SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB

                            Annual Report Pursuant to
                       the Securities Exchange Act of 1934


                  For the fiscal year ended September 30, 2002
                        Commission file number 33-5203-D

                                THE ENTITY, INC.
                                ----------------
             (Exact name of registrant as specified in its charter)


   Colorado                                             84-0953839
   --------                                             ----------
   (State of incorporation)                             (I.R.S. Employer
                                                        Identification No.)

                       7609 Ralston Road, Arvada, CO 80002
                       -----------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code:(303) 422-8127

           Securities registered pursuant to Section 12(b) of the Act:

                            Title of each class: None
                                                 -----

                 Name of each exchange on which registered: N/A
                                                            ----

           Securities registered pursuant to Section 12(g) of the Act:

                            Title of each class: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.

                      Yes   X          No
                          ------          -----

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not 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. $0



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Transitional Small Business Disclosure Format:

                  Yes  X                No
                     -----                 -----

Aggregate market value of the voting stock held by non-affiliates
of the registrant as of September 30, 2002:  $0

Number of outstanding shares of the registrant's no par value
common stock, as of September 30, 2002: 81,400,000





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                                     PART 1

Item 1.  Business

         Moonstone, Inc. (the "Registrant" or the "Company") was
         incorporated under the laws of the State of Colorado on July
         7, 1983 for the primary purpose of seeking acquisitions of
         businesses or properties, without limitation as to geographic
         location or type of business.  The Company's initial
         activities were directed toward the acquisition of operating
         capital.  The Company changed its name to The Entity, Inc. in
         1991.

         On December 15, 1986, the Company completed a public offering (the
         "Offering") of 5,000,000 Units, each Unit consisting of one share of
         Common Stock, $.0001 par value, and one Warrant to purchase a share of
         Common Stock. From this public offering, the Company received net
         proceeds of approximately $33,597.

         Since the completion of the Offering, the Company has not engaged in
         any successful operations nor has it generated any significant revenue.
         The Company is now engaged in the identification and evaluation of
         target business entities for possible acquisition.

Current Activities
------------------

         The Company is currently engaged, and for the next fiscal year intents
         to engage, in the continued identification and evaluation of target
         business entities and/or assets for possible acquisition.

Employees
---------

         The Company has no full-time employees. Its officers, who represent the
         only part time employees, devote as much of their time as is necessary
         to conduct the Company's business.

         No business activity was conducted by the Company during the fiscal
         year. As a result, no income was realized by the Company in its last
         fiscal year.

         The Company was inactive and presently does not participate in any
         industry segment. The Company had no material revenues, or operating
         profits or identifiable assets attributable to its industry segment.

         In December 1997, the shareholders elected three new
         directors.  In 1997, Larry Carr acquired 34,574,000 shares of


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         common stock from James D. Pauls in a levy and execution under a
         judgment and controls the Company through such shares.

         The Company is actively seeking acquisition candidates.

         The Company's Articles of Incorporation, as amended, entitle it to
         transact any lawful business or businesses for which corporations may
         be incorporated pursuant to the Colorado Corporation Code. The Company
         can be defined as a "shell" company, whose sole purpose at this time is
         to locate and consummate a merger or acquisition with a private entity.
         Any business combination or transaction will likely result in a
         significant issuance of shares and substantial dilution to present
         stockholders of the Company.

         The proposed business activities described herein classify the Company
         as a "blank check" company. Many states have enacted statutes, rules
         and regulations limiting the sale of securities of "blank check"
         companies in their respective jurisdictions. In order to comply with
         these various limitations, management does not intend to undertake any
         efforts to sell any additional securities of the Company, either debt
         or equity, or cause a market to develop in the Company's securities
         until such time as the Company has successfully implemented its
         business plan described herein.

         General Business Plan

         The Company's purpose is to seek, investigate and, if such
         investigation warrants, acquire an interest in business opportunities
         presented to it by persons or firms who or which desire to seek the
         perceived advantages of a corporation which is registered under the
         Securities Exchange Act of 1934 (the "Exchange Act"). The Company will
         not restrict its search to any specific business, industry or
         geographical location and the Company may participate in a business
         venture of virtually any kind or nature. This discussion of the
         proposed business is purposefully general and is not meant to be
         restrictive of the Company's virtually unlimited discretion to search
         for and enter into potential business opportunities. Management
         anticipates that it may be able to participate in only one potential
         business venture because the Company has nominal assets and limited
         financial resources. See "Financial Statements." This lack of
         diversification should be considered a substantial risk to shareholders
         of the Company because it will not permit the Company to offset
         potential losses from one venture against gains from another.

         The Company anticipates that the selection of a business opportunity in
         which to participate will be complex and extremely risky. Due to
         general economic conditions, rapid


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         technological advances being made in some industries and shortages of
         available capital, management believes that there are numerous firms
         seeking the perceived benefits of a publicly registered corporation.
         Such perceived benefits may include facilitating or improving the terms
         on which additional equity financing may be sought, providing liquidity
         for incentive stock options or similar benefits to key employees,
         providing liquidity (subject to restrictions of applicable statutes)
         for all shareholders and other factors. Potentially, available business
         opportunities may occur in many different industries and at various
         stages of development, all of which will make the task of comparative
         investigation and analysis of such business opportunities extremely
         difficult and complex.

         The Company has, and will continue to have, no capital with which to
         provide the owners of business opportunities with any significant cash
         or other assets. However, management believes that the Company will be
         able to offer owners of acquisition candidates the opportunity to
         acquire a controlling ownership interest in a publicly registered
         company without incurring the cost and time required to conduct an
         initial public offering. The owners of the business opportunities will,
         however, incur significant legal and accounting costs in connection
         with the acquisition of a business opportunity including the costs of
         preparing forms 8-K, 10Q, or agreements and related reports and
         documents. The Exchange Act specifically requires that any merger or
         acquisition candidate comply with all applicable reporting
         requirements, which include providing audited financial statements to
         be included within the numerous filings relevant to comply with the
         Exchange Act. Nevertheless, the officers and directors of the Company
         have not conducted market research and are not aware of statistical
         data which would support the perceived benefits of a merger or
         acquisition transaction for the owners of a business opportunity. The
         analysis of new business opportunities will be undertaken by, or under
         the supervision of, the officers and directors of the Company have not
         conducted market research and are not aware of statistical acquisition
         transaction for the owners of a business opportunity.

