SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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                                   FORM 10-KSB

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 2000

                        Commission File Number: 000-24835

                                 PTN MEDIA, INC.
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             (Exact name of registrant as specified in its charter)

           Delaware                                          98-3833990
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   (State of Incorporation)                        (I.R.S. Employer I.D. Number)


        455 East Eisenhower Parkway, Suite 15, Ann Arbor, Michigan 48108
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              (Address of principal executive offices and Zip Code)

                                 (734) 327-0579
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              (Registrant's telephone number, including area code)

      Securities registered pursuant to Section 12(b) of the Exchange Act:
                                      None.

      Securities registered pursuant to Section 12(g) of the Exchange Act:
                                  Common Stock.

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB:                                               [X]

Registrant's revenues for its most recent fiscal year (ended December 31, 2000):
$5,613


Aggregate market value of voting stock held by non-affiliates: $2,415,148


Indicate the number of shares outstanding of each of the registrant's classes of
common stock:

4,632,962 common shares were outstanding as of December 31, 2000
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                                TABLE OF CONTENTS
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Part I........................................................................1

Item 1. Description of Business...............................................1
Item 2. Description of Property..............................................17
Item 3. Legal Proceedings....................................................17
Item 4. Submission of Matters to a Vote of Security Holders..................17


Part II......................................................................18

Item 5. Market for Common Equity and Related Stockholder Matters.............18
Item 6. Management's  Discussion and Analysis of Financial Condition.........19
Item 7. Financial Statements.................................................20
Item 8. Changes in and Disagreements with Accountants........................21


Part III.....................................................................22

Item 9. Directors, Executive Officers, Promoters and Control Persons.........22
Item 10. Executive Compensation..............................................23
Item 11. Security Ownership of Certain Beneficial Owners.....................25
Item 12. Certain Relationships and Related Transactions......................26
Item 13. Exhibits and Reports on Form 8-K....................................27

Signatures ..................................................................29



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PART 1.
ITEM 1. DESCRIPTION OF BUSINESS.

Background

     This Annual Report on Form 10-KSB and the documents incorporated herein by
reference contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. This Act provides a "safe harbor" for
forward looking statements to encourage companies to provide prospective forward
looking information about themselves so long as they identify these statements
as forward looking and provide meaningful cautionary statements identifying
important factors that could cause actual results to differ from the projected
results. All statements other than statements of historical fact made in this
Annual Report on Form 10-KSB are forward looking. In particular, the statements
herein regarding industry prospects and future results of operations or
financial position are forward-looking statements. Forward-looking statements
reflect management's current expectations and are inherently uncertain. Our
actual results may differ significantly from management's expectations.

     We are an interactive media content provider of branded content and
commerce opportunities using a combination of new and traditional media. We
currently produce three web sites. They are: (i) "FashionWindow.com"
(www.fashionwindow.com), which is designed to be the leading online destination
for fashion, style and beauty content, commerce and community; (ii)
ClaudiaSchiffer.com (www.claudiashiffer.com), which is hosted by well-known
model Claudia Schiffer and is intended to be a destination for those interested
in fashion, style and beauty using Ms. Schiffer as a host and guide; and (iii)
FragranceDirect.com (www.fragrancedirect.com) which is dedicated to selling
branded fragrances, spa products, and to a limited extent cosmetics. We also
produce a nationally syndicated radio program entitled "The Style Minute with
Daisy Fuentes".

     In addition to our existing web sites and our radio syndication program, we
have recently entered into an original equipment manufacturer partner agreement
with Palm, Inc., the maker of hand-held computing devices, to create a branded
Claudia Schiffer hand-held device based on the Palm Vx model. We have obtained
from Ms. Schiffer the right to use her name, likeness and image on the hand-held
device.

                                  Our Web sites

FashionWindow.com

     FashionWindow.com provides original editorial materials prepared by staff
and freelance writers. It also offers exclusive and original photography. We
maintain two celebrity relationships to enhance FashionWindow.com's content.

     Country music artist Chely Wright signed an exclusive agreement with us on
March 29, 2000 to give FashionWindow.com exclusive rights to fashion news and
images related to her public activities. The term of the agreement is two years

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with an option to renew for two additional one-year terms. In connection with
this contract, we issued to Ms. Wright, 15,000 shares of the Company's common
stock and we are obligated to issue her an additional 15,000 shares of common
stock on the contract's first anniversary.

     We also entered into a web site license agreement with teenage artist and
MTV personality Mandy Moore. Pursuant to such agreement, Ms. Moore grants to us
a license for an on-line Internet service and to use her name and likeness in
the creation and promotion of the web site. The agreement also provides that Ms.
Moore is to provide us with exclusive fashion, news, behind the scenes looks and
fashion tips and advice. The term of the agreement is for one year and may be
renewed on the first anniversary for an additional year if certain conditions
are met. In connection with this agreement, we issued to a company controlled by
Ms. Moore, and Ms. Moore's agent 31,000, and 3,100 shares of our common stock,
respectively. If the common stock issued in connection with this agreement has
not been sold as of the first anniversary and the value of such common stock at
the first anniversary is less than $100,000 and $10,000, respectively, then we
are required to issue on the first anniversary additional common stock such that
the total value of all common stock held by Ms. Moore and Ms. Moore's agent is
not less than $100,000 and $10,000, respectively.

     FashionWindow.com generates revenues through various means. It sells banner
advertising on a cost per thousand impressions basis. It generates transactional
revenues paid by online retailers and rent paid by online retailers for
placement in the shops at FashionWindow.com. It also generates revenue from
third party application providers via bounties and commissions. There can be no
assurance that FashionWindow.com will continue to generate revenues or that it
will ever result in net income.

ClaudiaSchiffer.com

     We have the exclusive license to use well-known model Claudia Schiffer's
name and likeness in connection with our web site, ClaudiaSchiffer.com
(www.claudiaschiffer.com). In addition to a large collection of photographs of
Ms. Schiffer, the site is intended to be a destination for an audience
interested in fashion, style, and beauty using Ms. Schiffer as a host and guide.
The site features notes from her, diet and fitness news from her trainer, and
fashion and shopping news from a leading fashion, stylist.

     This license agreement with Ms. Schiffer, which we entered into in November
1998, grants us the exclusive license for an on-line Internet service devoted to
Ms. Schiffer. Pursuant to the terms of the License Agreement, we have the right
to use Ms. Schiffer's name and likeness for an Internet site including a
merchandise "boutique", monthly column and interviews or on-line chat sessions.
Ms. Schiffer also is required to make promotional appearances and voice
recordings to promote the site and provide content for it. The license agreement
continues until November 2001. We are obligated to pay Ms. Schiffer guaranteed
minimum royalties of $300,000 for the first year, $400,000 for the second year,
and $500,000 for the third year, which would be credited against earned
royalties ranging from 25% to 80% of site revenues and profits from boutique
merchandise sales.

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     The License Agreement grants to Ms. Schiffer 269,682 shares of our Common
Stock, with the right to maintain the ratio of her Common Stock ownership to
that of Peter Klamka, our President. We valued Ms. Schiffer's shares at 80% of
the market value of our stock on the date of issuance or $4.00 per share. We
agreed to indemnify Ms. Schiffer for any U.S. income tax liability resulting
from the issuance of these shares, however, we have been assured that Ms.
Schiffer is not a U.S. citizen or resident, and therefore is not likely to be
responsible for any such taxes.

     We have paid Ms. Schiffer in full under the license agreement except that
we currently owe her $225,000 for the year 2001.

FragranceDirect.com

     Our wholly owned subsidiary, FragranceDirect.com, Inc., operates our site,
FragranceDirect.com (www.fragrancedirect.com) which sells branded fragrances,
spa products, and related gift sets. The site currently offers a variety of
popular fragrances at prices that are generally lower than in traditional
retailers. Brands currently available on our site include Ralph Lauren, Chanel,
Tommy Hilfiger, Liz Clairborne, and Calvin Klein.

     We use some of the available radio time to promote the site and drive
traffic to it. We also recently entered into an agreement with Dynamic Trade,
Inc. to promote the site to affiliate sites. Our site pays sites that feature
FragranceDirect.com and/or our products a commission on each product sold. On
October 27, 2000, we also entered into a cross marketing agreement with TEC.com,
LLC to promote the site and to supply fragrances to its entertainment site,
www.twec.com and to a limited extent to its retail stores on a test basis.

                            Our Syndicated Radio Show

     We produce the nationally syndicated radio program, "The Style Minute with
Daisy Fuentes". It is a daily, one minute news or tip of the day show targeted
at women. We make this content available free to radio stations in exchange for
the right to include a 30 second commercial spot within the body of the program.
The show is hosted by Daisy Fuentes, a well known celebrity, and currently airs
on 13 stations. We are working to increase the number of stations that the show
airs on. In addition to the commercial advertisement featuring a third party,
the show also carries a commercial message for the FashionWindow.com web site.

     We entered into an agreement with Ms. Fuentes in September 2000. The term
of the agreement is for one year following the first airing of the program. In
connection with this agreement, we paid Ms. Fuentes a total of $75,000 as
advances against future royalties. Ms. Fuentes is also to receive a royalty of
50% of gross proceeds received in connection with her services.

     We ceased production of "The Julie Show" hosted by Downtown Julie Brown as
of March 30, 2001.

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                   Our Planned Business in Hand-Held Computers

Palm Vx-Claudia Schiffer Edition

     On October 5, 2000, we entered into an agreement with Palm, Inc., the maker
of hand-held computing devices to create a branded Claudia Schiffer hand-held
device based on the Palm model. We have also obtained from Ms. Schiffer the
right to use her name, likeness and image on the hand-held device. We currently
sell the devices through our ClaudiaSchiffer.com web site. In addition, in March
2001, we amended our agreement with Palm, Inc. such that Palm plans to sell the
Claudia Schiffer branded hand-held device through its own web site, Palm.com, as
well as, for a period of one year, through its standard distribution channels in
both the United States and Canada.

Palm Vx-Michael Jordan Edition

     On December 29, 2000, we entered into a three-year, exclusive,
royalty-free, worldwide license agreement with Michael Jordan, the former
National Basketball Association player granting us the right to use Mr. Jordan's
name, likeness, image and endorsement in connection with the proposed
advertisement, promotion and sale of Palm Inc. products, including the Palm
Pilot series. In addition to the standard features of Palm products, we plan
that the Michael Jordan edition include branding, identification and software
applications that will appeal to the market segment associated with Mr. Jordan.

     The license agreement with Mr. Jordan provides that we pay Mr. Jordan a
royalty equal to twelve percent (12%) of the proceeds from the sale of certain
Palm Inc. products, but in no event less than an annual minimum royalty of
$1,250,000.

     We have not yet amended our original equipment manufacturer partner
agreement with Palm Inc. to include our rights under the license agreement with
Mr. Jordan.

Christina Aguilera Hand-Held Computers

     On February 19, 2001, we entered into a two year, exclusive worldwide
license with pop music artist Christina Aguilera granting us the right to use
Ms. Aguilera's name, likeness, image and endorsement in connection with the
proposed-advertisement, promotion and sale of certain hand-held computers.

     The license agreement provides that we shall pay Ms. Aguilera a royalty
equal to twelve percent (12%) of the proceeds from the sale of certain hand-held
computers, but in no event less than an annual minimum royalty of $100,000. We
have also agreed to deliver shares of PTN Media, Inc. common stock equal to
$50,000, based on the closing price of the common stock on February 19, 2001.

Palm Software and Accessories

     We have entered into several relationships to develop and promote Palm
software in conjunction with our efforts relating to the Claudia Schiffer Palm

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and the planned Michael Jordan Palm. We intend to sell versions of Healthetech,
Inc. software and Firepad's Fireviewer. Both now come bundled with the Claudia
Schiffer Palm. We are currently evaluating several other opportunities for
software to be bundled or offered in conjunction with our branded Palms.

     On July 24, 2000, we also entered into a development agreement with Neohand
Inc., a developer of Palm software. Neohand, Inc. is currently developing a
stand alone software program for sale via electronic distribution and CD-ROM.
The program is based on content that we have been featuring on our
FashionWindow.com web site.

     We currently made Fashionwindow.com content available via web clippings to
users of Palm VII.

     We are also exploring opportunities to promote and sell Palm accessories
such as carrying cases, modems, a wireless ISP, plastic flip covers, stylus, and
keyboards.

     We formed PTN Wireless, Inc., a Delaware company and wholly-owned
subsidiary of PTN Media, Inc. on February 21, 2001. PTN Wireless, Inc. currently
has no assets and is not operating.

                             Our Sources of Revenue

Advertising

     We believe that FashionWindow.com offers a desirable vehicle for
advertisers seeking to reach fashion-oriented consumers. The subject matter of
FashionWindow.com and our proposed future web sites attract an audience that is
well educated, sophisticated and affluent. ClaudiaSchiffer.com generates banner
and placement advertising from companies interested in reaching a global
audience of fashion conscious consumers. To be successful, we must attract
advertising placements from businesses that provide the types of products and
services that appeal to the target audience of our web sites.

     We are currently represented by Engage, Inc., a CMGI portfolio company, to
sell advertising on FashionWindow.com.

Banner Advertising

     We derive revenues from the sale of advertising banners on our initial web
site. These banners appear on a user's computer screen when accessing different
areas of our web sites. The interactive nature of the Internet also allows users
to obtain extensive additional information about an advertiser's products or
services instantly, by clicking on a hypertext link to the advertiser's web
site. In some cases the advertiser's products can be purchased in a transaction
completed on the Internet. We have entered into agreements with certain
advertisers whose banner advertisements appear on our FashionWindow.com web
site, and are negotiating with additional advertisers to place banner
advertisements on our current and/or future web sites.

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     In November 1999 we entered into an exclusive representation agreement with
Adsmart Corporation for both FashionWindow.com and ClaudiaSchiffer.com. The
Agreement continues on a month-to-month basis. The advertisements are sold
pursuant to the agreement on a cost per thousand impressions basis.

Sale of Hand-Held Computer Devices

     We began selling the Claudia Schiffer branded Palm devices in the 1st
Quarter of 2001. We expect that the sale of hand-held computer devices and
accessories will be a primary source of our future revenues.

                             Marketing and Promotion

     The Company continually evaluates numerous ways to promote its brand names
such as "Fashionwindow," believing that brand recognition will assume increasing
importance as the volume of activity on the Internet increases. The Company
intends to promote its web sites, products and other services through
co-branding and online partnerships, paid advertising, content syndication,
public relations and sponsorship.

     We also intend to draw users to our web sites and affiliated programs by
the following means:

     o    Offer free information and services: We provide information, services,
          and commerce opportunities without cost or charges to the user and
          make those services easily accessible.

     o    Develop additional licensing of our content to third parties: We are
          presently party to one license of our original content and are
          exploring additional opportunities to extend our licensing to other
          web sites and to other media. These relationships will enable us to
          develop recognition for our content cost effectively.

     o    Develop value added electronic commerce: We believe that Web-based
          electronic commerce for fashion, apparel and beauty products will
          continue to grow as an increasing number of consumers and businesses
          accept the Internet as a viable method of purchasing these goods and
          services. We currently offer a number of ways to purchase goods and
          services on our sites including placement of a number of leading
          internet retailers in our "Shops at FW" area, the Personal Shopper
          which allows the purchases of items found in search results, direct
          response via banners, and product specific purchases through affina
          Stores.

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     o    Enhance FashionWindow.com's product offerings: We intend to enhance
          and expand product offerings on FashionWindow.com with additional
          content areas such as music, features, and functionality to maintain
          and enhance our market position.

     o    Provide original and compelling targeted sites: Specific sites such as
          ClaudiaSchiffer.com should offer us opportunities to deliver premium
          advertising opportunities to a user base with attractive demographics
          and to diversify our revenue streams through rents, transactional
          revenue, and licensing.

     o    Establish market awareness and brand recognition: We believe that
          building the FashionWindow.com brand is a critical element of our
          business strategy. In this regard, we expect to place significant
          emphasis on establishing a brand identity for our sites and product
          offerings. We seek to reflect a network of fashion related sites that
          provide a compelling balance of commerce, community, and content. Our
          strategy is to build brand awareness using our content licensing, ad
          new radio programming, and traditional advertising and sponsorships.

     o    Advertise our web sites: We advertise and promote our web sites
          through various forms of media. We purchase banner advertisements on
          search engines on the World Wide Web and enter into advertising barter
          arrangements with other web sites. We promote our web sites through
          advertising and promotional spots contained within Company-sponsored
          radio programs and by advertising in selected publications. We arrange
          for the promotion of our web sites by host models, to the extent that
          they are not prohibited from participating in any such promotion as a
          result of other commitments, or such promotion is limited by the terms
          of our license with the model. Finally, promotional advertising in
          connection with products offered by us, including calendars and
          electronic planners, is another means by which we promote our web
          sites.

     o    Offer interactive communication: We plan to offer an online avenue for
          interactive communication covering topics such as fashion and health,
          with the primary focus on our web sites' models and celebrity hosts.
          Our goal is to operate the exclusive online access to select models
          such as Claudia Schiffer, and to provide visitors and members with
          information, photos and other content unavailable elsewhere.

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                  Web Host; Operations, Security and Technology

     Our web sites are made available to users through our web host, Genuity. We
provide pages of code, graphics and video to Genuity, which uploads this
information to its dedicated servers. Genuity is responsible for all traffic,
security and management of the technological aspects of our web sites. We are
responsible for updating the content on the web sites and to apprising Genuity
of our changing technological needs and offering Genuity the opportunity to
provide for these needs. We compensate Genuity with a combination of cash and
promotional consideration. We believe we would have no difficulty replacing
Genuity with another web host if our relationship with Genuity were to be
terminated for any reason.

     A key element of our success is to generate a high volume of use of our
sites. Accordingly, high levels of performance are critical. Any system failure
that causes interruption or an increase in response time could result in less
traffic to our web sites and, if sustained or repeated, could reduce the
attractiveness of our web sites to advertisers. Further, any substantial
increase in the number of visits to our web sites could strain the capacity of
the software or hardware deployed by us or our web hosts and would require us to
expand and adapt our network infrastructure. Our inability to add software or
hardware to accommodate substantial increases in traffic could lead to slower
response time or system failures.

     Our operations also are dependent, in part, upon the ability of our web
hosts to protect their operating systems against physical damage from fire,
floods, earthquakes, power loss, telecommunications failures, break-ins and
similar events. We do not currently have redundant, multiple site capacity in
the event of any such occurrence. Notwithstanding the implementation of security
measures by us, such as limiting physical and network access to its routers, our
infrastructure is vulnerable to computer viruses, break-ins and similar
disruptive acts by Internet users. These factors could lead to interruption,
delays or cessation in service of our web sites. Furthermore, the inappropriate
use of the Internet could jeopardize the security of confidential information
stored in the computer systems of our customers and other users of the Internet,
which could deter potential customers from accessing our web sites and give rise
to uncertain liability to users whose security and privacy has been infringed. A
security breach could result in loss of customers, damage to our reputation,
damage to our web sites, costs of repair and detection and other expenses. The
security and privacy concerns of existing and potential customers may inhibit
the growth of the Internet, in general, and our revenues in particular.

                                   Competition

     Competition among content providers on the Internet is intense and is
expected to increase significantly. The Internet is currently characterized by
minimal barriers to entry, since new web sites can be developed and launched at
relatively low cost. We face competition from a number of sources that provide
content through one or more media, such as print, broadcast, cable television
and the Internet. In order to compete successfully, we must establish and
maintain awareness, among the public, of our brand names, effectively market our
services and products, and successfully differentiate our web sites. This will
be highly dependent on our ability to provide compelling and popular content to
attract Internet users and support advertising and sales of products and
services that are intended to reach such users.

