U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                      FOR FISCAL YEAR ENDED: JUNE 30, 2005
                                       OR

 [  ]       TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        For the transition period from To



                        Commission file number 000-28553

                        STEREO VISION ENTERTAINMENT, INC.
                 (Name of small business issuer in its charter)

           Nevada                                               95-4786792
State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization                             Identification No.)

                15452 Cabrito Rd., Suite 204, Van Nuys, CA 91406
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)



                                (Former address)


Issuer's telephone number                      (818) 909-7911
                                              ---------------

Securities registered under Section 12(b) of the Act: NONE Securities registered
under Section 12(g) of the Act:

                          Common Stock, par value $.001
                                (Title of class)

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

         Check if there is no disclosure of delinquent  filers  pursuant to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]

         State issuer's revenues for its most recent fiscal year.      $ -0-
                                                                       -----

         As of October 7, 2005, there were 11,103,537 shares of the Registrant's
common stock,  par value $0.001,  issued and  outstanding.  The aggregate market
value of the Registrant's  voting stock held by non-affiliates of the Registrant
was approximately  $1,943,119  computed at the average bid and asked price as of
October 7, 2005.


                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):
NONE

         Transitional  Small Business  Disclosure Format (check one): Yes ; No X


         Indicate by check mark whether the  registrant  is a shell  company (as
defined by Rule 12b-2 of the Exchange Act). Yes [ X ] No [ ]

















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<PAGE>

                                     PART I

ITEM 1.   DESCRIPTION OF
BUSINESS

GENERAL

         The  Company  intends to position  itself to evolve  into a  vertically
integrated,  diversified media  entertainment  company.  The Company anticipates
generating  revenues  from  several  sources,  including  production  of new and
existing  feature films in both 2-D and 3-D format for  theatrical and direct to
DVD release, as well as expanding into other areas of the entertainment industry
including the production of music albums.

         The Company's  common stock is traded on the NASDAQ OTC Bulletin  Board
market under the symbol: SVSN.

HISTORY

         Stereo Vision Entertainment,  Inc. ("SVEI") was originally incorporated
in the State of Arizona as Arizona Tax Pros & Insurance  Wholesalers,  Inc.,  on
December14,  1993. Arizona Tax Pros & Insurance  Wholesalers,  Inc., changed its
name to Kestrel  Equity  Corporation  ("Kestrel") on September 30, 1997. On July
20, 1999,  Kestrel  entered into an  Acquisition  Agreement  and Plan of Reverse
Merger  with  Stereo  Vision  Entertainment,   Inc.,  a  privately  held  Nevada
corporation  ("Stereo")  (the "Merger").  Pursuant to the Merger,  which was not
actually  consummated  until December 30, 1999,  Stereo was merged with and into
"Kestrel".  Each share of Stereo common stock  outstanding was exchanged for 120
shares of Kestrel's common stock, $.001 par value (the "Common Stock").

         On January 31, 2000,  "Kestrel" changed its state of incorporation from
Arizona to Nevada,  and also  changed its name to Stereo  Vision  Entertainment,
Inc.

         Since the time of its inception until the effective date of the Merger,
Kestrel  Equity  Corporation  was a  development  stage  company  with no active
business  operations and no revenues.  As such, Kestrel was considered a "shell"
corporation  with a principal  purpose of locating and  consummating a merger or
acquisition  with a private  entity.  Beginning  in August  1999,  the  business
activities  of Kestrel,  prior to the  Merger,  encompassed  administrative  and
organizational matters and identifying additional acquisition  opportunities for
operating  companies and intellectual  property assets in the global multi-media
industries.  Upon the  consummation of the Merger,  Kestrel  acquired all of the
assets of Stereo with the intent of continuing  Stereo's  business and expanding
into new areas of the  entertainment  industry.  Stereo was  incorporated in the
State   of    Nevada   on   May   5,   1999   for    purposes    of    acquiring
multi-media/entertainment industry assets and pursuing merger opportunities with
an existing  publicly  traded company.  Mr. Kallett,  an officer and director of
Kestrel Equity Corporation,  and Mr. Honour, a principal shareholder of Kestrel,


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<PAGE>

both owned common stock in Stereo representing an aggregate of 51% of the issued
and  outstanding  capital stock of Stereo.  The operations and management of the
merged  companies  (SVEI) were then  integrated  following  the  replacement  of
Stereo's  sole officer and  director  with the then sole officer and director of
Kestrel.

         On  December  17,  1999  "Kestrel"  filed its Form  10-SB with the U.S.
Securities  and  Exchange  Commission.  Upon the  consummation  of the merger on
December  30,  1999,  shortly  thereafter  in January of 2000,  SVEI elected new
officers and directors.  Since January 2000, the Company's  activities have been
developing entertainment projects, both musical and theatrical,  and identifying
and securing  candidates with entertainment  industry experience to serve on the
SVEI  Board  of  Directors  and  identifying  additional  opportunities  for the
acquisition of operating  entertainment  oriented companies as well as acquiring
intellectual  property  assets.  Although  acquisition  opportunities  have been
identified, no transactions have been consummated and there is no guarantee that
any transactions will be consummated in the near future.

         The  executive  offices of the  Company  are  located at 15452  Cabrito
Road., Suite 204, Van Nuys, CA 91406. Its telephone number is (818) 909-7911.

OPERATING LOSSES

         The Company has incurred  net losses of  approximately  $1,833,000  and
$2,945,000  for the fiscal  years ended June 30, 2005 and 2004.  Such  operating
losses reflect  developmental  and other start-up  activities for 2005 and 2004.
The Company  expects to incur losses in the near future until  profitability  is
achieved. The Company's operations are subject to numerous risks associated with
establishing  any  new  business,  including  unforeseen  expenses,  delays  and
complications.  There can be no  assurance  that the  Company  will  achieve  or
sustain profitable operations or that it will be able to remain in business.

FUTURE CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING

         SVEI anticipates  generating  operating revenues during its next fiscal
year as it becomes  operational and begins production of films and music albums.
"SVEI"  management  acknowledges  that  during its next  fiscal year there is no
assurance that "SVEI" will transition itself from a development stage company to
an  operational  one and SVEI's  continued  operations  will be  dependent  upon
additional  shareholder loans and/or proceeds from "SVEI" debt/equity offerings.
There  currently  are no agreements  in place for future  shareholder  loans and
management  has no  assurances  as to any market  acceptance  of any future SVEI
debt/equity offerings.

BUSINESS  OVERVIEW

Management believes that StereoVision's  principal expertise lies in the content
production segment of the multi-media entertainment industry. The Company's main
line of business will be to provide original 3-D and 2-D programming, as well as
dependable  low cost  productions  for  theatrical  release  and  direct to DVD.


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<PAGE>

Pay-per-view  films,  television/cable  films, and other  entertainment  related
projects,  including  merchandising 3-D technology and items related to specific
creative  content will also be targeted.  Unique  self-developed  projects  will
initially  focus on low budget  films  (below $ 3  Million).  In  addition,  the
Company will pursue its interests in live entertainment and the music business.

STEREOVISION ENTERTAINMENT PRODUCTIONS

         The film  content  production  business is very capital  intensive  and
StereoVision  will need to raise  and  secure  significant  equity  and/or  debt
financing  to  implement  its  specific  production  objectives.  If the Company
receives such financing,  it anticipates  producing and/or co-producing  cutting
edge, commercially successful independent feature length film productions in all
genres.  Financing for these  productions,  when possible,  will be accomplished
through  partnerships or joint ventures in order to minimize  company risk. When
feasible,  StereoVision  anticipates  each  production  will be  structured as a
stand-alone  limited  liability  company,  thus  diminishing the equity dilution
impact on the Company.  StereoVision intends to act as the executive producer of
each film project.  There is no assurance that StereoVision can secure financing
to  produce  films or even if films are  produced  that  they can be  profitably
distributed.

MUSIC DIVISION

            The Company  intends to engage in the  production  of music  albums,
beginning  with  composition  records,   under  the  StereoVision  label.  Herky
Williams, a Director of the Company, has been an active record producer for over
ten years.  Mr.  Williams  will direct this effort for the Company from his home
base in Nashville, TN.

BUSINESS EXPANSION; CAPITAL GROWTH

         StereoVision  intends to position  itself to evolve  into a  vertically
integrated,   diversified  multimedia  entertainment  company  with  an  initial
concentration  on low to medium  budget 3-D and 2-D films and the  production of
composition  albums.  StereoVision  intends to finance  its  business  expansion
initially  through  the  sale of  equity  securities.  The  Company  can give no
assurance that any offering of its securities will be successful. If the Company
is unable to successfully  raise equity  financing or alternative  financing its
ability to fund its business plan would be significantly limited.

         The ability of StereoVision to implement its business  strategy depends
upon its  ability to  successfully  create,  produce,  and market  entertainment
content and ancillary products for traditional real-world  distribution channels
including, but not limited to, retailers,  television, theatres and home markets
and newly emerging distribution channels such as the Internet.

         StereoVision  intends  to  produce  and  develop  3-D and 2-D films and
DVD/videos in all genres for its library, as well as acquire additional film and
music assets. While the Company may enter into participation, licensing or other


                                       5
<PAGE>

financial  arrangements  with third  parties in order to minimize its  financial
involvement in production,  it will be subject to  substantial  financial  risks
relating to the content. StereoVision expects that it will typically be required
to pay for the  production  of content  during the  production  period  prior to
release and will most likely be able to recoup these costs, utilizing a strategy
of high volume and moderate  profits,  from  revenues from  exhibition  licenses
within to 18 to 24 months following release.  The company will, however,  always
seek to arrange  presales to both foreign and  domestic  buyers such as studios,
distribution companies, cable networks, equity partners etc.

         StereoVision  anticipates  generating  revenues  from several  sources,
including  production and  distribution of new and existing  independent 3-D and
2-D feature  films,  TV movies and direct to DVD/video  films and record albums.
The company will also license the rights to its products for  ancillary  markets
where appropriate.

MANAGEMENT OF GROWTH

         In order to maximize  the  potential  growth of the  Company's  various
opportunities,   StereoVision   believes   that  it  must  expand   rapidly  and
significantly upon its entrance into the marketplace. This impetus for expansion
will place a significant  strain on the Company's  management,  operational  and
financial  resources.  In order to manage growth, the Company must implement and
continually  improve its operational and financial  systems,  expand operations,
attract and retain superior management and train, manage and expand its employee
base.  StereoVision  cannot guarantee that it will effectively  manage the rapid
expansion of its  operations,  that its  systems,  procedures  or controls  will
adequately  support its  operations  or that its  management  will  successfully
implement  its  business  plan.  If the Company  cannot  effectively  manage its
growth, its business, financial condition and results of operations could suffer
a material adverse effect.

         StereoVision  expects that it will  require  additional  equity  and/or
credit  financing  prior  to  becoming  cash  self-sufficient.  There  can be no
assurances  that the Company will  successfully  negotiate or obtain  additional
financing, or that it will obtain financing on terms favourable or acceptable to
it.  StereoVision  does not have any commitments for additional  financing.  The
Company's ability to obtain additional capital depends on market conditions, the
global  economy and other factors  outside its control.  If the Company does not
obtain  adequate  financing  or such  financing is not  available on  acceptable
terms,  its ability to finance  its  expansion,  develop or enhance  products or
services or respond to competitive  pressures  would be  significantly  limited.
StereoVision's  failure  to secure  necessary  financing  could  have a material
adverse effect on its business,  prospects,  financial  condition and results of
operations.

GOVERNMENT REGULATION

         The  Classification  and Rating  Administration  of the Motion  Picture
Association  of America,  an industry  trade  association,  assigns  ratings for


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<PAGE>

age-group suitability for motion pictures. SVEI plans to submit its pictures for
such ratings.  Management's  current policy is to produce  motion  pictures that
qualify for a rating no more restrictive than "R."

         The Company is subject to all pertinent Federal,  State, and Local laws
governing its business.  The Company is subject to licensing and regulation by a
number of authorities in its State or  municipality.  These may include  health,
safety,  and fire  regulations.  The  Company's  operations  are also subject to
Federal and State minimum wage laws governing such matters as working conditions
and overtime.

RISK OF LOW-PRICED STOCKS

         Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act
of 1934 (the "Exchange  Act") impose sales practice and disclosure  requirements
on certain brokers and dealers who engage in certain  transactions  involving "a
penny stock."

         Currently,  the Company's  Common Stock is considered a penny stock for
purposes of the  Exchange  Act. The  additional  sales  practice and  disclosure
requirements imposed on certain brokers and dealers could impede the sale of the
Company's  Common  Stock  in the  secondary  market.  In  addition,  the  market
liquidity for the Company's securities may be severely adversely affected,  with
concomitant adverse effects on the price of the Company's securities.

