<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

              [x] Quarterly Report Pursuant to Section 13 or 15(d)
                         Securities Exchange Act of 1934
                  for Quarterly Period Ended September 30, 2001

                                      -OR-

              [ ] Transition Report Pursuant to Section 13 or 15(d)
                   of the Securities And Exchange Act of 1934
            for the transaction period from ___________ to _________

                         Commission File Number 0-14646


                        Entertainment International Ltd.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            New York                                  06-1113228
--------------------------------------------------------------------------------
   (State or other jurisdiction of      (I.R.S. Employer Identification Number)
    incorporation or organization)


                7380 Sand Lake Road, Suite 350, Orlando, FL 32819
--------------------------------------------------------------------------------
               (Address of principal executive offices, Zip Code)



                                 (407) 351-0011
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


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

                                 Yes [X] No [ ]

                     The number of outstanding shares of the
                  registrant's common stock, par value $.01 as
                       of October 17, 2001 is 36,532,333



                         PART I -- FINANCIAL INFORMATION

                                       1




<PAGE>



ITEM 1 -- FINANCIAL STATEMENTS

                        ENTERTAINMENT INTERNATIONAL LTD.
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                 SEPTEMBER 30,         DECEMBER 31,
                                                                      2001                 2000
                                                                (NOTE 1 and 2)           (NOTE 1)
                                                                  (Unaudited)            (Audited)

                           ASSETS

<S>                                                              <C>                 <C>
Assets held for sale                                             $          -        $  1,091,000
Other assets                                                                -               4,000
                                                                 ------------        ------------

                                                                 $          -        $  1,095,000
                                                                 ============        ============

            LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES:
   Bank overdraft                                                $          -        $    242,000
   Accounts payable - trade                                                 -             314,000
   Customer payments on future services                                     -             200,000
   Accrued expenses and other liabilities                                   -              45,000
   Obligation under capital lease                                           -             231,000
   Due to related parties                                                   -           4,375,000
                                                                 ------------        ------------
           Total liabilities                                                -           5,407,000
                                                                 ------------        ------------

STOCKHOLDERS' DEFICIT
   Common stock                                                       696,000             696,000
   Capital in excess of par value                                  50,987,000          50,987,000
   Accumulated deficit                                            (51,683,000)        (55,995,000)
                                                                 ------------        ------------
       Total stockholders' deficit                                          -          (4,312,000)
                                                                 ------------        ------------
                                                                 $          -        $  1,095,000
                                                                 ============        ============
</TABLE>


            See accompanying notes to condensed financial statements.

                                       2




<PAGE>



                        ENTERTAINMENT INTERNATIONAL LTD.
                       CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>


                                                          THREE MONTHS ENDED        NINE MONTHS ENDED
                                                             SEPTEMBER 30,             SEPTEMBER 30,
                                                          2001          2000        2001          2000
                                                          ----          ----        ----          ----

<S>                                                    <C>          <C>           <C>          <C>
REVENUES                                               $         -  $        -    $         -  $        -
                                                       -----------  -----------   -----------  -----------

COSTS AND EXPENSES:
   Selling, general & administrative                       115,000      129,000       279,000      360,000
                                                       -----------  -----------   -----------  -----------


OPERATING LOSS                                            (115,000)    (129,000)     (279,000)    (360,000)
                                                       -----------  -----------   -----------  -----------

OTHER INCOME (EXPENSE):
   Gain on from discharge of
      indebtedness (Note 2)                              4,886,000            -     4,886,000            -
   Interest expense                                        (98,000)     (81,000)     (295,000)    (246,000)
                                                       -----------  -----------   -----------  -----------
                                                         4,788,000      (81,000)    4,591,000     (246,000)
                                                       -----------  -----------   -----------  -----------

NET INCOME (LOSS)                                      $ 4,673,000  $  (210,000)  $ 4,312,000  $  (606,000)
                                                       ===========  ===========   ===========  ===========

WEIGHTED AVERAGE NUMBER
   OF COMMON SHARES
   OUTSTANDING                                          69,597,000   69,597,000    69,597,000   69,526,000


  NET INCOME (LOSS) PER SHARE                          $      0.07  $     (0.01)     $   0.06  $     (0.01)
                                                       ===========  ===========   ===========  ===========

</TABLE>

     Unaudited -- See accompanying notes to condensed financial statements.

