mr.  Tassinari  other  incentive  compensation,  such as stock
options  or  bonuses.  Mr.  Tassinari's  April  2002  agreement  also  contained
indemnification  provisions  relating  to his  performance  of  services  on the
Company's behalf, and  confidentiality,  non-disparagement,  non-competition and
non-solicitation provisions.

         Mr. Tassinari's April 2002 employment  agreement further provided that,
upon his death during the agreement's  term, the Company is obligated to pay his
designee  or  estate  a lump  sum  death  benefit  equal  to the  sum of (a) the
annualized average of the base salary paid to him during the five calendar years
immediately  preceding  his  death,  plus  (b)  the  annualized  average  of the
incentive  awards  granted  to him during the five  calendar  years  immediately
preceding  his death.  The April 2002  agreement  also  provided for  disability
coverage,  including continuing to pay him his base salary and keeping in effect
any incentive  awards during an initial period and then to continuing to pay him
for a one year  period at a rate  equal to the  annualized  average  of the base
salary,  plus the value of any  incentive  compensation,  paid to him during the
prior five calendar years.

         Mr.  Tassinari's April 2002 employment  agreement provided for payments
in  the  event  of his  termination  "without  cause"  or if he  terminates  his
employment  for  "good  reason,"  as  such  terms  are  used in the  April  2002
agreement.  These payments  include (a) payment of a sum equal to 2.99 times the
annualized  average  of the  base  salary,  plus  the  value  of  any  incentive
compensation,   paid  to  him  during  the  prior  five  calendar   years,   (b)
reimbursement of certain legal fees up to $100,000,  (c) continuation of, or the
payment  of an amount  equal in value to,  all  employee  benefits  which he was
entitled to receive  immediately  prior to termination for the remaining term of
the employment  agreement and (d)  continuation  of, or the payment of an amount
equal in value to, all medical  insurance  coverage for him and his family for a
twelve month period  following  termination.  The maximum amount of all of these
payments  may not exceed the amount which would  otherwise  result in an "excess
parachute payment" under section 280G of the Internal Revenue Code, minus $1.00.

         The Company  entered  into a new  employment  agreement  with Ronald J.
Tassinari  effective February 1, 2003. Mr. Tassinari's  February 2003 employment
agreement provides for him to continue to serve as the Company's Chief Executive
Officer  and  President.  The term of the  February  2003  employment  agreement

36
<PAGE>

expires on January 31, 2006.  The February  2003  agreement  with Mr.  Tassinari
provides,  among  other  matters,  for (a) an  initial  annual  base  salary  of
$300,000,  subject to adjustments in the event of increases the Company gives to
any of its other  executives or increases in a specified  cost-of-living  index,
(b) reimbursement for his personal legal and financial  consulting expenses to a
maximum  of 3% of his  prior  calendar  year's  base  salary,  (c) his  right to
designate the  beneficiary  on a $2 million term life policy on his life and (d)
reimbursement  of  all  normal  expenses  relating  to the  use of his  personal
automobile.  The Company also retained the right in the February 2003 employment
agreement  to  otherwise  increase  Mr.  Tassinari's  base  salary and grant Mr.
Tassinari other incentive  compensation,  such as stock options or bonuses.  Mr.
Tassinari's  February 2003  agreement also contains  indemnification  provisions
relating  to  his  performance  of  services  on  the  Company's   behalf,   and
confidentiality,   non-disparagement,   non-competition   and   non-solicitation
provisions.

         Mr.  Tassinari's  February 2003 employment  agreement  further provides
that,  upon his death during the  agreement's  term, the Company is obligated to
pay his designee or estate a lump sum death  benefit equal to the sum of (a) the
annualized average of the base salary paid to him during the five calendar years
immediately  preceding  his  death,  plus  (b)  the  annualized  average  of the
incentive  awards  granted  to him during the five  calendar  years  immediately
preceding his death.  The February 2003  agreement  also provides for disability
coverage,  including continuing to pay him his base salary and keeping in effect
any incentive awards during an initial period and then continuing to pay him for
a one year period at a rate equal to the annualized  average of the base salary,
plus the value of any incentive compensation,  paid to him during the prior five
calendar years.