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     We compete with a significant number of web content providers, several of
which offer competitive services and/or products, and address certain of our
target markets, including, among others, Women's Wire, Elle Magazine, Ford
Models, Inc. and Pataxi Entertainment Network, Inc. (operator of
supermodel.com). In addition, we compete against large service providers,
including web directories, search engines, commercial online services and sites
maintained by Internet service providers, many of which offer content similar to
that provided on our web sites and attract advertisers targeting the same
audience as us. Some of these companies include Microsoft Corporation, America
Online, Inc., Netscape Communications, Yahoo! Inc. and Prodigy Services Co. Many
of these competitors have significantly greater financial, technical and
marketing resources than us, and include companies that are larger and better
capitalized than us. These competitors also may have expertise and established
brand recognition in the Internet market.

     In addition, we compete for the time and attention of Internet users with
thousands of non-profit Internet sites operated by educational institutions,
governments and individuals. Existing and potential competitors also include
other forms of media, such as television, radio and print media, many of which
provide services and products that are similar to those which we currently
provide and also intend to provide through our web sites. Although traditional
media outlets do not offer many of the interactive features available through
the Internet (such as online chat rooms, E-mail, etc.), there are numerous
publications, as well as television and radio programs, which provide editorial
content similar to that which we provide on our web site, as well as articles
and features on fashion, beauty, health and celebrities. There can be no
assurance that our competitors will not develop services and products that are
superior to ours or that achieve greater market acceptance.

     We believe that the principal competitive factors in the Internet market
are brand recognition, ease of use, content depth, content quality, content
presentation, speed and quality of service execution, competitive pricing,
successful marketing and the availability of targeted content and focused value
added services and products. To be competitive, we believe that we must
distinguish our editorial content from our competitors and customize this
content to appeal to our target audiences.

     Since many of our competitors have greater resources than us, these
competitors may be able to undertake more extensive marketing campaigns, adopt
more aggressive pricing policies and devote substantially more resources to
developing their content and services. In addition, as a strategic response to
changes in the competitive environment, we may make certain pricing, service or
marketing decisions or enter into acquisitions of new entities that could have a
material adverse effect on our business, results of operations and financial
condition.

                  Technology; Trademarks and Proprietary Rights

     Our success is highly dependent on our trademarks and other intellectual
property rights. We rely upon trademark and copyright law, trade secret
protection and, where appropriate, confidentiality and /or license agreements
with our employees, independent contractors and consultants to protect our

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proprietary rights. To date, none of our trademarks has been registered, nor do
we currently contemplate registering any of our trademarks. We also rely on
copyright laws to protect the original content included on our web sites. A
substantial amount of uncertainty exists concerning the application of copyright
laws to the Internet, and there can be no assurance that existing laws will
provide us with adequate protection.

     Effective trademark, copyright and trade secret protection may not be
available in every country in which our services and products are distributed or
appear via the Internet. As part of our business strategy, we may license our
content, trademarks and images to third parties. Without adequate protection in
foreign markets, there can be no assurance that these licensees will not take
actions that might materially or adversely affect the value of our proprietary
rights. In addition, despite our efforts to protect our proprietary rights, the
rapid pace of technological innovation on the Internet makes it possible for
third parties to copy or otherwise obtain and use our products or technology
without authorization, or to develop similar technology independently. Policing
unauthorized use of our technology and intellectual property will be difficult.
We generally obtain confidentiality agreements from all employees and
independent contractors providing services in connection with the development
and design of our web sites.

                              Government Regulation

     Our business is not currently subject to direct regulation by any
government agency, other than regulations applicable to businesses generally,
and there are currently few laws or regulations directly applicable to access to
or commerce on the Internet. However, due to the increasing popularity and use
of the Internet, it is possible that a number of laws and regulations may be
adopted with respect to the Internet, covering issues such as user privacy,
pricing, characteristics and quality of products and services. The
Telecommunications Reform Act of 1996 imposes criminal penalties on anyone who
distributes obscene, indecent or patently offensive communications on the
Internet (although certain provisions of that law have recently been held to be
unconstitutional). The manner in which this law, or any similar law which may be
adopted in the future, will be interpreted and enforced and its effects on our
proposed operations cannot yet be fully determined. The adoption of any
additional laws or regulations may decrease the growth of the Internet, which
could in turn decrease the demand for our services and products and increase our
cost of doing business. Furthermore, the applicability to the Internet of
existing laws in various jurisdictions governing issues such as property
ownership, libel and personal privacy is uncertain.

                         Arbitration filed by Tyra Banks

     We entered into a license agreement with a company controlled by well-known
model, Tyra Banks. In addition, we also entered into an agreement with Ms.
Banks' company in connection with the creation, marketing and sale of calendars
and electronic planners featuring photographs of Ms. Banks. On June 18, 1998,
Ms. Banks declared us in breach of both of these agreements and has refused to
perform under either of them. The basis for this declaration was our alleged
failure to pay the full amount of all advances due and payable to Ms. Banks'
company pursuant to the agreements, as well as our failure to fully reimburse
Ms. Banks for certain expenses provided for under the calendar agreement. To
date, we have advanced funds to Ms. Banks' company in the aggregate amount of

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$134,000. We received a letter from Ms. Banks' attorneys, dated September 8,
1998, demanding that we pay to Ms. Banks' company an additional $153,000 on or
before September 15, 1998, cease all uses of Ms. Banks' name, picture and
likeness and return all photographs and images of Ms. Banks. This letter further
stated that in the event that we failed to comply with their demands by that
date, Ms. Banks and her company would be forced to take all "appropriate" action
to recover all amounts alleged to be owed, and to enforce their rights against
us.

     On December 8, 1998, attorneys for Tyra Banks and Bankable, Inc., an entity
controlled by Ms. Banks, made a Demand for Arbitration against the Company under
the Commercial Arbitration Rules of the American Arbitration Association. Ms.
Banks' attorneys alleged that the Company failed to make timely payments of
money due upon the execution the Web site License Agreement and Calendar
Agreement between Ms. Banks and the Company, and refused to return photographs,
pictures, prints, negatives and images of Ms. Banks. Ms. Banks sought damages
under the Calendar Agreement in the amount of $161,333, damages under the Web
site Agreement of $370,000 and legal fees. On January 15, 1999, the Company,
through its attorneys, filed an Answer and Counterclaim to Ms. Banks' Demand for
Arbitration. The Company raised several defenses to Ms. Banks' claims and
claimed a breach by Ms. Banks and Bankable, Inc. of the Web site Agreement. The
Company sought the amount of $264,000 in damages related to the Agreements. A
preliminary administrative conference was held on January 19, 1999, and a
hearing was held in October 1999 and the Company filed briefs on March 6, 2000
in response. In June, 2000 the arbitrator awarded Ms. Banks $128,000, plus
interest on this amount at 12% from April 1, 1998. In addition, the Company is
to pay the arbitrator fee and the administrative expenses of the arbitrator. The
arbitrator reaffirmed the award in August, 2000. The Company has accrued
$187,053 related to this judgment in the accompanying financial statements.

                                       11


<PAGE>


                ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

     The following risk factors and other information included in this Annual
Report should be carefully considered. The risks and uncertainties described
below are not the only ones we face. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial also may impair our
business operations. If any of the following risks actually occur, our business,
financial condition and operating results could be materially adversely
affected.

We have an accumulated deficit and anticipate further losses.

     We have incurred significant losses since we began doing business. There
can be no assurance that our services and products will ever generate sufficient
revenues or that our operations will ever be profitable. As of December 31,
2000, we had an accumulated deficit of $9,187,520. We expect to incur operating
losses for the foreseeable future due to the significant expenses which we
expect to incur in the continued development and marketing of FashionWindow.com,
ClaudiaSchiffer.com, and FragranceDirect.com as well as expenses related to our
agreement with Palm, Inc. These expenses include substantial advance royalty
payments that we have agreed to make to several models and celebrities in
connection with license agreements. Additionally, to the extent that we engage
additional models and/or celebrities for our web sites, we will most likely be
required to pay advance royalties to those persons.

     We have generated extremely limited revenues to date from our web sites and
there can be no assurance that we will ever generate revenues from these web
sites or from any other business we conduct. We also expect to significantly
increase our operating expenses to expand our sales and marketing operations, to
fund greater levels of product development, and to develop other forms of
revenue generating business, including the continued development of a branded
Palm computing device, direct response sales, licensing of our proprietary
materials to others, and celebrity chat clubs.

We received an opinion from our accountants for the period ended December 31,
2000 which raised doubt about our ability to continue after such date as a going
concern.

     Our consolidated financial statements for the year ended December 31, 2000,
which are included in this Form 10-KSB, indicate that there was substantial
doubt as of December 31, 2000 about our ability to continue as a going concern
due to our need to generate cash from operations and obtain additional
financing.

We need to raise additional funds to fund our business operations.

     We need to raise additional funds because our cash flows have proven to be
insufficient to fund operations. There can be no assurance that additional
financing will be available to us on commercially reasonable terms, or at all.
We may raise funds through equity or debt financings, depending on our
opportunities. If we raise additional funds by issuing equity securities, this

                                       12

<PAGE>


will further dilute the interests of our current stockholders. If we raise
additional funds by issuing debt securities, we will be subject to the risks
associated with incurring substantial indebtedness, including the risks that
interest rates may fluctuate and cash flow may be insufficient to pay principal
and interest on any such indebtedness. We have no current arrangements with
respect to, or sources of, additional financing, and it is not anticipated that
our existing stockholders will provide any portion of our future financing
requirements.

We may not be able to compete successfully in the hand-held device and operating
system software markets. This would have a material adverse effect on or
business, results of operations and financial condition.

     As we attempt to expand into the hand-held device and operating system
software markets, our future growth will depend on the commercial success of our
proposed Claudia Schiffer, Michael Jordan and Christina Aguilera hand-held
devices. The markets for these products and services are highly competitive and
we expect competition to increase in the future. Most of our competitors in this
market have significantly greater financial, technical and marketing resources
than we do. This will make it difficult for us to compete successfully in the
hand-held device and operating system software markets.

We depend on license agreements with models to attract users to our web sites.

     We plan that a principal attraction of our web sites will be celebrity
models who host our web sites. In the event we are unable to retain the services
of a sufficient number of celebrities to host our web sites, or maintain the
services of such celebrities for an extended period of time, it is highly
unlikely that our web sites will attract the number of users required to obtain
significant advertising and merchandisers.

     In addition, the success of our web sites will be highly dependent on the
continued popularity of the celebrity models who host the sites. In the event
that the popularity of any such celebrity model fades in the public eye,
including for among other reasons, disclosure of allegedly illegal or immoral
acts by such celebrity model, we will in all likelihood find it necessary to
terminate our relationship with that celebrity model. This could adversely
effect our business because a suitable replacement may not be available on a
timely basis and on mutually agreeable terms and conditions.

In the event that we fail to attract advertising customers, lose customers after
they have been retained, or we are forced to reduce advertising rates in order
to retain or attract advertisers, our business, results of operations and
financial condition could be materially and adversely affected.

     We have historically derived most of our revenues from the sale of
advertisements on our web sites. Our ability to generate advertising revenues
will depend upon, among other factors, the acceptance of our web sites as
attractive and sustainable media, the development of a large audience of users
of our web sites and the effective development of media properties that provide
user demographic characteristics that will be attractive to advertisers.
Existing advertising placement contracts are for relatively short terms,
generally three months or less, and are terminable by advertisers at any time on
very short notice. Consequently, our advertising clients will be able to

                                       13

<PAGE>


eliminate or move their advertising to competing Internet sites or from the
Internet to traditional media, quickly and at low cost.

     There is currently intense competition in the sale of advertising on the
Internet. This competition has resulted in a wide range of advertising rates for
a variety of advertising services, making it difficult to project future levels
of Internet advertising revenues which may be realized by us or any of our
competitors. Competition among current and future web sites, as well as
competition from traditional media for advertising placements, could result in
significant price competition and reductions in our projected advertising prices
and revenues.

In the event that we are unable to generate significant revenues from any
sources other than advertising placements, our business, results of operations
and financial condition could be materially and adversely affected.

     Our ability to expand our business is also dependent upon our success in
generating significant revenues from sources other than advertising placements
on our web sites. We intend to enter into direct marketing arrangements with a
variety of businesses in connection with the sale of their products and services
on our web sites. There can be no assurance that we will be able to enter into
such arrangements or create and maintain revenue from such arrangements.

If our web sites, including their content, are not accepted, or develop more
slowly than expected, or the market becomes saturated with competitors, our
business, results of operations and financial condition will be materially and
adversely affected.

     Our success is dependent upon our ability to deliver original and
compelling content in order to attract users. There can be no assurance that our
current web site and/or future web sites, to the extent developed and launched,
will contain content which will be attractive to a sufficient number of users to
generate advertising revenues or that we will be able to anticipate, monitor and
successfully respond to rapidly changing consumer tastes and preferences so as
to attract a sufficient number of new and repeat users to our sites. If we are
unable to do so, this will have a material adverse effect on our financial
condition. As is typical in a new and rapidly evolving industry, demand and
market acceptance for recently introduced products and services, such as our web
sites, are subject to a high level of uncertainty and risk. Because this market
is new and evolving, it is difficult to predict future growth. There can be no
assurance that we will be able to successfully develop a market for our web
sites or that demand will emerge or become sustainable.

If we are unable to develop and maintain satisfactory relationships with other
web sites or if our competitors are better able to maintain such relationships,
our business, results of operations and financial condition could be materially
and adversely affected.

     Our ability to advertise on other web sites and the willingness of the
owners of such sites to direct users to our web sites through hypertext links is
critical to our operations. Search engines, directories and other navigational
tools managed by Internet service providers and web browser companies also
significantly affect traffic to our web sites. We also depend on our
relationships with third party vendors of Internet development tools and

                                       14

<PAGE>


technologies in order to develop the content required to attract users to our
web sites. Developing and maintaining satisfactory relationships with such
persons could become more difficult and expensive as competition increases among
content providers.

A security breach could result in loss of customers, damage to our reputation,
damage to our web sites, costs of repair and detection and other expenses. This
could have a material adverse effect on our business, results of operations and
financial condition.

     Although we have engaged a third party, Genuity to host our web sites, the
Internet infrastructure is vulnerable to computer viruses, break-ins and similar
disruptive problems by our customers and other Internet users. These factors
could lead to interruption, delays or cessation in service thereby causing harm
to our business and financial condition. In addition, unauthorized use of the
Internet could also jeopardize the security of confidential information stored
in computer systems of our customers and other parties using the Internet, which
could deter potential customers from accessing our web sites and give rise to
liability to users whose security or privacy has been infringed.

If we are unable to compete successfully with potential competitors it will have
a material adverse effect on our business, results of operations and financial
condition.

     The market for Internet services and products is highly competitive and
competition is expected to continue to increase significantly in the future. In
addition, we expect the market for web-based advertising to be intensely
competitive.

     There can be no assurance that we will ever be able to compete successfully
with potential competitors or that the competitive pressures faced by us will
not have a material adverse effect on our business, results of operations and
financial condition. There are no significant barriers to developing web sites,
and we expect competition to continue to grow. We compete with a significant
number of web content providers, several of which offer competitive services
and/or products, and address certain of our target markets, including, among
others, Women's Wire, Elle Magazine and Ford Models, Inc. Many of these
competitors have significantly greater financial, technical and marketing
resources than us, and include companies that are larger and better capitalized
than us. These competitors may also have expertise and established brand
recognition in the Internet market. There can be no assurance that our
competitors will not develop Internet services and products that are superior to
those currently offered or contemplated by us or that they will not achieve
greater market acceptance than our contemplated services and products. In
addition, we compete with these competitors, online services and other web site
operators, for the same sources of advertising and direct marketing revenue.

     Our web sites compete with (and any future developed web sites will compete
with) other forms of media, such as television, radio and print media, many of
which provide services and products that are similar to those which we currently
provide and also intend to provide through our web sites. Although traditional
media outlets do not offer many of the interactive features available through
the Internet (such as online chat rooms and E-mail), there are numerous
publications, as well as television and radio programs, which provide editorial

                                       15

<PAGE>


content similar to that which we provide on our web site, as well as articles
and features on fashion, beauty, health and celebrities. We also will compete
with these traditional media outlets for advertising revenue and direct
marketing revenue.

     Although we believe that there exists a large share of advertising dollars
available to us and other web site operators, as well as several other
commercial opportunities for the generation of revenues through our contemplated
web sites, competition among current and future web sites, as well as
competition with other forms of media for advertising placements, could result
in significant price competition and reductions in advertising revenues.

The loss of our Chief Executive Officer's services would have a material adverse
effect on us.

     Our success will be largely dependent on the efforts of Peter Klamka, our
Chairman, President and Chief Executive Officer, and his ability to forge new
relationships with celebrity models and to maintain such relationships, as well
as to oversee the development and maintenance of our web sites and other
services and products. Our success will also be highly dependent on Mr. Klamka's
ability, as well as the ability of others employed by us, to obtain advertising
placements consistent with the demographic characteristics of the users of our
web sites. The loss of his services would have a material adverse effect on our
business and prospects.

     We have not entered into an employment agreement with Mr. Klamka and Mr.
Klamka has not entered into any agreement restricting his involvement in a
business which competes with us. As a result, Mr. Klamka is an employee-at-will
and has the right to leave us at any time. Mr. Klamka has informed us that he
intends to devote a substantial portion of his working time to our business and
that he also intends to devote a portion of his time to other business interests
that do not compete with our business. In addition, Mr. Klamka is not restricted
from entering into a competing business after the term of his employment with
us; provided, however, that he would not be permitted to use proprietary
information and trade secrets belonging to us. Our success will also be
dependent upon our ability to hire and retain qualified writers, editors and
technical personnel, as well as qualified marketing, financial and other
personnel. Competition for qualified personnel is intense and there can be no
assurance that we will be able to hire or retain additional qualified personnel.

                                    Employees

     The Company presently employs two individuals, Peter Klamka, its President
and Chief Executive Officer and Chris Giordano, its Chief Operating Officer.
None of the Company's employees are represented by a labor union.

                                   Facilities

     The Company currently maintains its executive offices, consisting of 1,353
square feet of space, at 455 East Eisenhower Parkway, Suite 15, Ann Arbor,
Michigan, pursuant to a three year lease at a monthly rental of $2,227. The
telephone number is (734) 327-0579.

                                       16

<PAGE>


ITEM 2. DESCRIPTION OF PROPERTY.

     The Company does not own any real property.

ITEM 3. LEGAL PROCEEDINGS.

     On December 8, 1998, attorneys for Tyra Banks and Bankable, Inc., an entity
controlled by Ms. Banks, made a Demand for Arbitration against the Company under
the Commercial Arbitration Rules of the American Arbitration Association. Ms.
Banks' attorneys alleged that the Company failed to make timely payments of
money due upon the execution the Web site License Agreement and Calendar
Agreement between Ms. Banks and the Company ("Agreements"), and refused to
return photographs, pictures, prints, negatives and images of Ms. Banks. Ms.
Banks sought damages under the Calendar Agreement in the amount of $161,333,
damages under the Web site Agreement of $370,000 and legal fees. On January 15,
1999, the Company, through its attorneys, filed an Answer and Counterclaim to
Ms. Banks' Demand for Arbitration. The Company raised several defenses to Ms.
Banks' claims and claimed a breach by Ms. Banks and Bankable, Inc. of the Web
site Agreement. The Company sought the amount of $264,000 in damages related to
the Agreements. A preliminary administrative conference was held on January 19,
1999, and a hearing was held in October 1999 and the Company filed briefs on
March 6, 2000 in response. In June, 2000 the arbitrator awarded Ms. Banks
$128,000, plus interest on this amount at 12% from April 1, 1998. In addition,
the Company is to pay the arbitrator fee and the administrative expenses of the
arbitrator. The arbitrator reaffirmed the award in August, 2000. The Company has
accrued $187,053 related to this judgment in the accompanying financial
statements.