         The analysis of new business opportunities will be undertaken by, or
         under the supervision of, the officers and directors of the Company,
         none of whom is a professional business analyst. Management intends to
         concentrate on identifying preliminary prospective business
         opportunities which may be brought to its attention through present
         associations of the Company's officers and directors, or by the
         Company's shareholders. In analyzing prospective business
         opportunities, management will consider such matters as the available
         technical, financial


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         and managerial resources; working capital and other financial
         requirements; history of operations, if any; prospects for the future;
         nature of present and expected competition; the quality and experience
         of management services which may be available and the depth of that
         management; the potential for further research, development or
         exploration; specific risk factors not now foreseeable but which then
         may be anticipated to impact the proposed activities of the Company;
         the potential for growth or expansion; the potential for profit; the
         perceived public recognition or acceptance of products, services or
         trades; name identification; and other relevant factors. Officers and
         directors of the Company will meet personally with management and key
         personnel of the business opportunity as part of their investigation.
         To the extent possible, the Company intends to utilize written reports
         and personal investigation to evaluate the above factors. The Company
         will not acquire or merge with any company for which audited financial
         statements cannot be obtained within a reasonable period of time after
         closing of the proposed transaction.

         Management of the Company, while not especially experienced in matters
         relating to the new business of the Company, shall rely upon their own
         efforts and, to a much lesser extent, the efforts of the Company's
         shareholders, in accomplishing the business purposes of the Company. It
         is not anticipated that any outside consultants or advisors, other than
         the Company's legal counsel and accountants, will be utilized by the
         Company to effectuate its business purposes described herein. However,
         if the Company does retain such an outside consultant or advisor, any
         cash fee earned by such party will need to be paid by the prospective
         merger/acquisition candidate, as the Company has no cash assets with
         which to pay such obligation. There have been no contracts or
         agreements with any outside consultants and none are anticipated in the
         future.

         The Company will not restrict its search to any specific kind of firms,
         but may acquire a venture which is in its preliminary or development
         stage, which is already in operation or which is in essentially any
         stage of its corporate life. It is impossible to predict at this time
         the status of any business in which the Company may become engaged, in
         that such business may need to seek additional capital, may desire to
         have its shares publicly traded or may seek other perceived advantages
         which the Company may offer.

         It is anticipated that the Company will incur nominal expenses in the
         implementation of its business plan described herein. Because the
         Company has no capital with which to pay these anticipated expenses,
         present management of the Company will pay these charges with their
         personal funds, as interest free


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         loans to the Company. However, the only opportunity which management
         has to have these loans repaid will be from a prospective merger or
         acquisition candidate. Management has agreed among themselves that the
         repayment of any loans made on behalf of the Company will not impede,
         or be made conditional in any manner, on consummation of a proposed
         transaction.

         Acquisition of Opportunities

         In implementing a structure for a particular business acquisition, the
         Company may become a party to a merger, consolidation, reorganization,
         joint venture or licensing agreement with another corporation or
         entity. It may also acquire stock or assets of an existing business. On
         the consummation of a transaction, it is probable that the present
         management and shareholders of the Company will no longer be in control
         of the Company. In addition, the Company's directors may, as part of
         the terms of the acquisition transaction, resign and be replaced by new
         directors without a vote of the Company's shareholders or may sell
         their stock in the Company. Any and all such sales will only be made in
         compliance with the securities laws of the United States and any
         applicable state.

         It is anticipated that any securities issued in any such reorganization
         would be issued in reliance upon exemption from registration under
         applicable federal and state securities laws. In some circumstances,
         however, as a negotiated element of its transaction, the Company may
         agree to register all or a part of such securities immediately after
         the transaction is consummated or at specified times thereafter. If
         such registration occurs, of which there can be no assurance, it will
         be undertaken by the surviving entity after the Company has
         successfully consummated a merger or acquisition and the Company is no
         longer considered a "shell" company. Until such time as this occurs,
         the Company will not attempt to register any additional securities. The
         issuance of substantial additional securities and their potential sale
         into any trading market which may develop in the Company's securities
         may have a depressive effect on the value of the Company's securities
         in the future, if such a market develops, of which there is no
         assurance.

         While the actual terms of a transaction to which the Company may be a
         party cannot be predicted, it may be expected that the parties to the
         business transaction will find it desirable to avoid the creation of a
         taxable event and thereby structure the acquisition in a so-called
         "tax-free" reorganization under Sections 368(a)(1) or 351 of the
         Internal Revenue Code (the "Code"). In order to obtain tax-free
         treatment under the Code,


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         it may be necessary for the owners of the acquired business to own 80%
         or more of the voting stock of the surviving entity. In such event, the
         shareholders of the Company would retain less than 20% of the issued
         and outstanding shares of the surviving entity, which would result in
         significant dilution in the equity of such shareholders.

         As part of the Company's investigation, officers and directors of the
         Company will meet personally with management and key personnel, may
         visit and inspect material facilities, obtain independent analysis or
         verification of certain information provided, check references of
         management and key personnel and take other reasonable investigative
         measures, to the extent of the Company's limited financial resources
         and management expertise. The manner in which the Company participates
         in an opportunity will depend on the nature of the opportunity, the
         respective needs and desires of the Company and other parties, the
         management of the opportunity and the relative negotiation strength of
         the Company and such other management.

         With respect to any merger or acquisition, negotiations with target
         company management are expected to focus on the percentage of the
         Company which target company shareholders would acquire in exchange for
         all of their shareholdings in the target company. Depending upon, among
         other things, the target company's assets and liabilities, the
         Company's shareholders will in all likelihood hold a substantially
         lesser percentage ownership interest in the Company following any
         merger or acquisition. The percentage ownership may be subject to
         significant reduction in the event the Company acquires a target
         company with substantial assets. Any merger or acquisition effected by
         the Company can be expected to have a significant dilutive effect on
         the percentage of shares held by the Company's then-shareholders. If
         required to so do under relevant law, management of the Company will
         seek shareholder approval of a proposed merger or acquisition via a
         Proxy Statement. However, such approval would be assured where
         management supports such a business transaction because management
         presently controls sufficient shares of the Company to effectuate a
         positive vote on the proposed transaction. Further, a prospective
         transaction may be structured so that shareholder approval is not
         required, and such a transaction may be effectuated by the Board of
         Directors without shareholder approval.