         Mr.  Tassinari's   February  2003  employment  agreement  provides  for
payments in the event of his termination "without cause" or if he terminates his
employment  for "good  reason," as such terms are used in the  agreement.  These
payments include (a) payment of a sum equal to 2.99 times the annualized average
of the base salary,  plus the value of any incentive  compensation,  paid to him
during the prior five calendar years, (b) reimbursement of certain legal fees up
to $100,000, (c) continuation of, or the payment of an amount equal in value to,
all  employee  benefits  which he was entitled to receive  immediately  prior to
termination  for  the  remaining  term  of  the  employment  agreement  and  (d)
continuation  of, or the  payment of an amount  equal in value to,  all  medical
insurance  coverage for him and his family for a twelve  month period  following
termination.  The  maximum  amount of all of these  payments  may not exceed the
amount  which would  otherwise  result in an "excess  parachute  payment"  under
section 280G of the Internal Revenue Code, minus $1.00.

         The Company's severance  agreements with Audrey K. Tassinari and Roy K.
Keefer provided for payments  totaling $757,900 to Ms. Tassinari and $551,060 to
Mr. Keefer. The severance agreements provided for their respective  resignations
as officers of the Company;  Ms.  Tassinari as its executive  vice president and
Mr. Keefer as its chief financial officer. Ms. Tassinari continues to serve as a
director of the Company.  The severance agreements also contain mutual releases,
indemnification  for acts  occurring  during their terms of  employment  and for
their retention of options granted to them previously.

         The Company  entered into an employment  agreement  with Anna Morrison,
the Chief Accounting Officer, as of April 16, 2003, the date on which she became
a full-time employee of the Company.  This agreement has a term expiring on July
31, 2004 (subject to  extension)  and provides for a base salary of $135,000 per
year. Ms.  Morrison  received an option to purchase  50,000 shares of our common
stock, at $1.41 per share, upon entering into the agreement and will be entitled
to the health  insurance  and other  benefits  the  Company  have  traditionally
afforded its executive officers.  The Company has the right under this agreement
to increase Ms. Morrison's base salary and to grant her incentive  compensation,
such as  additional  options  or  bonuses.  Ms.  Morrison's  agreement  contains
severance or "golden parachute"  provisions  providing for payments to her equal
to 35% of her base salary if she is terminated  without cause or she  terminates
her  employment  following  a change in control  of the  Company.  Such  payment
percentage will increase by 5% annually, commencing in August 2004.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------  --------------------------------------------------------------

         The Company's  common stock is the only class of the  Company's  voting
securities presently outstanding.


37
<PAGE>
         The  following  table  sets  forth  information  with  respect  to  the
beneficial  ownership of shares of the  Company's  common stock as of the record
date for the annual meeting by:

o        each person  known to  beneficially  own 5% or more of the  outstanding
         shares of such class of stock, based on filings with the Securities and
         Exchange Commission and certain other information,

o        each of the Company's "named executive officers" and directors, and

o        all of the Company's executive officers and directors as a group.

         Beneficial  ownership is determined in accordance with the rules of the
SEC and includes voting and investment  power.  In addition,  under SEC rules, a
person is deemed to be the beneficial  owner of securities which may be acquired
by such person upon the  exercise of options and warrants or the  conversion  of
convertible  securities  within  60  days  from  the  date on  which  beneficial
ownership is to be determined.

         The term  "named  executive  officers"  is  defined in the SEC rules as
those  executive  officers  that  are  required  to be  listed  in  the  Summary
Compensation Table provided in the discussion in this report.

Except as otherwise indicated in the notes to the following table,

o        The  Company  believes  that all shares  are  beneficially  owned,  and
         investment  and voting  power is held by, the persons  named as owners,
         and

o        the address for each  beneficial  owner listed in the table is American
         Vantage  Companies,  4735 S.  Durango Dr.,  Suite 105,  Las Vegas,  NV,
         89147.