                                       3





<PAGE>



                        ENTERTAINMENT INTERNATIONAL LTD.
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                    NINE MONTHS ENDED
                                                                       SEPTEMBER 30,

                                                                    2001           2000
                                                                    ----           ----
<S>                                                             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                      $ 4,312,000    $  (606,000)
  Adjustments to reconcile net loss to net cash flows
      used in operating activities:
      Depreciation                                                        -         49,000
      Gain from discharge of indebtedness                        (4,886,000)             -
      Changes in operating assets and liabilities                   (69,000)       (16,000)
                                                                 ----------       --------

  Net change in cash used for operating activities                 (643,000)      (573,000)
                                                                 ----------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Principal payments on capital lease obligation                  (231,000)      (300,000)
   Net change in due to related parties                           1,116,000        872,000
                                                                 ----------       --------

   Net cash flows provided by financing activities                  885,000        572,000
                                                                 ----------       --------

NET CHANGE IN CASH AND CASH EQUIVALENTS                             242,000         (1,000)

CASH AND CASH EQUIVALENTS, BEGINNING OF
  PERIOD                                                           (242,000)         1,000
                                                                 ----------       --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                         $        -       $      -
                                                                 ==========       ========
SUPPLEMENTAL INFORMATION:

Non-cash financing activity:
  Conversion of debt into common stock                           $        -       $214,000
                                                                 ==========       =======

  Cash paid for interest                                         $   13,000       $ 20,000

</TABLE>

       Unaudited-See accompanying notes to condensed financial statements.

                                       4




<PAGE>


                        ENTERTAINMENT INTERNATIONAL LTD.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   [UNAUDITED]


NOTE 1-BASIS OF PRESENTATION:

The accompanying consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete statements. Management believes that all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of such
financial statements, have been included. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
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. If such differences prove significant and material, Entertainment
International Ltd. (the "Company") will file an amendment to this report on Form
10-Q.

NOTE 2 - SUBSEQUENT EVENTS:

         On October 17, 2001 the Company, through its wholly owned subsidiary
ENTI Acquisition Corp. ("ENTI" or "Registrant"), closed a transaction (the
"Transaction") providing for the acquisition of all of the issued and
outstanding shares of CSTI Hi-Tech, Ltd. ("CSTI") an Israeli corporation, in
exchange for approximately 31,052,483 shares of Registrant's unregistered
restricted common stock on a post-split basis (simultaneously with the closing
Registrant effectuated a one for twenty reverse stock split effective on October
18, 2001 of all of its issued and outstanding stock as approved by the
shareholders of the company on December 28, 2000.)

         Following the closing of the transaction, the former shareholders of
CSTI controlled approximately 85 percent of ENTI's outstanding share capital
(36,532,333 shares). Mr. Jacob Lustgarten, the president of CSTI became the
Chairman and Chief Executive Officer of the Registrant. Mr. Louis J. Pearlman,
resigned as Chairman and Chief Executive Officer of Registrant, and will remain
on the Board of Directors. Meir Elazar, General Counsel for CSTI, will fill the
remaining vacancy on the Registrant's Board of Directors. Effective immediately
the activities of CSTI are to be conducted through Registrant. CSTI is
headquartered in Israel, 4 Ashlagan St., P.O. Box 8624, Kiryat Gat 82021, Israel
(011 972 8 660 2108).

         CSTI has offices in Germany and Italy and is engaged in the business of
the planning, production and installation of ultra-high purity systems for
transporting highly pure gases and chemicals. These highly pure products are
used in the production of products ranging from micro-electronics, optical
fibers and metal blades to pharmaceutical and bio-technology items. CSTI
currently has 140 employees and its customers include Sapio Gas Company (Italy),
Hydrogas (Scandanavia), Pirelli Optic Fibres (Italy), Teva (Israel) and Intel
(Israel) among others.

Summary information with regard to CSTI as of September 30, 2001 is
as follows:

<TABLE>
<CAPTION>

                                                                              September 30,
                                                                                  2001
                                                                                  ----
                                                                              (Unaudited)
                                                                               (in 000's)

<S>                                                                         <C>
Cash and Cash Equivalents                                                   $         102
Trade Receivables                                                                   1,973
Other Receivables                                                                     823
Inventory                                                                           1,664
                                                                            -------------

Total Current Assets                                                                4,562

Property, Plant and Equipment (Net of Accumulated Depreciation of $805)             1,656
Deferred Taxes                                                                         17
                                                                            -------------

Total Assets                                                                $       6,235
                                                                            =============

Current Liabilities:
   Short-Term Credit                                                        $       2,001
   Trade Payables                                                                   1,666
   Other Payables                                                                   1,125
                                                                            -------------

                                                                                    4,792
                                                                            -------------


Long-Term Liabilities:
   Shareholders' loans                                                                 14
   Severance liability, net of amount funded                                           71
                                                                            -------------

                                                                                       85
                                                                            -------------

Contingencies and Commitments

</TABLE>


                                       5




<PAGE>


<TABLE>
<S>                                                                         <C>

Shareholders' Equity:
   Share capital                                                                        1
   Additional paid in capital                                                         738
   Retained earnings                                                                  619
                                                                            -------------


                                                                                    1,358
                                                                            -------------

                                                                            $       6,235
                                                                            =============
</TABLE>


<TABLE>
<CAPTION>

                                                                         For the Period ended
                                                                             September 30,
                                                                                 2001
                                                                                 ----
                                                                              (unaudited)