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

     No matters were submitted for shareholder approval during the fourth
quarter of the fiscal year covered by this Report.

                                       17

<PAGE>


PART 2.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a) Market Information. Our common stock has been quoted on the NASDAQ
Bulletin Board under the symbol "PTNM" since March 29, 1999.

     The following table sets forth the range of high and low closing prices for
our common stock for each quarterly period indicated, as reported by brokers and
dealers making a market in the capital stock. Such quotations reflect
inner-dealer prices without retail markup, markdown or commission, and may not
necessarily represent actual transactions.

                                   Price Range
                                   -----------
                                                          High       Low
                                                          ----       ---

Calendar Year 2000
First Quarter.........................................   $15.06     $5.25

Second Quarter .......................................     9.75      3.00

Third Quarter.........................................     4.97      3.25

Fourth Quarter .......................................     3.88      1.06

Calendar Year 1999
First Quarter.........................................    $7.00     $4.00

Second Quarter .......................................     8.25      5.00

Third Quarter.........................................     8.25      1.63

Fourth Quarter........................................     7.38      2.00

     (b) Holders. As of March 31, 2001, there were approximately 110 record
holders of the Company's Common Stock.

     (c) Dividends. The Company has not paid any cash or other dividends on its
Common Stock since its inception and does not anticipate paying any such
dividends in the foreseeable future. The Company intends to retain any earnings
for use in the Company's operations and to finance the expansion of its
business.

                                       18
<PAGE>


ITEM 6. PLAN OF OPERATION.

     This Annual Report on Form 10-KSB and the documents incorporated herein by
reference contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. This Act provides a "safe harbor" for
forward looking statements to encourage companies to provide prospective forward
looking information about themselves so long as they identify these statements
as forward looking and provide meaningful cautionary statements identifying
important factors that could cause actual results to differ from the projected
results. All statements other than statements of historical fact made in this
Annual Report on Form 10-KSB are forward looking. In particular, the statements
herein regarding industry prospects and future results of operations or
financial position are forward-looking statements. Forward-looking statements
reflect management's current expectations and are inherently uncertain. Our
actual results may differ significantly from management's expectations.

     The following discussion and analysis should be read in conjunction with
the Company's Consolidated Financial Statements and the Notes thereto included
elsewhere in this document. The discussion of results, causes and trends should
not be construed to imply any conclusion that such results or trends will
necessarily continue in the future.

     We have incurred net losses since our inception, of $9,187,520. We may be
unable to continue in existence unless we are able to arrange additional
financing. We have not yet generated any significant revenues and are still
considered in the development stage. Through December 31, 2000, cumulative
revenues totaled $23,801; however, in January 2001, we began selling the Claudia
Schiffer edition of the Palm Vx.

     In April 1998, our Chairman, President and Chief Executive Officer provided
us with a revolving credit line with a maximum of $500,000 available. In
September 1998, our Board of Directors authorized an increase in this line to
$610,000 and in November and December 1998, further increases to $1,000,000,
were authorized. Loans drawn under this line bear interest at a rate of 9% per
annum from the date they are made to us and are payable by May 2001, provided,
however, that if we raises gross proceeds in an IPO of at least $1,500,000, the
entire outstanding amount and accrued interest will be repaid from the proceeds
from the IPO. In February 2000, the principal and accrued interest of $432,844
and $65,908, respectively, were converted into an aggregate of 110,000 shares of
our common stock.

     On September 18, 1998, the Securities and Exchange Commission declared
effective our Registration Statement concerning an Initial Public Offering
("IPO") of 400,000 shares of common stock, which we hoped would generate
proceeds of approximately $1,600,000. This IPO expired on January 31, 1999. As
of December 31, 1998, we had completed the sale of 66,900 shares of common stock
and in February 1999, closed on the sale of an additional 62,000 shares of
common stock, realizing aggregate net proceeds of $326,596. The net proceeds
from this offering, along with bridge loans received in 1997, have been used to
satisfy our obligations under the License Agreements entered into with the
fashion models.

                                       19

<PAGE>


     In March 1999, we completed the sale of 5.5 units, each unit consisting of
a $50,000 promissory note, bearing interest at an annual rate of 10%, and
warrants to purchase 10,000 shares of common stock at $7.50 per share. During
the second quarter of 1999, we completed the sale of 2,400 shares of Class A
Preferred Stock in a private offering of such securities, generating net
proceeds of $216,000. The purchasers of these securities also received two-year
warrants to purchase 5,000 shares of common stock for every $25,000 of Preferred
Stock purchased at an exercise price of $7.50. The preferred shares accumulate
dividends at the rate of $10 per share per annum and are convertible to common
shares at the option of the holders.

     During 1999 we issued (i) 190,000 shares of common stock for professional
services valued at $637,500; (ii) 200,000 warrants to purchase shares of common
stock for professional services valued at $200,000; (iii) 25,000 options to
purchase shares of common stock for legal fees valued at $25,000; (iv) 25,000
shares of common stock for services valued at $185,625 and (v) 402,500 shares of
common stock in a series of private placement offerings for aggregate proceeds
of $737,500.

     During 2000, we (i) converted $432,844 of the loans payable to officer and
$65,908 of interest payable to officer in exchange for 110,000 shares of common
stock, (ii) issued 9,500 shares of common stock for professional services valued
at $34,125, (iii) issued 61,600 shares of common stock for license fees valued
at $325,000, (iv) converted 3,250 shares of Series A preferred stock into 65,000
shares of common stock; and (v) issued 336,000 shares of its common stock in
connection with two private placement offerings for net proceeds of $1,293,970.

     In July and August of 1999, our subsidiary Fragrancedirect.com, Inc.
("Fragrance") issued 10% promissory notes aggregating $160,000. The notes are
due the earlier of one year or the completion of an initial public offering of
Fragrance common stock. In addition, Fragrance issued to the note holders an
aggregate of 96,000 two-year warrants to purchase Fragrance common stock at
$3.50 per share. In addition during the second and third quarters of 2000,
Fragrance sold 210,000 and 200,000 shares of its common stock at $2.50 per share
for gross proceeds of $525,000 and $500,000, respectively.

     On November 22, 2000 we issued a promissory note to an investor. The note
bears interest at 9.25% and is due on April 1, 2001. The holder of the note has
the option of converting the note to a royalty participation certificate or
converting into shares of our common stock at a 20% discount. In addition, the
holder of the note was issued a two-year warrants to purchase 100,000 shares of
our common stock.

     In order for us to continue in existence, we will have to raise additional
capital through the sale of equity or debt and begin to generate profits from
operations.

ITEM 7. FINANCIAL STATEMENTS.

     The consolidated financial statements of PTN Media, Inc. and its
subsidiary, including the notes thereto and the report of independent
accountants thereon, commence at page F-1 of this Report.

                                       20

<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

     (a) By letter dated July 10, 2000, we terminated Lazar, Levine & Felix, LLP
("Lazar Levine") as our independent certified accountants. The decision to
change accountants was recommended by the Company's Board of Directors.

     The Company's former independent certified accountants' Lazar, Levine &
Felix, LLP, annual report covering the two fiscal years ended December 31, 1999
and 1998 did not include an adverse opinion or disclaimer of opinion, and was
not modified as to audit scope or accounting principles but was modified for a
going concern uncertainty.

     In connection with the audits of the two most recent fiscal years and
during subsequent interim periods preceding the termination of Lazar, Levine,
there did not develop any disagreements on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure
between such former independent certified accountants and management of the
Company or other reportable events which have not been resolved to the Company's
former independent certified accountants' satisfaction. Lazar, Levine had been
the Company's independent certified accountants since approximately July 1998.

     (b) By letter dated February 13, 2001, we terminated Merdinger, Fruchter,
Rosen & Corso ("Merdinger, Fruchter") as the independent certified accountants
for the Company. The decision to change accountants was recommended by the
Company's Board of Directors. The decision was based solely on the fact that the
primary contact person at Merdinger, Fruchter moved to Stonefield Josephson,
Inc., the Company's new independent auditors.

     Merdinger, Fruchter was engaged on July 12, 2000 and, because the Company's
fiscal year ends on December 31, was not engaged to conduct an audit of the
Company's financial statements. Merdinger, Fruchter did, however, perform a
review of our two most recent quarterly reports (Quarterly Reports on Form
10-QSB for the quarters ended June 30, 2000 and September 30, 2000). In
connection with the reviews by Merdinger, Fruchter of the Company's quarterly
reports for the quarters ended June 30, 2000 and September 30, 2000, and any
subsequent period preceding the termination of Merdinger, Fruchter, there did
not develop any disagreement on any matter of accounting principles or
practices, financial statement disclosure, or auditing or review scope or
procedure between such former independent certified accountants and management
of the Company or other reportable events which have not been resolved to the
Company's former independent certified accountants' satisfaction.


                                       21
<PAGE>


PART 3.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

     (a) Directors and executive officers of the Company:

Directors and Executive Officers

       Our directors and executive officers are as follows:

       NAME                   AGE                 POSITION
       ----                    ---                --------

  Peter Klamka..............   32    Chairman of the Board, President, Chief
                                     Executive Officer, Treasurer and Secretary
  Chris Giordano............   45    Chief Operating Officer

     The business experience, principal occupations and employment, as well as
the periods of service, of each of our directors and executive officers during
the last five years are set forth below.

     Peter Klamka has been our Chairman of the Board and Chief Executive Officer
since our inception in May 1997. In 1994, Mr. Klamka founded Wilshire Fragrance,
a company that developed and marketed men's fragrance products. Mr. Klamka was
the chief executive officer of Wilshire Fragrance from 1994 through 1996. In
connection with his fragrance business, in 1996, Mr. Klamka developed, what he
believes to have been one of the first authorized celebrity web sites, featuring
Anna Nicole Smith promoting fragrances for Wilshire Fragrance. Mr. Klamka
continued working on this web site until early 1997. Mr. Klamka received his
Bachelor of Arts degree from the University of Michigan.

     Chris Giordano has been our Chief Operating Officer since December 1999.
Mr. Giordano has been President of Birchwood Capital Advisors Group, Inc. since
1992 and has arranged over $200 million in financings in that period. Mr.
Giordano earned a BSBA in Accounting and Finance from the University of South
Florida in 1977.

     (b) Other significant employees. None.

     (c) Family relationships. None.

     (d) Involvement in certain legal proceedings. None.

                                       22

<PAGE>


Section 16(a) Beneficial Ownership Reporting Compliance

     Pursuant to Section 16(a) of the Securities Exchange Act of 1934, and the
rules issued thereunder, our directors and executive officers are required to
file with the Securities and Exchange Commission reports of ownership and
changes in ownership of Common Stock and other equity securities of the Company.
Copies of such reports are required to be furnished to the Company. Based solely
on a review of the copies of such reports furnished to the Company, or written
representations that no other reports were required, we believe that, during our
fiscal year ended December 31, 2000, all of our executive officers and directors
complied with the requirements of Section 16(a).

ITEM 10. EXECUTIVE COMPENSATION.

     The following table sets forth the annual compensation paid to executive
officers of the Company for the fiscal year ended December 31, 2000. No
executive officer received annual compensation in excess of $100,000.
<TABLE>
<CAPTION>

                           Summary Compensation Table

                                                                Long Term
                                                                Compensation
         Name and                                               Securities
   Principal Position    Year     Salary($)       Bonus($)      Underlying Options(#)
   ------------------    ----     ---------       --------      ---------------------

<S>                       <C>            <C>         <C>                  <C>
   Peter Klamka           2000           $0          0                    0
   Chief Executive        1999      $45,000          0               250,000
   Officer                1998      $50,000          0                     0
</TABLE>


                     Option Grants in Last Fiscal Year Table

                       Shares            % of Total                   Exercise
                       Underlying        Options Granted              or Base
                       Options           to Employees in              Price
Name                   Granted           Fiscal Year                  ($/Sh)
----                   -------           -----------                  ------

Peter Klamka                 0                 -- (1)                   --
Chief Executive
Officer

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

(1)  No options were granted to the Company's employees in the fiscal year ended
     December 31, 2000.


                                       23
<PAGE>

<TABLE>
<CAPTION>
        Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values Table

                                                          Number of
                                                          Unexercised           Value of
                                                          Options at            Unexercised
                        Shares                            FY-End (#)            In-The-Money
                        Acquired on     Value             Exercisable/          Options at FY-End ($)
Name                    Exercise (#)    Realized          Unexercisable         Exercisable/Unexercisable
----                    ------------    --------          -------------         -------------------------

<S>                           <C>             <C>          <C>                      <C>
Peter Klamka                  0               0            250,000 / 0                 $0 / $0
Chief Executive
Officer
</TABLE>


Employment and Consulting Agreements

     We have no employment or other written agreement with Peter Klamka, our
President and Chief Executive Officer. Mr. Klamka has an oral agreement with the
Company to receive a base salary of $100,000 per year and such other
compensation as the Board of Directors shall designate. During 1998, Mr. Klamka
was issued 16,666 shares of Common Stock as compensation for services provided
in 1997. The Company believes that Mr. Klamka will continue to waive a portion
of the base salary for the foreseeable future, although no assurance thereof can
be given.

     Mr. Klamka is involved in other business ventures, including the ownership
of over 500,000 shares of American Sports History Inc. (approximately 5.5% of
its outstanding capital stock), a Nasdaq Bulletin Board company, but he intends
to devote substantially all his business time and effort on behalf of the
Company for the foreseeable future. Mr. Klamka has orally committed that, for so
long as the Company shall be in existence, he shall conduct no business relating
to models or fashion personalities other than through the Company.

     We have no employment or other written agreement with Mr. Giordano.

Limitation of Liability and Indemnification Matters

     As permitted pursuant to the corporate law of the State of Delaware, our
state of incorporation, the Certificate of Incorporation requires that we
indemnify its directors and officers against certain liabilities and expenses
incurred in their service in such capacities to the fullest extent permitted by
applicable law. These provisions would provide indemnification for liabilities
arising under the federal securities laws to the extent that such
indemnification is found to be enforceable under, and to be in accordance with
applicable law. Additionally, we have entered into an indemnity agreement with
each director and officer which generally provides that they are indemnified
with respect to actions taken in good faith. Furthermore, the personal liability
of the directors is limited as provided in our Certificate of Incorporation.

     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of PTN Media,
Inc. pursuant to the foregoing provisions, or otherwise, we have been advised

                                       24

<PAGE>


that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.


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

     The following table sets forth certain information known to us with respect
to beneficial ownership of our common stock as of the date of this prospectus
by: (a) each stockholder known by us to be the beneficial owner of more than 5%
of our common stock; (b) each of our directors; (c) the named executive
officers; and (d) all executive officers and directors as a group.

     Except as otherwise indicated, we believe that the beneficial owners of
common stock listed below, based on information furnished by such owners, have
sole investment and voting power with respect to such shares, subject to
community property laws where applicable.

                                             Shares Beneficially Owned
                                             -------------------------

Name and Address                    Number of Shares
Of Beneficial Owner                 Beneficially Owned      Percent of Class (1)
-------------------                 ------------------      --------------------

Peter Klamka(2)                     2,234,174(3)                   45.75%
Chris H. Giordano(4)                526,000(5)                     11.42%
Claudia Schiffer(6)                 269,682                         5.82%
American Nortel(7)                  400,000                         8.64%

All directors and executive
officers as a group (2 persons)     2,777,414                      55.46%


(1)  Based on 4,632,962 shares outstanding.

(2)  Mr. Klamka's address is the same as that of the Company.

(3)  Includes 250,000 currently exercisable options to purchase 250,000 shares
     of common stock at $4.50 per share.

(4)  Chris Giordano's address is 4 Dogwood Court, West Patterson, NJ 07424.

                                       25

<PAGE>


(5)  Includes 125,000 currently exercisable options to purchase 125,000 shares
     of common stock at $3.00 per share.

(6)  Ms. Schiffer's business address is c/o Peter Klamka, 455 East Eisenhower
     Parkway, Suite 15, Ann Arbor, Michigan 48108.

(7)  American Nortel's address is 7201 East Camelback Road, Suite 320,
     Scottsdale, Arizona 85251.



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     In June 1997, Mr. Klamka purchased 2,117,008 shares of Common Stock of our
predecessor for an aggregate purchase price, paid by delivery of a promissory
note, of $2,117.01. In June 1997 Chris Giordano purchased 540,340 shares of
Common Stock of our predecessor for an aggregate purchase price, paid by
delivery of a promissory note, of $540.34. In June 1997 Michael Giordano
purchased 300,000 shares of Common Stock of our predecessor for an aggregate
purchase price, paid by delivery of a promissory note, of $300.00. All three
promissory notes have been paid in full. Messrs. Klamka, Chris Giordano and
Michael Giordano are each deemed to be founders and promoters of the Company.

     Jean Renard, manager for Niki Taylor, owns 10,000 shares of Common Stock.

     In April 1998, Mr. Klamka provided the Company with a revolving credit line
with a maximum of $500,000 available. In September 1998, the Board of Directors
of the Company authorized an increase in this line to $610,000, and in November
and December 1998, further increases to $1,000,000 were authorized. Loans drawn
on the credit line bear interest at a rate of 9% per annum from the date they
are made and are payable by May 2001. Monies loaned were used to make certain
payments to Niki Taylor's company, to provide a payment required under the
Calendar Agreement with Claudia Schiffer, and for working capital. In February
2000 the then current balance of $498,752 owed to Mr. Klamka was converted into
110,000 shares of Common Stock.

     The Company paid Birchwood Capital Advisors Group, Inc. commissions in
connection with monies raised for the Company. Chris Giordano, our Chief
Operating Officer, is an officer of Birchwood Capital Advisors Group, Inc.


                                       26
<PAGE>


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

Exhibit
Number                               Description
------                               -----------

3.1(1)         Certificate of Incorporation of PTN Media, Inc. dated as of
               January 13, 1998.
3.2(1)         By-Laws of PTN Media, Inc.
3.3(2)         Certificate of Incorporation of PTN Wireless, Inc. dated as of
               February 21, 2001
3.4(2)         By-laws of PTN Wireless, Inc.
4.2(3)         PTN Media, Inc. 2000 Stock Option Plan
10.1(2)        Amendment to Palm, Inc. and PTN Media, Inc. Agreement of October
               5, 2000
10.2(2)        License Agreement dated February 19, 2001 between 3 Wishes
               Production f/s/o Christina Aguilera and PTN Media, Inc.
10.3(5)        Host Agreement dated March 1, 2000, between PTN Media, Inc. and
               Dafu Production, Inc.
10.4(5)        Web site License Agreement dated March 29, 2000 between PTN
               Media, Inc. and Chely Wright
10.5(5)        Web site License Agreement between PTN Media, Inc. and Double M
               Holding, Inc.
10.6(5)        General Agreement dated July 28, 2000, between PTN Media, Inc.
               and NeoHoand, Inc.
10.7(5)        Partnering Agreement dated October 27, 2000, between PTN Media,
               Inc. and TWEC.com, LLC
10.8(5)        Palm, Inc. OEM Partner Agreement dated October 5, 200, between
               PTN Media, Inc. and Palm, Inc.
10.9(5)        Funding Agreement dated August 24, 2000 between PTN Media, Inc.
               and American Nortel Communications, Inc.
10.10(5)       Merchant and Partner Network Agreement dated May 8, 2000, between
               PTN Media, Inc. and Dynamic Trade Inc.
10.11(6)       License Agreement dated January 4, 2001 between PTN Media, Inc.
               and Michael Jordan
21.1(2)        List of PTN Media, Inc. Subsidiaries
23.1(2)        Consent of Stonefield Josephson, Inc.
23.2(2)        Consent of Lazar Levine & Felix LLP

                                       27

<PAGE>


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

(1)  Incorporated by reference from the Company's Registration Statement on Form
     SB-2 (File #333-51933).
(2)  Filed herewith.
(3)  Incorporated by reference from the Company's Definitive Proxy Statement
     filed on July 24, 2000.
(4)  Incorporated by reference from the Company's Registration Statement on Form
     S-3 filed on December 11, 2000.
(5)  Incorporated by reference from the Company's Form 8-K filed January 9,
     2001.