         Under the penny stock  regulations,  a broker or dealer  selling  penny
stock to anyone  other than an  established  customer or  "accredited  investor"
(generally,  an  individual  with net worth in excess  of  $1,000,000  or annual
incomes  exceeding  $200,000,  or $300,000 together with his or her spouse) must
make a special suitability  determination for the purchaser and must receive the
purchaser's  written consent to the transaction prior to sale, unless the broker
or dealer or the transaction is otherwise exempt.  In addition,  the penny stock
regulations  require the broker or dealer to deliver,  prior to any  transaction
involving a penny stock,  a disclosure  schedule  prepared by the Securities and
Exchange  Commission (the "SEC") relating to the penny stock market,  unless the
broker or dealer or the transaction is otherwise  exempt.  A broker or dealer is
also  required to disclose  commissions  payable to the broker or dealer and the
registered   representative  and  current  quotations  for  the  Securities.  In
addition,  a broker or dealer is required to send monthly statements  disclosing
recent  price  information  with respect to the penny stock held in a customer's
account and information with respect to the limited market in penny stocks.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

         The Company  relies on a  combination  of trade  secret,  copyright and
trademark  law,  nondisclosure  agreements  and technical  security  measures to
protect its  products.  Notwithstanding  these  safeguards,  it is possible  for
competitors  of the  company to obtain  its trade  secrets  and to  imitate  its
products.  Furthermore,  others may  independently  develop  products similar or
superior to those developed or planned by the Company.



                                       7
<PAGE>

         Distribution  rights to motion  pictures are granted  legal  protection
under the copyright laws of the United States and most foreign countries.  These
copyright laws provide substantial civil and criminal sanctions for unauthorized
duplication and exhibition of motion pictures.  Motion pictures,  musical works,
sound recordings,  artwork,  still photography and motion picture properties are
each separate works subject to copyright  under most copyright  laws,  including
the United States Copyright Act of 1976, as amended.

COMPETITION

         SVEI competes with a large array of diverse global media conglomerates,
upstart  "entertainment,  information and commerce" companies, as well as with a
number  of  smaller,   independent  production  companies.  SVEI's  current  and
potential competitors include:

         o        Fox, Disney, Warner Bros., Universal, Lions Gate Entertainment
                  and others
         o        Globcast, Vyvx and COMSAT World Systems
         o        Universal music, EMI, BMG and others

         A portion of these  companies  compete for motion picture  projects and
talent and are producing  motion  pictures that compete for  exhibition  time at
theaters,  on  television,  and on home  video  with  pictures  produced  by the
Company.   Other  companies  compete  in  areas  of  satellite   production  and
transmission  services and music  production,  distribution and promotion.  SVEI
also  intends  to use its core  competencies  in areas of music  production  and
production services to diversify and compete in the global marketplace.

         Most of SVEI's  competitors have operating  histories,  larger customer
bases and  significantly  greater  financial,  marketing  and  other  resources.
Certain of SVEI's  competitors  have the financial  resources to devote  greater
resources to marketing and promotional  campaigns and devote  substantially more
resources to technology development. Increased competition may result in reduced
operating margins.

EMPLOYEES

         As of October 7, 2005, SVEI employed four employees. SVEI considers its
employee relations to be satisfactory at present.


ITEM 2.   DESCRIPTION OF PROPERTY

         SVEI's principal  executive  offices are located at 15452 Cabrito Road,
Suite 204, Van Nuys, CA 91406 and consist of approximately  2,500 square feet of
unfurnished   executive   suite  offices  and  reception  and  conference   room
arrangements.  The lease  expires in June  2005.  Since the lease  expired,  the
Company is on a month to month  lease.  The  monthly  rent for the  property  is
$2,500.

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<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

         In  September of 2001 the company  entered into a promissory  note with
Duncan  MacPhearson  to be payable within the year. A dispute arose and the note
was not timely paid,  which led to a court action  styled R. DUNCAN  MACPHEARSON
VS. STEREO VISION  ENTERTAINMENT,  ET. AL., Case No. LC 0611749, in Los Angeles,
California.  Subsequently,  the  parties,  on January 26,  2004,  entered into a
Settlement Agreement, including default provisions if scheduled payments did not
occur as agreed.  25,000 shares of  restricted  stock,  valued at $25,000,  were
delivered and $42,500 of payments were made, but the final $10,000 was not paid.
According  to  the  stipulated  judgement   agreement,   this  resulted  in  the
plaintiff's entry of a judgment, according to notice received by the company, of
$37,411,  which was then  appealed by the Company as  incorrect.  The  appellate
court  disagreed  and allowed the entry of judgment as filed,  stating  that the
25,000  shares had "no value" and  allowing  $37,411 to be imposed  against  the
Company.  Therefore, the company has paid $42,500 in cash, $25,000 in restricted
stock,  and owes $37,411,  which has been accrued as a liability on the June 30,
2005 and 2004 financial statements, for a total lawsuit resolution of $104,911.

               The Company has  informed  counsel for its former  President  and
CEO, Lance Robbins,  who resigned on December 5, 2004 and was unanimously  fired
by the Board of Directors for cause on December 9, 2004, that it intends to seek
recision of any and all  agreements  with him as well as return of all sums paid
to him, a return of all shares of stock that were issued to him and cancellation
of any stock options currently outstanding.  As of June 30, 2005, this issue had
not been resolved.  No adjustments have been made to the June 30, 2005 financial
statements with regards to this issue.



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

         In accordance  with Nevada  corporate law, no matters were subject to a
vote of security holders during the year ended June 30, 2005.

                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         The  Company's  Common  Stock is traded on the NASDAQ OVER OTC Bulletin
Board market under the symbol "SVSN." The following  table presents the high and


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low bid quotations for the Common Stock as reported by the NASD for each quarter
during the last two years. Such prices reflect  inter-dealer  quotations without
adjustments  for retail markup,  markdown or commission,  and do not necessarily
represent actual transactions.

         Prior to December 2, 1999,  there was no trading  market for  Company's
Common Stock. As of December 2, 1999, SVEI's Common Stock has been traded on the
OTC Bulletin Board under the trading symbol "SVED." On June 2, 2003, the Company
changed  its  trading  symbol to  SVSN.OB.  The price for the  common  stock has
approximately ranged in price as follows:




                                                   HIGH                 LOW

Quarter ended September 30, 2003                      $1.20               $0.40
Quarter ended December 31, 2003                       $0.61               $0.21
Quarter ended March 31, 2004                          $3.25               $0.25
Quarter ended June 30, 2004                           $2.15               $0.35

Quarter ended September 30, 2004                      $0.90               $0.32
Quarter ended December 31, 2004                       $0.70               $0.37
Quarter ended March 31, 2005                          $0.72               $0.25
Quarter ended June 30, 2005                           $0.50               $0.26


         The number of shareholders  of record of the Company's  Common Stock as
of October 7, 2005 was approximately 179.

DIVIDENDS

         SVEI has never paid a cash  dividend on its Common  Stock nor does SVEI
anticipate  paying cash dividends on its Common Stock in the near future.  It is
the present  policy of SVEI not to pay cash dividends on the Common Stock but to
retain  earnings,  if any,  to fund  growth and  expansion.  Any payment of cash
dividends  on the  Common  Stock in the future  will be  dependent  upon  SVEI's
financial  condition,  results  of  operations,  current  and  anticipated  cash
requirements,  plans  for  expansion,  as well as  other  factors  the  Board of
Directors deems relevant.

TRANSFER AGENT

         The Company has appointed  Holladay Stock Transfer,  Inc., with offices
at 2939 North 67th Place, Scottsdale, Arizona, 85215, phone number 480-481-3940,
as  transfer  agent for our  shares  of  common  stock.  The  transfer  agent is
responsible for all record-keeping  and  administrative  functions in connection
with the common shares and stock warrants.



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<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

         During the  quarter  ended  September  30,  2004,  the  Company  issued
1,234,333  shares of common stock to nine  individuals  for  services  rendered,
including financial  advisory,  marketing,  PR and strategic advice.  Consulting
expense of $461,233 was  recognized in  connection  with these  issuances.  Also
during the quarter  400,000 shares were issued for cash at $0.25 per share.equal
to 50% of the bid price.

         During the quarter ended  December 31, 2004, the Company issued 189,300
shares  of common  stock as  follows:  86,000  shares  to five  individuals  for
services including  secretarial,  marketing and public relations.  This included
issuance of 56,000 S-8 shares  valued at the  closing  price of the stock on the
day prior to issuance and 30,000  restricted  shares valued at fifty per cent of
the price of the  stock on the day  prior to  issuance.  Consulting  expense  of
$39,850 was  recognized  in  connection  with these  issuances.  Also during the
quarter, $39,000 in loans was converted into 103,300 shares of common stock.

         During the quarter  ended March 31, 2005,  the Company  issued  160,000
shares of common stock for cash of $35,000. These shares were valued at $.25 per
share,  which was equal to a discount of 50% of the prevailing  market price due
for restricted securities.

         During the quarter  ended March 31, 2005,  the Company  issued  100,000
shares of common stock for $25,000 of accounts payable. These shares were valued
at $.25 per share, which was equal to a discount of 50% of the prevailing market
price due for restricted securities.

         During the quarter  ended March 31, 2005,  the Company  issued  370,000
shares of common stock to various  people for services  valued at $167,850.  The
shares  were  valued  at the  market  price  on the date of the  signing  of the
agreements, which ranged from $.25 to $.70 per share.

         During the quarter  ended March 31,  2005,  the officers of the Company
agreed to convert  accrued  payroll of $266,666 for the period from September 1,
2004 to March 31, 2005 to 266,666  shares of common stock,  at a price of $1 per
share,  versus the then  market  price of $.40 per share.  As of June 30,  2005,
these shares had not been issued.

         On April 4, 2005,  the Company issued 20,000 shares of common stock for
consulting  and legal  services at $.35 per share,  the closing price on the day
prior to issuance, resulting in expense of $7,000 being recognized.

         During the quarter  ended June 30,  2005,  the Company  entered into an
agreement  to issue  20,000  shares of common  stock valued at $.30 per share in
exchange for a 10% interest in JamOakie  Productions,  Inc. As of June 30, 2005,
the shares had not been issued.



                                       11
<PAGE>

         During the quarter  ended June 30,  2005,  the Company  entered into an
agreement  to issue  100,000  shares of common  stock for  payment of $35,000 in
accounts payable. As of June 30, 2005, these shares had not been issued.

         During the quarter ended June 30, 2005, the Company  entered into three
separate  agreements  to issue a total of  153,000  shares of  common  stock for
conversion  of notes payable of $32,000.  As of June 30, 2005,  these shares had
not been issued.

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


PLAN OF OPERATIONS - The following discussion should be read in conjunction with
the Company's audited financial statements.


         SVEI intends to pursue  opportunities  in four product  segments of the
entertainment industry:

                        Direct to DVD 2-D and 3-D films
                        Feature length 2-D and 3-D films for theatrical  release
                        Pilots for television series Music production

         StereoVision  intends to be the only  company in  Hollywood  focused on
developing  a library of films  using 3-D  technology.  The  company  intends to
develop  four new scripts for  theatrical  release and direct to DVD movies each
year and will  concentrate on the most popular genres including  horror,  visual
thrillers, sci-fi CGI effect movies, comedies and family films. The company also
plans to develop its own record label out of Nashville, Tennessee and will focus
its initial efforts on the production and distribution of composition albums.

         As a development stage company, SVEI has minimal historical operations,
no revenues and negative cash flows. In order to satisfy cash  requirements  for
SVEI'sproduction  and revenue  goals,  management  must obtain  working  capital
through either debt or equity financing.

         The  entertainment  industry is an  intensely  competitive  one,  where
price, service, location, and quality are critical factors. The Company has many
established  competitors,  ranging from similar local single unit  operations to
large multi-national  operations.  The entertainment industry may be affected by
changes in customer tastes,  economic,  and demographic trends.  Factors such as
inflation,  increased  supplies costs and the availability of suitable employees
may adversely  affect the  entertainment  industry in general and the Company in
particular.  In view of the Company's limited financial resources and management
availability,  the  Company  will  continue to be at a  significant  competitive
disadvantage vis-a-vis the Company's competitors.



                                       12
<PAGE>

         RESULTS OF  OPERATIONS - THERE were no revenues  from sales for the two
years  ended  June  30,  2005  and  2004.  SVEI  has  sustained  a net  loss  of
approximately  $1,833,000  for the year ended June 30,  2005,  which was largely
attributable to consulting expense from stock issuances to consultants. From May
5, 1999 the Company was a development  stage company and had not begun principal
operations. Accordingly, comparisons with prior periods are not meaningful.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has  developed a detailed plan of operations to exploit the
opportunities it sees in the entertainment industry and to take advantage of the
skills and  experience  of its  management  team. On a  preliminary  basis,  the
Company estimates that it will require approximately $1,000,000 over a period of
12 months to fund initial  development  of existing  projects as well as operate
the  company.  In order to fund the actual  production  of a feature  film,  the
Company estimates it will require  approximately an additional  $3,000,000 which
it will obtain from a variety of sources  including  partner  distributors,  tax
rebates  for on site  production  in certain  jurisdictions  as well as debt and
equity  sources.  The Company may attempt to arrange joint ventures with studios
to facilitate the development of new movies.