<TABLE>
<CAPTION>
                                                                  Amount and Nature of             Percentage of
Name and Address of Stockholder                                   Beneficial Ownership          Outstanding Shares
-------------------------------                                   --------------------          ------------------
<S>                                                                 <C>                                <C>
YaYa, LLC (1)..................................................       824,811 (2)                      14.5
Ronald J. Tassinari (3)........................................       555,329 (2) (4)                   9.8
Audrey K. Tassinari (5)........................................       555,329 (2) (6)                   9.8
Engex, Inc. (7)................................................       949,201 (8)                      16.7
Rosalind Davidowitz (9)........................................       949,201 (10)                     16.7
Jay H. and Sharyn Brown (11)...................................       348,211 (12)                      6.0
Kinder Investments, L.P., Nesher, LLC and Dov Perlysky (13)....       274,100 (14)                      4.8
Stephen K. Bannon (15).........................................       200,000 (2) (16)                  3.4
Jeanne Hood (17)...............................................        77,501 (2) (18)                  1.4
Steven G. Barringer (19).......................................        45,000 (2) (20)                  0.8
Anna M. Morrison (21)..........................................        25,000 (22)                      0.4
Randolph C. Read (23)..........................................        12,500 (2) (24)                  0.2

All executive officers and directors as a group
   (seven persons) (25)........................................     1,740,141 (26)                     28.5
</TABLE>
----------

(1)      The address for YaYa, LLC is 1250 4th Street - Suite 580, Santa Monica,
         California 90401.

(2)      YaYa, LLC has granted the Company's  board of directors a limited power
         to direct how YaYa,  LLC is to vote its shares of Company  common stock
         pursuant to a voting  agreement  dated as of April 16, 2003. This power
         has been  granted  to the  Company's  board as a group,  and not to any
         individual director. The Company believes that such voting power is not
         held by any individual since the board is required to act by plurality.
         As such,  no individual  director  named in this  stockholder  table is
         listed as the beneficial owner of the 824,811 shares owned by YaYa, LLC
         as of the record date.

(3)      Mr. Tassinari is the Company's  President and Chief Executive  Officer.
         Mr.  Tassinari  also  serves  as  Chairman  of the  Company's  board of
         directors.  Mr.  Tassinari  is the  husband by Audrey K.  Tassinari,  a
         director of the Company.

(4)      Includes  (a) 3,698  shares of Company  common stock owned of record by
         Mr.  Tassinari,  his spouse and child,  as joint  tenants,  (b) 443,293
         shares owned by the Tassinari Family Trust, a family trust in which Mr.
         Tassinari  and his wife are  trustees  and  beneficiaries,  (c)  80,555
         shares  issuable  upon  exercise of options  granted to Mr.  Tassinari,

38
<PAGE>
         which shares are  exercisable  within the next 60 days,  and (d) 27,778
         shares  issuable  upon exercise of options  granted to Mr.  Tassinari's
         wife,  which  shares  are  exercisable  within  the next 60  days.  Mr.
         Tassinari  disclaims  beneficial  ownership  to the (x)  27,778  shares
         underlying  options granted his wife and (y) 221,646 shares held by the
         Tassinari  Family  Trust in excess of his  pecuniary  interest  in such
         trust.

(5)      Ms.  Tassinari  resigned as the  Company's  Executive  Vice  President,
         effective July 31, 2002. Ms. Tassinari continues to serve as one of the
         Company's directors. Ms. Tassinari is the wife of Ronald J. Tassinari.

(6)      Includes  (a) 3,698  shares of Company  common stock owned of record by
         Ms.  Tassinari,  her spouse  and child as joint  tenants,  (b)  443,293
         shares owned by the Tassinari Family Trust, a family trust in which Ms.
         Tassinari  and her husband are trustees and  beneficiaries,  (c) 27,778
         shares  issuable  upon  exercise of options  granted to Ms.  Tassinari,
         which shares are exercisable within the next 60 days, (d) 80,555 shares
         issuable upon exercise of options  granted to Ms.  Tassinari's  husband
         which are exercisable  within the next 60 days and (e) five shares held
         of  record  by  Ms.  Tassinari's   husband.   Ms.  Tassinari  disclaims
         beneficial  ownership  to the  (x)  80,555  shares  underlying  options
         granted her husband,  (y) 221,647  shares held by the Tassinari  Family
         Trust in excess of her  pecuniary  interest  in such  trust and (z) the
         shares held of record by Ms. Tassinari's husband.