Reports On Form 8-K:  None


                                       28
<PAGE>




                                   SIGNATURES

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

                                         PTN MEDIA, INC.

                                         /s/  Peter Klamka
                                         ---------------------------------------
                                         Peter Klamka
                                         Chairman, President, Secretary and
                                         Chief Executive Officer


     In accordance with the requirements of the Exchange Act, this report is
signed below by the following persons on behalf of the Registrant in the
capacities and on the dates indicated.

Name and Capacity                                             Date
-----------------                                             ----


/s/  Peter Klamka                                         April 16, 2001
------------------------------------------------
Name:     Peter Klamka
Title:    Chairman, President, Secretary
          and Chief Executive Officer
          (Principal Executive Officer and
          Principal Financial and Accounting
          Officer)




                                       29
<PAGE>


                                 PTN MEDIA, INC.
                          INDEX TO FINANCIAL STATEMENTS




                                                                       Page(s)

INDEPENDENT AUDITORS' REPORTS

     Report on Financial Statements for
      the Year ended December 31, 2000                                   F-2

     Report on Financial Statements for
      the Year ended December 31, 1999                                   F-3

FINANCIAL STATEMENTS

     Consolidated Balance Sheets as of December 31, 2000 and 1999        F-4

     Consolidated Statements of Operations for the Cumulative
        Period During the Development Stage from May 27, 1999
        (Inception) to December 31, 2000 and for the Years
        Ended December 31, 2000 and 1999                                 F-5

     Consolidated Statements of Shareholders' Deficit
        for the Period From May 27, 1997 (Inception)
        to December 31, 2000                                             F-6

     Consolidated Statements of Cash Flows for the Cumulative
        Period During the Development Stage from May 27, 1999
        (Inception) to December 31, 2000 and for the Years
        Ended December 31, 2000 and 1999                                 F-8

     Notes to Consolidated Financial Statements                          F-10

<PAGE>


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------




To the Board of Directors and Shareholders
PTN Media, Inc.

We have audited the accompanying consolidated balance sheet of PTN Media, Inc.
and subsidiary (a development stage company) as of December 31, 2000, and the
related statements of operations, shareholders' (deficit), and cash flows for
the year ended December 31, 2000 and the cumulative period from January 1, 2000
to December 31, 2000. The cumulative period May 27, 1997 (inception) to December
31, 1999 was audited by other auditors whose report, dated April 12, 2000, is
included in the financial statements. 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of PTN
Media, Inc. and subsidiary as of December 31, 2000, and the consolidated results
of their operations and their consolidated cash flows for year ended December
31, 2000 and the cumulative period from January 1, 2000 to December 31, 2000, in
conformity with generally accepted ccounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1, the
Company is in the development stage, has incurred net losses since its inception
and has experienced severe liquidity problems. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

                                          /s/   STONEFIELD JOSEPHSON, INC.
                                                STONEFIELD JOSEPHSON, INC.
                                                Certified Public Accountants


Santa Monica, California
April 9, 2001


                                      F-2

<PAGE>



                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------




To the Board of Directors and Shareholders
PTN Media, Inc.

We have audited the accompanying consolidated balance sheet of PTN Media, Inc.
and subsidiary (a development stage company) as of December 31, 1999, and the
related statements of operations, shareholders' (deficit), and cash flows for
the year ended December 31, 1999 and the period from May 27, 1997 (inception) to
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of PTN
Media, Inc. and subsidiary as of December 31, 1999, and the consolidated results
of their operations and their consolidated cash flows for the year ended
December 31, 1999 and the period from May 27, 1997 (inception), to December 31,
1999, in conformity with accounting principles generally accepted in the United
States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1, the
Company is in the development stage, has incurred net losses since its inception
and has experienced severe liquidity problems. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

                                            /s/ LAZAR LEVINE & FELIX LLP
                                                LAZAR LEVINE & FELIX LLP

New York, New York
April 12, 2000


                                      F-3
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------

                          (a Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------

                                   - ASSETS -

                                                     December 31,   December 31,
                                                         2000           1999
                                                     -----------    ------------

CURRENT ASSETS:
     Cash                                            $   503,636    $    46,539
     Deposits and prepaid expenses                       112,015        715,625
                                                     -----------    -----------
TOTAL CURRENT ASSETS                                     615,651        762,164

FIXED ASSETS - NET (Notes 2d and 3)                       24,584         24,799
OTHER ASSETS                                               2,226           --
                                                     -----------    -----------
TOTAL ASSETS                                         $   642,461    $   786,963
                                                     ===========    ===========

                   - LIABILITIES AND SHAREHOLDERS' DEFICIT -

CURRENT LIABILITIES:
     Accounts payable and accrued expenses           $   232,103    $   191,958
     Interest payable to officer                            --           64,348
     License fee payable (Notes 2f and 4)              1,082,500        400,000
     Short-term loans payable (Note 5)                   191,250        191,250
     Loans payable - officer (Note 6)                       --          458,844
     Promissory note (Note 7)                          1,000,000           --
                                                     -----------    -----------
TOTAL CURRENT LIABILITIES                              2,505,853      1,306,400
                                                     -----------    -----------

COMMITMENTS AND CONTINGENCIES (Notes 4 and 11)

SHAREHOLDERS' DEFICIT (Notes 8 and 9):
     Preferred stock, $0.01 par value;
         1,000,000 shares authorized,
         2,350 and 5,600 shares issued
         and outstanding                                      24             56
         for 2000 and 1999, respectively
     Common stock, $0.001 par value;
         10,000,000 shares authorized,
         4,632,962 and 4,049,862 shares
         issued and outstanding
         for 2000 and 1999, respectively                   4,633          4,050
     Additional paid-in capital                        7,319,471      3,954,175
     Deficit accumulated during the
         development stage                            (9,187,520)    (4,477,718)
                                                     -----------    -----------
TOTAL SHAREHOLDERS' DEFICIT                           (1,863,392)      (519,437)
                                                     -----------    -----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT          $   642,461    $   786,963
                                                     ===========    ===========

                            See accompanying notes.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>

                                          PTN MEDIA, INC. AND SUBSIDIARY
                                          ------------------------------
                                           (a Development Stage Company)
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                      -------------------------------------



                                                          Cumulative
                                                          During the
                                                         Development
                                                            Stage
                                                        (May 27, 1997
                                                             to                 Year Ended December 31,
                                                          December         ------------------------------
                                                          31, 2000)           2000               1999
                                                        -----------        -----------        -----------

<S>                                                     <C>                <C>                <C>
REVENUE (Note 2e)                                       $    23,801        $     5,613        $    13,700
                                                        -----------        -----------        -----------

EXPENSES:
   Cost of revenue                                        4,436,897          2,255,246            452,923
   Product development                                    2,195,315            752,293            960,934
   General and administrative expenses                    2,317,324          1,548,942            413,718
                                                        -----------        -----------        -----------

                                                          8,949,536          4,556,481          1,827,575
                                                        -----------        -----------        -----------

LOSS FROM OPERATIONS                                     (8,925,735)        (4,550,868)        (1,813,875)
                                                        -----------        -----------        -----------

OTHER (INCOME) EXPENSES:
   Interest expense                                        (261,824)          (158,934)           (73,496)
   Interest income                                               39               --                 --
                                                        -----------        -----------        -----------

                                                           (261,785)          (158,934)           (73,496)
                                                        -----------        -----------        -----------

LOSS BEFORE PROVISION FOR INCOME TAXES                   (9,187,520)        (4,709,802)        (1,887,371)

   Provision for income taxes (Notes 2g and 10)                --                 --                 --
                                                        -----------        -----------        -----------

NET LOSS                                                $(9,187,520)       $(4,709,802)       $(1,887,371)
                                                        ===========        ===========        ===========

BASIC AND DILUTED
   LOSS PER COMMON SHARE (Note 2i)                      $     (2.57)       $     (1.06)       $     (0.54)
                                                        ===========        ===========        ===========

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                                     3,568,348          4,431,781          3,547,270
                                                        ===========        ===========        ===========

                                                See accompanying notes.

                                                          F-5

<PAGE>


                                                   PTN MEDIA, INC. AND SUBSIDIARY
                                                   ------------------------------
                                                   (a Development Stage Company)
                                      CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
                                      ----------------------------------------------------------



                                       Preferred Stock              Common Stock          Additional
                                   ------------------------     -----------------------     Paid-in       Accumulated      Total
                                      Shares       Amount        Shares       Amount        Capital        Deficit       (Deficit)
                                      ------       ------        ------       ------        -------        -------        -------

Shares issued at inception for
  promissory notes                       --     $      --       2,957,348   $     2,957   $      --      $      --      $     2,957
Shares issued in payment of
  legal fees                             --            --          10,000            10           990           --            1,000
Net loss for the period from
  inception to December 31, 1997         --            --            --            --            --          (261,267)     (261,267)
                                   -----------   -----------   -----------   -----------   -----------    -----------    -----------

Balance, December 31, 1997               --            --       2,967,348         2,967           990       (261,267)      (257,310)
Conversion of notes payable              --            --          54,166            54       162,446           --          162,500
Compensatory shares                      --            --          16,666            17        49,983           --           50,000
Shares issued in payment of
  legal fees                             --            --           3,500             4        12,996           --           13,000
Shares issued in connection with
  license agreement                      --            --         269,682           269     1,078,459           --        1,078,728
Shares issued in connection with
  initial public offering                --            --          66,900            67       238,036           --          238,103
Waiver of compensation payable           --          66,000        66,000
Net loss for year                        --            --            --            --            --       (2,329,080)    (2,329,080)
                                   -----------   -----------   -----------   -----------   -----------    -----------    -----------

Balance, December 31, 1998               --            --       3,378,262         3,378     1,608,910    (2,590,347)       (978,059)
Shares issued in connection with
  initial public offering                --            --          62,000            62        88,431           --           88,493
Shares issued in connection
  with a private placement              2,400            24          --         215,976          --          216,000
Exercise of warrants                     --            --          10,000            10        29,990           --           30,000
Shares issued in payment of
  professional fees                      --            --         190,000           190       637,310           --          637,500
Shares issued in payment of
  production costs                       --            --           1,000             1         5,999           --            6,000
Warrants issued in payment of
  professional fees                      --            --            --            --         200,000           --          200,000
Options issued in payment of
  legal fees                             --            --            --            --          25,000           --           25,000
Shares issued in connection
  with a private placement               --            --         402,500           403       737,097           --          737,500
Waiver of compensation payable           --            --            --          55,000          --           55,000
Conversion of notes payable and
  accrued interest                      3,200            32         6,100             6       350,462           --          350,500
Net loss for year                        --            --            --            --            --       (1,887,371)    (1,887,371)
                                  -----------   -----------   -----------   -----------   -----------    -----------    -----------

Balance, December 31, 1999              5,600   $        56     4,049,862   $     4,050   $ 3,954,175    $(4,477,718)   $  (519,437)


                                                         See accompanying notes.

                                                                   F-6

<PAGE>



                                                   PTN MEDIA, INC. AND SUBSIDIARY
                                                   ------------------------------
                                                   (a Development Stage Company)
                                  CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT, continued
                                  ---------------------------------------------------------------------


                                       Preferred Stock              Common Stock          Additional
                                   ------------------------     -----------------------     Paid-in       Accumulated      Total
                                      Shares       Amount        Shares       Amount        Capital        Deficit       (Deficit)
                                      ------       ------        ------       ------        -------        -------        -------

Balance forward,
   December 31, 1999                   5,600    $      56      4,049,862   $     4,050   $ 3,954,175    $(4,477,718)   $  (519,437)

Shares issued in exchange
  for loan payable and
  accrued interest                      --           --          110,000           110       498,642           --          498,752
Shares issued in payment of
  professional fees                     --           --            9,500             9        34,116           --           34,125
Shares issued in payment
  of license fees                       --           --           61,600            62       324,938           --          325,000
Exercise of warrants                    --           --            1,000             1           999           --            1,000
Conversion of Series A
  preferred to common                 (3,250)         (32)        65,000            65           (33)          --             --
Waiver of compensation payable          --           --             --         100,000          --          100,000
Shares issued in connection
  with a private placements             --           --          336,000           336     1,293,634           --        1,293,970
Fair value of warrants issued
  in connection with
  promissory note                       --           --             --            --         138,000           --          138,000
Shares of common stock issued
  in connection private
  placement of shares of
  Fragrancedirect.com, net              --           --             --         975,000          --          975,000
Net loss for year                       --           --             --            --            --       (4,709,802)    (4,709,802)
                                 -----------    ---------    -----------   -----------   -----------    -----------    -----------

Balance, December 31, 2000             2,350    $      24      4,632,962   $     4,633   $ 7,319,471    $(9,187,520)   $(1,863,392)
                                 ===========    =========    ===========   ===========   ===========    ===========    ===========



                                                      See accompanying notes.

                                                                F-7

<PAGE>


                                            PTN MEDIA, INC. AND SUBSIDIARY
                                            ------------------------------
                                            (a Development Stage Company)
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        -------------------------------------

                                                                    Cumulative
                                                                    During the
                                                                    Development
                                                                       Stage
                                                                   (May 27, 1997
                                                                        to                  Year Ended December 31,
                                                                     December          -------------------------------
                                                                     31, 2000)            2000                 1999
                                                                   ------------        -----------         -----------

Cash flows from operating activities:
   Net loss                                                        $(9,187,520)        $(4,709,802)        $(1,887,371)
   Adjustments to reconcile net loss
     to net cash used in operating activities:
       Depreciation of fixed assets                                     18,362              11,906               5,576
       Warrants and shares issued for professional and
         legal fees                                                    910,625              34,125             862,500
       Waiver of compensation payable                                  221,000             100,000              55,000
       Shares issued for license fees and production costs           1,409,728             325,000               6,000
       Fair value of warrants issued in connection with
         promissory note                                               138,000             138,000                --
   Changes in operating assets and liabilities:
     Decrease (increase) in receivables                                   --                  --                 4,488
     Decrease (increase) in deposits and prepaid expenses             (112,015)            603,610            (715,625)
     Increase in accounts payable and accrued expenses                 353,511              41,705             127,991
     Increase in license fees payable                                1,082,500             682,500             145,000
                                                                   -----------         -----------         -----------

Net cash used in operating activities                               (5,165,809)         (2,772,956)         (1,396,441)
                                                                   -----------         -----------         -----------

Cash flows from investing activities:
   Purchase of furniture and equipment                                 (42,946)            (11,691)            (26,749)
   Security deposit (paid) refunded                                     (2,226)             (2,226)                690
                                                                   -----------         -----------         -----------

Net cash used in investing activities                                  (45,172)            (13,917)            (26,059)
                                                                   -----------         -----------         -----------

Cash flows from financing activities:
   Loans received from (paid to) officer                               477,844             (26,000)            (38,656)
   Proceeds from short-term loans                                      653,750                --               435,000
   Payment from shareholders                                             2,957                --                  --
   Proceeds from promissory note                                     1,000,000           1,000,000                --
   Proceeds from exercise of warrants                                   31,000               1,000              30,000
   Proceeds from sale of common stock of subsidiary                    975,000             975,000                --
   Proceeds from sale of common and preferred stock, net             2,574,066           1,293,970           1,041,993
                                                                   -----------         -----------         -----------

Net cash provided by financing activities                            5,714,617           3,243,970           1,468,337
                                                                   -----------         -----------         -----------

Increase (decrease) in cash                                            503,636             457,097              45,837

Cash, beginning of period                                                 --                46,539                 702
                                                                   -----------         -----------         -----------

Cash, end of period                                                $   503,636         $   503,636         $    46,539
                                                                   ===========         ===========         ===========


                                                    See accompanying notes.

                                                             F-8

<PAGE>




                                            PTN MEDIA, INC. AND SUBSIDIARY
                                            ------------------------------
                                            (a Development Stage Company)
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
                                     ------------------------------------------------

                                                                  Cumulative
                                                                  During the
                                                                  Development
                                                                     Stage
                                                                 (May 27, 1997
                                                                      to                  Year Ended December 31,
                                                                   December          -------------------------------
                                                                   31, 2000)            2000                 1999
                                                                 ------------        -----------         -----------

Supplemental disclosures of cash flow information

       Interest paid                                             $   --              $   --              $   --
                                                                  ========            ========            ========


       Income taxes paid                                          $   --              $   --              $   --
                                                                  ========            ========            ========

</TABLE>


Supplemental disclosures of non-cash investing and financing activities

1.   In May 1997, the Company issued (i) 2,957,348 shares of common stock in
     exchange for notes receivable of $2,957 and (ii) 10,000 shares of common
     stock in lieu of payment for legal fees aggregating $1,000.

2.   During 1998, holders of notes aggregating $162,500 converted such notes
     into 54,166 shares of common stock at a value of $3.00 per share.

3.   During 1998, the Company issued (i) 16,666 shares of common stock in lieu
     of payment of $50,000 of compensation accrued as of December 31, 1997, (ii)
     3,500 shares of common stock in payment of legal fees aggregating $13,000
     and (iii) the Company recognized additional paid in capital of $66,000
     related to the waiver of payment of compensation by the Company's CEO.

4.   During 1999, (i) the Company converted $25,000 of debt and $5,500 of
     accrued interest in exchange for 6,100 shares of common stock, (ii) the
     Company issued 190,000 shares of common stock for professional services
     valued at $637,500, (iii) the Company issued 200,000 warrants to purchase
     shares of common stock for professional services valued at $200,000, (iv)
     the Company issued 25,000 options to purchase shares of common stock for
     legal fees valued at $25,000, (v) the Company issued 1,000 shares of common
     stock for production costs valued at $6,000, (vi) the Company converted
     $320,000 of debt in exchange for 3,200 of Series A preferred stock, and
     (vii) the Company recognized additional paid in capital of $55,000 related
     to the waiver of payment of compensation by the Company's CEO.

5.   During 2000, (i) the Company converted $432,844 of the loans payable to an
     officer and $65,908 of interest payable to an officer in exchange for
     110,000 shares of common stock, (ii) the Company issued 9,500 shares of
     common stock for professional services valued at $34,125, (iii) the Company
     issued 61,600 shares of common stock for license fees valued at $325,000,
     (iv) the Company converted 3,250 shares of Series A preferred stock into
     65,000 shares of common stock, (v) the Company issued 100,000 warrants in
     connection with a promissory note whose fair value is estimated to be
     $138,000 and (vi) the Company recognized additional paid in capital of
     $100,000 related to the waiver of payment of compensation by the Company's
     CEO.


                            See accompanying notes.

                                      F-9
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 1 - DESCRIPTION OF COMPANY AND GOING CONCERN UNCERTAINTY:

         PTN Media, Inc., (the "Company"), was incorporated in Delaware on
         January 13, 1998 and is the successor to Interactive Entertainment
         Studio, Inc. (IES). IES was incorporated in the State of Nevada on May
         27, 1997 and was merged into the Company in March 1998, for the sole
         purpose of changing the domicile of the Company to Delaware. This
         merger was retroactively reflected in the December 31, 1997 financial
         statements. The Company has been in the development stage in accordance
         with Statement of Financial Accounting Standards ("SFAS") No. 7, since
         its inception. However, in mid-December 2000 the Company began
         receiving orders for its Claudia Schiffer edition of the Palm. The
         Company received orders for 354 of these Palms and began shipping to
         customers in January 2001. Effective January 1, 2001, the Company will
         no longer be in the development stage.