         The aforementioned  estimates of capital required are still preliminary
in nature and are subject to substantial and continuing revisions.  Although the
Company has not yet commenced any formal capital  raising  efforts,  the Company
expects  that any capital that it raises will be in the form of one or more debt
or equity financings.  However, there can be no assurances that the Company will
be  successful  in raising any  required  capital on a timely basis and/or under
acceptable  terms and conditions.  To the extent that the Company does not raise
sufficient  capital to implement its plan of  operations  on a timely basis,  it
will have to curtail,  revise and/or delay its business  plans.  The Company has
financed  its  operations  to date from the sale of stock and loans from related
parties. During the year ended June 30, 2005, the Company received approximately
$164,000  from the sale of common stock and $220,000  from related  party loans.
However,  there can be no assurances that  additional  loans will be forthcoming
from officers, directors, and shareholders.

GOVERNMENT REGULATIONS - The Company is subject to all pertinent Federal, State,
and Local laws  governing its business.  The Company is subject to licensing and
regulation by a number of  authorities in its State or  municipality.  These may
include health, safety, and fire regulations.  The Company's operations are also
subject to Federal and State minimum wage laws governing such matters as working
conditions and overtime.

ITEM 7.   FINANCIAL STATEMENTS

         The  financial  statements  of the Company and  supplementary  data are
included beginning immediately preceding the signature page to this report.

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



                                       13
<PAGE>

         There are not and have not been any  disagreements  between the Company
and its  accountants  on any  matter  of  accounting  principles,  practices  or
financial statements disclosure.

ITEM 8A. CONTROLS AND PROCEDURES

         The Company's Chief Executive  Officer and Chief Financial  Officer are
responsible for establishing and maintaining  disclosure controls and procedures
for the Company.

         (a) Evaluation of Disclosure Controls and Procedures

         As of the end of the period covered by this report, the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's management, including the Company's President, of the effectiveness of
the design and operation of the  Company's  disclosure  controls and  procedures
pursuant to Rule 13a-15 under the  Securities  Exchange Act of 1934,  as amended
(the  "Exchange  Act").  Based  upon the  evaluation,  the  Company's  President
concluded that, as of the end of the period, the Company's  disclosure  controls
and  procedures  were effective in timely  alerting him to material  information
relating to the Company  required to be included in the reports that the Company
files and submits pursuant to the Exchange Act.

         (b) Changes in Internal Controls

         Based on his evaluation as of June 30, 2005,  there were no significant
changes in the Company's  internal  controls over financial  reporting or in any
other areas that could  significantly  affect the  Company's  internal  controls
subsequent to the date of his most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                    PART III


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

EXECUTIVE OFFICERS AND DIRECTORS

         The  composition  of the Board of  Directors as well as the Officers of
the company has  undergone  significant  change  since the end of the  company's
fiscal year ending June 30,  2004.  On July 5, 2004  Douglas  Schwartz was named
Chairman  of the Board of  Directors.  On August 30,  2004 Lance H.  Robbins was
appointed CEO and President and joined the Board of Directors. On that same day,
Theodore P. Botts joined the Board and was appointed Chief Financial  Officer on
September 7. On December 9, the Company  terminated its CEO, Lance Robbins,  for


                                       14
<PAGE>

cause and subsequentlypointed  Theodore Botts acting CEO. In February, 2005, the
Board  appointed  Douglas  Schwartz to the newly created podt of Chief  Creative
Officer.  Messrs.  Botts and Schwartz resigned thgeir positions with the company
in October,  2005 and announced they would continue their  affiliation  with the
Company as consultants.

         The members of the Board of  Directors  of the Company  serve until the
next  annual  meeting  of  stockholders,  or until  their  successors  have been
elected.  The  officers  serve at the  pleasure of the Board of  Directors.  The
following table sets forth the name, age, and position of each executive officer
and director of the Company: as of June 30, 2005:

Name of Director          Age   Current Position            Position Held Since

Doug Schwartz              60   Chairman/Director           July, 2004
Tom Noonan                 73   Vice Chairman               August, 2000
Theodore Botts             60   CEO/CFO, Director           September, 2004
John Honour                53   COO, Director               June, 2001
Herky Williams             50   Secretary/Treasurer         May, 2000
John C. Bodziak, Jr.       31   Director                    August, 2000


DOUG SCHWARTZ, Chairman of the Board
Mr. Schwartz was elected Chairman of the Board on July 6, 2004 and was appointed
Chief Creative Officer on December 16, 2004. He has been an established  writer,
creator  and  director  for 25 years.  His  extensive  entertainment  background
includes  being  co-creator  and executive  producer of the world's most watched
television series in history. `Baywatch", which was distributed to 145 countries
in 23 languages, was viewed by a world wide audience of over one billion people.
In addition, Mr. Schwartz has co-created and executive produced eight television
series, which added up to hundreds of one hour episodes,  and over twenty highly
rated and award winning television movies

TOM NOONAN, Vice-Chairman of the Board
Mr.  Noonan has  served on the Board of  Directors  since  August,  2000.  He is
currently head of Columbia/Epic  Records Alumni  Association.  From 1995-2000 he
was  President  of  Noonan  Consulting,  a record  industry  consulting  firm to
artists, labels, video companies, music publishers, trade publications, artists'
managers, newly formed companies and foreign affiliates. Mr. Noonan was formerly
a senior executive at Billboard Magazine where he founded the Hot 100 Charts. He
has provided  valuation  advice to the IRS on albums and music  associations and
served as a US Government  Expert  Witness  before  investigative  congressional
committees.  He has  provided  marketing  services for major  artists  including
Barbara  Streisand,  Bob Seger,  Janis Joplin,  Marvin Gaye and Diana Ross & The
Supremes.



                                       15
<PAGE>

THEODORE P. BOTTS, CEO/CFO, Director
Mr. Botts was elected to the  StereoVision  Board of Directors  and appointed as
the Chief  Financial  officer in  August,  2004.  He assumed  the role of CEO in
December,  2005.  Prior to his  appointments,  Mr.  Botts  had  served as Senior
Financial Advisor to the Company's officers and  BoardofDirectors.With  a career
on Wall  Street  that  spans  more than 30 years,  including  fourteen  years at
Goldman Sachs, and then until the year 2000, twelve years as a Managing Director
for UBS in London and New York, Mr.Botts brings to StereoVision a broad range of
corporate  finance  experience and contacts in the investment  community.  Since
2000, he has been managing his private financial advisory firm,  Kensington Gate
Capital.  He has been consulting to StereoVision since the beginning of 2004. In
addition to his  position at  StereoVision,  Mr. Botts serves as the chairman of
the audit committee and a Board Member of INTAC  International,  a NASDAQ listed
China Ventures Company.  He also serves on the Board of Trustees and is the head
of development for REACH Prep, a non-profit children's educational organization.

JACK HONOUR, Chief Operating Officer, Director
Mr. Honour has been the driving force behind the Company's  vision and strategy.
He founded the Company  three years ago in order to capitalize on what he saw as
the  emerging  transition  from  traditional  entertainment  to state of the art
multimedia entertainment. He served as President and CEO before recruiting Lance
Robbins to that position and is a member of the Board of Directors.  His diverse
career has included  starting a number of businesses  in Restaurant  Management,
Real Estate and an Import/Export Trading Company. Since he founded Stereo Vision
Entertainment  he has  gathered  together  the  management  team  and  Board  of
Directors necessary to develop the various facets of the business.  In addition,
Mr. Honour has succeeded in identifying  attractive projects for the Company and
forging close relationships with key strategic partners.

HERKY WILLIAMS, Secretary and Treasurer, Director
Mr.  Williams  has  served as  Secretary/Treasurer  and a member of the board of
directors  since  May,  2000.  Mr.  Williams  has an  extensive  background  and
experience in various facets of the music industry. He served as Senior Director
of A&R for Capitol Records in 1995/6 where his duties  included  signing artists
as well as artist  development.  Such  artists  included  Willie  Nelson,  Garth
Brooks, Charlie Daniels and Tanya Tucker.

JOHN C. BODZIAK, Director
Mr. Bodziak served as  CEO/President  of StereoVision  from August 4 to November
15,  2000.  During his career,  Mr.  Bodziak has owned and  operated a number of
businesses  in the  restaurant,  liquor and concert  entertainment  areas.  From
1995-1997  he was the  general  manager  for Key Largo  International  where his
duties included managing a restaurant and a nightclub.  From 1997-2000 he served
as  CEO/President  of Janus  Landing  Courtyard  that was voted by Rolling Stone
magazine to be one of the top ten concert venues in the US.



                                       16
<PAGE>

CONFLICTS OF INTEREST

         Certain conflicts of interest existed at June 30, 2005 and may continue
to exist  between the Company and some of its officers and  directors due to the
fact that each may have  other  business  interests  to which  they  devote  his
primary  attention.  Each of these  officers and directors may continue to do so
notwithstanding  the fact that management time should be devoted to the business
of the Company.

         Certain  conflicts  of interest  may exist  between the Company and its
management,  and  conflicts  may  develop in the  future.  The  Company  has not
established  policies or procedures  for the  resolution of current or potential
conflicts of  interests  between the  Company,  its  officers  and  directors or
affiliated entities.  There can be no assurance that management will resolve all
conflicts  of interest in favor of the  Company,  and failure by  management  to
conduct the  Company's  business in the  Company's  best  interest may result in
liability to the  management.  The officers and directors are accountable to the
Company as  fiduciaries,  which means that they are  required  to exercise  good
faith and integrity in handling the Company's affairs.  Shareholders who believe
that the  Company  has been  harmed by  failure of an  officer  or  director  to
appropriately  resolve any conflict of interest may,  subject to applicable rule
of  civil  procedure,  be able to bring a class  action  or  derivative  suit to
enforce their rights and the Company's rights.

BOARD MEETINGS AND COMMITTEES

         Our Board of Directors  conducts its business  through  meetings of the
Board.  During the fiscal year ended June 30, 2005,  the Board  consisted of six
individuals and adopted 3 resolutions.

         The Board  does not  currently  have any  committees,  but  intends  to
establish  an audit  committee  and a  compensation  committee as soon as formal
operations commence.

CODE OF ETHICS

         We do not currently  have a Code of Ethics  applicable to our principal
executive,  financial and  accounting  officers.  We do not have an  independent
"financial expert" on the board.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer,  beneficial owner of more than 10% of any class of equity securities of
the  Company  or any other  person  known to be  subject  to  Section  16 of the
Exchange  Act of 1934,  as  amended,  failed to file on a timely  basis  reports
required by Section 16(a) of the Exchange Act for the last fiscal year.



                                       17
<PAGE>

ITEM 10.   EXECUTIVE COMPENSATION


         None of the  executive  officer's  annual  salary  and  bonus  exceeded
$250,000 during any of the Company's last two fiscal years.

ITEM 11. SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL SHAREHOLDERS

         The table  below sets forth  information  as to each  person  owning of
record or who was known by the Company to own  beneficially  more than 5% of the
11,103,537  shares of issued and  outstanding  Common Stock of the Company as of
October 7, 2005 and  information  as to the ownership of the Company's  Stock by
each of its directors and executive  officers and by the directors and executive
officers  as a group.  Except  as  otherwise  indicated,  all  shares  are owned
directly,  and the persons  named in the table have sole  voting and  investment
power with respect to shares shown as beneficially owned by them.

Name and Address of            Nature of
Beneficial Owners / Directors  Ownership    Shares Owned     Percent
-----------------------------  -----------  -------------   ----------

All Executive Officers
and Directors as a Group *
(6 persons)                   Common         4,428,842      39.88%
Douglas Schwartz              Common           162,500
Theodore Botts                Common           941,142       8.84%
Tom Noonan                    Common           100,000
John Honour                   Common         2,541,600      24.62%
Herky Williams                Common           571,000
John C. Bodziak               Common           112,600


*The address of all six officers and directors is in care of the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         As of June 30, 2005 and 2004, the company owes $463,766 and $285,370 to
various  shareholders  and  officers/directors.  The  loans are  unsecured  with
interest at rates of 4.00% to 12% and have no fixed terms of repayment.


         On  April  30,  2004,  the  company  signed  a  Development  Production
Agreement with Baywatch 3 Double D LLC which is 50 % owned by Douglas  Schwartz,
Chairman.  Under the terms of the  agreement,  the company will receive  certain
rights  in a film  to be  produced  in  return  for  providing  the  development
production  advance.  Originally  the company had 30 days in which to secure the
advance.  The  company  has since  received  an  extension  for which it granted
Baywatch LLC 100,000  unregistered  shares and is free to continue to pursue the
funding  on a  non-exclusive  basis of the  production  advance  for the  movie,
"Baywatch 3 Double D". This agreement has expired.



                                       18
<PAGE>

         On March 30, 2005, the Company  entered into a two-year  agreement with
Mr. Herky Williams, an officer, director and shareholder of the Company, whereby
the  Company  will pay Mr.  Williams  $5,000  per  month  ($60,000  per year) in
exchange for part-time services related to the music product  development of the
Company.  The annual pay will be increased to $120,000 if and when Mr.  Williams
services are deemed to be full-time. The annual salary is retroactive to January
1, 2005.


         On May 2, 2005,  the Company signed an agreement with Mr. Jamie Oldaker
to acquire a 10% interest in JamOakie  Productions which entitles the company to
10% of the profits from the album,  "Mad Dogs and Oakies" which has subsequently
been  released.  The  Company  has the right but not the  obligation  to finance
future JamOakie projects.  The price paid was 20,000  unregistered common shares
of the Company which were worth $6,000 at the time, and $5,893 in cash.