(7)      The  address  for Engex,  Inc. is 44 Wall  Street,  New York,  New York
         10005.

(8)      According to a Schedule 13D of Engex,  Inc., filed with the SEC on July
         10, 2003,  Engex claims to have sole voting and dispositive  power with
         respect to 474,500  shares of Company  common stock and is not a member
         of a group for Schedule 13D  purposes.  The  president  and chairman of
         Engex is J. Morton  Davis.  According to the proxy  statement of Engex,
         filed with the SEC on January 13, 2003, the principal  stockholders  of
         Engex are (a) Mr. Davis,  the reported  beneficial owner of 6.2% of the
         outstanding  common  stock of  Engex,  (b) Mr.  Davis'  wife,  Rosalind
         Davidowitz,  the reported  beneficial owner of 28.2% of the outstanding
         common  stock of Engex,  (c)  Kinder  Investments  L.P.,  the  reported
         beneficial owner of 11.2% of the outstanding common stock of Engex, and
         (d)  Venturetek  LP,  the  reported  beneficial  owner  of 11.4% of the
         outstanding  common  stock of Engex.  The Engex  proxy  statement  also
         reports that Dov Perlysky,  the managing  member of the general partner
         of Kinder, is the son-in-law of Mr. and Ms. Davis. The shares listed in
         the principal  stockholders table are limited to those shares set forth
         in the  Schedule  13D.  See note (14) for  information  with respect to
         Kinder's direct ownership interest in the Company's  outstanding common
         stock.

(9)      The address of Rosalind  Davidowitz is 7 Sutton Place South,  Lawrence,
         New York 11563.

(10)     According  to a Schedule 13G of Ms.  Davidowitz,  filed with the SEC on
         February  4,  2003,  Ms.  Davidowitz  claims  to have sole  voting  and
         dispositive powers with respect to these shares of Company common stock
         and that she is not a member of a group for Schedule 13G purposes.  The
         Schedule 13G notes that neither  Kinder,  Nesher nor Mr. Perlysky are a
         member of a group for Schedule 13G  purposes.  The shares listed in the
         principal  stockholders  table are limited to those shares set forth in
         the Schedule 13G. See notes (8) and (14) for information concerning Ms.
         Davidowitz's  and Kinder  Investments,  L.P.'s  ownership  interest  in
         Engex,  another principal  stockholder of the Company, Ms. Davidowitz's
         family relationship with J. Morton Davis, the chairman and president of
         Engex,  and Dov  Perlysky,  the  managing  member of Nesher,  LLC,  the
         general  partner of Kinder,  a principal  stockholder  of Engex and the
         Company.

(11)     These  stockholders  hold  260,711  shares of Company  common  stock of
         record as  tenants-in-common.  Mr. Brown  provides legal services to us
         and is a  member  of  the  advisory  group  we  formed  to  assist  our
         management in evaluating merger and acquisition  candidates.  Mr. Brown
         received an option to purchase  87,500  shares of our common stock upon
         his  appointment  to the  advisory  group,  which shares were to become
         exercisable  upon  consummation of a merger or acquisition  transaction
         involving the Company  during the term of the advisory  group.  Such an
         acquisition  transaction was consummated on April 16, 2003. The address
         for Mr. and Ms. Brown is 1801 Waldman Avenue, Las Vegas, Nevada 89102.

39
<PAGE>

(12)     Includes  87,500  shares that are issuable  upon  exercise of an option
         granted to Mr. Brown,  which shares are exercisable  within the next 60
         days.

(13)     The business address for Kinder  Investments L.P.,  Nesher, LLC and Dov
         Perlysky  is c/o Laidlaw & Co.,  100 Park  Avenue,  New York,  New York
         10017.