         The Company will participate in a business opportunity only after the
         negotiation and execution of appropriate written agreements. Although
         the terms of such agreements cannot be predicted, generally such
         agreements will require some specific representations and warranties by
         all of the parties thereto, will specify certain events of default,
         will detail


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         the terms of closing and the conditions which must be satisfied by each
         of the parties prior to and after such closing, will outline the manner
         of bearing costs, including costs associated with the Company's
         attorneys and accountants, will set forth remedies on default and will
         include miscellaneous other terms.

         As stated hereinabove, the Company will not acquire or merge with any
         entity which cannot provide independent audited financial statements
         within a reasonable period of time after closing of the proposed
         transaction. The Company is subject to all of the reporting
         requirements included in the Exchange Act. Included in these
         requirements is the affirmative duty of the Company to file independent
         audited financial statements as part of its Form 8-K to be filed with
         the Securities and Exchange Commission upon consummation of a merger or
         acquisition, as well as the Company's audited financial statements
         included in its annual report on Form 10-KSB (or 10-K, as applicable).
         If such audited financial statements are not available at closing, or
         within time parameters necessary to insure the Company's compliance
         with the requirements of the Exchange Act, or if the audited financial
         statements provided do not conform to the representations made by the
         candidate to be acquired in the closing documents, the closing
         documents will provide that the proposed transaction will be voidable,
         at the discretion of the present management of the Company. If such
         transaction is voided, the agreement will also contain a provision
         providing for the acquisition entity to reimburse the Company for all
         costs associated with the proposed transaction.

         Competition

         The Company will remain an insignificant participant among the firms
         which engage in the acquisition of business opportunities. There are
         many established venture capital and financial concerns which have
         significantly greater financial and personnel resources and technical
         expertise than the Company. In view of the Company's combined extremely
         limited financial resources and limited management availability, the
         Company will continue to be at a significant competitive disadvantage
         compared to the Company's competitors.

         Employees

         The Company has no full time employees. The Company's president,
         treasurer and secretary have agreed to allocate a portion of their time
         to the activities of the Company, without compensation. These officers
         anticipate that the business plan of the Company can be implemented by
         their devoting approximately 20 hours per month to the business


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         affairs of the Company and, consequently, conflicts of interest may
         arise with respect to the limited time commitment by such officers. See
         Item 9, "Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act."

         Investment Company Act of 1940

         The Company may participate in a business or opportunity by purchasing,
         trading or selling the securities of such business. However, the
         Company does not intend to engage primarily in such activities.
         Specifically, the Company intends to conduct its activities so as to
         avoid being classified as an "investment company" under the Investment
         Company Act of 1940 (the "Investment Act"), and therefore avoid
         application of the costly and restrictive registration and other
         provisions of the Investment Act and the regulations promulgated
         thereunder.

         Section 3(a) of the Investment Act provides the definition of an
         "investment company" which includes an entity that engages or holds
         itself out as being engaged primarily in the business of investing,
         reinvesting or trading in securities, or that engages or proposes to
         engage in the business of investing, reinvesting, owning, holding or
         trading "investment securities" (defined as all securities other than
         government securities, securities of majority-owned subsidiaries and
         certain other securities) the value of which exceeds 40% of the value
         of its total assets (excluding government securities, cash or cash
         items). The Company intends to implement its business plan in a manner
         that will result in the availability of this exception from the
         definition of "investment company." Consequently, the Company's
         participation in a business or opportunity through the purchase and
         sale of investment securities will be limited. In order to avoid
         classification as an investment company, the Company will search for,
         analyze and acquire or participate in a business opportunity by use of
         a method that does not involve the acquisition, ownership or holding of
         investment securities.

         The Company's plan of business may involve changes in its capital
         structure, management, control and business, especially if it
         consummates a reorganization as discussed above. Each of these areas is
         regulated by the Investment Act, which regulation has the purported
         purpose of protecting purchasers of investment company securities.
         Since the Company will not register as an investment company, its
         shareholders will not be afforded these purported protections.



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         The Company intends to vigorously resist classification as an
         investment company and to take advantage of any exemptions or
         exceptions from application of the Investment Act, which allows an
         entity a one-time option during any three-year period to claim an
         exemption as a "transient" investment company. The necessity of
         asserting any such resistance, or making any claim of exemption, could
         be time-consuming and costly, or even prohibitive, given the Company's
         limited resources.

         Certain Risks

         The Company's business is subject to numerous risk factors, including
         the following:

         No Operating History or Revenue and Minimal Assets. The Company has had
         no operating history nor any revenues or earnings from operations. The
         Company has no significant assets or financial resources. The Company
         will, in all likelihood, sustain operating expenses without
         corresponding revenues, at least until the consummation of a business
         combination. This may result in the Company incurring a net operating
         loss which will increase continuously until the Company can consummate
         a business combination with a profitable business opportunity. There is
         no assurance that the Company can identify such a business opportunity
         and consummate such a business combination.

         Speculative Nature of Company's Proposed Operations. The success of the
         Company's proposed plan of operation will depend to a great extent on
         the operations, financial condition and management of the identified
         business opportunity. While management intends to seek business
         combination(s) with entities having established operating histories,
         there can be no assurance that the Company will be successful in
         locating candidates meeting such criteria. In the event the Company
         completes a business combination, of which there can be no assurance,
         the success of the Company's operations may be dependent upon
         management of the successor firm or venture partner firm and numerous
         other factors beyond the Company's control.

         Scarcity of and Competition for Business Opportunities and
         Combinations. The Company is and will continue to be an insignificant
         participant in the business of seeking mergers with, joint ventures
         with and acquisitions of small private and public entities. A large
         number of established and well- financed entities, including venture
         capital firms, are active in mergers and acquisitions of companies
         which may be desirable target candidates for the Company. Nearly all
         such entities have significantly greater financial resources,


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         technical expertise and managerial capabilities than the Company and,
         consequently, the Company will be at a competitive disadvantage in
         identifying possible business opportunities and successfully completing
         a business combination. Moreover, the Company will also compete in
         seeking merger or acquisition candidates with numerous other small
         public companies.

         No Agreement for Business Combination or Other Transaction; No
         Standards for Business Combination. The Company has no arrangement,
         agreement or understanding with respect to engaging in a merger with,
         joint venture with or acquisition of, a private or public entity. There
         can be no assurance that the Company will be successful in identifying
         and evaluating suitable business opportunities or in concluding a
         business combination. Management has not identified any particular
         industry or specific business within an industry for evaluation by the
         Company. There is no assurance that the Company will be able to
         negotiate a business combination on terms favorable to the Company. The
         Company has not established a specific length of operating history or a
         specified level of earnings, assets, net worth or other criteria which
         it will require a target business opportunity to have achieved, and
         without which the Company would not consider a business combination in
         any form with such business opportunity. Accordingly, the Company may
         enter into a business combination with a business opportunity having no
         significant operating history, losses, limited or no potential for
         earnings, limited assets, negative net worth or other negative
         characteristics.