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

Exhibits

The following exhibits are included as part of this report:

Exhibit
Number   Title of Document


2.1 *    Acquisition  Agreement  and Plan of  Reverse  Merger by and  between
         Stereo Vision Entertainment,  Inc. and Kestrel Equity Corporation dated
         December 3, 1999.  (incorporated  by reference to Form 10-SB filed with
         the SEC on December 17, 1999)

2.2 *    Agreement and Plan of Merger by and between Kestrel Equity Corporation


1
1
         and SVE Merger, Inc. dated January 10, 2000.

3.1 *    Articles of  Incorporation of Kestrel Equity  Corporation  filed with
         the State of Arizona on December 14, 1993.  (incorporated  by reference
         to Form 10-SB filed with the SEC on December 17, 1999)

3.2 *    Articles of Amendment of Articles of  Incorporation of Kestrel Equity
         Corporation  filed  with  the  State  of  Arizona  on  June  18,  1997.
         (incorporated by reference to Form 10-SB filed with the SEC on December
         17, 1999)



                                       19
<PAGE>

3.3      * Articles of Amendment of Articles of  Incorporation of Kestrel Equity
         Corporation  filed  with the State of Arizona on  September  30,  1997.
         (incorporated by reference to Form 10-SB filed with the SEC on December
         17, 1999)

3.4       * Bylaws of the Kestrel Equity Corporation. (incorporated by reference
          to Form 10-SB filed with the SEC on December 17, 1999)

3.5 *    Articles of Incorporation of SVE Merger, Inc. filed with the State of
         Nevada on December 23, 1999.

3.6 *    Bylaws of SVE Merger, Inc.

4.1 *    Specimen Stock Certificate of Kestrel Equity Corporation. (incorporated
         by reference to Form 10-SB filed with the SEC on December 17, 1999)

4.2 *    Specimen Stock Certificate of SVE Merger, Inc.

10.1*    Stock Purchase Agreement by and between Kestrel Equity Corporation and
         John Honour, dated September 25, 1999.

31       Certification  of  Principal  Executive  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 302 of the  Sarbanes-Oxley
         Act of 2002.

32       Certification  of  Principal  Executive  Officer  Pursuant  to 18 U.S.C
         Section 1350 as Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley
         Act of 2002.

(*)      Incorporated by reference to the Registrant's registration statement on
         Form 10-SB filed on August 9, 2000.

(a)      Reports on Form 8-K filed.

         There were no Form 8-K's filed during the quarter ended June 30, 2005.




                                       20
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Robison, Hill & Co. has served as the Company's Principal Accountant since 1999.
Their pre-approved fees billed to the Company are set forth below:


                               FISCAL YEAR ENDING         FISCAL YEAR ENDING
                                  JUNE 30, 2005              JUNE 30, 2004

Audit Fees                 $            21,200            $         13,725
Audit Related Fees                         NIL                         NIL
Tax Fees                                   100                          90
All Other Fees                             NIL                         NIL

As of June 30,  2005,  the  Company's  Audit  Committee  did not have a  formal,
documented pre-approval policy for the fees of the principal accountant.


















                                       21
<PAGE>

                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)

                                       -:-

                          INDEPENDENT AUDITOR'S REPORT


                             JUNE 30, 2005 AND 2004


















<PAGE>



                                    CONTENTS



                                                                         Page

Independent Auditor's Report............................................F - 1

Balance Sheets
   June 30, 2005 and 2004...............................................F - 2

Statements of Operations for the
   Years Ended June 30, 2005 and 2004 and the Cumulative
   Period May 5, 1999 (inception) to June 30, 2005......................F - 4

Statement of Stockholders' Equity for the
   Period May 5, 1999 (Inception) to June 30, 2005 .....................F - 5

Statements of Cash Flows for the
   Years Ended June 30, 2005 and 2004 and the Cumulative
   Period May 5, 1999 (Inception) to June 30, 2005.....................F - 17

Notes to Financial Statements..........................................F - 19
























<PAGE>






                          INDEPENDENT AUDITOR'S REPORT

Stereo Vision Entertainment, Inc.
(A Development Stage Company)

         We have  audited  the  accompanying  balance  sheets of  Stereo  Vision
Entertainment,  Inc. (a development  stage company) as of June 30, 2005 and 2004
and the related statements of operations, and cash flows for the two years ended
June 30, 2005 and 2004 and the cumulative period May 5, 1999 (inception) to June
30, 2005 and the  statement  of  stockholders  equity for the period May 5, 1999
(inception) to June 30, 2005. 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 audits in accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly,  in all  material  respects,  the  financial  position of Stereo  Vision
Entertainment,  Inc. (a development  stage company) as of June 30, 2005 and 2004
and the  results of its  operations  and its cash flows for the two years  ended
June 30, 2005 and 2004 and the cumulative period May 5, 1999 (inception) to June
30, 2005, in conformity with  accounting  principles  generally  accepted in the
United States of America.

         The accompanying  financial statements have been prepared assuming that
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

                                            Respectfully Submitted,

                                               /S/ Robison, Hill & Co.
                                            Certified Public Accountants

Salt Lake City, Utah
November 11, 2005

                                      F - 1

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS

<TABLE>
<CAPTION>

ASSETS:                                                                                     June 30,
                                                                                    2005               $2,004
                                                                             ------------------  ------------------
Current Assets:
<S>                                                                          <C>                 <C>
   Cash                                                                      $            1,669  $                -
   Prepaid Expenses                                                                      10,000               9,234
                                                                             ------------------  ------------------
       Total Current Assets                                                              11,669               9,234
                                                                             ------------------  ------------------

Fixed Assets:
   Office Equipment                                                                      13,745              13,745
   Less Accumulated Depreciation                                                        (13,745)            (13,745)
                                                                             ------------------  ------------------
       Net Fixed Assets                                                                       -                   -
                                                                             ------------------  ------------------

Intangible and Other Non- Current Assets:
   Investment in JamOakie                                                                11,893
   Investment in Wilfield Entertainment                                                       -                   -
   Films, Manuscripts, Recordings and Similar Property                                        -                   -
                                                                             ------------------  ------------------
       Net Intangible and Other Non-Current Assets                                       11,893                   -
                                                                             ------------------  ------------------

Total Assets                                                                 $           23,562  $            9,234
                                                                             ==================  ==================

</TABLE>



















                                      F - 2

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                            June 30,
                                                                                    2005                2004
                                                                             ------------------  ------------------
LIABILITIES AND STOCKHOLDERS' EQUITY:

Liabilities:
<S>                                                                          <C>                 <C>
   Accounts Payable                                                          $          281,976  $          246,628
   Accrued Expenses                                                                     502,799              78,373
   Bank Overdraft                                                                             -                 401
   Payable to SAG for Route 66                                                           71,493              71,493
   Lawsuit Payable                                                                       32,411              37,411
   Loans from Shareholders                                                              463,766             285,370
                                                                             ------------------  ------------------
      Total Current Liabilities                                                       1,352,445             719,676
                                                                             ------------------  ------------------


Stockholders' Equity:
   Shareholder Receivable                                                                     -                   -
  Common Stock, $.001 Par value
    Authorized 100,000,000 shares,
    Issued10,821,855 shares at June 30, 2005
      and 8,348,222 shares at June 30, 2004                                              10,822               8,348
  Common Stock to be Issued, 539,666 shares at
      June 30, 2005 and -0- shares at June 30, 2004                                         540                   -
  Additional Paid in Capital                                                         13,349,736          12,138,180
  Deficit Accumulated During the Development Stage                                  (14,689,981)        (12,856,970)
                                                                             ------------------
     Total Stockholders' Equity                                                      (1,328,883)           (710,442)
                                                                             ------------------  ------------------

     Total Liabilities and Stockholders' Equity                              $           23,562  $            9,234
                                                                             ==================  ==================

</TABLE>









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

                                      F - 3

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                    Cumulative
                                                                                                   Since May 5,
                                                                                                       1999
                                                                 For the Year Ended                Inception of
                                                                      June 30,                      Development
                                                       --------------------------------------
                                                              2005                2004                 Stage
                                                       ------------------  ------------------   -------------------

<S>                                                    <C>                 <C>                  <C>
Revenues                                               $                -  $                -   $                 -
                                                       ------------------  ------------------   -------------------

Expenses
Research & Development                                                  -                   -               293,000
General & Administrative                                          239,699             186,524             8,202,247
Salaries & Consulting                                           1,452,915           1,781,703             4,872,413
Advertising & Promotion                                           116,600              31,750               418,423
Loss on Investment                                                      -             558,191               558,191
Lawsuit Settlement                                                      -             104,911               104,911
                                                       ------------------  ------------------   -------------------

Operating Loss                                                 (1,809,214)         (2,663,079)          (14,449,185)

Other income (expense):
   Interest                                                       (22,989)            (14,737)             (417,050)
   Investment Fee                                                       -             (75,000)              (75,000)
   Loss on Sale of Assets                                               -                   -               (15,883)
   Write off of Note Receivable                                         -            (191,701)             (191,701)
   Gain on Forgiveness of Debt                                          -                   -                48,516
   Gain (Loss) on Available for Sale
          Securities                                                    -                   -               412,772
                                                       ------------------  ------------------   -------------------
Total Other Income (expense)                                      (22,989)           (281,438)             (238,346)
                                                       ------------------  ------------------   -------------------

       Net Loss Before Taxes                                   (1,832,203)         (2,944,517)          (14,687,531)

Income Tax Expense                                                   (808)               (808)               (2,450)
                                                       ------------------  ------------------   -------------------

       Net Loss                                        $       (1,833,011) $       (2,945,325)  $       (14,689,981)
                                                       ==================  ==================   ===================

Basic & Diluted loss Per Share                         $           (0.18)  $           (0.48)
                                                       ==================  ==================

Weighted Average                                               10,072,272           6,154,874
                                                       ==================  ==================
</TABLE>

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

                                      F - 4

<PAGE>


                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                                        Deficit
                                                                                                                      Accumulated
                                                                                   Common           Additional           During
                                                     Common Stock                   Stock             Paid in         Development
                                         ------------------------------------
                                              Shares             Value          to be Issued          Capital            Stage
                                         ----------------- ------------------ --------------  ----------------- ------------------
<S>                                      <C>               <C>                <C>             <C>               <C>
May 5, 1999 Stock Issued for Services
  and Payment of Accounts Payable                1,530,000 $            1,530 $            -  $           3,470 $                -

Net Loss                                                 -                  -              -                  -           (144,977)
                                         ----------------- ------------------ --------------  ----------------- ------------------

Balance at June 30, 1999                         1,530,000              1,530              -              3,470           (144,977)

Retroactive Adjustment for 25:1
  Stock Split May 30, 2003                      (1,468,800)            (1,469)             -              1,469                  -
                                         ----------------- ------------------ --------------  ----------------- ------------------

Restated Balance June 30, 1999                      61,200                 61              -              4,939           (144,977)

December 2, 1999 Stock Issued in
   Exchange for Assets                              58,800                 59              -          4,011,841                  -

December 3, 1999 Stock Issued in
   Connection to Merger with Kestrel
   Equity Corporation                               48,000                 48              -           (112,114)                 -

December 31, 1999 Stock Issued
   for Services                                     14,000                 14              -            699,986                  -

February 14, 2000 Stock Issued
   for Services                                      4,000                  4              -             99,996                  -

April 17, 2000 Stock Issued for
   Services                                          4,000                  4              -             99,996                  -

May 4, 2000 Stock Issued for Cash                    2,200                  2              -             54,998                  -

June 2, 2000 Stock Issued for Services               4,000                  4              -             99,996                  -

June 30, 2000 Stock Issued for Cash                  1,420                  2              -             35,498                  -

Net Loss                                                 -                  -              -                  -         (2,680,213)
                                         ----------------- ------------------ --------------  ----------------- ------------------
</TABLE>



                                     F - 5
<PAGE>

                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                    Deficit
                                                                                                                  Accumulated
                                                                               Common           Additional           During
                                                 Common Stock                   Stock             Paid in         Development
                                     ------------------------------------
                                          Shares             Value          to be Issued          Capital            Stage
                                     ----------------- ------------------ -----------------  ----------------- ------------------
<S>                                  <C>               <C>                <C>                <C>               <C>
Balance at June 30, 2000                       197,620 $              198 $               -  $       4,995,136 $       (2,825,190)

September 13, 2000 Stock Issued for
   Conversion of notes payable                   5,000                  5                 -            141,245                  -

September 29, 2000 Stock Issued for
  Advertising                                    4,000                  4                 -             94,996                  -

October 27, 2000 Stock Issued for
  Advertising                                      500                  -                 -             12,500                  -

November 15, 2000 Stock Issued for
  Conversion of Note Payable                    32,000                 32                 -            407,106                  -

November 22, 2000 Stock Issued for
  Conversion of Note Payable                     2,000                  2                 -             24,998                  -

November 22, 2000 Stock Issued for
  Consulting                                     4,080                  4                 -            101,996                  -

December 4, 2000 Stock Issued for
   Services                                        400                  -                 -             10,200                  -

December 14, 2000 Stock Issued for
   Services                                      4,000                  4                 -            105,996                  -