(14)     According to a Schedule 13G of Kinder  Investments,  L.P.,  Nesher, LLC
         and Dov  Perlysky,  filed with the SEC on July 17, 2003,  (a) Kinder is
         the owner of these shares of Company common stock and (b) Mr.  Perlysky
         is the managing  member of Nesher and Nesher is the general  partner of
         Kinder.  The  Schedule  13G also  reports  that  Kinder and Nesher have
         shared voting and dispositive powers with respect to the shares,  while
         Mr.  Perlysky,  as the managing  member of Nesher,  has sole voting and
         dispositive  powers with respect to the shares.  The Schedule 13G notes
         that neither  Kinder,  Nesher nor Mr.  Perlysky are a member of a group
         for  Schedule  13G  purposes.   The  shares  listed  in  the  principal
         stockholders  table  are  limited  to  those  shares  set  forth in the
         Schedule  13G.  See  note  (8)  for  information   concerning  Kinder's
         ownership  interest  in Engex,  another  principal  stockholder  of the
         Company.  See  notes  (8)  and  (10)  for  information  concerning  Mr.
         Perlysky's  family  relationship with J. Morton Davis, the chairman and
         president of Engex, and Rosalind Davidowitz,  the wife of Mr. Davis and
         a principal stockholder of Engex and the Company.

(15)     Mr. Bannon is  Vice-Chairman  of the Company's board of directors.  Mr.
         Bannon  also is a member of the  advisory  group  formed to assist  the
         Company's  management in evaluating merger and acquisition  candidates.
         Mr.  Bannon  received an option to purchase  175,000  shares of Company
         common stock upon his appointment to the advisory  group,  which shares
         were to become exercisable upon consummation of a merger or acquisition
         transaction  involving  the  Company  during  the term of the  advisory
         group.  Such an acquisition  transaction  was  consummated on April 16,
         2003.

(16)     Represents  200,000  shares  of  Company  common  stock  issuable  upon
         exercise of options granted to Mr. Bannon, which shares are exercisable
         within the next 60 days.

(17)     Ms. Hood is a director of the Company.

(18)     Includes  60,834 shares of Company  common stock issuable upon exercise
         of options granted to Ms. Hood that are exercisable  within the next 60
         days.

(19)     Mr. Barringer is a director of the Company.

(20)     Represents 45,000 shares of Company common stock issuable upon exercise
         of  options  granted to Mr.  Barringer,  which  shares are  exercisable
         within the next 60 days.

(21)     Ms. Morrison became the Company's Chief Accounting Officer on April 16,
         2003.

(22)     Includes  25,000 shares of Company  common stock issuable upon exercise
         of an option  granted to Ms.  Morrison,  which  shares are  exercisable
         within  the next 60 days.  Does not  include  25,000  shares of Company
         common  stock  issuable  upon  exercise  of an  option  granted  to Ms.
         Morrison, which shares are not exercisable within the next 60 days.

(23)     Mr. Read became a director of the Company on May 20, 2003.

(24)     Includes  12,500 shares of Company  common stock issuable upon exercise
         of an option granted to Mr. Read,  which shares are exercisable  within
         the next 60 days.  Does not  include  12,500  shares of Company  common
         stock  issuable upon exercise of an option  granted to Mr. Read,  which
         shares are not exercisable within the next 60 days.

(25)     Includes only current executive officers and directors.


40
<PAGE>

(26)     Includes  those  shares  beneficially  owned by the  Company's  current
         executive officers and directors,  as set forth in notes (2), (4), (6),
         (16), (18), (20), (22) and (24).


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

EQUITY COMPENSATION PLAN INFORMATION

         The following table sets forth, as of July 31, 2003:

o        the number of shares of Company  common stock issuable upon exercise of
         outstanding  options,  warrants and rights,  separately  identified  by
         those granted under equity  incentive  plans  approved by the Company's
         stockholders  and  those  granted  under  plans,  including  individual
         compensation  contracts,  not  approved by the  Company's  stockholders
         (column A),
o        the  weighted  average  exercise  price of such  options,  warrants and
         rights, also as separately identified (column B), and
o        the number of shares remaining available for future issuance under such
         plans,  other than those shares  issuable upon exercise of  outstanding
         options, warrants and rights (column C).