         The Company is an interactive content provider focusing on providing
         leading branded content for well-defined target audiences using a
         combination of new and traditional media. The Company provides this
         content on its interactive web sites in the form of articles and
         photographs pertaining to fashion, beauty, style and entertainment.
         These web sites, utilizing celebrity models as hosts, will provide an
         avenue for users to share general tips and advice relating to the
         subjects covered.

         In July 1999, the Company formed, FragranceDirect.com, Inc.
         ("Fragrance"), a majority owned subsidiary. Through this entity, the
         Company sells fragrance products over the Internet.

         The Company, since its inception, has incurred net losses of,
         $9,187,520 and at December 31, 2000 current liabilities exceeded
         current assets by $1,890,202. In addition, the Company is delinquent in
         certain payments due for license fees and short-term financing. The
         Company has relied on certain bridge financing to fund its activities
         and in late 1998 and early 1999 completed the sale of common stock
         through an initial public offering to provide working capital for its
         continuing development stage activities and eventual commencement of
         full operations. The Company sold an aggregate of 128,900 shares of
         common stock with net proceeds from the offering aggregated $326,596.
         During the second quarter of 1999, the Company issued $275,000 in
         convertible debentures that were subsequently converted to Series A
         preferred stock. In addition in the fourth quarter of 1999, the Company
         raised $737,500 in a private placement of its common stock. In 2000,
         the Company raised net proceeds of $1,293,970 in private placement
         offerings of its common stock and the Company also raised $975,000 in a
         private placement offering of the common stock of its wholly owned
         subsidiary, Fragrance. The Company also raised $1,000,000 in 2000 by
         issuing a promissory note. The Company may be unable to continue in
         existence unless it is able to arrange additional financing and achieve
         profitable operations. Management plans to raise additional capital and
         expects to generate cash from the sale of products in 2001.

         The financial statements do not include any adjustments relating to the
         recoverability of assets that might be necessary in the event the
         Company cannot continue in existence.

                                      F-10


<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     (a)  Principles of Consolidation:

         The accompanying financial statements include the accounts of the
         Company and its majority owned subsidiary, Fragrance. All intercompany
         accounts and transactions have been eliminated.

     (b)  Estimates:

         In preparing financial statements in conformity with generally accepted
         accounting principles, management makes estimates and assumptions that
         affect the reported amounts of assets and liabilities and disclosures
         of contingent assets and liabilities at the date of the financial
         statements, as well as the reported amounts of revenues and expenses
         during the reporting period. Actual results could differ from those
         estimates.

     (c)  Statements of Cash Flows:

         For purposes of the statements of cash flows, the Company considers all
         highly liquid investments purchased with a remaining maturity of three
         months or less to be cash equivalents.

     (d)  Fixed Assets:

         Furniture and equipment are recorded at cost. Depreciation is provided
         on a straight-line basis over estimated useful lives of the assets as
         follows:

                  Computer equipment                   3 years
                  Furniture and fixtures               5 years

         Expenditures for maintenance and repairs are charged to operations as
         incurred while renewals and betterments are capitalized. Gains and
         losses on disposals are included in the results of operations.

     (e)  Revenue Recognition:

         The Company generates revenue from the sale of products on its web
         sites. The Company recognizes revenue for these product sales when the
         product is shipped to the customer. The Company also generates revenues
         from the sale of advertising banners on its web sites which appear on a
         user's computer screen when accessing different areas of the Company's
         web sites. Advertising revenue is recognized in the period the
         advertisement is displayed, provided that no significant Company
         obligations remain. Company obligations typically include guarantees of
         a minimum number of "impressions" or times that an advertisement is
         viewed by users of the Company's web sites. Minimal revenues were
         generated through December 31, 2000 and the Company does not believe
         that as of December 31, 2000 it had commenced significant sales
         activities.

                                      F-11
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

     (f)  Royalties/License Fees:

         Royalties/license fees paid under the terms of license agreements
         entered into are charged to expense in accordance with the terms of the
         agreements. Any guaranteed minimum payments will be amortized over the
         period of the license agreement.

         During its development stage, the Company has expensed the guaranteed
         minimum royalties upon execution of the license agreements since there
         is no assurance that the Company will be able to derive any revenues
         during the initial term of the agreement. See also Note 4.

     (g)  Income Taxes:

         The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which
         requires the recognition of deferred tax assets and liabilities for the
         expected future tax consequences of events that have been included in
         the financial statements or tax returns. Under this method, deferred
         income taxes are recognized for the tax consequences in future years of
         differences between the tax bases of assets and liabilities and their
         financial reporting amounts at each period end based on enacted tax
         laws and statutory tax rates applicable to the periods in which the
         differences are expected to affect taxable income. Valuation allowances
         are established, when necessary, to reduce deferred tax assets to the
         amount expected to be realized.

     (h)  Stock Based Compensation:

         SFAS No. 123, "Accounting for Stock-Based Compensation," establishes
         and encourages the use of the fair value based method of accounting for
         stock-based compensation arrangements under which compensation cost is
         determined using the fair value of stock-based compensation determined
         as of the date of grant and is recognized over the periods in which the
         related services are rendered. The statement also permits companies to
         elect to continue using the current intrinsic value accounting method
         specified in Accounting Principles Board ("APB") Opinion No. 25,
         "Accounting for Stock Issued to Employees," to account for stock-based
         compensation. The Company has elected to use the intrinsic value based
         method and has disclosed the pro forma effect of using the fair value
         based method to account for its stock-based compensation. The Company
         uses the fair value method for options granted to non-employees.


                                      F-12
<PAGE>



                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

     (i)  Earnings (Loss) Per Share:

         The Company reports earnings (loss) per share in accordance with SFAS
         No. 128, "Earnings per Share." Basic earnings (loss) per share is
         computed by dividing income (loss) available to common shareholders by
         the weighted average number of common shares available. Diluted
         earnings (loss) per share is computed similar to basic earnings (loss)
         per share except that the denominator is increased to include the
         number of additional common shares that would have been outstanding if
         the potential common shares had been issued and if the additional
         common shares were dilutive. Diluted earnings (loss) per share has not
         been presented since the effect of the assumed conversion of options
         and warrants to purchase common shares would have an anti-dilutive
         effect. The following potential common shares have been excluded from
         the computation of diluted net loss per share for the year ended
         December 31 2000 and 1999 because the effect would have been
         anti-dilutive:


                                                         2000          1999
                                                      ---------      ---------
         Conversion of Series A preferred stock          47,000        112,000
         Stock options issued to employees
             and consultants under the Company's
             stock option plan                          481,000        481,000
         Stock options issued outside of plan            25,000         25,000
         Warrants issued with Series A preferred         43,200         43,200
         Warrants issued for services                   200,000        200,000
         Warrants issued with notes                     308,334        208,334
                                                      ---------      ---------
                                                      1,104,534      1,069,534
                                                      =========      =========

     (j)  Fair Value of Financial Instruments:

         The Company measures its financial assets and liabilities in accordance
         with generally accepted accounting principles. For certain of the
         Company's financial instruments, including cash, accounts payable and
         accrued expenses, and license fees payable, the carrying amounts
         approximate fair value due to their short maturities. The amounts shown
         for short-term loans also approximate fair value because current
         interest rates offered to the Company for debt of similar maturities
         are substantially the same.

     (k)  Comprehensive Income:

         For the year ended December 31, 1999, the Company adopted SFAS No. 130,
         "Reporting Comprehensive Income." This statement establishes standards
         for reporting other comprehensive income and its components in a
         financial statement. Comprehensive income, as defined, includes all
         changes in equity (net assets) during a period from non-owner sources.
         Examples of items to be included in comprehensive income, which are
         excluded from net income, include foreign currency translation
         adjustments and unrealized gains and losses on available-for-sale
         securities. Comprehensive income is not presented in the Company's
         financial statements since the Company did not have any of the items of
         other comprehensive income in any period presented.


                                      F-13
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:

     (l)  Recently Issued Accounting Pronouncements:

         In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
         Instruments and Hedging Activities." The Company does not expect
         adoption of SFAS No. 137 to have a material impact, if any, on its
         financial position or results of operations.

         In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain
         Derivative Instruments and Certain Hedging Activities." The Company
         does not expect the adoption of SFAS No. 138 to have a material impact,
         if any, on its financial position or results of operations.

         In June 2000, the FASB issued SFAS No. 139, "Rescission of FASB
         Statement No. 53 and amendments to FASB Statements No. 63, 89, and
         121." The Company does not expect the adoption of SFAS No. 138 to have
         a material impact, if any, on its financial position or results of
         operations.

         In September 2000, the FASB issued SFAS No. 140, "Accounting for
         Transfers and Servicing of Financial Assets and Extinguishments of
         Liabilities." This statement is not applicable to the Company.

     (m)  Minority Interest:

         Minority interest represents the minority shareholders' proportionate
         share of the equity of Fragrance. During the year ended December 31,
         2000, the Company sold 410,000 or 17% of the common stock of Fragrance.
         Fragrance, on a stand-alone basis, had a shareholders' deficit. As a
         result, the Company's investment in Fragrance had a negative carrying
         value. The increase in capitalization of Fragrance resulting from the
         sale of 410,000 shares of common stock to outside investors benefited
         the Company in that it reduced the negative carrying value of the
         Company's investment in Fragrance. Accordingly, the Company has
         accounted for the change in its proportionate share of Fragrance's
         equity resulting from the issuance of stock to outside investors as an
         increase in shareholders' equity and a reduction in minority interest
         liability in the consolidated financial statements. The accompanying
         consolidated financial statements do not reflect a minority interest
         liability as of December 31, 2000 and 1999 as Fragrance, on a
         stand-alone basis, had a shareholders' deficit as of such dates. The
         accompanying consolidated statements of operations for the years ended
         December 31, 2000 and 1999 do not reflect the minority interest's share
         of Fragrance's losses for said years as the related accrual would
         result in the Company's recordation of a minority interest receivable.

     (n)  Concentration of Credit Risk:

         The Company places its cash with high-credit, quality financial
         institutions. At times, such amounts may be in excess of the Federal
         Deposit Insurance Corporation limit. As of December 31, 2000, the
         uninsured portions of the balances held at these financial institutions
         aggregated to $351,546. The Company has not experienced any losses in
         such accounts and believes it is not exposed to any significant credit
         risk on cash and cash equivalents.


                                      F-14
<PAGE>



                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 3 - FIXED ASSETS:

         Fixed assets at December 31, 2000 and 1999 consisted of the following:

                                                          2000            1999
                                                         -------         -------

             Computer equipment                          $39,494         $27,803
             Furniture and fixtures                        3,452           3,452
                                                         -------         -------
                                                          42,946          31,255
             Less accumulated depreciation                18,362           6,456
                                                         -------         -------
                  Total
                                                         $24,584         $24,799
                                                         =======         =======

         Depreciation expense for the years ended December 31, 2000 and 1999 was
         $11,906 and $5,576, respectively.

NOTE 4 - LICENSE FEES PAYABLE:

         A summary of the guaranteed minimum payments as of December 31, 2000,
         is as follows:
<TABLE>
<CAPTION>
                                                                                      Balance
                                                Guaranteed           Less            Owed as of
                                                  Minimum           Amounts           December
                                                 Royalties           Paid             31, 2000
                                               -----------       -----------         -----------

<S>                                            <C>               <C>                 <C>
        Niki Taylor Web Site                   $   150,000       $  (150,000)        $      --
        Tyra Banks Web Site                        100,000           (50,000)             50,000
        Tyra Banks Calendar                        100,000           (50,000)             50,000
        Claudia Schiffer Web Site                1,200,000          (975,000)            225,000
        Claudia Schiffer Calendar                   75,000           (75,000)               --
        Estella Warren Calendar                     30,000           (30,000)               --
        Chely Wright Web Site                      105,000          (105,000)               --
        Mandy Moore Web Site                       137,500          (137,500)               --
        Daisy Fuentes Host Agreement                75,000           (67,500)              7,500
        Michael Jordon Palm License              1,250,000          (500,000)            750,000
                                               -----------       -----------         -----------

                                               $ 3,222,500       $(2,140,000)        $ 1,082,500
                                               ===========       ===========         ===========
</TABLE>


         On June 1, 1997, the Company entered into a License Agreement (the
         "Agreement") with Niki, Inc. ("Niki"). This agreement provided for,
         among other things, the right to use Ms. Niki Taylor's name and
         likeness in connection with the Company's "Fashion House with Niki
         Taylor" web site. In consideration for such rights, the Company will
         pay royalties of 15% of any gross revenues received in connection with
         this web site (except for sponsors introduced by Niki whereby the
         royalties will be calculated at 50%) and 35% of net revenues from
         product sales. This agreement expired on September 30, 1998, and was
         automatically extended for an additional 12-month period at which time
         it was terminated.

                                      F-15
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 4 - LICENSE FEES PAYABLE, continued:

         The Company guaranteed the payment of minimum royalties to Niki, Inc.,
         in the amount of $150,000. $50,000 of this amount was paid at the time
         of execution of the agreement (in 1997) and the balance of $100,000 was
         paid in 1998.

         In January 1998, the Company entered into a License Agreement (the
         "Agreement") with an entity controlled by model Tyra Banks pursuant to
         which Ms. Banks would host the Company's next web site under terms
         similar to that negotiated with Ms. Taylor. This agreement expired on
         March 31, 1999, but provided for automatic extensions for up to two
         additional 12-month periods, unless terminated by either party prior to
         such extension. The Company had guaranteed the payment of minimum
         royalties in the amount of $100,000. $50,000 of this amount was paid at
         the time of execution of this agreement and the balance to be paid upon
         the consummation of the Company's proposed IPO. As of December 31,
         2000, the Company had not paid the remaining balance of $50,000.

         Also in January 1998, the Company entered into a separate agreement
         with this entity for the rights to utilize the name and likeness of Ms.
         Banks in connection with the "Tyra Banks Calendar." These rights were
         applicable to the calendar for the 16-month period ending December 31,
         1999. The Company agreed to pay this entity up to $87,000 for
         production expenses incurred in connection with the creation of this
         calendar and guaranteed minimum royalties in the amount of $100,000 of
         which only $50,000 was paid as of December 31, 2000. The Company paid
         $59,000 toward the production expenses of the Tyra Banks calendar. The
         remaining unpaid balance of $28,000 is included in accrued expenses.

         See Note 11 concerning legal proceedings associated with the agreements
         entered into with Ms. Banks.

         In October 1998, the Company entered into a License Agreement (the
         "Agreement") with model Claudia Schiffer under terms similar to those
         negotiated with Ms. Taylor and Ms. Banks. This agreement expires on the
         third anniversary of the launch of this web site, and may be extended
         only upon mutual agreement of the parties. The Company guaranteed the
         payment of minimum royalties in the amounts of $300,000 for the first
         year of the agreement, $400,000 for the second year and $500,000 for
         the third. $150,000 of the royalties for the first year was payable at
         the time of execution of this agreement and the balance before December
         23, 1998. The Company paid $145,000 in 1998 and the remaining balance
         of $155,000 was paid in February 1999 in full payment of royalties for
         the first year. In November 1999 and November 2000, the Company paid
         $100,000 and $300,000 due in connection with the second year royalty.
         In addition the Company paid $25,000 and $250,000 in August 2000 and
         November 2000, respectively, due in connection with the third year
         royalty. In connection with this agreement, the Company also issued an
         aggregate of 269,682 shares of common stock, valued at $4.00 per share,
         to Ms. Schiffer as additional compensation during 1998. As of December
         31, 2000, the Company had paid $275,000 towards royalties for the third
         year and the remaining $225,000 is included in license fees payable.

                                      F-16


<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 4 - LICENSE FEES PAYABLE, continued:

         Also in October 1998, the Company entered into a separate agreement
         with Ms. Schiffer for the rights to utilize her name and likeness in
         connection with the "Claudia Schiffer Calendar." These rights were
         applicable to the calendar for the 16-month period ending December 31,
         1999. The Company has guaranteed the payment of minimum royalties in
         the amount of $75,000 which amount was paid as of December 31, 1998.

         In June 1999, the Company entered into a License Agreement with model
         Estella Warren. This license provides for an on-line Internet service
         and downloadable electronic calendars featuring the name and likeness
         of Ms. Warren. This agreement continues until the first anniversary of
         the date the service is launched and required payment of the entire fee
         of $30,000 at the time of execution. Ms. Warren also receives a royalty
         equal to 20% of revenues received in connection with calendar sales.

         In March 2000, the Company entered into a website license agreement
         with country music artist Chely Wright to give the Company an exclusive
         license for an area on the Company's on-line Fashionwindow.com Internet
         service and to use her name and likeness in the creation and promotion
         of the Internet service. Chely Wright will be the sole country artist
         associated with Fashionwindow.com Internet service for the term of the
         agreement, which is two years with an option to renew for two
         additional one-year terms. In connection with this contract, the
         Company has issued to Ms. Wright, 15,000 shares of the Company's common
         stock valued at $105,000 which was the fair market value of the
         Company's stock at the date of issuance and is obligated to issue her
         an additional 15,000 shares of common stock on the contract's first
         anniversary.

         In July 2000, the Company entered into a website license agreement with
         pop music artist Mandy Moore to give the Company a license for an
         on-line Internet service and to use her name and likeness in the
         creation and promotion of the Internet service. The term of the
         agreement is for one year and maybe renewed on the first anniversary
         for an additional year if certain conditions are met. In connection
         with this agreement, the Company has issued to a company controlled by
         Ms. Moore and Ms. Moore's agent 31,000 and 3,100 shares of the
         Company's common stock valued at $125,000 and $12,500, respectively,
         which was the fair market value of the Company's stock at the date of
         issuance. If the common stock issued in connection with this agreement
         has not been sold as of the first anniversary and the value of such
         common stock at the first anniversary is less than $100,000 and $10,000
         respectively, then the Company is required to issue additional common
         stock such that the total value of all common stock held by Ms. Moore
         and Ms. Moore's agent is not less than $100,000 and $10,000
         respectively.

         In August 2000 the Company entered into a host agreement with a company
         controlled by Daisy Fuentes for Ms. Fuentes to host "The Style Minute
         with Daisy Fuentes." The term of the agreement is for one year
         following the first airing of the program. In connection with this
         agreement, the Company is obligated to pay $37,500 at the signing of
         the agreement and $37,500 three months following the signing of this
         agreement. These two payments are advances against future royalties.
         Ms. Fuentes will also receive a royalty of 50% of gross proceeds
         received by the Company in connection with the services of Ms. Fuentes.
         The Company paid Ms. Fuentes $37,500 in September 2000, $30,000 in
         December 2000 and the remaining $7,500 is included in license fee
         payable.

                                      F-17
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 4 - LICENSE FEES PAYABLE, continued:

         On December 29, 2000, the Company entered into a three year license
         agreement with Michael Jordon that provides the Company an exclusive,
         royalty-free, worldwide license to use, distribute, display and
         transmit Michael Jordon's full name, image, likeness, and endorsement
         in connection with the proposed manufacture, advertisement,
         distribution and sale of certain approved Palm Products. Jordon is to
         receive a royalty equal to 12% of the proceeds from the Palm sales. The
         Company must pay Jordon an annual minimum royalty of $1,250,000. The
         Company paid Mr. Jordon $500,000 in December 2000 and the remaining
         $750,000 is included in license fee payable.