January 23, 2001 Stock Issued for
   Cash                                            600                  1                 -             14,999                  -


January 30, 2001 Stock Issued for
   Services                                      4,724                  4                 -             64,946                  -

March 10, 2001 Stock Issued for
   Services                                      8,000                  8                 -            153,992                  -
</TABLE>



                                     F - 6
<PAGE>

                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                      Deficit
                                                                                                                    Accumulated
                                                                                 Common           Additional           During
                                                    Common Stock                  Stock             Paid in         Development
                                         ----------------------------------
                                              Shares            Value         to be Issued          Capital            Stage
                                         ---------------- ----------------- -----------------  ----------------- ------------------
<S>                                      <C>              <C>               <C>                <C>               <C>
April 9, 2001 Stock Issued for
   Advertising                                      3,600 $               4 $               -  $          49,496 $                -

April 18, 2001 Stock Issued for
  Acquisition of Wilfield Entertainment            16,000                16                 -            219,984                  -

May 25, 2001 Shares Cancelled for
   Non-Performance of Advertising and
   Services                                       (14,000)              (14)                -           (328,486)                 -

June 1, 2001 Shares Issued for
   Conversion of Notes Payable                        840                 1                 -              7,512                  -

June 15, 2001 Shares Issued for
   Services                                         1,000                 1                 -             14,999                  -

June 28, 2001 Shares Issued for
   Advertising                                      4,000                 4                 -             59,996                  -

June 28, 2001 Shares Issued for
   Services                                         6,000                 6                 -             89,994                  -

June 29, 2001 Shares Issued for
   Conversion of Notes Payable                     34,000                34                 -            224,966                  -

Net Loss                                                -                 -                 -                  -         (4,572,325)
                                         ---------------- ----------------- -----------------  ----------------- ------------------

Balance at June 30, 2001                          314,364               314                 -          6,466,571         (7,397,515)

July 3, 2001 Shares Issued for Expense              1,000                 1                 -              9,999                  -

July 3, 2001 Shares Issued for Services             5,000                 5                 -             74,995                  -

July 25, 2001 Shares Issued for Cash                1,600                 1                 -             19,999                  -
</TABLE>


                                     F - 7

<PAGE>

                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                      Deficit
                                                                                                                    Accumulated
                                                                                 Common           Additional           During
                                                   Common Stock                   Stock             Paid in         Development
                                        -----------------------------------
                                            Shares             Value          to be Issued          Capital            Stage
                                        ---------------- ------------------ -----------------  ----------------- ------------------
<S>                                     <C>              <C>                <C>                <C>               <C>
July 30, 2001 Shares Issued for
    Consulting                                     4,400 $                4 $               -  $          45,096 $                -

August 29, 2001 Shares Issued for
    Interest on Notes Payable                     13,400                 13                 -            100,487                  -

September 10, 2001 Shares Issued for
    Services                                         800                  1                 -              5,999                  -

September 10, 2001 Shares Issued for
   Conversion of Note Payable                      4,000                  4                 -             25,596                  -

September 25, 2001 Shares Canceled
   For Non-Performance of Contract                (4,000)                (4)                -             70,536                  -

September 27, 2001 Shares Issued for
    Services                                     101,000                101                 -          1,136,149                  -



September 27, 2001 Shares Issued for
   Cash and Commission                             2,000                  2                 -             24,998                  -

October 2, 2001 Shares Issued for
   Services                                       18,000                 18                 -            242,982                  -

October 31, 2001 Shares Issued for
   Conversion of Note Payable                     10,182                 10                 -             89,085                  -

November 1, 2001 Shares Issued for
   Services                                        2,825                  3                 -             14,123                  -

November 7, 2001 Shares Issued for
   Conversion of Note Payable                      8,910                  9                 -             55,676                  -
</TABLE>



                                     F - 8
<PAGE>

                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                   Deficit
                                                                                                                 Accumulated
                                                                              Common           Additional           During
                                                Common Stock                   Stock             Paid in         Development
                                      ----------------------------------
                                         Shares             Value          to be Issued          Capital            Stage
                                      --------------- ------------------ -----------------  ----------------- ------------------
<S>                                   <C>             <C>                <C>                <C>               <C>
December 19, 2001 Shares Issued for
   Services                                    44,000 $               44 $               -  $         153,956 $                -

December 19, 2001 Shares Issued for
   Conversion of Note Payable                   6,820                  7                 -             23,863                  -

December 20, 2001 Shares Issued for
   Services                                    30,000                 30                 -            157,470                  -

January 15, 2002 Shares Issued for
   Cash                                        12,000                 12                 -             99,988                  -

January 24, 2002 Shares Issued for
  Previous Conversion of Note Payable          55,660                 56                 -                (57)                 -

February 25, 2002 Shares Issued for
  Previous Conversion of Note Payable          63,525                 64                 -                (64)                 -

April 10, 2002 Shares Issued for
  Conversion of Note Payable                    9,920                 10                 -             32,617                  -

April 15, 2002 Shares Issued for Rent           2,000                  2                 -              3,998                  -

April 15, 2002 Shares Issued for Cash           4,000                  4                 -              2,996                  -

April 29, 2002 Shares Issued for
   Project Agreement                            8,000                  8                 -             11,992                  -

April 29, 2002 Shares Issued for
   Consulting                                   4,000                  4                 -              5,996                  -

May 8, 2002 Shares Issued for Cash              4,000                  4                 -              2,496                  -

May 24, 2002 Shares Issued for
   Consulting                                   4,000                  4                 -              3,496                  -
</TABLE>


                                     F - 9
<PAGE>

                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                    Deficit
                                                                                                                  Accumulated
                                                                               Common           Additional           During
                                                 Common Stock                   Stock             Paid in         Development
                                      -----------------------------------
                                          Shares             Value          to be Issued          Capital            Stage
                                      ---------------- ------------------ -----------------  ----------------- ------------------
<S>                                   <C>              <C>                <C>                <C>               <C>
May 30, 2002 Shares Issued for
  Project Agreement                              4,000 $                4 $               -  $           2,996 $                -

June 24, 2002 Shares Issued for Cash             4,000                  4                 -              7,496                  -

Net Loss                                             -                  -                 -                  -         (1,066,683)
                                      ---------------- ------------------ -----------------  ----------------- ------------------

Balance at June 30, 2002                       739,406                739                 -          8,891,530         (8,464,198)

July 1, 2002 Shares Issued for Cash             34,000                 34                 -              9,466                  -

July 8, 2002 Shares Issued for
  Interest on Debt Retirement                   85,344                 85                 -             81,582                  -

December 20, 2002, Shares returned
   to treasury and cancelled                   (20,000)               (20)                -                 20                  -

December 23, 2002, Shares
  Cancelled for non-performance of
  Services                                    (104,000)              (104)                -         (1,054,396)                 -

January 1, 2003, Shares Issued for
  Services                                     494,000                494                 -            370,006                  -

March 18, 2003, Shares Issued for
  Services                                      52,600                 53                 -             26,247                  -

March 26, 2003, Shares Issued for
  Conversion of Debt                           160,000                160                 -            274,772                  -

March 26, 2003, Shares Issued for
  Services                                      13,200                 13                 -              6,587                  -

May 9, 2003, Shares Issued for
  Services                                     101,600                102                 -             25,298                  -
</TABLE>


                                     F - 10

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                   Deficit
                                                                                                                 Accumulated
                                                                              Common           Additional           During
                                                Common Stock                   Stock             Paid in         Development
                                     -----------------------------------
                                         Shares             Value          to be Issued          Capital            Stage
                                     ---------------- ------------------ -----------------  ----------------- ------------------
<S>                                  <C>              <C>                <C>                <C>               <C>
May 29, 2003, Shares Issued for
  Services                                    108,000 $              108 $               -  $         121,932 $                -

June 2, 2003, Shares Issued for
  Services                                     38,000                 38                 -             42,902                  -

June 2, 2003, Shares Issued for
  Conversion of Debt                           88,000                 88                 -             19,912                  -

June 3, 2003, Shares Cancelled for
  Non-Performance of Service                  (12,000)               (12)                -            (56,988)                 -

June 12, 2003, Shares Issued for
  Services                                  2,000,000              2,000                 -            598,000                  -

June 20, 2003, Shares Issued for
  Services                                     10,000                 10                 -              5,990                  -

June 25, 2003, Shares Issued for
  Conversion of Debt                           40,000                 40                 -             15,451                  -

Net Loss                                            -                  -                 -                  -         (1,447,447)
                                     ---------------- ------------------ -----------------  ----------------- ------------------

Balance at June 30, 2003                    3,828,150              3,828                 -          9,378,311         (9,911,645)

July 1, 2003, Shares Issued for
   Services                                   100,000                100                 -             47,900                  -

July 8, 2003 Loan Converted to Shares          30,000                 30                 -              8,875                  -

July 9, 2003, Shares Issued for
   Services                                    70,000                 70                 -             23,930                  -
</TABLE>




                                     F - 11

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                   Deficit
                                                                                                                 Accumulated
                                                                              Common           Additional           During
                                                Common Stock                   Stock             Paid in         Development
                                     -----------------------------------
                                         Shares             Value          to be Issued          Capital            Stage
                                     ---------------- ------------------ -----------------  ----------------- ------------------
<S>                                  <C>              <C>                <C>                <C>               <C>
September 11, 2003, Shares Issued
  for Services                                218,000 $              218 $               -  $         101,382 $                -

September 17, 2003, Shares Issued
  for Services                                100,000                100                 -             51,900                  -

September 29, 2003, Shares Issued
  for Services                                710,000                710                 -            403,990                  -

October 1, 2003, Shares Issued for
  Cash                                        200,000                200                 -             55,300                  -

October 1, 2003, Shares Issued for
  Services                                     20,000                 20                 -              4,980                  -

November 17, 2003, Shares
  Canceled for Non-Performance               (100,000)              (100)                -            (47,800)                 -

December 2, 2003, Shares Issued for
  Services                                  1,223,072              1,223                 -            210,277                  -

January 12, 2004, Shares Issued for
  Services                                     90,000                 90                 -             53,910                  -

January 20, 2004, Shares Issued for
  Conversion of Note Payable                  200,000                200                 -             34,846                  -

February 2, 2004, Shares Issued for
  Cash                                        400,000                400                 -             99,600                  -

February 9, 2004, Shares Canceled
  for Non-Performance                         (20,000)               (20)                -             (4,980)                 -
</TABLE>



                                     F - 12

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                   Deficit
                                                                                                                 Accumulated
                                                                              Common           Additional           During
                                                Common Stock                   Stock             Paid in         Development
                                    ------------------------------------
                                         Shares             Value          to be Issued          Capital            Stage
                                    ----------------- ------------------ -----------------  ----------------- ------------------
<S>                                 <C>               <C>                <C>                <C>               <C>
March 9, 2004, Shares Issued for
  Cash                                         25,000 $               25 $               -  $          12,475 $                -

March 9, 2004, Shares Issued for
  Rent and Accounts Payable                   100,000                100                 -             24,900                  -

March 9, 2004, Shares Canceled for
  Non-Performance                            (156,000)              (156)                -            (75,276)                 -

March 11, 2004, Shares Issued for
  Services                                    345,000                345                 -            689,655                  -

April 7, 2004, Shares Issued for
  Services                                     60,000                 60                 -            122,740                  -

April 7, 2004, Shares Issued for
  Cash                                        375,000                375                 -            214,495                  -

April 7, 2004, Loan Converted to
  Shares                                       30,000                 30                 -             14,169                  -

April 14, 2004, Shares Issued for
  Cash                                        100,000                100                 -             25,000                  -

May 6, 2004, Shares Issued for
  Cash                                         10,000                 10                 -              4,990                  -

May 25, 2004, Shares Issued for
  Services                                     50,000                 50                 -             40,450                  -

June 8, 2004, Shares Issued for
  Investment Expense                          100,000                100                 -             74,900                  -
</TABLE>



                                     F - 13

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                     Deficit
                                                                                                                   Accumulated
                                                                                Common           Additional           During
                                                  Common Stock                   Stock             Paid in         Development
                                      ------------------------------------
                                           Shares             Value          to be Issued          Capital            Stage
                                      ----------------- ------------------ -----------------  ----------------- ------------------
<S>                                   <C>               <C>                <C>                <C>               <C>
June 16, 2004, Shares Issued for
  Services                                      240,000 $              240 $               -  $          79,761 $                -

Cancellation of Stock Options for
Non-Performance                                       -                  -                 -            487,500                  -

Net Loss                                              -                  -                 -                  -         (2,945,325)
                                      ----------------- ------------------ -----------------  ----------------- ------------------

Balance at June 30, 2004                      8,348,222              8,348                 -         12,138,180         (12,856,970)

July 13, 2004, Shares issued for
   Consulting                                   128,333                128                 -             54,805                  -

July 22, 2004, Shares issued for
  Consulting                                    280,000                280                 -            121,920                  -

July 31, 2004, Shares issued for cash           100,000                100                 -             24,870                  -

August 9, 2004, Shares issued for
   Consulting                                   620,000                620                 -            183,380                  -

August 26, 2004 Shares issued for cash          100,000                100                 -             24,900                  -