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                            (A)                          (B)                         (C)
Plan Category                   Number of securities to be    Weighted-average exercise      Number of securities
                                  issued upon exercise of       price of outstanding        remaining available for
                                   outstanding options,         options, warrants and        future issuance under
                                    warrants and rights                rights              equity compensation plans
                                                                                             (excluding securities
                                                                                            reflected in column (A)
------------------------------- ---------------------------- ---------------------------- ----------------------------

<S>                                         <C>                         <C>                          <C>
Equity compensation plans                   699,835                     $1.76                        858,335
approved by security holders

Equity compensation plans not                25,000                     $1.65                           N/A
approved by security holders

Total                                       724,835                     $1.75                        858,335

------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

         The shares to be issued upon exercise of outstanding options,  warrants
and rights granted under plans not approved by stockholders consist of:

o 25,000 warrants granted to Gerard,  Klauer,  Mattison,  Inc. on May 3, 2002 in
connection  with such firm's  rendering of  investment  banking  services to the
Company.  Each of these  warrants  entitles  its holder to purchase one share of
Company common stock,  at a purchase price of $1.65 per share and expires on May
3, 2007.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------  ----------------------------------------------

         As  compensation  for  serving  on the  Company's  board  or as a board
committee chair, on October 25, 2002, the Company granted to Jeanne Hood, Steven
G.  Barringer  and Stephen K. Bannon,  non-qualified  stock  options to purchase
20,000,  20,000 and 25,000 shares,  respectively,  of the Company's common stock
each at an exercise price of $1.26 per share. The options became  exercisable on
the date of grant and expire  upon the earlier of (i) ten years from the date of
grant or (ii) upon the  removal or  resignation  of such person as a director of
the Company.

         In connection with the execution of their  employment  agreements,  the
Company  granted to Ronald J.  Tassinari and Anna M. Morrison,  qualified  stock


41
<PAGE>

options to purchase  25,000 and 50,000  shares,  respectively  of the  Company's
common  stock  each at an  exercise  price of $1.41 per share.  Mr.  Tassinari's
shares  became  exercisable  on the date of grant.  One-half  of Ms.  Morrison's
shares became  exercisable  on the date of grant and the remaining  one-half are
exercisable on April 16, 2004. Both option grants expire ten years from the date
of grant.

         The April 16,  2003  closing of the YaYa  acquisition  resulted  in the
options previously granted to Stephen K. Bannon on July 12, 2002, to purchase up
to  175,000  shares  of the  Company's  common  stock at $1.41 per share and the
option  previously  granted to Jay H. Brown on July 12, 2002,  to purchase up to
87,500  shares of the  Company's  common stock at $1.41 per share to each become
fully exercisable. Mr. Bannon is the Vice-Chairman of the Board of Directors and
Mr.  Brown is a  beneficial  owner of more than five  percent  of the  Company's
common  stock.  These options were granted as  compensation  for future and past
services while serving on the Company's  special  advisory group to the Board of
Directors.  The special  advisory  group was  established  on July 12, 2002,  to
identify,  review and perform initial due diligence services of potential merger
and acquisition candidates on behalf of the Company. The options have a ten-year
exercise  term and an exercise  price  equal to the closing  price of the common
stock on July 12, 2002.

         Jay H. Brown,  a beneficial  owner of more than five percent of Company
common  stock,  received  $90,000  in the fiscal  year  ended July 31,  2003 and
$92,833 in the fiscal year ended July 31, 2002, in consideration  for consulting
and legal services he performed for the Company's benefit.

         During the fiscal years ended July 31, 2003 and 2002,  Mr.  Bannon also
received $60,000 and $20,000 in consideration for consulting services.

         Mr. Brown also received  $90,000 in the fiscal year ended July 31, 2003
and  $93,000  in the  fiscal  year ended July 31,  2002,  in  consideration  for
consulting and legal services.

         See  subsection  entitled  "Employment  and Severance  Agreements"  for
discussions of the April 2002  employment  agreements  the Company  entered into
with each of Ronald J.  Tassinari,  Audrey K.  Tassinari  and Roy K Keefer,  the
options  granted  to  these  executive  officers  pursuant  to  such  employment
agreements, the subsequent voluntary cancellations of certain of such options in
July 2002 and the July 2002 severance  agreements  entered into with each of Ms.
Tassinari and Mr. Keefer in connection  with the Company's  July 2002  corporate
restructuring.


ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K
--------  --------------------------------------

(a)      Exhibits

         2.1      Asset Purchase  Agreement,  dated as of April 16, 2003,  among
                  YaYa, LLC,  American  Vantage  Companies and YaYa Media,  Inc.
                  (13)

         4.1      American  Vantage  Companies  Common Stock Purchase Warrant to
                  Gerard Klauer Mattison & Co., Inc.  (Certificate  No.: GKM-1),
                  dated as of May 3, 2002. (12)

         10.1     American Casino  Enterprises,  Inc. 1991 Officers Stock Option
                  Plan, as amended. (1)

         10.2     American Casino  Enterprises,  Inc. 1992 Employee Stock Option
                  Plan. (1)

         10.3     American Casino Enterprises, Inc. 1996 Stock Option Plan. (7)

         10.4     Management Consultant Contract,  dated March 27, 1993, between
                  the Company and the Table Mountain Band of Indians. (2)

         10.5     Employment Agreement, dated July 20, 1995, between the Company
                  and Ronald J. Tassinari. (2)

         10.6     Employment Agreement, dated July 20, 1995, between the Company
                  and Audrey K. Tassinari. (2)


42
<PAGE>

         10.7     Employment Agreement, dated July 20, 1995, between the Company
                  and Roy K. Keefer. (2)

         10.8     Letter  Agreement,  dated  September  11,  1995,  between  the
                  Company and Table Mountain Rancheria. (7)

         10.9     Settlement  Agreement,  dated  February  1, 1996,  between the
                  Company and the National Indian Gaming Commission. (7)

         10.10    Termination  Agreement,  dated  February 1, 1996,  between the
                  Company  and the Table  Mountain  Rancheria.  Exhibit A to the
                  Termination  Agreement is set forth as Exhibit 99.1 below, and
                  Exhibit B to the Termination  Agreement is incorporated herein
                  by reference from Exhibit 10.3 above. (7)

         10.11    Consulting  Agreement,  dated  February  1, 1996,  between the
                  Company and Table Mountain Rancheria. (7)

         10.12    Amendment  to  Consulting  Agreement,  dated  June  26,  1997,
                  between the Company and Table Mountain Rancheria. (9)

         10.13    Joint Venture Agreement, dated as of February 1, 1996, between
                  the Company and the Table Mountain Rancheria. (7)

         10.14    Funding and Loan  Agreement,  dated February 1, 1996,  between
                  United Auburn Indian Community and Table  Mountain/ACES  Joint
                  Venture (joint venture  between the Company and Table Mountain
                  Band of Indians of the Table Mountain Rancheria). (7)

         10.15    Lease,  dated June 10,  2003,  between the Company and Durango
                  Trop, L.L.C. *

         10.16    Operating  Agreement  for Border Grill Las Vegas,  LLC,  dated
                  November 12, 1998,  by and between  TT&T,  LLC and Vantage Bay
                  Group, Inc. (8)

         10.17    Employment  Agreement,  dated  as of April  1,  2002,  between
                  American Vantage Companies and Ronald J. Tassinari. (12)

         10.18    Employment  Agreement,  dated  as of April  1,  2002,  between
                  American Vantage Companies and Audrey K. Tassinari. (12)

         10.19    Employment  Agreement,  dated  as of April  1,  2002,  between
                  American Vantage Companies and Roy K. Keefer. (12)

         10.20    Settlement and General Release Agreement, dated as of July 29,
                  2002,  between Roy K. Keefer and American  Vantage  Companies.
                  (12)

         10.21    Settlement and General Release Agreement, dated as of July 29,
                  2002,   between  Audrey  K.  Tassinari  and  American  Vantage
                  Companies. (12)

         10.22    Employment Letter Agreement dated September 27, 2002,  between
                  Ronald J. Tassinari and American Vantage Companies. (12)

         10.23    Letter  agreement,  dated  July 31,  2002,  between  Ronald J.
                  Tassinari and American Vantage Companies. (21)

         10.24    Letter  agreement,  dated  July 31,  2002,  between  Audrey K.
                  Tassinari and American Vantage Companies. (12)



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<PAGE>

         10.25    Letter agreement,  dated July 31, 2002,  between Roy K. Keefer
                  and American Vantage Companies. (12)

         10.26    Employment  Agreement,  dated as of February 1, 2003,  between
                  Ronald J. Tassinari and American Vantage Companies. *

         10.27    Employment  Agreement,  dated April 16, 2003,  between Anna M.
                  Morrison and American Vantage Companies. *