         Continued Management Control; Limited Time Availability. While seeking
         a business combination, management anticipates devoting up to 20 hours
         per month to the business of the Company. None of the Company's
         officers has entered into a written employment agreement with the
         Company and none is expected to do so in the foreseeable future. The
         Company has not obtained key man life insurance on any of its officers
         or directors. Notwithstanding the combined limited experience and time
         commitment of management, loss of the services of any of these
         individuals would adversely affect development of the Company's
         business and its likelihood of continuing operations. See Item 9,
         "Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act."

         Conflicts of Interest - General. Certain of the officers and directors
         of the Company are directors and/or principal shareholders of other
         blank check companies and, therefore, could face conflicts of interest
         with respect to potential acquisitions. In addition, officers and
         directors of the


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         Company may in the future participate in business ventures which could
         be deemed to compete directly with the Company. Additional conflicts of
         interest and non-arms length transactions may also arise in the future
         in the event the Company's officers or directors are involved in the
         management of any firm with which the Company transacts business. The
         Company's Board of Directors has adopted a policy that the Company will
         not seek a merger with, or acquisition of, any entity in which
         management serve as officers or directors, or in which they or their
         family members own or hold a controlling ownership interest. Although
         the Board of Directors could elect to change this policy, the Board of
         Directors has no present intention to do so. In addition, if the
         Company and other blank check companies with which the Company's
         officers and directors are affiliated both desire to take advantage of
         a potential business opportunity, then the Board of Directors has
         agreed that said opportunity should be available to each such company
         in the order in which such companies registered or became current in
         the filing of annual reports under the Exchange Act subsequent to
         January 1, 1997. See Item 9, "Directors, Executive Officers, Promoters
         and Control Persons; Compliance with Section 16(a) of the Exchange Act
         - Conflicts of Interest."

         Reporting Requirements May Delay or Preclude Acquisition. Sections 13
         and 15(d) of the Exchange Act require companies subject thereto to
         provide certain information about significant acquisitions, including
         certified financial statements for the company acquired, covering one,
         two or three years, depending on the relative size of the acquisition.
         The time and additional costs that may be incurred by some target
         entities to prepare such statements may significantly delay or
         essentially preclude consummation of an otherwise desirable acquisition
         by the Company. Acquisition prospects that do not have or are unable to
         obtain the required audited statements may not be appropriate for
         acquisition so long as the reporting requirements of the Exchange Act
         are applicable.

         Lack of Market Research or Marketing Organization. The Company has
         neither conducted, nor have others made available to it, results of
         market research indicating that market demand exists for the
         transactions contemplated by the Company. Moreover, the Company does
         not have, and does not plan to establish, a marketing organization.
         Even in the event demand is identified for a merger or acquisition
         contemplated by the Company, there is no assurance the Company will be
         successful in completing any such business combination.

         Lack of Diversification.  The Company's proposed operations, even if
         successful, will in all likelihood result in the


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         Company engaging in a business combination with a business opportunity.
         Consequently, the Company's activities may be limited to those engaged
         in by the business opportunity or opportunities which the Company
         merges with or acquires. The Company's inability to diversify its
         activities into a number of areas may subject the Company to economic
         fluctuations within a particular business or industry and therefore
         increase the risks associated with the Company's operations.

         Regulation. Although the Company will be subject to regulation under
         the Exchange Act, management believes the Company will not be subject
         to regulation under the Investment Company Act of 1940, insofar as the
         Company will not be engaged in the business of investing or trading in
         securities. In the event the Company engages in business combinations
         which result in the Company holding passive investment interests in a
         number of entities, the Company could be subject to regulation under
         the Investment Company Act of 1940. In such event, the Company would be
         required to register as an investment company and could be expected to
         incur significant registration and compliance costs. The Company has
         obtained no formal determination from the Securities and Exchange
         Commission as to the status of the Company under the Investment Company
         Act of 1940 and, consequently, any violation of such Act would subject
         the Company to material adverse consequences.

         Probable Change in Control and Management. A business combination
         involving the issuance of the Company's Common Stock will, in all
         likelihood, result in shareholders of a private company obtaining a
         controlling interest in the Company. Any such business combination may
         require management of the Company to sell or transfer all or a portion
         of the Company's Common Stock held by them, or resign as members of the
         Board of Directors of the Company. The resulting change in control of
         the Company could result in removal of one or more present officers and
         directors of the Company and a corresponding reduction in or
         elimination of their participation in the future affairs of the
         Company.

         Reduction of Percentage Share Ownership Following Business Combination.
         The Company's primary plan of operation is based upon a business
         combination with a private concern which, in all likelihood, would
         result in the Company issuing securities to shareholders of any such
         private company. The issuance of previously authorized and unissued
         shares of Common Stock of the Company would result in a reduction in
         the percentage of shares owned by present and prospective shareholders
         of the Company and may result in a change in control or management of
         the Company.



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         Disadvantages of Blank Check Companies. The Company may enter into a
         business combination with an entity that desires to establish a public
         trading market for its shares. A business opportunity may attempt to
         avoid what it deems to be adverse consequences of undertaking its own
         public offering by seeking a business combination with the Company.
         Such consequences may include, but are not limited to, time delays of
         the registration process, significant expenses to be incurred in such
         an offering, loss of voting control to public shareholders and the
         inability or unwillingness to comply with various federal and state
         laws enacted for the protection of investors.

         Taxation. Federal and state tax consequences will, in all likelihood,
         be major considerations in any business combination the Company may
         undertake. Currently, such transactions may be structured so as to
         result in tax-free treatment to both companies, pursuant to various
         federal and state tax provisions. The Company intends to structure any
         business combination so as to minimize the federal and state tax
         consequences to both the Company and the target entity; however, there
         can be no assurance that such business combination will meet the
         statutory requirements of a tax-free reorganization or that the parties
         will obtain the intended tax-free treatment upon a transfer of stock or
         assets. A non- qualifying reorganization could result in the imposition
         of both federal and state taxes which may have an adverse effect on
         both parties to the transaction.