August 30, 2004 Shares issued for cash          200,000                200                 -             49,800                  -

August 30, 2004, Shares issued for
   Consulting                                    70,000                 70                 -             17,430                  -

September 17, 2004, Shares issued for
   Services                                     136,000                136                 -             82,464                  -

December 8, 2004, Shares issued for
   Services                                      36,000                 36                 -             17,964                  -
</TABLE>


                                     F - 14

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                     Deficit
                                                                                                                   Accumulated
                                                                                Common           Additional           During
                                                  Common Stock                   Stock             Paid in         Development
                                       -----------------------------------
                                           Shares             Value          to be Issued          Capital            Stage
                                       ---------------- ------------------ -----------------  ----------------- ------------------
<S>                                    <C>              <C>                <C>                <C>               <C>
December 15, 2004, Shares Issued for
  Services                                       45,000 $               45 $               -  $          19,955 $                -

December 15, 2004, Loans Converted
   To Shares                                    103,300                103                 -             38,897                  -

December 17, 2004, Shares issued for
   Services                                       5,000                  5                 -              1,845                  -

January 24, 2005, Shares issued for
   Services                                      15,000                 15                 -              3,735                  -

January 24, 2005, Shares issued for
   Cash                                          20,000                 20                 -              4,980                  -

February 1, 2005, Shares issued for
   Cash                                         120,000                120                 -             24,880                  -

February 22, 2005, Shares issued for
   Cash                                          20,000                 20                 -              4,980                  -

March 30, 2005, Shares issued for
   Services                                     355,000                355                 -            163,745                  -

March 30, 2005, Shares issued for
   Accounts payable                             100,000                100                 -             24,900                  -

April 4, 2005, Shares issued for
   Services                                      20,000                 20                 -              6,980                  -

Shares to be issued for payroll                       -                  -               267            266,399                  -

Shares to be issued for Investment
   In JamOakie Productions, Inc.                      -                  -                20              5,980                  -

Shares to be issued for expenses                      -                  -               100             34,900                  -
</TABLE>


                                     F - 15
<PAGE>

                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                                      Deficit
                                                                                                                    Accumulated
                                                                                 Common           Additional           During
                                                   Common Stock                   Stock             Paid in         Development
                                        -----------------------------------
                                            Shares             Value          to be Issued          Capital            Stage
                                        ---------------- ------------------ -----------------  ----------------- ------------------
<S>                                     <C>              <C>                <C>                <C>               <C>
Shares to be issued for conversion of
   Loans payable                                       - $                - $             153  $          31,847 $                -

Net Loss                                               -                  -                 -                  -         (1,833,011)
                                        ---------------- ------------------ -----------------  ----------------- ------------------

Balance at June 30, 2005                      10,821,855 $           10,821 $             540  $      13,349,736 $      (14,389,981)
                                        ================ ================== =================  ================= ==================
</TABLE>




























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

                                     F - 16

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                     Cumulative
                                                                                                    Since May 5,
                                                                                                        1999
                                                                    For the Year Ended              Inception of
                                                                         June 30,                   Development
                                                           ------------------------------------
                                                                 2005               2004               Stage
                                                           ----------------  ------------------  ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                        <C>               <C>                 <C>
Net Loss                                                   $     (1,833,011) $       (2,945,325) $      (14,689,981)
Adjustments to reconcile net loss to net
cash used in operating activities:
   Depreciation and Amortization                                          -               2,749           3,536,428
   Issuance of Common Stock for Expenses                            710,933           1,785,769           6,279,129
   Stock Issued for Payment of Accounts Payable                      25,000              20,000              45,000
   Stock to be Issued for accrued expenses                          266,666                   -             266,666
   Compensation Expense from Stock Options                                -                   -             487,500
   Realized gain on trading investments                                   -                   -            (412,773)
   Loss on sale of assets                                                 -                   -              15,883
   Loss on Investment Written Off                                         -             557,008             557,008
   Gain on Forgiveness of Debt                                            -                   -             (48,516)
   Cash acquired in merger                                                -                   -                 332

Change in operating assets and liabilities:
   Investment in films, manuscripts, recordings
      and similar property                                                -                   -            (272,008)
    Prepaid Expense                                                    (766)             (9,234)            (10,000)
   Accounts Payable                                                  35,348             (21,649)            264,546
   Accrued Expenses                                                 424,426              36,331             502,799
   Lawsuit Payable                                                   (5,000)             37,411              32,411
   Payable to SAG for Route 66                                            -                   -              71,493
                                                           ----------------  ------------------  ------------------

  Net Cash Used in operating activities                            (376,404)           (536,940)         (3,374,083)
                                                           ----------------  ------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchase of investment                                            (5,892)                                 (5,892)
   Purchase of equipment                                                  -                   -             (13,745)
   Proceeds from sale of assets                                           -                   -              51,117
   Proceeds from sale of investments                                      -                   -             565,773
                                                           ----------------  ------------------  ------------------

Net cash provided (used) in investing activities                     (5,892)                  -             597,253
                                                           ----------------  ------------------  ------------------
</TABLE>




                                     F - 17

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (Continued)

<TABLE>
<CAPTION>
                                                                                                     Cumulative
                                                                                                    Since May 5,
                                                                                                        1999
                                                                    For the Year Ended              Inception of
                                                                      June 30, 2005                 Development
                                                           ------------------------------------
                                                                 2005               2004               Stage
                                                           ----------------  ------------------  ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
<S>                                                        <C>               <C>                 <C>
Net proceeds from loans from shareholders                  $        220,396  $           77,766  $        1,831,513
Proceeds from issuance of common stock                              163,970             448,016             882,986
Proceeds from issuance of short-term notes                                -                   -              64,000
Bank Overdraft                                                         (401)                401                   -
                                                           ----------------  ------------------  ------------------

Net Cash Provided by Financing Activities                           383,965             526,183           2,778,499
                                                           ----------------  ------------------  ------------------

Net (Decrease) Increase in Cash                                       1,669             (10,757)              1,669
Cash at Beginning of Period                                               -              10,757                   -
                                                           ----------------  ------------------  ------------------

Cash at End of Period                                      $          1,669  $                 - $            1,669
                                                           ================  ==================  ==================

SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the year for:
  Interest                                                 $              -  $                -  $           43,799
                                                           ----------------  ------------------  ------------------
  Income taxes                                             $              -  $                -  $                -
                                                           ----------------  ------------------  ------------------

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:

Common Stock Issued for Investment in
   Wilfield Entertainment                                  $              -  $                -  $          220,000
Common Stock Issued for Investment in
   Mad Dogs & Oakies Project                                              -                   -               3,000
Common Stock Issued for Investment in
  In the Garden of Evil Project                                           -                   -              12,000
Notes Payable Converted to Stock                           $         42,000  $           23,105  $        1,256,936
</TABLE>


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

                                     F - 18

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of accounting  policies for Stereo  Vision  Entertainment,
Inc. is presented to assist in understanding the Company's financial statements.
The accounting policies conform to generally accepted accounting  principles and
have been consistently applied in the preparation of the financial statements.

Nature of Operations and Going Concern

         The accompanying  financial  statements have been prepared on the basis
of accounting principles applicable to a "going concern", which assumes that the
Company  will  continue in  operation  for at least one year and will be able to
realize  its assets  and  discharge  its  liabilities  in the  normal  course of
operations.

         Several conditions and events cast doubt about the Company's ability to
continue  as  a  "going  concern".  The  Company  has  incurred  net  losses  of
approximately  $14,690,000  for the period from May 5, 1999  (inception) to June
30, 2005, has a liquidity problem, and requires additional financing in order to
finance its business  activities  on an ongoing  basis.  The Company is actively
pursuing  alternative  financing  and has had  discussions  with  various  third
parties,  although  no firm  commitments  have been  obtained.  In the  interim,
shareholders  of the Company  have  committed  to meeting its minimal  operating
expenses.

         The  Company's  future  capital  requirements  will  depend on numerous
factors  including,  but not  limited  to,  continued  progress  developing  its
products and market penetration and profitable operations.

         These  financial  statements do not reflect  adjustments  that would be
necessary  if the Company  were unable to continue as a "going  concern".  While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial  statements,  there can be
no assurance that these actions will be successful.

         If the  Company  were unable to  continue  as a "going  concern",  then
substantial adjustments would be necessary to the carrying values of assets, the
reported  amounts of its  liabilities,  the reported  expenses,  and the balance
sheet classifications used.







                                     F - 19

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Organization and Basis of Presentation

         The Company was  incorporated  under the laws of the State of Nevada on
May 5, 1999. The Company as of June 30, 2005 is in the  development  stage,  and
has not commenced planned principal operations.

Nature of Business

         The  Company  intends to position  itself to evolve  into a  vertically
integrated,  diversified media  entertainment  company.  The Company anticipates
generating  revenues  from  several  sources,  including  production  of new and
existing  feature films in both 2-D and 3-D format for  theatrical and direct to
DVD release, as well as expanding into other areas of the entertainment industry
including the production of composition music albums

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.










                                     F - 20

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Property and Equipment

         Property and equipment are stated at cost. Depreciation is provided for
in amounts  sufficient  to relate the cost of  depreciable  assets to operations
over their estimated service lives,  principally on a straight-line basis from 3
to 5 years.

         Upon sale or other disposition of property and equipment,  the cost and
related  accumulated  depreciation or amortization are removed from the accounts
and any gain or loss is included in the determination of income or loss.

         Expenditures  for  maintenance  and  repairs  are charged to expense as
incurred.  Major overhauls and betterments are capitalized and depreciated  over
their useful lives.

         The Company  identifies  and records  impairment  losses on  long-lived
assets such as property and  equipment  when events and  circumstances  indicate
that such assets  might be  impaired.  The  Company  considers  factors  such as
significant  changes in the regulatory or business  climate and projected future
cash flows from the  respective  asset.  Impairment  losses are  measured as the
amount by which the carrying amount of intangible asset exceeds its fair value.

Stock Compensation for Non-Employees

         The  Company  accounts  for the fair  value of its  stock  compensation
grants for  non-employees  in accordance with FASB Statement 123. The fair value
of each grant is equal to the market price of the Company's stock on the date of
grant if an active  market  exists or at a value  determined  in an arms  length
negotiation between the Company and the non-employee.

Advertising Costs

         Advertising  costs are  expensed as  incurred.  There was  $116,600 and
$31,750 advertising expense for the two years ended June 30, 2005 and 2004.

Concentration of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign  hedging  arrangements.  The Company  maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.

                                     F - 21

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Loss per Share

         Basic loss per share has been  computed  by  dividing  the loss for the
year  applicable to the common  stockholders  by the weighted  average number of
common shares  outstanding  during the years.  The effect of outstanding  common
stock equivalents would be anti-dilutive for June 30, 2005 and 2004 and are thus
not  considered.  At June 30,  2005 and 2004,  the total  number of  potentially
dilutive common stock equivalents was 1,120,000 and 20,000, respectively.

Reclassification

         Certain   reclassifications  have  been  made  in  the  2004  financial
statements to conform with the 2005 presentation.

NOTE 2 - INCOME TAXES

         As of June 30, 2005, the Company had a net operating loss  carryforward
for income tax  reporting  purposes  of  approximately  $16,801,000  that may be
offset against  future  taxable income through 2025.  Current tax laws limit the
amount of loss  available  to be offset  against  future  taxable  income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset  future  taxable  income may be limited.  Accordingly,  the potential tax
benefits of the loss  carryforwards  are offset by a valuation  allowance of the
same amount.

NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN

         The Company has not begun principal  operations and as is common with a
development  stage  company,  the Company has had  recurring  losses  during its
development  stage.  Continuation of the Company as a going concern is dependent
upon obtaining the additional  working capital necessary to be successful in its
planned  activity,  and the  management of the Company has developed a strategy,
which it believes will  accomplish  this  objective  through  additional  equity
funding  and long term  financing,  which will enable the Company to operate for
the coming year.

NOTE 4 - RENT EXPENSE

         The Company  has  entered  into lease  agreements  for various  office,
storage and warehouse  facilities  on a month to month basis.  For the two years
ended June 30, 2005 and 2004, rent expense was $73,309 and $49,723.

                                     F - 22

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5 - LOANS FROM SHAREHOLDERS AND OTHER RELATED PARTY
TRANSACTIONS

         As of June 30, 2005 and 2004, the company owes $463,766 and $285,370 to
various  shareholders  and  officers/directors.  The  loans are  unsecured  with
interest at rates of between 4.00% to 12% and have no fixed terms of repayment.

         On  April  30,  2004,  the  company  signed  a  Development  Production
Agreement with Baywatch 3 Double D LLC which is 50 % owned by Douglas  Schwartz,
Chairman  of the Board of Stereo  Vision  Entertainment.  Under the terms of the
agreement,  the company will receive  certain rights in a film to be produced in
return for providing a development  production  advance.  Originally the company
had 30 days in which  to  secure  the  advance.  On June 8,  2004,  the  company
received an extension on this agreement,  for which the Company granted Baywatch
LLC 100,000  unregistered  shares of common stock valued at $0.75 per share, and
is free to  continue  to pursue  the  funding  on a  non-exclusive  basis of the
production advance for the movie,  "Baywatch 3 Double D". The $75,000 investment
fee has  been  recorded  as  other  expense  in the  financial  statements.  The
agreement has since expired.