         10.28    Voting Agreement,  dated as of April 16, 2003, among YaYa, LLC
                  and American Vantage Companies. (13)

         14.1     Code of Ethics, dated as of July 31, 2003. *

         21.1     Subsidiaries of the Registrant.*

         31.1     Certification of Ronald J. Tassinari.*

         31.2     Certification of Anna M. Morrison.*

         32.1     Certification  of Ronald J.  Tassinari  pursuant  to 18 U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002. *

         32.2     Certification  of  Anna  M.  Morrison  pursuant  to 18  U.S.C.
                  Section  1350,  as  adopted  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002. *

__________________________

* Filed herewith.

(1)      Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for July 31, 1992.

(2)      Incorporated  by reference to the Company's  Registration  Statement on
         Form S-8 (File No. 333-00905) declared effective on February 13, 1996.

(3)      Incorporated by reference to the Company's Annual Report on Form 10-KSB
         for the year ended July 31, 1994.

(4)      Incorporated by reference to the Company's Annual Report on Form 10-KSB
         for the year ended July 31, 1995.

(5)      Incorporated by reference from the Company's Current Report on Form 8-K
         filed on February 2, 1996.

(6)      Incorporated by reference from the Company's Current Report on Form 8-K
         filed on July 2, 1996.

(7)      Incorporated by reference to the Company's Annual Report on Form 10-KSB
         for the year ended July 31, 1996.

(8)      Incorporated by reference to the Company's Annual Report on Form 10-KSB
         for the year ended July 31, 1999.

(9)      Incorporated  by reference  from the  Company's  Annual  Report on Form
         10-KSB for the year ended July 31, 1997.

(10)     Incorporated by reference from the Company's Current Report on Form 8-K
         filed on June 26, 2001.


44
<PAGE>

(11)     Incorporated by reference from the Company's Current Report on Form 8-K
         filed on September 18, 2002.

(12)     Incorporated  by reference  from the  Company's  Annual  Report on Form
         10-KSB for the year ended July 31, 2002.

(13)     Incorporated by reference from the Company's Current Report on Form 8-K
         filed on April 16, 2003.

(b)      Reports on Form 8-K.

         No  reports  on Form 8-K  were  filed by the  Company  during  the last
quarter of Fiscal 2003.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
--------  --------------------------------------

         During  Fiscal 2003 and 2002,  Piercy Bowler Taylor & Kern were engaged
to audit our  consolidated  financial  statements  and to perform  certain other
non-audit services on our behalf.  Fees billed to us by this accounting firm for
services  rendered  with  respect to our fiscal year ended July 31, 2003 were as
follows:

o        Audit fees:  $48,000;
o        Financial information systems design and implementation fees: $0; and
o        All other fees: $29,000.

         Other fees  relate  primarily  to federal  tax return  preparation  and
review of the Company's quarterly consolidated financial statements.






45
<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
its behalf by the undersigned, thereunder duly authorized.

Dated:  October 24, 2003

                                    AMERICAN VANTAGE COMPANIES

                                    By:      /s/ Ronald J. Tassinari
                                             ---------------------------------
                                             Ronald J. Tassinari, President and
                                             Chief Executive Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the date indicated.

<TABLE>
<CAPTION>
         Signature                          Title                                       Date

<S>                                 <C>                                         <C>
/s/ Ronald J. Tassinari             President and Chief Executive Officer,      October 24, 2003
-----------------------             Director (Principal Executive)
Ronald J. Tassinari



/s/ Anna M. Morrison                Chief Accounting Officer                    October 24, 2003
--------------------                (Principal Financial Officer)
Anna M. Morrison



/s/ Stephen K. Bannon               Director                                    October 24, 2003
---------------------
Stephen K. Bannon



/s/ Steven G. Barringer             Director                                    October 24, 2003
-----------------------
Steven G. Barringer



/s/ Jeanne Hood                     Director                                    October 24, 2003
----------------------
Jeanne Hood



/s/ Randolph C. Read                Director                                    October 24, 2003
--------------------
Randolph C. Read



/s/ Audrey K. Tassinari             Director                                    October 24, 2003
-----------------------
Audrey K. Tassinari
</TABLE>




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