         Requirement of Audited Financial Statements May Disqualify Business
         Opportunities. Management of the Company believes that any potential
         business opportunity must provide audited financial statements for
         review, for the protection of all parties to the business combination.
         One or more attractive business opportunities may choose to forego the
         possibility of a business combination with the Company, rather than
         incur the expenses associated with preparing audited financial
         statements.



                                      -15-

<PAGE>



Item 2.  Property
         --------

         The Company does not have any formal offices at year end. Records are
         maintained and mail received at 7609 Ralston Road, Arvada, CO 80002.
         The Company owns no real property.

Item 3.  Legal Proceedings
         -----------------

         The Company is a party to no pending legal proceedings, nor is its
         property subject to such proceedings, at September 30, 2002.

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

         None in year reported.




                                      -16-

<PAGE>



                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters
         ---------------------------------------------------------------------

         As of the date of this report, management knows of no trading or
         quotation of the Company's common stock. The range of high and low bid
         quotations for each fiscal quarter since the last report, as reported
         by the National Quotation Bureau Incorporated, was as follows:

                                 2002                 High     Low
                           -------------             ------   -----

                           First quarter             *          *
                           Second quarter            *          *
                           Third quarter             *          *
                           Fourth quarter            *          *

                                 2001                 High      Low
                           ------------              ------    -----

                           First quarter             *           *
                           Second quarter            *           *
                           Third quarter             *           *
                           Fourth quarter            *           *

                                 2000                 High      Low
                           ------------              ------    -----

                           First quarter             *           *
                           Second quarter            *           *
                           Third quarter             *           *
                           Fourth quarter            *           *

* No quotations reported

         The above quotations reflect inter-dealer prices, without retail
         mark-up, mark-down, or commission and may not necessarily represent
         actual transactions.

         As of September 30, 2002, there were 404 record holders of the
         Company's common Stock.

         The Company has not declared or paid any cash dividends on its common
         stock and does not anticipate paying dividends for the foreseeable
         future.


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

Financial Condition and Changes in Financial Condition
------------------------------------------------------

         No operations were conducted and no revenues were generated in the
fiscal year. The Company had no income in year ended September 30, 2002. The
Company at year end had no capital, no cash, and no other assets. The Company at
year end was totally illiquid and needed cash infusions from shareholders to
provide capital, or loans from any sources.



                                      -17-

<PAGE>



Results of  Operations - Year Ended  September  30, 2002  Compared to Year Ended
--------------------------------------------------------------------------------
September 30, 2001
------------------

         During the fiscal year ended September 30, 2002, the Company had no
revenues, and in 2001, the Company had no revenues. In 2002, the Company
incurred $13,126 in expenses. In 2001 the Company incurred expenses of $8228.
The Company had a loss on operations in 2002 of ($13,126) and in 2001 a loss of
($8228). Loss per share was nominal each year.


Liquidity and Capital Resources
-------------------------------

     The Company is unable to carry out any plan of business without funding.
The Company cannot prdict to what extent its current lack of liquidity and
capital resources will impair the consummation of a business combination or
whether it will incur further operating losses through any business entity which
the Company may eventually acquire. There is no assurance that the Company can
continue as a going concern without substantial funding, for which there is no
source.

     The Company estimates it will require $10,000 to $15,000 to cover legal,
accounting, transfer, and miscellaneous costs of being a reporting company in
the next fiscal year. The Company will have a cash shortfall for current annual
costs of $10,000 to $15,000, for which it has no source except shareholder loans
or contributions, none of which have been committed.

        The Company has no cash for any operations. It will have to make private
placements of stock, for which it has no sources, or obtain loans from
shareholders, to have any cash for even limited operations. There are no
committed loan sources at this time.

Evaluation of Internal and Disclosure Controls
----------------------------------------------

     The  management  of the  company has  evaluated  the  effectiveness  of the
issuer's disclosure controls and procedures as of a date within 90 days prior to
the filing  date of the report  (evaluation  date) and have  concluded  that the
disclosure  controls and procedures are adequate and effective  based upon their
evaluation as of the evaluation date.

     There were no significant  changes in internal controls or in other factors
that could significantly  affect internal controls subsequent to the date of the
most recent evaluation of such,  including any corrective actions with regard to
significant deficiencies and material weaknesses.


NEED FOR ADDITIONAL FINANCING

        The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. In the event the
Company is able to complete a business combination during this period, lack of
its existing capital may be a sufficient impediment to prevent it from
accomplishing the goal of completing a business combination. There is no
assurance, however, that without funds it will ultimately allow registrant to
complete a business combination. Once a business combination is completed, the
Company's needs for additional financing are likely to increase substantially.
The Company will need to raise additional funds to conduct any business
activities in the next twelve months.

                                      -18-

<PAGE>

        No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses as they may be incurred.

        Irrespective of whether the Company's cash assets prove to be inadequate
to meet the Company's operational needs, the Company might seek to compensate
providers of services by issuance of stock in lieu of cash.


                               PLAN OF OPERATIONS

        The Company has no plans for any research and development in the next
twelve months. The Company has no plans at this time for purchase or sales of
fixed assets which would occur in the next twelve months.

        The Company has no expectation or anticipation of significant changes in
number of employees in the next twelve months. However, if it achieves a
business acquisition, it may acquire or add employees of an unknown number in
the next twelve months.

        The Company's auditor has issued a "going concern" qualification as part
of his opinion in the Audit Report.

        There is substantial doubt about the ability of the Company to continue
as a "going concern." The Company has no business, no capital, and has debt in
excess of $33,000, all of which is current, no cash, no assets, and no capital
commitments. The effects of such conditions could easily be to cause the
Company's bankruptcy, except there are no assets to liquidate in Bankruptcy.

        Management hopes to seek a business which might be acquired, at which
time there may be a necessity to seek and obtain funding, via loans or private
placements of stock to pay off debt and provide working capital. Management has
no current plan to seek capital in the form of loans or stock private placements
at this time because it has no business upon which to base any capital raising
plan.

Item 7.  Financial Statements and Supplementary Data

                  Please refer to pages F-1 through F-7.

Item 8.  Changes in and Disagreements on Accounting and Financial Disclosure

        None


                                      -19-

<PAGE>



                                    PART III

Item 9.  Directors and Executive Officers of the Registrant and Compliance with
         ----------------------------------------------------------------------
Section 16(a)
-------------

         The directors and executive officers of the Company as of September 30,
         2000, are as follows:

          Name               Age                Position
-----------------          -------              -------------------

Larry Carr                   62               President and Director

Sharon Carr                  63               Secretary and Director

Chris Sanders                47               Vice President and Director

         The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director or officer
has been previously employed is an affiliate, parent or subsidiary of the
Company.