NOTE 5 - SHORT-TERM LOANS PAYABLE:

         In July and August 1997, the Company received $56,250 through the
         issuance of 8% promissory notes and common stock purchase warrants to
         acquire Company stock. The 45,000 warrants issued, which expire in July
         2001, entitle the holders to purchase 45,000 shares of common stock at
         an exercise price of $3.00 per share, the deemed fair value of the
         warrants at the time of issuance. The notes and accrued interest are
         payable one year from the date of issuance or the closing of an equity
         funding of the Company of a minimum of $500,000, whichever is sooner.
         In 1999, one of the note holders converted $25,000 of principal and
         $5,500 of accrued interest into 6,100 shares of the Company's common
         stock. The remainder of the notes ($31,250) continues to be outstanding
         notwithstanding the fact that payments owed by the Company thereunder
         are now past due. Interest accrued as of December 31, 2000 and 1999,
         aggregated $6,000 and $3,500, respectively.

         In December 1997, the Company issued unsecured 8% promissory notes
         aggregating $65,000 originally due six months from date of issuance. In
         1998, the Company issued additional 8% unsecured promissory notes
         aggregating $97,500. In March 1998, these note holders agreed to
         convert these notes (aggregating $162,500) into 162,500 shares of the
         Company's common stock. In August 1998, the Company determined that the
         fair value of its shares in March 1998 was $3.00. Accordingly, the
         Company requested, and these shareholders agreed to the return of
         108,334 shares of common stock in exchange for warrants to purchase an
         aggregate of 108,334 shares of common stock, at a price of $4.00 per
         share, the deemed fair value in August 1998.

         In March 1999, the Company completed the sale of 5.5 units, each unit
         consisting of a $50,000 promissory note, bearing interest at an annual
         rate of 10%, and warrants to purchase 10,000 shares of common stock at
         $7.50 per share. During the fourth quarter of 1999, these promissory
         notes were converted to 2,750 shares of Series A preferred stock. As of
         December 31, 2000, $20,625 of accrued interest related to these
         promissory notes is unpaid.

         In July and August of 1999, the Company's subsidiary, Fragrance issued
         10% promissory notes aggregating $160,000. The notes are due the
         earlier of one year or the completion of an initial public offering of
         Fragrance common stock. In addition, Fragrance issued to the note
         holders an aggregate of 96,000 two-year stock purchase warrants to
         purchase Fragrance common stock at $3.50 per share. As of December 31,
         2000, these notes are still outstanding. The principal amount of
         $160,000 plus accrued interest of $22,667 is in default at December 31,
         2000.

                                      F-18
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 6 - LOANS PAYABLE - OFFICER:

         In April 1998, the Company's Chairman, President and Chief Executive
         Officer, provided the Company with a revolving credit line with a
         maximum of $500,000 available. In September 1998, the Board of
         Directors of the Company authorized an increase in this line to
         $610,000 and in November and December 1998, further increases to
         $1,000,000, were authorized. Loans drawn under this line bear interest
         at a rate of 9% per annum from the date they are made to the Company
         and are payable by May 2001, provided, however, that if the Company
         raises gross proceeds in an IPO of at least $1,500,000, the entire
         outstanding amount and accrued interest will be repaid from the
         proceeds of the IPO. During 1999, $45,000 of the outstanding balance
         was converted to 450 shares of Series A preferred stock. In January
         2000 the Company borrowed an additional $4,000 on this line of credit
         and repaid $26,000. In February 2000, the principal and accrued
         interest of $432,844 and $65,908, respectively, were converted into an
         aggregate of 110,000 shares of the Company's common stock valued at
         $4.53 per share.

NOTE 7 - PROMISSORY NOTE:

         On November 22, 2000 the Company issued a promissory note to an
         investor in the amount of $1,000,000. The note bears interest at 9.25%
         and was due on April 1, 2001. The holder of the note has the option of
         converting the note to a royalty participation certificate or
         converting into shares of the Company's common stock at a 20% discount.
         The note holder intends to convert this promissory note into a royalty
         participation certificate and is currently negotiating terms with the
         Company. In addition, the holder of the note was issued a two-year
         warrants to purchase 100,000 shares of the Company's common stock at
         $3.00 per share. The Company has taken a charge to earnings of $138,000
         that represents the fair value of the warrants issued in connection
         with the promissory note. The Company used the Black Scholes model to
         estimate the fair value of the warrants. If the note is converted into
         common stock, the Company will take a charge at that time for the 20%
         discount.

NOTE 8 - SHAREHOLDERS' EQUITY:

         The Company's authorized capital consists of 1,000,000 shares of
         preferred stock, $.01 par value and 10,000,000 shares of common stock,
         $.001 par value.

         In June 1997, the Company issued 2,957,348 shares of common stock in
         exchange for one-year promissory notes aggregating $2,957, bearing
         interest at an annual rate of 6%. These notes (and accrued interest)
         were repaid in June 1998.

         In addition, in June 1997, the Company also issued 10,000 shares of
         common stock in exchange for legal services rendered aggregating
         $1,000.


<PAGE>

                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 8 - SHAREHOLDERS' EQUITY, continued:

         In March 1998, the Company issued (i) 54,166 shares of common stock in
         connection with the conversion of $162,500 of notes payable into common
         stock (see Note 5) (ii) issued 16,666 shares of common stock in lieu of
         payment of $50,000 of compensation accrued to an officer as of December
         31, 1997 and (iii) 1,000 shares of common stock in lieu of payment of
         legal fees aggregating $3,000. These shares were deemed to have a fair
         value of $3.00 per share at the time of issuance. In July 1998, the
         Company issued 2,500 shares of common stock in lieu of payment of legal
         fees of $10,000.

         During 1998, the Company issued an aggregate of 269,682 shares of
         common stock to Ms. Schiffer (see Note 4), in connection with the
         license agreement entered into. These restricted shares have been
         valued at $4.00 per share, the deemed fair value at the time of
         issuance.

         On September 18, 1998, the Securities and Exchange Commission declared
         effective the Company's registration statement concerning an initial
         public offering ("IPO") of 400,000 shares of common stock. On October
         22, 1998, the Company extended the expiration date of the initial
         public offering to January 31, 1999. During the three-month period
         ended December 31, 1998, the Company consummated the sale of 66,900
         shares of common stock, realizing net proceeds of $238,103. In February
         1999, the Company consummated the sale of an additional 62,000 shares
         of common stock for net proceeds of $88,431.

         During the second quarter of 1999, the Company completed the sale of
         2,400 shares of Class A Preferred Stock in a private offering of such
         securities, generating net proceeds of $216,000. The purchasers of
         these securities also received two-year warrants to purchase 5,000
         shares of common stock for every $25,000 of Preferred Stock purchased
         at an exercise price of $7.50. The preferred shares accumulate
         dividends at the rate of $10 per share per annum and are convertible to
         common shares at the option of the holders. Undeclared, cumulative
         dividends on preferred stock aggregated $30,333 at December 31, 1999.

         In September 1999, an individual exercised 10,000 warrants for
         aggregate proceeds to the Company of $30,000 and note holder converted
         $25,000 of principal and $5,500 of accrued interest into 6,100 shares
         of the Company's common stock.

         In October and November 1999, the Company issued 190,000 shares of
         common stock for professional services valued at $637,500. The value
         was determined using the market value of the Company's stock at the
         date of issuance.

         In October 1999 the Company issued warrants to purchase 200,000 shares
         of common stock for professional services valued at $200,000 and
         options to purchase 25,000 shares of common stock for legal fees valued
         at $25,000.

         In October and November 1999 the Company issued 402,500 shares of its
         common stock is a series of private placement offerings for aggregate
         proceeds of $737,500.

         In February 2000, the Company converted $432,844 of the loans payable
         to officer and $65,908 of interest payable to officer in exchange for
         110,000 shares of common stock.

                                      F-20
<PAGE>



                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 8 - SHAREHOLDERS' EQUITY, continued:

         In April 2000 and November 2000, the Company issued 2,500 and 7,000
         shares of common stock for professional services valued at $17,500 and
         $16,625, respectively. The value was determined using the market value
         of the Company's stock at the date of issuance.

         In April 2000, July 2000 and October 2000, the Company issued 22,500,
         34,100 and 5,000 shares of common stock for license fees valued at
         $168,125, $137,500 and $19,375, respectively. The value was determined
         using the market value of the Company's stock at the date of issuance.

         In February 2000, May 2000 and October 2000, the Company converted
         1,650, 1,350 and 250 shares of Series A preferred stock into 33,000,
         27,000 and 5,000 shares of common stock, respectively.

         In February 2000 and September 2000 Company issued 186,000 and 150,000
         shares of its common stock in connection with private placement
         offerings for net proceeds of $838,970 and $455,000, respectively.

         In addition, in April 2000 and July 2000, the Company sold a total of
         410,000 shares or approximately 17% of the common stock of its
         subsidiary, Fragrance for net proceeds of $975,000. Fragrance, on a
         stand-alone basis, had a shareholders' deficit. As a result, the
         Company's investment in Fragrance had a negative carrying value. The
         increase in capitalization of Fragrance resulting from the sale of
         410,000 shares of common stock to outside investors benefited the
         Company in that it reduced the negative carrying value of the Company's
         investment in Fragrance. Accordingly, the Company has accounted for the
         change in its proportionate share of Fragrance's equity resulting from
         the issuance of stock to outside investors as an increase in
         shareholders' equity in the consolidated financial statements.

NOTE 9 - STOCK OPTIONS:

         In March 1998, the Company adopted the 1998 Stock Option Plan (the
         Plan), which provides for the grant of options to purchase up to
         500,000 shares of the Company's common stock. Under this Plan incentive
         stock options may be granted to employees and non-statutory stock
         options may be granted to employees and non-employees.

         In March 1998, the Company granted options to purchase 106,000 shares
         of common stock under this Plan. These options are exercisable at
         $3.00, the market value at the date of grant, per share and expire ten
         years from the date of grant.

         In October 1999, the Company granted options to purchase 250,000 shares
         of common stock under the Plan to its Chief Executive Officer. These
         options are exercisable at $4.50 (the market value at the date of
         grant) per share and expire ten years from the date of grant. The
         Company also granted options to purchase 125,000 shares of common stock
         under the Plan to its Chief Operating Officer. These options are
         exercisable at $3.00 (the market value at the date of grant) per share
         and expire ten years from the date of grant.

                                      F-21
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 9 - STOCK OPTIONS, continued:

         In October 1999, the Company also granted options to purchase 25,000
         shares of common stock as consideration for legal fees valued at
         $25,000. These options are exercisable at $4.50 (the market value at
         the date of grant) per share and expire ten years from the date of
         grant. The options vest immediately.

         The compensation cost resulting from the effect of applying SFAS 123 to
         the above described option grant is not disclosed since the amount is
         considered immaterial.

         At December 31, 1999, there were 441,534 and 506,000 warrants and
         options outstanding, respectively. During the year ended December 31,
         2000 the Company issued 100,000 and 0, warrants and options,
         respectively.

         At December 31, 2000 the total warrants and options outstanding was
         551,534 and 506,000 with a weighted average exercise price of $4.00 and
         $3.82, respectively. At December 31, 2000, 551,534 and 506,000 of the
         warrants and options, respectively, were exercisable. The weighted
         average remaining contractual life of warrants and options at December
         31, 2000 was 1.41 and 7.80 years, respectively.

NOTE 10 - INCOME TAXES

         No provision for Federal and state income taxes has been recorded since
         the Company has incurred losses for the period from inception through
         December 31, 2000. Deferred tax assets at December 31, 2000 and 1999
         consist primarily of the tax effect of a net operating loss carry
         forwards which amount to approximately $3,075,000 and $1,495,000,
         respectively. The Company has provided a 100% valuation allowance on
         the deferred tax assets at December 31, 2000 and 1999 to reduce such
         asset to zero, since there is no assurance that the Company will
         generate future taxable income to utilize such asset. Management will
         review this valuation allowance requirement periodically and make
         adjustments as warranted.


                                      F-22
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 11 - COMMITMENTS AND CONTINGENCIES:

     (a)  Operating Leases:

         During 1997, the Company utilized office space provided by its majority
         shareholder pursuant to a month-to-month lease at a monthly rental of
         $400. In 1998, the Company began renting new space under a
         month-to-month lease at a monthly rental of $690 which increased to
         $1,500 per month, effective March 1999. Rent expense for the year ended
         December 31, 2000 and 1999 aggregated $32,444 and $17,470,
         respectively.

         Effective April 1, 2000, the Company entered into a three-year lease
         for office space. Annual lease commitments for the next four years and
         in the aggregate are:

                     2001                                 $   27,483
                     2002                                     28,498
                     2003                                      7,188
                                                          ----------
                                                          $   63,169
                                                          ==========
     (b)  Consulting Agreements:

         In March 1998, the Company entered into a consulting agreement with its
         editorial director which expired on June 30, 1999, subject to automatic
         annual renewals. The Company (i) agreed to pay this individual a
         monthly fee of $4,166 and (ii) granted options to purchase up to 50,000
         shares of the Company's common stock at an exercise price of $3.00 per
         share. This agreement was terminated in 1999, and the options were
         cancelled.

         The Company agreed to pay a monthly fee of $3,500 to a public relations
         firm to assist in the launch of its web sites. This agreement for an
         eight-month period effective May 1, 1998 has expired.

     (c)  Employment Agreements:

         The Chairman/President of the Company is entitled to receive an annual
         base salary of $100,000 from the Company. At December 31, 1997, the
         Company accrued $50,000 in compensation payable to this individual and
         payment was accomplished in 1998, through the issuance of shares of
         common stock. In 1999, the Company paid this individual $45,000 and
         issued warrants to purchase 250,000 shares of common stock. In 2000,
         1999 and 1998, this individual waived all rights to receive accrued
         salaries payable to him in the amounts of $100,000, $55,000 and
         $66,000, respectively, and, accordingly, such amount has been presented
         as a contribution to the Company's additional paid-in capital.

                                      F-23
<PAGE>


                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 11 - COMMITMENTS AND CONTINGENCIES, continued:

     (d)  Other Agreements:

         In the normal course of operations, and in accordance with industry
         customs, the Company trades its advertising services with those of some
         of its suppliers. These transactions are recorded at fair value when
         the services are received. No such transactions were recorded in 2000
         or 1999.

         The Company has also entered into various agreements pursuant to which
         it provides hyperlinks to other web sites for the purchase of certain
         items. In exchange, the Company will receive a percentage of any
         revenues derived from sales to those customers using these hyperlinks.
         No such transactions were recorded in 2000 or 1999.

         In March 2000, the Company entered into an agreement with a company
         controlled by Downtown Julie Brown to give the Company her services for
         weekly radio shows to air on weekends. The Company is obligated to pay
         her $100,000 annually for one year plus give her 10,000 shares of
         common stock. The Company issued Ms. Brown 10,000 shares in 2000 valued
         at $65,000, the market value of the Company's stock at the date of
         issuance. The Company has also paid Ms. Brown $8,333 per month since
         April 2000. The Company has elected not to renew its agreement with Ms.
         Brown.

         In connection with a website license agreement with pop music artist
         Mandy Moore, if the common stock issued in connection with the
         agreement has not been sold as of the first anniversary and the value
         of such common stock at the first anniversary is less than $110,000,
         then the Company is required to issue additional common stock such that
         the total value of all common stock held by Ms. Moore and Ms. Moore's
         agent is not less than $110,000.



                                      F-24
<PAGE>

                         PTN MEDIA, INC. AND SUBSIDIARY
                         ------------------------------
                          (a Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             For the Years Ended December 31, 2000 and 1999 and the
      cumulative period from May 27, 1997 (inception) to December 31, 2000


NOTE 11 - COMMITMENTS AND CONTINGENCIES, continued:


     (e)  Legal Proceedings:

         On December 8, 1998, attorneys for Tyra Banks and Bankable, Inc., an
         entity controlled by Ms. Banks, made a Demand for Arbitration against
         the Company under the Commercial Arbitration Rules of the American
         Arbitration Association. Ms. Banks' attorneys alleged that the Company
         failed to make timely payments of money due upon the execution of the
         Website License Agreement and Calendar Agreement between Ms. Banks and
         the Company ("Agreements"), and refused to return photographs,
         pictures, prints, negatives and images of Ms. Banks. Ms. Banks sought
         damages under the Calendar Agreement in the amount of $161,333, damages
         under the Website Agreement of $370,000 and legal fees. On January 15,
         1999, the Company, through its attorneys, filed an Answer and
         Counterclaim to Ms. Banks' Demand for Arbitration. The Company raised
         several defenses to Ms. Banks' claims and claimed a breach by Ms. Banks
         and Bankable, Inc. of the Website Agreement. The Company sought the
         amount of $264,000 in damages related to the Agreements. A preliminary
         administrative conference was held on January 19, 1999, and a hearing
         was held in October 1999 and the Company filed briefs on March 6, 2000
         in response. In June, 2000 the arbitrator awarded Ms. Banks $128,000,
         plus interest on this amount at 12% from April 1, 1998. In addition,
         the Company is to pay the arbitrator fee and the administrative
         expenses of the arbitrator. The arbitrator reaffirmed the award in
         August, 2000. The Company has accrued $187,053 related to this judgment
         in the accompanying financial statements.

NOTE 12 - RELATED PARTY TRANSACTIONS:

         During the year ended December 31, 2000, the Company paid $62,500 to a
         firm that the Company's Chief Operating Officer is an owner. The
         payments were for investor relations and assistance with raising debt
         and equity capital.

NOTE 13 - SUBSEQUENT EVENT (Unaudited):

         In February 2001, the Company entered into a two year license agreement
         with Christina Aguilera that provides the Company an exclusive,
         royalty-free, worldwide license to use, distribute, display and
         transmit Christina Aguilera's full name, image, likeness, and
         endorsement in connection with the proposed manufacture, advertisement,
         distribution and sale of certain hand-held computers. Aguilera is to
         receive a royalty equal to 12% of the proceeds from the hand-held
         computers. The Company must pay Aguilera an annual minimum royalty of
         $100,000. In addition, the Company has also agreed to issue $50,000
         worth of the Company's common stock to Ms. Aguilera.


                                      F-25


<PAGE>
                           STATEMENT OF ORGANIZATION
                             OF THE INCORPORATOR OF
                               PTN WIRELESS, INC.

     The undersigned incorporator of PTN Wireless, Inc., a Delaware corporation,
hereby certifies, pursuant to Section 108 of the General Corporation Law of the
State of Delaware, that:

     1.   The certificate of incorporation of said corporation was filed with
          the Secretary of State of the State of Delaware on February 21, 2001.

     2.   The By-laws annexed hereto are hereby adopted as and for the By-laws
          of said corporation.

     3.   Peter Klamka is hereby elected as the director of said corporation to
          hold office until the first annual meeting of stockholders or until
          his successors are elected and qualified:

     IN WITNESS WHEREOF, I have signed this instrument as of the date when these
actions were so taken this 21st day of February 21, 2001.


                                             /s/  Hank Gracin
                                             -----------------------------------
                                             Hank Gracin


<PAGE>

                                     BY-LAWS

                                       OF

                               PTN WIRELESS, INC.

                                    ARTICLE I
                                  Stockholders
                                  ------------



          Section 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of Directors at such date, time and place either within
or without the State of Delaware as may be designated by the Board of Directors
from time to time. Any other proper business may be transacted at the annual
meeting.

          Section 1.2. Special Meetings. Special meetings of stockholders may be
called at any time by the Chairman of the Board, if any, the Vice Chairman of
the Board, if any, or the President to be held at such date, time and place
either within or without the State of Delaware as may be stated in the notice of
the meeting. A special meeting of stockholders shall be called by the Secretary
upon the written request, stating the purpose of the meeting, of stockholders
who together own of record a majority of the outstanding shares of each class of
stock entitled to vote at such meeting.

          Section 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the written notice of any meeting
shall be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting. If mailed, such
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at such stockholder's address as it
appears on the records of the Corporation.

          Section 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.