NOTE 6 - COMMON STOCK TRANSACTIONS

         The Company was initially authorized to issue 100,000,000 common shares
with a par value of $0.001.

         At inception, the company issued 61,200 (1,530,000 pre-split) shares of
common stock to its officers and directors  for services  performed and payments
made on the Company's  behalf during its formation.  This transaction was valued
at approximately  $0.003 per share or an aggregate  approximate value of $5,000.
These shares were issued under Rule 4(2).

         On December 2, 1999,  the Company  issued 58,800  (1,470,000 pre split)
shares of common  stock in exchange  for $350,000  investment  in 3-D  projects,
$255,000 licensing and distribution  rights,  $3,306,900 3-D film production and
exhibition  equipment,  and $100,000 patent  pending.  On September 25, 2001 the
asset  acquisition  was rescinded and the assets  acquired were returned and the
common stock was returned to treasury.

         In addition to the asset acquisition,  on December 3, 1999, the company
entered into an  acquisition  agreement and plan of reverse  merger with Kestrel
Equity  Corporation  whereby the company  acquired $332 cash,  $153,001  trading
investments,  $100,686  reduction  in accounts  payable,  and  4366,084 in notes
payable in exchange for 48,000 (1,200,000  pre-split) shares of common stock. by
virtue of the merger  and the asset  acquisition,  the  Company  issued  106,800
(2,670,000  pre-split)  shares of common stock of the surviving  corporation and
acquired assets valued at $4,013,100 or approximately $1.50 per share.

                                     F - 23

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         On December 31, 1999,  the Company  issued 14,000  (350,000  pre-split)
shares to several  employees  (Rick Ducommun and Rocco Urbisci) and a consultant
for project related  services  rendered and to be rendered,  valued at $2.00 per
share.  These  shares  were  issued in  reliance  upon the Rule  4(2)  exemptive
provisions, and no advertising nor solicitation occurred.

         On February 14, 2000,  the Company  issued  4,000  (100,000  pre-split)
shares of common  stock as payment for services  rendered by Mr. Herky  Williams
valued at $1.00 per share. The services rendered were for the development of the
company's music  division.  The shares were issued under Rule 4(2) to an officer
of the Company.

         On April 17, 2000, the Company issued 4,000 (100,000  pre-split) shares
of common stock to Shauna  Gilibarti as payment for marketing  related  services
valued at $100,000. They were cancelled on May 25, 2001 for failure to perform.

         On May 4, 2000, the Company issued 2,200 (55,000  pre-split)  shares of
common stock for cash of $55,000.

         On June 2, 2000, the Company issued 4,000 (100,000 pre-split) shares of
common stock to Profit Earth as payment for market development services services
valued at $100,000.  They were  cancelled for non  performance  on September 25,
2001.

         On June 30, 2000, the Company issued 1,420 (35,500 pre-split) shares of
common stock for cash of $35,500.

         On September 13, 2000,  the Company  issued 5,000  (125,000  pre-split)
shares of common stock for conversion of notes payable  totaling  $141,250.  The
value of these  shares  was  $1.13  per  share,  according  to the  terms of the
original loan agreement.

         On September  27, 2000,  the company  entered into a contract  with Ron
Whiten  to  make  strategic  introductions  on  behalf  of  the  Company  to the
investment community in exchange for 4,000 (100,000 pre-split) common shares. On
September 29, 2000, the shares were issued at a value of $95,000,  which was the
quoted  market price on the date of issue.  The contract is for a period of time
covering 3 quarterly financial  statements.  To the best knowledge and belief of
the company, no services were performed by Mr.Whiten pursuant to this agreement.
On May 25, 2001,  the 4,000 shares of stock issued to Mr. Whiten were  cancelled
for non-performance of services.

         On October 27, 2000, the Company issued 500 (12,500  pre-split)  shares
of  common  stock  valued at $1.00 per  share to  National  Financial  Group for
financial  services  previously  rendered.  These  shares were issued under Rule
4(2).


                                     F - 24

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         On November 15, 2000,  the Company  issued 32,000  (800,000  pre-split)
shares of common stock for conversion of notes payable  totaling  $407,138.  The
value of these  shares  was  $0.51  per  share,  according  to the  terms of the
original loan agreement.

         On November  22, 2000,  the Company  issued  2,000  (50,000  pre-split)
shares of common stock for  conversion of notes payable  totaling  $25,000.  The
value of these shares was $0.50 per share according to the terms of the original
agreement.

         On November 22, 2000,  the Company  issued  4,080  (102,000  pre-split)
shares of common stock to Daniel Symmes as payment for 3-D  consulting  services
valued at $102,000.

         On December 4, 2000, the Company issued 400 (10,000  pre-split)  shares
of common stock as payment for services valued at $10,200.

         On December 14, 2000,  the Company  issued  4,000  (100,000  pre-split)
shares of common stock to Rod Whiton as payment for advertising  services valued
at $106,000. These shares were cancelled for non-performance on May 25, 2001.

         On January 23, 2001, the Company issued 600 (15,000  pre-split)  shares
of common stock for cash $15,000.

         On January 30,  2001,  the Company  issued  4,724  (118,100  pre-split)
shares of common  stock to six  individuals  as payment for  services  valued at
$64,950.  These services  included advising on the film "On Route 66" as well as
website  design.  On May 25,  2001,  2,000 of these  shares were  cancelled  for
non-performance.

         On March 10, 2001, the Company issued 8,000 (200,000  pre-split) shares
of common stock to Herky  Williams  (100,000)  and Jerry  Crutchfiels  (100,000)
valued at $154,000 as payment for services  regarding the production of a record
album.

         On April 9, 2001, the Company issued 3,600 (90,000 pre-split) shares of
common stock to Charles  Marshall as payment for  advertising  expense valued at
$49,500.

         Pursuant to an agreement made with an affiliate company of Mr. Williams
(the  Secretary-  Treasurer  and a  Director  of the  Company)  called  Wilfield
Entertainment,  the Company issued 16,000 (400,000  pre-split)  shares of common
stock  at a  market  price  of  $.55  per  share  on  April  18,  2001  for  its
participation  in the joint venture.  The joint venture with Wilfield is for the
production of thirteen

                                     F - 25

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

musical albums. The company will supply the necessary funding for the production
of these  albums and after  capital  repayment  has  occurred,  the Company will
receive 51% of the profits from the projects. The estimated production costs per
album are projected to be $80,000.

         On May 25, 2001,  14,000  (350,000  pre split)  shares that were issued
during the years  ended June 30,  2001 and 2000 to various  people for  services
were cancelled. These shares were cancelled for non-performance of services. The
expenses related to these shares were recorded when the shares were issued.  The
expenses  related  to the  issuance  of  these  shares  were  reversed  upon the
cancellation of the shares.

         On June 1, 2001,  the Company issued 840 (21,000  pre-split)  shares of
common stock for conversion of notes payable totaling  $7,513,  according to the
terms of the original agreement.

         On June 15, 2001, the Company issued 1,000 (25,000 pre-split) shares of
common stock as payment for services valued at $15,000.

         On June 28, 2001, the Company issued 10,000 (250,000  pre-split) shares
of common stock to Vision  Publishing  (100,000) and Jim and Cynthia  Pitochelli
(150,000) as payment for services and advertising expenses valued at $150,000.

         On June 29, 2001, the Company issued 34,000 (850,000  pre-split) shares
of common stock for conversion of notes payable totaling $225,000,  according to
the terms of the original loan agreement.

         On August 29,  2001,  the Company  issued  13,400  (335,000  pre-split)
shares of common  stock  for  conversion  of notes  payable  totaling  $100,500,
according to the terms of the original loan agreement.

         During the quarter ended September 30, 2001, 4,000 (100,000  pre-split)
shares were issued for conversion of notes payable totaling  $25,600.  The value
of these shares was $0.26 per share,  as agreed in the original loan  documents.
These shares were issued under Rule 4(2).

         On  September  25, 2001,  4,000  (100,000  pre-split)  shares that were
issued  during the year ended June 30, 2000 for services were  cancelled.  These
shares were cancelled for  non-performance of services.  The expenses related to
these shares were recorded when the shares were issued.  The expenses related to
the issuance of these shares were reversed upon the  cancellation of the shares.
Also on  September  25,  2001,  the  asset  acquisition  agreement  with 3-D was
rescinded and the assets acquired by the Company were returned to 3-D. The stock
issued by the  Company  in the  acquisition  was not  returned.  There was a net
increase in total stockholders' equity of $70,532.

                                     F - 26

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         During the quarter ended September 30, 2001, the company issued 112,200
(2,805,000  pre- split)  shares to the  Company's  officers  and  directors  for
services  rendered  in their  various  capacities  (J.  Honour  (1,500,000),  H.
Williams (600,000),  J. Bodziak, R. Urbisci and T. Noonan (100,000 each)) at the
market value of the stock on the date of agreed (not  actual)  issuance of $0.30
to $0.45 per share.

         During the quarter ended September 30, 2001,  3,600 (90,000  pre-split)
restricted  common shares were issued to individuals for cash at $0.50 per share
trading value. All shares were issued under Rule 4(2).

         During the quarter ended  December 31, 2001,  the Company issued 25,912
(647,795  pre-split)  shares of stock for  conversion of notes payable  totaling
$135,596,  for  accrued  interest  on the  notes  payable  of  $12,275,  and for
consulting  services of $20,779.  The value of the shares was between  $0.14 and
$0.35 per share. The share values were always  determined based upon the trading
price of the stock on the date of the agreement,  not on the date of issuance of
the shares. All shares were issued in reliance on the exemption provided by Rule
4(2).

         During the quarter ended  December 31, 2001,  the Company issued 94,825
(2,370,631 pre- slit) shares to twelve different individuals for services at the
market value on the date of the  agreements,  between $0.21 and $0.54 per share.
Such  services  included  financial  and  market  advisory  as well  as  project
advisory.

         On January 15, 2002, 12,000 (300,000  pre-split) shares of common stock
were issued for cash at $0.33 per share.

         During the quarter ended March 30, 2002,  119,185 (2,979,625 pre split)
shares were issued in connection  with previous debt  cancellation,  pursuant to
the terms of the  convertible  instrument.  These  shares were issued under Rule
4(2), and the recipient was an accredited investor.

         On April 10, 2002, the Company issued 9,920 (248,000  pre-split) shares
of common stock for conversion of notes payable  totaling  $32,627  according to
the terms of the original agreement.

         On April 29, 2002, 8,000 (200,000  pre-split) common shares were issued
for the purchase of "In the Garden of Eden"  album.  The value of the shares was
$0.06 on the date of  contractual  agreement,  and the shares were issued  under
Rule 4(2),  but later  rescinded for failure of the owner to deliver the rights.
These shares were cancelled on June 3, 2003.

         On May 30, 2002, 4,000 (100,000 pre-split) common shares were issued to
various people for services,  which included writing,  arranging,  composing and
product  placement,  all  connected  with the project "Mad Dogs and Oakies." The
value of the shares  was $.03 per share on the date of  contract.  These  shares
were issued to non-affiliates under Rule 4(2).

                                     F - 27

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         During the  quarter  ended June 30,  2002,  the Company  issued  12,000
(300,000  pre-split)  shares of common  stock for cash.  Shares  were issued for
$.025 to $.075 per share.

         During the quarter  ended June 30,  2002,  10,000  (250,000  pre-split)
shares were issued for consulting and rent expense.  The value of the shares was
between $.03 (April 15) and $.08 (May 24) per share.

         On July 1, 2002,  34,000 (850,000  pre-split) common shares were issued
for cash of $9,500, based upon a conversion contract entered into earlier.

         On July 8, 2002,  85,334  (2,133,334  pre-split)  shares were issued in
connection with a previous debt  cancellation,  based upon the terms of the note
and  conversion  price  therein  committed.  These  shares  were  issued  to  an
accredited investor under Rule 506 of Regulation D.

         On December 20, 2002,  20,000 (500,000  pre-split) shares were returned
to the treasury and cancelled.

         On December 23, 2002,  104,000 (2,600,000 pre split) common shares were
cancelled from various  shareholders for  non-performance  of services.  750,000
shares were initially issued December 20, 2001,  1,500,000 shares were initially
issued  September 27, 2001, and 450,000 shares were initially  issued October 2,
2001.  The shares were recorded as a prepaid asset at the time of issuance.  The
entry recording the issuance of the shares was reversed upon cancellation.

         During the quarter ended March 31, 2003, a total of 559,800 (13,995,000
pre-split)  common shares were issued to  individuals  for services.  This total
included  issuances to officers and directors,  at $0.029 per share (restricted)
of 13,450,000 shares (J. Honour (10,000,000), H. Williams (1,500,000), T. Noonan
(500,000),   J.  Bodziak  (250,000)  and  R.  Urbisci   (100,000))  and  outside
consultants  providing  media  solicitation  services  (Ron  Kelley,   1,100,000
shares).

         On March 26, 2003,  160,000  (4,000,000  pre-split)  common shares were
issued for conversion of notes payable of $274,932.  These shares were issued to
an accredited investor, in conversion of pre-existing rights, under Rule 506.