<S>                                                                         <C>
Sales                                                                       $      10,123
Cost of Sales                                                                       6,347
                                                                            -------------

Gross Profit                                                                        3,776
General Expenses and Administrative                                                 1,786
                                                                            -------------

Operating Income                                                                    1,990
Interest Income - net                                                                  67
Other Income                                                                            6
                                                                            -------------

Income Before Income Taxes                                                          2,063
Income Taxes                                                                           83
                                                                            -------------

Net Income                                                                  $       1,980
                                                                            =============

</TABLE>

As a part of the Transaction, Louis Pearlman, TransCon Airlines and
TransCon Records (Transcon Airlines and Transcon Records collectively referred
to as "TransCon") entered into a separate cancellation and discharge agreement
with CSTI whereby, Pearlman and TransCon agreed to cancel and discharge all
indebtedness of the Company owed to Pearlman and TransCon. Pearlman and TransCon
also jointly and severally assumed all remaining debts and liabilities
owned by the Company. The Company also transferred, to Pearlman and TransCon
all of the remaining airship assets owned by the Company. The financial
statements as of and for the period ended September 30, 2001, reflect this
agreement. As a result, such financial statements disclose a gain from
discharge from indebtedness of $4,886,000.


                                       6




<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS

OVERALL FINANCIAL CONDITION

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate that Entertainment
International, Ltd. (the "Company") will continue as a going concern. For the
first nine months of 2001, the Company had net income of $4,312,000 and had
negative cash flows of $643,000 from operations. The accompanying financial
statements do not include any adjustments that might result from the Company's
current liquidity shortage. The Company experienced a net loss of $606,000 from
the same period last year. This change is due to a $4.9 million gain on disposal
of discontinued operations occurring in the third quarter of this year.

RESULTS OF OPERATIONS

The Company had no revenue from operations during the first nine months of 2001
and 2000.

Selling, general and administrative costs for the nine months and three months
ended September 30, 2001 were $279,000 and $115,000, respectively as compared to
$360,000 and $129,000, respectively, for the comparable periods in 2000. These
amounts represent decreases of $ 81,000 and $14,000, respectively. This decrease
is primarily attributable to decreased officer and administrative salaries, and
legal expense.

Interest expense increased $51,000 or 20.7% to $297,000 for the nine months
ended September 30, 2001 from $246,000 during the same period during 2000. The
increase in interest expense was directly attributable to the increase in loans
from related parties.

LIQUIDITY AND CAPITAL RESOURCES

The Company experienced negative cash flow from operations of $643,000 in the
nine-month period ended September 30, 2001. Proceeds of $1.1 million primarily
from Trans Continental Records ("TCR") had a positive impact on cash flow,
however, this was offset by debt reduction under the Company's capital lease
obligation. As a result of the transactions described in Note 2 to the
financial statements, the Company had no assets or liabilities at
September 30, 2001 compared with negative working capital of $5,407,000
at December 31, 2000.

Other

The Company has approximately $42,548,000 in losses for income tax purposes
available to reduce future taxable income which will begin to expire in 2005. We
have no commitments for capital expenditures of a material nature in the near
future.

Inflation

The Company believes that there has not been a significant impact from inflation
on the Company's operations during the past fiscal year.

Additional Factors That May Affect Future Results

Future Operating Results - Future operating results may be impacted by a number
of factors that could cause actual results to differ materially from those
stated herein, which reflect management's current expectations. These factors
include worldwide economic and political conditions, industry specific factors,
the Company's ability to maintain access to external financing sources and its
financial liquidity, the acceptance of the Company by small and mid-sized
businesses, and the Company's ability to manage expense levels.

Stock Price Fluctuations - The Company's participation in a highly competitive
industry often results in significant volatility in the Company's common stock
price. This volatility in the stock price is a significant risk investors should
consider.

                                       7




<PAGE>



Forward-looking statements in this report are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The Company
wished to advise readers that actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed on or implied by the statements, including, but not limited to, the
following: the ability of the Company to successfully meet its cash and working
capital needs, the ability of the Company to successfully market its product,
and other risks detailed in the Company's periodic report filings with the
Securities and Exchange Commission.

                                       8




<PAGE>


Part II

ITEM 1 - LEGAL PROCEEDINGS

                  Not applicable

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

                  Not applicable

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

                  Not applicable.

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

                  Not applicable.

ITEM 5 - OTHER INFORMATION

                  Not applicable

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following exhibit is filed herewith:

                      None


                                       9




<PAGE>


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.

                                      ENTERTAINMENT INTERNATIONAL LTD.

Dated:  November 19, 2001             By:   /s/ Jacob Lustgarten
                                            --------------------------
                                            Jacob Lustgarten
                                            Chairman of the Board of
                                            Directors, and Chief
                                            Executive Officer


                                       10