          Section 1.5. Quorum. At each meeting of stockholders, except where
otherwise provided by law or the certificate of incorporation or these by-laws,
the holders of a majority of the outstanding shares of each class of stock
entitled to vote at the meeting, present in person or represented by proxy,
shall constitute a quorum. For purposes of the foregoing, two or more classes or

<PAGE>


series of stock shall be considered a single class if the holders thereof are
entitled to vote together as a single class at the meeting. In the absence of a
quorum the stockholders so present may, by majority vote, adjourn the meeting
from time to time in the manner provided by Section 1.4 of these by-laws until a
quorum shall attend. Shares of its own capital stock belonging on the record
date for the meeting to the Corporation or to another corporation, if a majority
of the shares entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the Corporation, shall neither
be entitled to vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of the Corporation to vote stock,
including but not limited to its own stock, held by it in a fiduciary capacity.

          Section 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in the absence of the Chairman of
the Board by the Vice Chairman of the Board, if any, or in the absence of the
Vice Chairman of the Board by the President, or in the absence of the President
by a Vice President, or in the absence of the foregoing persons by a chairman
designated by the Board of Directors, or in the absence of such designation by a
chairman chosen at the meeting. The Secretary, or in the absence of the
Secretary an Assistant Secretary, shall act as secretary of the meeting, but in
the absence of the Secretary and any Assistant Secretary the chairman of the
meeting may appoint any person to act as secretary of the meeting.

          Section 1.7. Voting; Proxies. Unless otherwise provided in the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
such stockholder which has voting power upon the matter in question. If the
certificate of incorporation provides for more or less than one vote for any
share on any matter, every reference in these by-laws to a majority or other
proportion of stock shall refer to such majority or other proportion of the
votes of such stock. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest sufficient in law to support
an irrevocable power. A stockholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date with the Secretary of the Corporation. Voting at meetings of
stockholders need not be by written ballot and need not be conducted by
inspectors unless the holders of a majority of the outstanding shares of all
classes of stock entitled to vote thereon present in person or by proxy at such
meeting shall so determine. At all meetings of stockholders for the election of
directors a plurality of the votes cast shall be sufficient to elect. With
respect to other matters, unless otherwise provided by law or by the certificate
of incorporation or these by-laws, the affirmative vote of the holders of a
majority of the shares of all classes of stock present in person or represented
by proxy at the meeting and entitled to vote on the subject matter shall be the
act of the stockholders, provided that (except as otherwise required by law or
by the certificate of incorporation) the Board of Directors may require a larger
vote upon any such matter. Where a separate vote by class is required, the
affirmative vote of the holders of a majority of the shares of each class
present in person or represented by proxy at the meeting shall be the act of
such class, except as otherwise provided by law or by the certificate of
incorporation or these by-laws.

                                     - 2 -

<PAGE>


          Section 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
nor less than ten days before the date of such meeting, nor more than sixty days
prior to any other action. If no record date is fixed: (1) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (2) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action by the Board is necessary, shall
be the day on which the first written consent is expressed; and (3) the record
date for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board may fix a new record date for the adjourned meeting.

          Section 1.9. List of Stockholders Entitled to Vote. The Secretary
shall prepare and make, at least ten days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present.

          Section 1.10. Consent of Stockholders in Lieu of Meeting. Any action
required by law to be taken at any annual or special meeting of stockholders of
the Corporation, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.

                                     - 3 -

<PAGE>


                                   ARTICLE II
                               Board of Directors
                               ------------------


          Section 2.1. Powers; Number; Qualifications. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors, except as may be otherwise provided by law or in the certificate of
incorporation. The Board shall consist of one or more members, the number
thereof to be determined from time to time by the Board. Directors need not be
stockholders.

          Section 2.2. Election; Term of Office; Resignation; Removal;
Vacancies. Each director shall hold office until the annual meeting of
stockholders next succeeding his or her election and until his or her successor
is elected and qualified or until his or her earlier resignation or removal. Any
director may resign at any time upon written notice to the Board of Directors or
to the President or the Secretary of the Corporation. Such resignation shall
take effect at the time specified therein, and unless otherwise specified
therein no acceptance of such resignation shall be necessary to make it
effective. Any director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of the shares then entitled to vote
at an election of directors; except that, if the certificate of incorporation
provides for cumulative voting and less than the entire Board is to be removed,
no director may be removed without cause if the votes cast against his or her
removal would be sufficient to elect him or her if then cumulatively voted at an
election of the entire Board, or, if there be classes of directors, at an
election of the class of directors of which he or she is a part. Whenever the
holders of any class or series of stock are entitled to elect one or more
directors by the provisions of the certificate of incorporation, the provisions
of the preceding sentence shall apply, in respect to the removal without cause
of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Unless otherwise provided in the certificate of
incorporation or these by-laws, vacancies and newly created directorships
resulting from any increase in the authorized number of directors elected by all
of the stockholders having the right to vote as a single class or from any other
cause may be filled by a majority of the directors then in office, although less
than a quorum, or by the sole remaining director. Whenever the holders of any
class or classes of stock or series thereof are entitled to elect one or more
directors by the provisions of the certificate of incorporation, vacancies and
newly created directorships of such class or classes or series may be filled by
a majority of the directors elected by such class or classes or series thereof
then in office, or by the sole remaining director so elected.

          Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board may from time to time determine, and if so determined
notice thereof need not be given.

          Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of

                                     - 4 -

<PAGE>


Delaware whenever called by the Chairman cf the Board, if any, by the Vice
Chairman of the Board, if any, by the President or by any two directors.
Reasonable notice thereof shall be given by the person or persons calling the
meeting.

          Section 2.5. Participation in Meetings by Conference Telephone
Permitted. Unless otherwise restricted by the certificate of incorporation or
these by-laws, members of the Board of Directors, or any committee designated by
the Board, may participate in a meeting of the Board or of such committee, as
the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this by-law shall
constitute presence in person at such meeting.

          Section 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors one-third of the entire Board shall constitute a quorum for
the transaction of business. The vote of a majority of the directors present at
a meeting at which a quorum is present shall be the act of the Board unless the
certificate of incorporation or these by-laws shall require a vote of a greater
number. In case at any meeting of the Board a quorum shall not be present, the
members of the Board present may adjourn the meeting from time to time until a
quorum shall attend.

          Section 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in the absence of the
Chairman of the Board by the Vice Chairman of the Board, if any, or in the
absence of the Vice Chairman of the Board by the President, or in their absence
by a chairman chosen at the meeting. The Secretary, or in the absence of the
Secretary an Assistant Secretary, shall act as secretary of the meeting, but in
the absence of the Secretary and any Assistant Secretary the chairman of the
meeting may appoint any person to act as secretary of the meeting.

          Section 2.8. Action by Directors Without a Meeting. Any action
required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof, may be taken without a meeting if all members of the
Board or of such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
or conunittee.

          Section 2.9. Compensation of Directors. The Board of Directors shall
have the authority to fix the compensation of directors.


                                   ARTICLE III
                                   Committees
                                   ----------


          Section 3.1. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The

                                     - 5 -

<PAGE>


Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in place
of any such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board, shall have and may exercise all the
powers and authority of the Board in the management of the business and affairs
of the Corporation, and may authorize the seal of the Corporation to be affixed
to all papers which may require it; but no such committee shall have power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the Corporation or a
revocation of dissolution, removing or indemnifying directors or amending these
by-laws; and, unless the resolution expressly so provides, no such committee
shall have the power or authority to declare a dividend or to authorize the
issuance of stock.

          Section 3.2. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board may adopt, amend and repeal
rules for the conduct of its business. In the absence of a provision by the
Board or a provision in the rules of such committee to the contrary, a majority
of the entire authorized number of members of such committee shall constitute a
quorum for the transaction of business, the vote of a majority of the members
present at a meeting at the time of such vote if a quorum is then present shall
be the act of such committee, and in other respects each committee shall conduct
its business in the same manner as the Board conducts its business pursuant to
Article II of these by-laws.


                                   ARTICLE IV
                                    Officers
                                    --------


          Section 4.1. Officers; Election. As soon as practicable after the
annual meeting of stockholders in each year, the Board of Directors shall elect
a President and a Secretary, and it may, if it so determines, elect from among
its members a Chairman of the Board and a Vice Chairman of the Board. The Board
may also elect one or more Vice Presidents, one or more Assistant Vice
Presidents, one or more Assistant Secretaries, a Treasurer and one or more
Assistant Treasurers and such other officers as the Board may deem desirable or
appropriate and may give any of them such further designations or alternate
titles as it considers desirable. Any number of offices may be held by the same
person.

          Section 4.2. Term of office; Resignation; Removal; Vacancies. Except
as otherwise provided in the resolution of the Board of Directors electing any
officer, each officer shall hold office until the first meeting of the Board
after the annual meeting of stockholders next succeeding his or her election,

                                     - 6 -

<PAGE>


and until his or her successor is elected and qualified or until his or her
earlier resignation or removal. Any officer may resign at any time upon written
notice to the Board or to the President or the Secretary of the Corporation.
Such resignation shall take effect at the time specified therein, and unless
otherwise specified therein no acceptance of such resignation shall be necessary
to make it effective. The Board may remove any officer with or without cause at
any time. Any such removal shall be without prejudice to the contractual rights
of such officer, if any, with the Corporation, but the election of an officer
shall not of itself create contractual rights. Any vacancy occurring in any
office of the Corporation by death, resignation, removal or otherwise may be
filled for the unexpired portion of the term by the Board at any regular or
special meeting.

          Section 4.3. Chairman of the Board. The Chairman of the Board, if any,
shall preside at all meetings of the Board of Directors and of the stockholders
at which he or she shall be present and shall have and may exercise such powers
as may, from time to time, be assigned to him or her by the Board and as may be
provided by law.

          Section 4.4. Vice Chairman of the Board. In the absence of the
Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at
all meetings of the Board of Directors and of the stockholders at which he or
she shall be present and shall have and may exercise such powers as may, from
time to time, be assigned to him or her by the Board and as may be provided by
law.

          Section 4.5. President. In the absence of the Chairman of the Board
and Vice Chairman of the Board, the President shall preside at all meetings of
the Board of Directors and of the stockholders at which he or she shall be
present. The President shall be the chief executive officer and shall have
general charge and supervision of the business of the Corporation and, in
general, shall perform all duties incident to the office of president of a
corporation and such other duties as may, from time to time, be assigned to him
or her by the Board or as may be provided by law.

          Section 4.6. Vice Presidents. The Vice President or Vice Presidents,
at the request or in the absence of the President or during the President's
inability to act, shall perform the duties of the President, and when so acting
shall have the powers of the President. If there be more than one Vice
President, the Board of Directors may determine which one or more of the Vice
Presidents shall perform any of such duties; or if such determination is not
made by the Board, the President may make such determination; otherwise any of
the Vice Presidents may perform any of such duties. The Vice President or Vice
Presidents shall have such other powers and shall perform such other duties as
may, from time to time, be assigned to him or her or them by the Board or the
President or as may be provided by law.

          Section 4.7. Secretary. The Secretary shall have the duty to record
the proceedings of the meetings of the stockholders, the Board of Directors and
any committees in a book to be kept for that purpose, shall see that all notices
are duly given in accordance with the provisions of these by-laws or as required
by law, shall be custodian of the records of the Corporation, may affix the

                                     - 7 -

<PAGE>


corporate seal to any document the execution of which, on behalf of the
Corporation, is duly authorized, and when so affixed may attest the same, and,
in general, shall perform all duties incident to the office of secretary of a
corporation and such other duties as may, from time to time, be assigned to him
or her by the Board or the President or as may be provided by law.

          Section 4.8. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation and shall deposit or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust companies
or other depositories as shall, from time to time, be selected by or under
authority of the Board of Directors. If required by the Board, the Treasurer
shall give a bond for the faithful discharge of his or her duties, with such
surety or sureties as the Board may determine. The Treasurer shall keep or cause
to be kept full and accurate records of all receipts and disbursements in books
of the Corporation, shall render to the President and to the Board, whenever
requested, an account of the financial condition of the Corporation, and, in
general, shall perform all the duties incident to the office of treasurer of a
corporation and such other duties as may, from time to time, be assigned to him
or her by the Board or the President or as may be provided by law.

          Section 4.9. Other Officers. The other officers, if any, of the
Corporation shall have such powers and duties in the management of the
Corporation as shall be stated in a resolution of the Board of Directors which
is not inconsistent with these by-laws and, to the extent not so stated, as
generally pertain to their respective offices, subject to the control of the
Board. The Board may require any officer, agent or employee to give security for
the faithful performance of his or her duties.


                                    ARTICLE V
                                      Stock
                                      -----


          Section 5.1. Certificates. Every holder of stock in the Corporation
shall be entitled to have a certificate signed by or in the name of the
Corporation by the Chairman or Vice Chairman of the Board of Directors, if any,
or the President or a Vice President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary, of the Corporation,
certifying the number of shares owned by such holder in the Corporation. If such
certificate is manually signed by one officer or manually countersigned by a
transfer agent or by a registrar, any other signature on the certificate may be
a facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if such
person were such officer, transfer agent or registrar at the date of issue.

          Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,

                                      - 8 -

<PAGE>


stolen or destroyed certificate, or such owner's legal representative, to give
the Corporation a bond sufficient to indemnify it against any claim that may be
made against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.



                                   ARTICLE VI
                                  Miscellaneous
                                  -------------


          Section 6.1. Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors.

          Section 6.2. Seal. The Corporation may have a corporate seal which
shall have the name of the Corporation inscribed thereon and shall be in such
form as may be approved from time to time by the Board of Directors. The
corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.

          Section 6.3. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Whenever notice is required to be given by law or under any
provision of the certificate of incorporation or these by-laws, a written waiver
thereof, signed by the person entitled to notice, whether before or after the
time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders,
directors, or members of a committee of directors need be specified in any
written waiver of notice unless so required by the certificate of incorporation
or these by-laws.

          Section 6.4. Indemnification of Directors, Officers and Employees. The
Corporation shall indemnify to the full extent authorited by law any person made
or threatened to be made a party to any action, suit or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
such person or such person's testator or intestate is or was a director, officer
or employee of the Corporation or serves or served at the request of the
Corporation any other enterprise as a director, officer or employee. For
purposes of this by-law, the term "Corporation" shall include any predecessor of
the Corporation and any constituent corporation (including any constituent of a
constituent) absorbed by the Corporation in a consolidation or merger; the term
"other enterprise" shall include any corporation, partnership, joint venture,
trust or employee benefit plan; service "at the request of the Corporation"
shall include service as a director, officer or employee of the Corporation
which imposes duties on, or involves services by, such director, officer or
employee with respect to an employee benefit plan, its participants or
beneficiaries; any excise taxes assessed on a person with respect to an employee

                                      - 9 -

<PAGE>


benefit plan shall be deemed to be indemnifiable expenses; and action by a
person with respect to an employee benefit plan which such person reasonably
believes to be in the interest of the participants and beneficiaries of such
plan shall be deemed to be action not opposed to the best interests of the
Corporation.

          Section 6.5. Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or her or their
votes are counted for such purpose, if: (1) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board or the committee, and the Board or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested directors
be less than a quorum; or (2) the material facts as to his or her relationship
or interest and as to the contract or transaction are disclosed or are known to
the stockholders entitied to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (3) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board or of a committee which
authorizes the contract or transaction.

          Section 6.6. Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.

          Section 6.7. Amendment of By-Laws. These by-laws may be amended or
repealed, and new by-laws adopted, by the Board of Directors, but the
stockholders entitled to vote may adopt additional by-laws and may amend or
repeal any by-law whether or not adopted by them.

                                     - 10 -
<PAGE>
PTN Media
Attn: Peter Klamka
455 E. Eisenhower
Ann Arbor, MI 48105

Cloudy Productions Ltd.
United Talent Agency
Attn: Lisa Jacobson
9560 Wilshire Blvd.
4th Floor
Beverly Hills, CA 92012

Re: Amendment to Palm, Inc. - PTN Media Agreement dated October 5, 2000


Dear Peter and Lisa,

As you know, we have recently been discussing alternative methods to move the
existing inventory of Claudia Schiffer Edition Palm Vx handhelds (CS Units)
ordered by PTN Media (PTN) pursuant to a purchase order issued on December 1,
2000 (the "Purchase Order"). The contract Palm, Inc. (Palm) signed with PTN
permits distribution only through the Claudia Schiffer web site. Since sales via
that channel have not met our mutual expectations, we all agree it is
appropriate to broaden distribution as more fully set forth below. What follows
is the agreement Palm, PTN and Cloudy Productions Ltd. via United Talent Agency
have made. It if it is consistent with your understanding, please sign the
letter where indicated and fax it back to me.

     1.   Palm will offer the CS Units directly to U.S. and Canadian customers
          via its Store on the Palm.com website.
     2.   For a period up to one (1) year from the date hereof unless further
          approved by Cloudy Productions, Palm will also make the product
          available to its standard distribution channels in both the U.S. and
          Canada. It is understood that such channels do not include specialty
          fashion. Any use of the name, image or likeness of Ms.Schiffer in any
          packaging, promotional or advertising materials, shall be approved in
          advance by Cloudy Productions.
     3.   Depending on sales, Palm will withhold inventory according to its
          standard practices in order to support customer service requests. No
          fee (Paragraph 5) shall be due for such units.
     4.   Palm will pay to PTN the sum of $20.00 for every CS Unit sold and paid
          for, net of any returns. The foregoing shall be inclusive of any and
          all royalties or fees due to either PTN or Cloudy Productions
          (relating to Ms. Schiffer) for the sales of these units, including any
          fees due for the third party software contained on the CS CD. PTN
          hereby authorizes and directs such sum to be paid directly to the
          order of Cloudy Productions (at the address above), which payment
          consists of $10 per unit as cloudy Productions' share of the $20
          royalty, and $10 per unit as a partial payment by PTN to Cloudy
          Productions on account of PTN's outstanding obligations due to Cloudy
          Productions.


<PAGE>


     5.   By signing this letter, both PTN and Cloudy Productions agree that
          Palm has full rights and authority to sell the CS Units as set forth
          herein. To the extent necessary, PTN and Cloudy Productions hereby
          grant such rights to Palm for this limited purpose.
     6.   PTN will provide to Palm documentation sufficient for Palm to
          distribute the software contained in the CS Unit software CD,
          including distribution in Canada and via Palm's standard channels.
          There will be no charge to Palm for such rights.
     7.   PTN agrees to indemnify and hold Palm harmless from any claim brought
          by any third party arising out of or related to Palm's right to
          distribute the CS Unit and CS Unit software CD.
     8.   To the extent Palm is able to sell the units, PTN will be relieved of
          its responsibilities under the Purchase Order placed by PTN for the
          units. PTN shall remain obligated for any unsold CS Units. Cloudy
          Productions shall have no responsibility with respect thereto.
     9.   Any unsold units remaining in inventory as of March 30, 2001 may be
          reworked by Palm into non-CS Units and sold as such. PTN will pay to
          Palm $30.00 per unit to rework such units. Upon payment of the rework
          fee, PTN shall be relieved of its responsibilities for such units
          under the Purchase Order. If PTN desires to take delivery of any
          remaining inventory it will make payment for same prior to March 31,
          2001 or Palm may proceed as described without need of notice to PTN.
     10.  Palm will supply the quantity of CS Units sold by Palm to PTN Media
          and Cloudy Productions by March 30, 2001.

This document will serve as an amendment to the Palm, Inc. - PTN Media agreement
dated October 5, 2000, the terms of which shall control except as otherwise
changed herein.

Sincerely,

/s/  Denny Riley
Denny Riley
Sr. Director, OEM Sales
Palm, Inc.

By signing on the attached signature page, each party agrees to the terms set
forth.