      Larry M. Carr, age 62, has been President and Director of the Company
since 1997. He attended Loyola University from 1961-63 and 1967-68 and attended
Tarkio College from 1963-64. From 1989 to the present, he has been CEO and
principal of Nursefinders Management Corporation From 1996 to the present, he
has been CEO and principal of Computerized Healthcare Management Services, LLC.
He has been Chairman of the Board of Northwest National Bank of Arlington since
1996. He has been Chairman of the Board of VSI Enterprises, Inc., a public
company, since 1994.

         Sharon R. Carr, age 63, has been Secretary and Director since 1997. She
received a Bachelors Degree from the University of Miami in 1965 and a Masters
Degree from Roosevelt University in 1971. From 1989 to the present, she has been
a Director and principal in Nursefinders Management Corporation and Computerized
Healthcare Management Services, LLC.

         Christine Sanders, age 47, has been a Director since 1997. She received
a BSN from Marquette University in 1982. From 1995 to the present, she has been
President and COO of Nursefinders Management Corporation. From 1996 to the
present, she has been President of Computerized Healthcare Management Services,
LLC. From 1988 to the present, she has been Regional Vice President and Regional
Director of Nursefinders, Inc.



                                      -20-

<PAGE>



Conflicts of Interest
---------------------

         Members of the Company's management are associated with other firms
involved in a range of business activities. Consequently, there are potential
inherent conflicts of interest in their acting as officers and directors of the
Company. Insofar as the officers and directors are engaged in other business
activities, management anticipates it will devote only a minor amount of time to
the Company's affairs.

         Certain of the officers and directors of the Company are directors and
principal shareholders in other blank check companies, and officers and
directors of the Company may in the future become shareholders, officers or
directors of other companies which may be formed for the purpose of engaging in
business activities similar to those conducted by the Company. Accordingly,
direct conflicts of interest may arise in the future with respect to such
individuals acting on behalf of the Company or other entities. Conflicts of
interest may arise with respect to opportunities which come to the attention of
such individuals in the performance of their duties or otherwise. The Company
does not currently have a right of first refusal pertaining to opportunities
that come to management's attention insofar as such opportunities may relate to
the Company's proposed business operations.

         The officers and directors are, so long as they are officers or
directors of the Company, subject to the restriction that all opportunities
contemplated by the Company's plan of operation which come to their attention,
either in the performance of their duties or in any other manner, will be
considered opportunities of, and be made available to the Company and the
companies that they are affiliated with on an equal basis. A breach of this
requirement will be a breach of the fiduciary duties of the officer or director.
If the Company and the companies with which the officers and directors are
affiliated both desire to take advantage of an opportunity, then the Board of
Directors has agreed that said opportunity should be available to each such
company in the order in which such companies registered or became current in the
filing of annual reports under the Exchange Act subsequent to January 1, 1997.
All directors may still individually take advantage of opportunities if the
Company should decline to do so. Except as set forth above, the Company has not
adopted any other conflict of interest policy with respect to such transactions.

         The Company's Board of Directors has adopted a policy that the Company
will not seek a merger with, or acquisition of, any entity in which any officer
or director serves as an officer or director or in which they or their family
members own or hold a controlling ownership interest. Although the Board of
Directors could elect to change this policy, the Board of Directors has no
present intention to do so.


                                      -21-

<PAGE>




         There can be no assurance that management will resolve all conflicts of
interest in favor of the Company.

Item 10. Executive Compensation
         ----------------------

         The Company accrued no compensation to the executive officers as a
group for services rendered to the Company in all capacities during the 2001
fiscal year. No one executive officer received, or has accrued for his benefit,
in excess of $100,000 for the year. No cash bonuses were or are to be paid to
such persons.

         The Company does not have any employee incentive stock option plans.

         There are no plans pursuant to which cash or non-cash compensation was
paid or distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the executive officers of the Company. No other
compensation not described above was paid or distributed during the last fiscal
year to the executive officers of the Company. There are no compensatory plans
or arrangements, with respect to any executive office of the Company, which
result or will result from the resignation, retirement or any other termination
of such individual's employment with the Company or from a change in control of
the Company or a change in the individual's responsibilities following a change
in control.



                                      -22-

<PAGE>
<TABLE>
<CAPTION>



                                     SUMMARY COMPENSATION TABLE OF EXECUTIVES
                                     ----------------------------------------

                                            Annual Compensation                         Awards

Name and                  Year          Salary          Bonus         Other Annual               Restricted            Securities
Principal                               ($)             ($)           Compensation               Stock                 Underlying
Position                                                              ($)                        Award(s)              Options/
                                                                                                 ($)                   SARs (#)
------------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>           <C>             <C>           <C>                        <C>                   <C>
Larry Carr,               2002          0               0             0                          0                     0
President                 2001          0               0             0                          0                     0
                          2000          0               0             0                          0                     0
------------------------------------------------------------------------------------------------------------------------------------
Sharon                    2002          0               0             0                          0                     0
Carr,                     2001          0               0             0                          0                     0
Secretary                 2000          0               0             0                          0                     0
------------------------------------------------------------------------------------------------------------------------------------
Christine                 2002          0               0             0                          0                     0
Sanders,                  2001          0               0             0                          0                     0
Vice                      2000          0               0             0                          0                     0
President
====================================================================================================================================
</TABLE>


         Option/SAR Grants Table (None)

         Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End
Option/SAR value (None)

         Long Term Incentive Plans - Awards in Last Fiscal Year (None)

<TABLE>
<CAPTION>

                                   DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
                                   ------------------------------------------

(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)

                      Cash Compensation                           Security Grants

Name                Annual             Meeting           Consulting             Number          Number of
                    Retainer           Fees              Fees/Other             of              Securities
                    Fees ($)           ($)               Fees ($)               Shares          Underlying
                                                                                (#)             Options/SARs(#)
------------------  -----------------  ----------------  ---------------------  --------------  -----------------------
<S>                 <C>                <C>               <C>                    <C>             <C>
A. All              0                  0                 0                      0               0
Directors

==================  =================  ================  =====================  ==============  =======================
</TABLE>



                                      -23-

<PAGE>



Item 11. Security Ownership of Certain Beneficial Owners and Management
         --------------------------------------------------------------

         The following table sets forth information, as of September 30, 2000,
with respect to the beneficial ownership of the Company's no par value common
stock by each person known by the Company to be the beneficial owner of more
than five percent of the outstanding common stock.

      Stock        Names and Address        Beneficial        Percent
Title of Class   of Beneficial Owner         Ownership        of Class
---------------  -------------------        -----------       --------

*Common                Larry Carr            34,574,000           42%


         The following table sets forth information, as of September 30, 1998,
with respect to the beneficial ownership of the Company's no par value common
stock by the directors and officers of the Company, both individually and as a
group.

      Stock        Names and Address            Beneficial        Percent
Title of Class     of Beneficial Owner          Ownership         of Class
--------------     ---------------------        -----------       --------

Common            Larry Carr*                   34,574,000        42%

Common            Sharon Carr*                       0             0%

Common            Christine Sanders                  0             0%

*                 Officers and Directors as a group               42%

Item 12. Certain Relationships and Related Transactions

             None.


*Note: Sharon Carr and Larry Carr are husband and wife.


                                      -24-

<PAGE>



                                     PART IV

Item 13.  Exhibits and Reports on Form 8-K
          --------------------------------

          The following documents are filed as part of this report:

          1.       Reports on Form 8-K:
                   None

          2.       Exhibits:
                   None



                                      INDEX

                                                            Form 10-K
Regulation                                                  Consecutive
S-K Number        Exhibit                                   Page Number
----------        -------                                   -----------

3.1               Articles of Incorporation           *Incorporated by reference
                                                       to Registration Statement

3.2               Bylaws                              *Incorporated by reference
                                                       to Registration Statement





                                      -25-

<PAGE>


                                   SIGNATURES

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

                                             The Entity, Inc.
                                             (Registrant)

Date: February 26, 2003

                                             /s/ Larry Carr
                                             -----------------------------------
                                             Larry Carr, President/Director


                                             /s/ Sharon Carr
                                             -----------------------------------
                                             Sharon Carr, Secretary/Director


                                             /s/ Christine Sanders
                                             -----------------------------------
                                             Christine Sanders, Director



                                      -26-

<PAGE>

                                THE ENTITY, INC.

                              Financial Statements
                     Years Ended September 30, 2002 and 2001






<PAGE>



                           Michael Johnson & Co., LLC
                          Certified Public Accountants
                        9175 East Kenyon Ave., Suite 100
                             Denver, Colorado 80237



Michael B. Johnson C.P.A.                             Telephone:  (303) 796-0099
Member:  A.I.C.P.A.                                         Fax:  (303) 796-0137
Colorado Society of C.P.A.s



                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
The Entity, Inc.
Denver, Colorado

We have audited the accompanying balance sheets of The Entity, Inc., as of
September 30, 2002 and 2001, and the related statements of operations, changes
in stockholders' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above, present fairly, in
all material respects, the financial position of The Entity, Inc. at September
30, 2002 and 2001, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States..

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5, conditions
exist which raise substantial doubt about the Company's ability to continue a
going concern unless it is able to generate sufficient cash flows to meet its
obligation and sustain its operations. Management's plans concerning these
matters are also described in Note 5. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



/s/ Michael Johnson & Co., LLC
Denver, Colorado
February 6, 2003


                                      F-1

<PAGE>


<TABLE>
<CAPTION>


                                        THE ENTITY, INC.
                                         Balance Sheets
                                  September 30, 2002 and 2001

                                                                            2002                 2001
                                                                        --------------       --------------
<S>                                                                     <C>                  <C>

ASSETS:

Other assets

TOTAL ASSETS                                                                      $ -                  $ -
                                                                        ==============       ==============

LIABILITIES & STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable and accrued expenses                                        $ 25,158             $ 11,352
Advances from stockholders'                                                     8,500                8,500
                                                                        --------------       --------------

Total Current Liabilities                                                      33,658               19,852
                                                                        --------------       --------------

Stockholders' Deficit

Preferred Stock, $ .01 par value, 10,000,000
 shares authorized, none issued and outstanding                                     -                    -
Common Stock, $.0001 par value, 100,000,000 shares
 authorized, 81,400,000 shares issued and outstanding                           8,140                8,140
Additional paid-in capital                                                     53,610               53,610
Accumulated deficit                                                           (95,408)             (81,602)
                                                                        --------------       --------------

Total Stockholders' Deficit                                                   (33,658)             (19,852)
                                                                        --------------       --------------

TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT                                         $ -                  $ -
                                                                        ==============       ==============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-2

<PAGE>

<TABLE>
<CAPTION>

                                    THE ENTITY, INC.
                                Statements of Operations
                    For the Years ended September 30, 2002 and 2001



                                                                             2002                    2001
                                                                        ---------------         ----------------
<S>                                                                     <C>                     <C>

REVENUES:                                                                          $ -                      $ -


OPERATING EXPENSES:
General and administrative expenses                                             13,126                    8,228
                                                                        ---------------         ----------------
 Total Operating Expenses                                                       13,126                    8,228
                                                                        ---------------         ----------------

OTHER EXPENSES:
Interest expense                                                                  (680)                       -
                                                                        ---------------         ----------------
 Total Other Expenses                                                             (680)                       -
                                                                        ---------------         ----------------


NET LOSS                                                                     $ (13,806)                $ (8,228)
                                                                        ===============         ================


Net loss per share                                                             *                       *
                                                                        ===============         ================
 * - less than $.0001 per share

Weighted average of number of
 shares outstanding                                                         81,400,000               81,400,000
                                                                        ===============         ================

</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-3

<PAGE>

<TABLE>
<CAPTION>

                                        THE ENTITY, INC.
                                    Statements of Cash Flows
                        For the Years Ended September 30, 2002 and 2001

                                        Indirect Method


                                                                                   Additional
                                                         Common Stock               Paid-In         Accumulated
                                              -----------------------------------
                                                  Shares           Amount           Capital          Deficit           Total
                                              ---------------  ---------------   ---------------  ---------------  ---------------
<S>                                           <C>              <C>               <C>              <C>              <C>

Balance - September 30, 1997                      81,400,000          $ 8,140          $ 53,610        $ (68,374)        $ (6,624)

Net loss for year                                          -                -                 -                -                -
                                              ---------------  ---------------   ---------------  ---------------  ---------------
Balance  - September 30, 1998                     81,400,000            8,140            53,610          (68,374)          (6,624)
                                              ---------------  ---------------   ---------------  ---------------  ---------------