<PAGE>


Palm, Inc.
----------

Printed Name:  Dennis Riley
Title:  Sr. Director OEM
Signature:  /s/  Dennis Riley
Date:  3-15-01

PTN Media
---------

Printed Name:  Peter Klamka
Title:  CEO
Signature:  /s/  Peter Klamka
Date:  3-15-01

United Talent Agency/for Cloudy Productions Ltd.
------------------------------------------------

Printed Name:  Gudrun Schiffer
Title:  Director
Signature:  /s/  Gudrun Schiffer
Date:  28-Feb-2001
<PAGE>

                                LICENSE AGREEMENT



     This License Agreement (the "Agreement") is entered into as of February 19,
2001 by and between 3 Wishes Productions Inc. f/s/o Christina Aguilera
("Aguilera") and PTN MEDIA INC. ("PTNM") with reference to the following facts
and circumstances:

     PTNM desires to obtain, and Aguilera is willing to grant, an exclusive
license to use Aguilera's name, image, likeness and endorsement (herein the
"Licensed Property") in connection with the proposed advertisement, promotion
and sale of hand held computers running the Pa1mTM operating system,

     NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties agree as follows:

     1. Terms of License,

          (a) Subject to the terms and conditions of the Agreement, Aguilera
hereby grants to PTNM an exclusive (solely with respect to hand held computers),
royalty-free (except as set forth herein), worldwide license (the "License") to
use, distribute, display and transmit Aguilera's full name (and parts thereof),
image, likeness, and endorsement (the "Licensed Property") only in the form, for
the purposes and in the manner, as expressly approved in writing in advance, by
her in connection with the proposed manufacture, advertisement, distribution and
sale of certain approved hand-held computers (the "Licensed Products") and in
the channels of distribution expressly approved in writing in advance by
Aguilera. PTNM shall have the exclusive right to subcontract manufacturing in
connection with the License, subject in all events to the express prior written
consent of Aguilera. The parties shall list products approved, as Licensed
Products, on Schedule I attached hereto and initialed. Any new item sought to be
included, as a Licensed Product must be set forth in an updated Schedule I
expressly authorized and executed by Aguilera. The Licensed Products may be
advertised and promoted immediately after execution of this Agreement, but
they shall not be offered for sale prior to August 01, 2001 (the "On-Sale
Date").

          (b) PTNM shall cause the Licensed Products to be produced in strict
conformance with the approvals as given by Aguilera and shall pay Aguilera a
royalty equal to twelve percent (12%) of the proceeds received from the sale of
the Licensed Products after deducting the direct invoiced cost from the
manufacturer. Payments shall be reported to Aguilera and accounted for within
thirty (30) days after the end of each calendar quarter hereunder, and


                                       1
<PAGE>


each accounting shall include payments of the share to Aguilera. Late payments
shall accrue interest at 1.5% per month. In addition, PTNM hereby agrees to
guarantee Aguilera an annual minimum royalty hereunder of one hundred thousand
dollars ($100,000.00), which in the first year of the Agreement shall be paid
upon execution by PTNM and in the second year of the Agreement shall be paid to
Aguilera one year from the date of the photo shoot set forth below. In addition,
PTNM agrees to deliver a stock certificate representing shares equal to fifty
thousand dollars ($50,000.00), based on the closing price of PTNM common stock
on the date of Aguilera's signing, within fifteen (15) days of final execution.
The annual minimum royalty payments contemplated thereby, excluding the PTNM
common stock acquired by Aguilera as set forth herein, shall be treated as an
advance against the royalty payments due hereunder. Subject to the terms of the
Agreement, Aguilera shall continue to own all right, title and interest in and
to the Licensed Property; Aguilera shall, however, have no right, title or
interest in or to the products or any content therein, and PTNM shall have sole
contact with the manufacturer in connection with the development, format,
contents and all other aspects in connection with Licensed Products or
otherwise, provided it is in compliance with the provisions hereof as to
approval rights of Aguilera.

          (c) In connection with the foregoing, Aguilera agrees to cooperate
with, and make herself reasonably available to, PTNM for a four (4) hour photo
shoot prior to the release of the Licensed Products, which photos shall be used
by PTNM for advertising, promotion and public relations purposes only. The photo
shoot is subject to her professional availability and with staffing that is
mutually agreed upon by Aguilera and PTNM.

          (d) Aguilera agrees to cooperate with and make herself reasonably
available to PTNM for two (2) 60 minute press events, no music/concert
performance shall be required at said events, during the term subject to her
professional availability and at PTNM's expense.

          (c) All rights to the Licensed Property not specifically granted to
PTNM in the Agreement are reserved to Aguilera. Aguilera shall have the right to
utilize or permit others to utilize any reserved rights throughout the duration
of the Agreement and beyond, but Aguilera agrees that she will not, either
jointly or alone, directly or indirectly, grant any rights to any third party
which arc in conflict with the rights granted for the Agreement.

          (f) Aguilera shall receive fifteen (15) units of the Licensed Products
hereunder and have the right to purchase additional units at PTNM's cost.

     2. Warranties, Indemnification and Remedies.
        --------------------------------------

          (a) Aguilera warrants and represents that she owns all right, title
and interest in and to the Licensed Property. Aguilera further represents,
warrants and agrees that she has the full right, power and authority to enter
into the Agreement and to grant the rights granted herein without violating any
other agreement or commitment of any sort to which she is a party or by which
she is hound; and that to the best of her knowledge, the use of the Licensed
Property as contemplated in the Agreement does not and will not infringe or
constitute a misappropriation of any trademark, patent, copyright, trade secret
or other proprietary, publicity or privacy right of any third party, and PTNM's
use of the Licensed Property in connection with the manufacture, advertisement,
distribution and sale of Licensed Products as provided herein shall not (with
respect only to the said Licensed Property) violate any rights of any kind or
nature of any third party. Excluded expressly herefrom are any representations
as to the handheld Products and any uses made of such items or any matters not
expressly approved in writing in advance by Aguilera.

          (b) Aguilera shall defend, indemnify and hold harmless PTNM and its
successors, permitted, assigns, affiliates, officers, directors, agents and
employees, from and against any action, suit, claim, damages, liability, costs


                                       2


<PAGE>

and expenses (including reasonable attorneys' fees), arising out of or in any
way connected with any breach of any representation, warranty or agreement made
by Aguilera herein or any claim that any Licensed Property infringes any
intellectual property rights or other rights of any third party on account of
the use of the Licensed Property. PTNM shall give Aguilera prompt notice of
any such claim or of any threatened claim. Neither Aguilera nor PTNM shall
agree to the settlement of any such claim or any associated press release,
demand or suit prior to final judgment thereon, nor issue any statement or file
any document that would increase the risk of Aguilera, without the written
consent of Aguilera.

          (e) PTNM hereby represents, warrants and agrees that it has the full
right, power and authority to enter into the Agreement and agrees that it will
not infringe or misappropriate any trademark, patent, copyright, trade secret or
other proprietary, publicity or privacy right of any third party in connection
with its use and/or marketing of the Licensed Property, and that the
manufacture, sale and distribution of Licensed Products shall comply with all
laws, regulations or other governmental requirements of all kinds, and that the
Licensed Products shall not cause injury or damage of any kind to any user or
other third party PTNM shall defend, indemnify and hold harmless Aguilera and
her successors, assigns, agents and employees, from and against any action,
suit, claim, damages, liability, costs and expenses (including reasonable
attorneys' fees), arising out of or in any way connected with any breach of any
representation, warranty or agreement made by PTNM herein. Aguilera shall give
PTNM prompt notice of any such claim or of any threatened claim. Without
limiting any obligations hereunder, PTNM, itself or through handheld
manufacturer, as a condition to the use of any of the 1icensed Property
hereunder, shall obtain and maintain product liability insurance and
comprehensive liability insurance, covering and protecting, as additional
insured's, Aguilera and her officers, directors, employees, agents and
representatives, with coverage amounts consistent with industry standards, but
no less than two million dollars ($2,000,000.00) per occurrence.

          (d) The parties' indemnification obligations set forth in the
foregoing paragraphs shall survive the termination of the Agreement.

     3. Termination
        -----------

          (a) The term of the Agreement shall he two (2) years from the date of
the photo shoot, but in no ease more than thirty (30) months from full
execution.

          (b) The Agreement may also be terminated by either party, upon written
notice to the other, if: (i) the other party files a petition for bankruptcy or
is adjudicated a bankrupt, (ii) a petition in bankruptcy is filed against the
other party, (iii) the other party makes an assignment for the benefit of its
creditors or an arrangement for its creditors pursuant to any bankruptcy law,
(iv) the other party discontinues its business, (v) a receiver is appointed for
the other party or its business or (vi) the other party breaches any material
provision hereof and such breach is not cured within ten (10) days after written
notice thereof.

          (c) Termination of the Agreement shall not extinguish any of PTNM's or
Aguilera's rights or obligations under the Agreement, which by their express
terms survives after the date of termination. Termination of the Agreement shall
be without prejudice to any other rights that either party may have at law or in
equity, and shall not affect the rights of end-users to continue to use all
distributed copies of handheld manufacturer Products.

          (d) The parties agree that PTNM shall have an additional one hundred-
twenty (120) days after the Term to market and sell the Licensed Products
pursuant to this Agreement (the "Sell-Off Period"). During said Sell-Off Period,
the Licensed Products shall continue to be marketed and sold as top-line
electronic products. it PTNM elects to substantially discount or otherwise
market the Licensed Products as less than top-line electronic products, said


                                        3

<PAGE>



products shall not embody any Licensed Property. PTNM agrees that it will not
manufacture the Licensed Products in unreasonable amounts in anticipation of the
end of the Term.

     4. Assignment. The Agreement and the rights granted hereunder are personal
to the parties and shall not be assigned without the prior written consent of
the other party; provider, however, that Aguilera may assign the Agreement to
any wholly or majority owned subsidiary or affiliated party. Subject to the
foregoing, the Agreement will bind the parties and their respective successors
and permitted assigns.

     5. Independent Contractor. Each party shall be deemed to have the status of
an independent contractor, and nothing in the Agreement shall be deemed to place
the parties in the relationship of employer-employee, principal-agent, partners
or joint ventures.

     6. No Brokers. All negotiations relative to the Agreement have been carried
on by the parties directly, without the intervention of any person as a result
of any act of either party (and, so far as known to either party, without the
intervention of any such person) in such manner as to give rise to any valid
claim against the parties hereto for brokerage CommissionS, finder's fees or
other like payment.

     7. Miscellaneous Provisions.
        ------------------------

          (a) Entire Agreement. The Agreement, and all other documents expressly
referred to herein, contain the entire agreement of the parties with respect to
its subject matter and supersedes all prior negotiations, agreements and
understandings, written or oral, with respect to such subject matter. The terms
of the Agreement shall be waived or amended only by the written agreement of the
parties. No delay or omission of either party in exercising any right or remedy
hereunder shall constitute a waiver of such right or remedy, and no waiver as to
any obligation shall operate as a continuing waiver or as a waiver of any
subsequent breach.

          (b) Governing Law. The Agreement shall be governed by, and construed
in accordance with, the laws of the State of California, without regard to the
conflicts of laws rules thereof.

          (c) Arbitration.
              -----------
               (i) Any dispute or controversy between the parties relating to or
     arising out of the Agreement or any amendment or modification hereof shall
     be determined in arbitration in the State of California pursuant to the
     rules and then obtaining of the American Arbitration Association. The
     arbitration award shall be final and binding upon the parties and judgment
     may be entered thereon in the Supreme Court of the State of California for
     the United States District Court for the Central District of California or
     in any other court of competent jurisdiction to which jurisdiction the
     parties hereby expressly consent. The service of any notice, process,
     motion or other document in connection with an arbitration under the
     Agreement or (he enforcement of any arbitration award hereunder may be
     effectuated by either personal service upon a party or by overnight courier
     delivery duly addressed to it, at the address or addresses of such party of
     such party or parties as herein set forth.
               (ii) Anything otherwise hereinabove provided to the contrary
     notwithstanding any dispute between the parties which involves a third
     party action or proceeding, including, but not limited to, cross-claims and
     third party action or interpleader action or proceeding, arising under the
     indemnification provisions hereof or otherwise, shall not at the election
     of the party subject to such third party action or proceedIng, be subject
     to arbitration (even though the same would have been arbitrable


                                        4

<PAGE>



     as between the parties and the action or proceeding been initiated by one
     of them against the other), but shall be resolved exclusively within the
     said action, and the other party hereto expressly consents to the
     jurisdiction of and in the court in which such action or proceeding is
     pending.

          (d) Benefit. The Agreement is not intended to confer upon any person
or entity other than the party's hereto any rights or remedies hereunder.

          (e) Interpretation. Each party intends that the Agreement be deemed
and construed to have been jointly prepared by the parties. As a result, the
parties agree that any ambiguity or uncertainty existing herein shall not be
interpreted against either of them. The parties also intend that the rights and
remedies hereunder be cumulative, so that exercise of any one or more of such
rights or remedies shall not preclude the later or concurrent exercise of any
other rights or remedies.

          (f) Notices. Whenever, under the terms of the Agreement, any notice or
other communication is required or permitted to be given by one party to the
other, such notice or other communication shall be in writing and shall be
deemed to have been sufficiently given if personally delivered, telecopied, or
sent by overnight courier addressed to the party to whom it is to be given, at
the address set forth at the end of the Agreement. Until further notice from
Aguilera, any notices intended for her shall be sent contemporaneously to Doug
Mark, Esq., Barnes Morris Klein & Yorn, 1424 Second St. 3Fd Fl., Santa Monica,
CA 90401. A notice or other communication shall be deemed received (i) upon
receipt, if personally delivered, (ii) on the first business day after dispatch,
if sent by overnight courier, and (iii) on the first business day alter
dispatch, if transmitted by telecopy. Either party hereto may change their
address by written notice in accordance with the Section.

          (g) Counterparts. The Agreement may be executed in counterparts, each
of which shall be deemed to be an original.

          (h) Severability. If any provision of the Agreement is declared by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions of the Agreement shall continue in full force and effect,
and the invalid provision shall be replaced by the legal provision which most
clearly achieves the intent of the invalid provision.

          (i) Confidentiality.
              ---------------
               (i) Each party agrees that all information, trade secrets of the
     party, product plans, designs, ideas, concepts, costs, finances, market
     plans, business opportunities, personnel, research, development or know-how
     and any other non-public technical or business information of a party,
     including, but not limited to, financial data and other data (collectively,
     the "Proprietary Information") is and shall remain the property of the
     disclosing party. Each party agrees that it shall hold the other's
     Proprietary Information in the strictest confidence and shall use such
     Proprietary Information only in connection with its performance under the
     Agreement. Each of them further agrees that it shall not disclose the
     other's Proprietary Information internally except to that minimum number of
     employees, agents, attorneys and accountants to whom such disclosure is
     necessary, with each such person to he advised of; and hound by, the
     confidentiality requirements hereunder. Each party shall return the other's
     Proprietary Information promptly upon the other's written request.

               (ii) The requirements of paragraph 7(a) above shall not apply to
     (a) Proprietary Information previously known to the receiving party free of
     any obligation to keep it confidential, (b) Proprietary Information that
     has been or is subsequently made public other than in breach of the Section
     or (c) any Proprietary Information the disclosure of which is required
     under any applicable law.


                                        5

<PAGE>



               (iii) Each party agrees that in the event of any breach of the
     Section 7, the non-breaching party would he irreparably and immediately
     harmed and that money damages would not be a sufficient remedy for any such
     breach. It is accordingly agreed that the non-breaching party shall be
     entitled to equitable relief; including injunction and specific
     performance, in the event of any breach of the provisions of the Section 7,
     in addition to all other remedies available to such party at law or in
     equity.

IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be executed
by them or their duly authorized representatives as of the date first written
above.




3 WISHES PRODUCTIONS INC.                    PTN MEDIA, INC.


By:  /s/  Christina Aguilera                  By:  /s/  Peter Klamka
    -----------------------------                  -----------------------------
Title:  Authorized Agent                      Title:  Peter Klamka, President





Address:                                      Address:
c/o Doug Mark, Esq.                           PTN Media, Inc.
Barnes Morris Klein & Yorn                    455 East Eisenhower Parkway,
Second St. 3rd Floor                          Suite 15
Santa Monica, CA 90401                        Ann Arbor, Michigan 48108




                                        6

<PAGE>



                                   SCHEDULE I

1. - Handspring: Visor PrismTM
2. - Handspring: Visor PlatinumTM
3. - Handspring: Visor DeluxeTM
4. - Handspring; VisorTM

/s/  Aguilera                 Date:
-----------------------------
Aguilera


 /s/  Klamka                  Date:
----------------------------
PTNM




                                       7

<PAGE>


                                    EXHIBIT A


Date: 02/19/01

Gentlemen:

     Reference is hereby made to the License Agreement dated February 19, 2001
between 3 Wishes Productions Inc. and PTN Media Inc.

     In consideration of your entering into said License Agreement with 3 Wishes
Productions, Inc. (a wholly owned enterprise of Christina Aguilera) and in order
to induce your execution thereof, I hereby confirm that I have read said License
Agreement and that I agree to perform all of the obligations and undertakings
required of me there under and to abide by all the restrictions contained
therein as they are applicable to me, regardless of whether 3 Wishes
Productions, Inc. continues throughout the term of the Agreement to be my
employer in connection with such services.

     I acknowledge that payment by PTN Media Inc. to 3 Wishes Productions, Inc.
as set forth in said Agreement shall fully discharge PTN Media's obligation to
me.

     I warrant and represent that 3 Wishes Productions, Inc. is authorized by me
to contract for my services as set forth in said License Agreement and represent
that I am not obligated to any third parties in any manner that would interfere
with my ability to perform as required under said Agreement.


                                                Very truly yours,

                                                /s/  Christina Aguilera
                                                --------------------------------
                                                     Christina Aguilera


                                        8
<PAGE>
                          PTN MEDIA, INC. SUBSIDIARIES



Company                                 Jurisdiction of Organization
-------                                 ----------------------------

Frangrancedirect.com, Inc.              Delaware

PTN Wireless, Inc.                      Delaware
<PAGE>
                                                                    Exhibit 23.1

              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
              ---------------------------------------------------

We herby consent to the incorporation of our report, dated April 9, 2001,
included in this Form 10-KSB in the prevsiously filed Registration Statements of
PTN Media, Inc. and subsidiary on Foarm S-8 (File No. 333-80771) and on Form S-3
(File No. 333-51600)



/s/  STONEFIELD JOSEPHSON, INC.

STONEFIELD JOSEPHSON, INC.
Certified Public Accountants

Santa Monica, California
April 16, 2001

<PAGE>



                                                                    Exhibit 23.2

              CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
              ---------------------------------------------------

We hereby consent to the incorporation of our report, dated April 12, 2000,
included in the Form 10-KSB in the previously filed Registration Statements of
PTN Media, Inc. and subsidiary on Form S-8 (File No. 333-80771) and on Form S-3
(File No. 333-51600)


/s/  LAZAR LEVINE & FELIX LLP

LAZAR LEVINE & FELIX LLP

New York, New York
April 16, 2001
<PAGE>


                                 April 16, 2001

VIA EDGAR

Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549

                        Re:  PTN Media, Inc.
                             Annual Report on Form 10-KSB for the fiscal
                             year ended December 31, 2000 (File No.  000-24835)

Ladies and Gentlemen:

     On behalf of PTN Media, Inc., transmitted herewith for filing pursuant to
the Securities Exchange Act of 1934, as amended, is PTN Media, Inc.'s Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2000 (the "Form
10-KSB"), including all exhibits thereto.

     The financial statements in the Form 10-KSB do not reflect a change from
the preceding year in any accounting principles or practices or in the methods
of application of those principles or practices.

                                                     Very truly yours,


                                                     /s/Peter Klamka
                                                     Peter Klamka
                                                     Chief Executive Officer