Net loss for year                                          -                -                 -           (3,000)          (3,000)
                                              ---------------  ---------------   ---------------  ---------------  ---------------
Balance - September 30, 1999                      81,400,000            8,140            53,610          (71,374)          (9,624)
                                              ---------------  ---------------   ---------------  ---------------  ---------------

Net loss for year                                          -                -                 -           (2,000)          (2,000)
                                              ---------------  ---------------   ---------------  ---------------  ---------------
Balance - September 30, 2000                      81,400,000            8,140            53,610          (73,374)         (11,624)
                                              ---------------  ---------------   ---------------  ---------------  ---------------

Net loss for year                                          -                -                 -           (8,228)          (8,228)
                                              ---------------  ---------------   ---------------  ---------------  ---------------
Balance - September 30, 2001                      81,400,000            8,140            53,610          (81,602)         (19,852)
                                              ---------------  ---------------   ---------------  ---------------  ---------------

Net loss for year                                          -                -                 -          (13,806)         (13,806)
                                              ---------------  ---------------   ---------------  ---------------  ---------------
Balance - September 30, 2002                      81,400,000          $ 8,140          $ 53,610        $ (95,408)       $ (33,658)
                                              ===============  ===============   ===============  ===============  ===============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-4

<PAGE>

<TABLE>
<CAPTION>

                                     THE ENDITY, INC.
                                 Statements of Cash Flows
                     For the Years Ended September 30, 2002, and 2001


                                                                           2002                     2001
                                                                       -------------            -------------
<S>                                                                    <C>                      <C>

Cash Flows from Operating Activities:
  Net Loss                                                                 $(13,806)                 $(8,228)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
      Changes in assets and liabilities:
        Increase in accounts payable                                         13,806                    6,728
                                                                       -------------            -------------
Net Cash Used in Operating Activities                                             -                   (1,500)
                                                                       -------------            -------------

Cash Flows from Financing Activities:
 Advances from stockholders                                                       -                    1,500
                                                                       -------------            -------------
Net Cash Provided by Financing Activities                                         -                    1,500
                                                                       -------------            -------------

Net increase (decrease) in cash                                                   -                        -

Cash and cash equivalents - Beginning of year                                     -                        -
                                                                       -------------            -------------

Cash and cash equivalents - End of year                                         $ -                      $ -
                                                                       =============            =============

Supplemental Disclosure of Cash Flows Information
     Cash Paid During the Year for:
       Interest                                                                 $ -                      $ -
                                                                       =============            =============
       Income Taxes                                                             $ -                      $ -
                                                                       =============            =============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-5

<PAGE>


                                THE ENTITY, INC.
                          Notes to Financial Statements
                               September 30, 2002

NOTE 1 - THE COMPANY

         Nature of Business
         ------------------

         The Entity, ("the Company") was incorporated July 7, 1983 under the
         laws of Colorado for the primary purpose of seeking acquisitions of
         business or properties, without limitation as to geographic location or
         type of business. The Articles of Incorporation and Bylaws were amended
         when Moonstone, Inc. a publicly traded shell, merged with The Entity,
         Inc. Moonstone the surviving entity, soon thereafter changed its name
         to The Entity, Inc.

         Since the completion of the initial offering, the Company has not
         engaged in any operations nor has it generated any revenue. The Company
         has been engaged in the identification and evaluation of target
         business entities or assets for possible acquisition.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         Cash and Cash Equivalents
         -------------------------

         For purpose of the statement of cash flows, cash and cash equivalents
         include cash in banks and money market accounts.

         Income Taxes
         ------------

         The Financial Accounting Standards Board (FASB) has issued Statement of
         Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting for
         Income Taxes", which requires a change from the deferred method to the
         assets and liability method, deferred income taxes are recognized for
         the tax consequences of "temporary differences" by applying enacted
         statutory tax rates applicable to future years to differences between
         the financial statement carrying amounts and the tax basis of existing
         assets and liabilities.

         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 amount of
         assets and liabilities and disclosures of contingent assets and
         liabilities at the date of the financial statements and the reported
         amounts of revenues and expenses during the reporting period. Actual
         results could differ from those estimates.

         Net earnings (loss) per share
         -----------------------------

         Net earnings (loss) per share has been computed by dividing net income
         (loss) by the weighted average number of common shares and equivalents
         outstanding.

         Other Comprehensive Income
         --------------------------

         The Company has no material components of other comprehensive income
         (loss) and, accordingly, net loss is equal to comprehensive loss in all
         periods.

                                      F-6

<PAGE>



                                THE ENTITY, INC.
                          Notes to Financial Statements
                               September 30, 2002


NOTE 3 - RELATED PARTY TRANSACTIONS
         --------------------------

         Advances from Shareholders
         --------------------------

         The former treasurer and other officers of the Company advanced cash to
         the Company for operating expenses as audit fees and legal fees. These
         advances were unsecured and due on demand.

NOTE 4  - INCOME TAXES:
          -------------

         The Company has made no provision for income taxes because there have
         been no operations to date causing income for financial statement or
         tax purposes.

         The Financial Accounting Standards Board (FASB) has issued Statement of
         Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting for
         Income Taxes", which requires a change from the deferred method to the
         asset and liability method of accounting for income taxes. Under the
         asset and liability method, deferred income taxes are recognized for
         the tax consequences of "temporary differences" by applying enacted
         statutory tax rates applicable to future years to differences between
         the financial statement carrying amounts and the tax basis of existing
         assets and liabilities.

                  Deferred tax assets:
                  Net operating loss carryforwards   $ 94,728
                  Valuation allowance                 (94,728)
                                                     ---------
                  Net deferred tax assets            $      -
                                                     =========

         At September 30, 2002, the Company had net operating loss carryforwards
         of approximately $94,728 for federal income tax purposes. These
         carryforwards if not utilized to offset taxable income will expire in
         2002.

NOTE 5 - GOING CONCERN
         -------------

         The accompanying financial statements have been prepared in conformity
         with accounting principles generally accepted in the United States,
         which contemplates continuation of the Company as a going concern. As
         shown in the financial statements, the Company incurred a net loss of
         $13,126 in 2002 and had incurred net losses in the prior years. As of
         September 30, 2002, the Company had no cash and current liabilities
         exceeded current assets by $32,978.

         The future success of the Company is likely dependent on its ability to
         attain additional capital, or to find an acquisition to add value to
         its present shareholders and ultimately, upon its ability to attain
         future profitable operations. There can be no assurance that the
         Company will be successful in obtaining such financing, or that it will
         attain positive cash flow from operations.



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