         On May 9, 2003, 101,600  (2,540,000  pre-split) shares were issued to 7
individuals providing various consulting services,  all as described in the Form
S8  registration  statement,  filed April 29, 2003.  The value of the registered
shares was effectively $0.01 per share. The private placement shares were issued
under the exemption available through Rule 4(2).


                                     F - 28

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         On June 2, 2003,  88,000  common  shares were issued for  conversion of
debt totaling $20,000 according to the terms of the original agreement.

         On June 3, 2003,  12,000 shares were cancelled for  non-performance  of
services.  These shares were  originally  issued  during the year ended June 30,
2002.  8,000 shares were  initially  issued April 29, 2002 and recorded as other
assets.  4,000 shares were initially issued September 27, 2001 and recorded as a
prepaid asset.  The journal  entries  recording the issuance of these shares was
reversed upon cancellation.

         On June 25,  2003,  40,000  shares were issued for  conversion  of debt
totaling $15,491, issued to Freddi Sidi, an accredited investor, under Rule 506.

         During the quarter ended June 30, 2003, 2,156,000 shares were issued to
various  people for services  which  included  2,000,000  shares  issued to Jack
Honour,  the Company  President,  in exchange  for  $600,000 of past and current
services ($.30 per share or a 50% discount to market), and 156,000 shares issued
to nine  additional  issuees for services whose shares were valued from $.60 per
share to $1.13  per  share  (market  value  on the  date of  issuance)  as their
contract dates differed from Honour's. These shares were issued under Rule 4(2).

         On July 8,  2003,  30,000  shares  of  common  stock  were  issued  for
conversion  of debt  totaling  $8,905,  according  to the terms of the  original
agreement.

         During the quarter  ended  September  30, 2003,  1,198,000  shares were
issued to various people for services.  A registration  statement on Form S8 was
filed covering 710,000 of these shares to the 5 individuals  listed therein,  at
100% of market on the date of issuance and  registration  ($0.57).  The value of
the unregistered shares, when originally issued, was between $0.47 and $0.52 per
share on the various agreement dates. These recipients (Buss, McLane,Tribe, Duke
Films, Doug Schwartz, Lawrence Kallet, Edby and Eric Honour) provided consulting
services in locating and securing new media  projects.  These shares were issued
under Rule 4(2).

         On November 17, 2003, 100,000 shares were cancelled for non-performance
of services.  These shares were originally issued in July 2003 to Rod McLane and
the  expense  associated  with these  shares was  recorded  when the shares were
issued.  The expense  related to the issuance of these shares was reversed  upon
the cancellation of the shares.




                                     F - 29

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         During the quarter ended December 31, 2003,  523,072 shares were issued
for $68,000 in services at approximately $0.13 per share (50% discount to market
on October 1, 2003).  During the quarter,  20,000  shares were issued to Chicago
Investment Group and Greg Myers for financial  consulting  services at $0.26 per
share, the market value on the date of issuance (October 1, 2003).
 In addition, 700,000 shares total were issued to Herky Williams (500,000), John
Bodziak  (100,000)  and Tom  Noonan  (100,000)  for  employment  and  consulting
services as officers and directors of the company,  at  approximately  $0.20 per
share (50% discount to market on November 23, 2003).  Also,  the Company  issued
200,000  shares to pay an  accounts  payable of $55,500  due to Adams  Technical
Solutions at a price of approximately $0.26 per share,  (market value on date of
issuance  on  October 1,  2003).  All shares  were  issued  under the Rule 4 (2)
exemption.

         On January 12, 2004,  90,000 shares were issued to Focus Partners West,
for financial services valued at $54,000.

         On January 20, 2004,  the Company  converted debt of $35,046 to 200,000
shares of common stock, pursuant to terms of pre-existing contracts.

         On February 9, 2004,  20,000 shares were cancelled for  non-performance
of services. These shares were originally issued to Chicago investment Group and
Greg Myers in October  2003,  and the expense  associated  with these shares was
recorded  when the shares were  issued.  The expense  related to the issuance of
these shares was reversed upon the cancellation of the shares.

         On March 9, 2004, 156,000 shares were cancelled for  non-performance of
services.  These  shares  were  originally  issued to Tribe  Communications  for
provision of advertising  services in September 2003, and the expense associated
with these shares was recorded when the shares were issued.  The expense related
to the  issuance  of these  shares was  reversed  upon the  cancellation  of the
shares.

         On March 9, 2004,  100,000  shares  were  issued to pay rent  valued at
$25,000, according to the terms of a previous agreement.

         On March  11,  2004,  345,000  shares  were  issued  to  employees  and
consultants  at $2.00,  which was the market price on the date of issuance,  and
these shares, issued to 7 named individuals,  were the subject of a registration
statement on Form S8, filed March 5, 2004.

         During the quarter  ended March 31, 2004,  the Company  issued  400,000
shares for cash  (cancellation  of  indebtedness of $100,000) at $.25 per share,
the price pre-set in the conversion  agreements.  The Company also issued 25,000
shares for cash (cancellation of indebtedness of $12,500) at $.50 per share, the
price pre-set in the conversion agreements.

                                     F - 30

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         On April 7, 2004,  the Company  issued 60,000 shares of common stock to
Messrs.  Goldman and Botts, at $2.04 per share (the then market price),  for the
provision of financial advisory services.

         On April 7, 2004 the Company  issued 375,000 shares of common stock for
cash of  $215,000,  valued at $0.57 per share,  in  accordance  with  previously
agreed  conversion  rights.  In  addition,  approximately  $14,200 in loans were
converted into 30,000 shares of common stock, at a conversion price of $0.47 per
share,  the  pre-agreed  conversion  price.  All shares  were  issued  under the
exemption provided by Rule 4(2).

         On April 14, 2004,  the Company  issued  100,000 shares of common stock
for cash at $0.25 per share, resulting from an option exercise.

         On May 6, 2004,  the Company  issued  10,000 shares of common stock for
cash at $0.50 per share.

         On May 25, 2004,  the Company  issued  50,000 shares of common stock to
Var Growth valued at $0.81 per share for marketing services.

         On June 8, 2004,  the Company issued 100,000 shares of common stock for
cash at $0.75 per share,  to  acquire  distribution  rights in  Baywatch 3 DD, a
planned  movie.  These shares were issued to an accredited  investor  under Rule
506.

         On June 16,  2004,  240,000  shares  were  issued to Jack Fennie for an
$80,000 debt of the company which he paid, at $0.33 per share,  representing 50%
of the market price on the date of delivery of the executed contract.

         During the  quarter  ended  September  30,  2004,  the  Company  issued
1,234,333  shares of common stock to nine  individuals  for  services  rendered,
including financial  advisory,  marketing,  PR and strategic advice.  Consulting
expense of $461,233 was  recognized in  connection  with these  issuances.  Also
during the quarter  400,000 shares were issued for cash at $0.25 per share.equal
to 50% of the bid price.

         During the quarter ended  December 31, 2004, the Company issued 189,300
shares  of common  stock as  follows:  86,000  shares  to five  individuals  for
services including  secretarial,  marketing and public relations.  This included
issuance of 56,000 S-8 shares  valued at the  closing  price of the stock on the
day prior to issuance and 30,000  restricted  shares valued at fifty per cent of
the price of the  stock on the day  prior to  issuance.  Consulting  expense  of
$39,850 was  recognized  in  connection  with these  issuances.  Also during the
quarter, $39,000 in loans was converted into 103,300 shares of common stock.


                                     F - 31

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6 - COMMON STOCK TRANSACTIONS (continued)

         During the quarter  ended March 31, 2005,  the Company  issued  160,000
shares of common stock for cash of $35,000. These shares were valued at $.25 per
share,  which was equal to a discount of 50% of the prevailing  market price due
for restricted securities.

         During the quarter  ended March 31, 2005,  the Company  issued  100,000
shares of common stock for $25,000 of accounts payable. These shares were valued
at $.25 per share, which was equal to a discount of 50% of the prevailing market
price due for restricted securities.

         During the quarter  ended March 31, 2005,  the Company  issued  370,000
shares of common stock to various  people for services  valued at $167,850.  The
shares  were  valued  at the  market  price  on the date of the  signing  of the
agreements, which ranged from $.25 to $.70 per share.

         During the quarter  ended March 31,  2005,  the officers of the Company
agreed to convert  accrued  payroll of $266,666 for the period from September 1,
2004 to March 31, 2005 to 266,666  shares of common stock,  at a price of $1 per
share,  versus the then  market  price of $.40 per share.  As of June 30,  2005,
these shares had not been issued.

         On April 4, 2005,  the Company issued 20,000 shares of common stock for
consulting  and legal  services at $.35 per share,  the closing price on the day
prior to issuance, resulting in expense of $7,000 being recognized.

         During the quarter  ended June 30,  2005,  the Company  entered into an
agreement  to issue  20,000  shares of common  stock valued at $.30 per share in
exchange for a 10% interest in JamOakie  Productions,  Inc. As of June 30, 2005,
the shares had not been issued.

         During the quarter  ended June 30,  2005,  the Company  entered into an
agreement  to issue  100,000  shares of common  stock for  payment of $35,000 in
accounts payable. As of June 30, 2005, these shares had not been issued.

         During the quarter ended June 30, 2005, the Company  entered into three
separate  agreements  to issue a total of  153,000  shares of  common  stock for
conversion  of notes payable of $32,000.  As of June 30, 2005,  these shares had
not been issued.

NOTE 7 - STOCK SPLIT

         On May 30,  2003,  the  Board  of  Directors  approved  a  proposal  to
effectuate a 25 to 1 reverse  stock split of the  Company's  outstanding  common
shares with no effect on the par value or on the number of authorized shares. As
a result of this action,  the total number of outstanding shares of common stock
are reduced from 37,903,485 to 1,516,150 shares.  All references to common stock
in the financial statements have been changed to reflect the stock split.

                                     F - 32

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 8 - COMMITMENTS

         On April 25, 2000, the Board of Directors  approved a stock option plan
whereby   2,675,000  common  shares  have  been  set  aside  for  employees  and
consultants to be  distributed at the discretion of the Board of Directors.  The
option  shares  will be  exercisable  on a cashless  basis at a 15%  discount to
market value. No formal plan has been adopted as of the date of this report.

         In addition,  the Company has committed to grant  various  providers of
services to the Company a total of 450,000 of its unregistered common stock.

         On March 30, 2005, the Company  entered into a two-year  agreement with
Mr. Herky Williams, an officer, director and shareholder of the Company, whereby
the  Company  will pay Mr.  Williams  $5,000  per  month  ($60,000  per year) in
exchange for part-time services related to the music product  development of the
Company.  The annual pay will be increased to $120,000 if and when Mr.  Williams
services are deemed to be full-time. The annual salary is retroactive to January
1, 2005.

NOTE 9 - STOCK OPTIONS

         Pursuant to a year 2000 Stock Option and Compensation  Plan,  grants of
shares  can  be  made  to  employees,   officers,  directors,   consultants  and
independent  contractors of non-qualified stock options as well as for the grant
of stock  options to employees  that qualify as incentive  stock  options  under
Section  422 of the  Internal  Revenue  Code of 1986 or as  non-qualified  stock
options.  The Plan is  administered by the Board of Directors  ("Board"),  which
has, subject to specified  limitations,  the full authority to grant options and
establish the terms and conditions for vesting and exercise thereof.

         In order to exercise an option  granted  under the Plan,  the  optionee
must pay the full exercise price of the shares being  purchased.  Payment may be
made either:  (i) in cash; or (ii) at the discretion of the Board, by delivering
shares of common stock  already  owned by the  optionee  that have a fair market
value equal to the applicable  exercise price; or (iii) with the approval of the
Board, with monies borrowed from the Company.

         Subject to the foregoing,  the Board has broad discretion to decide the
terms and conditions applicable to options granted under the Plan. The Board may
at any time discontinue  granting  options under the Plan or otherwise  suspend,
amend or terminate the Plan and may, with the consent of an optionee,  make such
modification of the terms and conditions of such optionee's  option as the Board
shall deem advisable.



                                     F - 33

<PAGE>



                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 9 - STOCK OPTIONS (continued)

         On March 11,  2004,  the  Company  granted  its  attorney  an option to
purchase  20,000 shares of its common stock at an exercise price of $1.00 for an
exercise period of two years. As a result of the grant,  $20,000 was recorded as
compensation expense.

         On July 12,  2004,  the  Board of  Directors  granted  an option to its
former President and CEO, Mr. Lance Robbins, to purchase 2,500,000  unregistered
common  shares at an  exercise  price of $0.40 per share that vest one year from
the grant date. These options have been cancelled for non- performance.

         The following table sets forth the options and warrants  outstanding as
of June 30, 2005 and 2004:

<TABLE>
<CAPTION>
                                                              June 30,                June 30,
                                                                2005                    2004
                                                        ---------------------     -----------------
<S>                                                     <C>                       <C>
Options Outstanding, Beginning of year                                 20,000                     -
         Granted                                                    2,500,000                20,000
         Expired                                                   (1,400,000)                    -
         Exercised                                                          -                     -
                                                        ---------------------     -----------------
Options Outstanding, End of year                                   1,120,000*                20,000
                                                        =====================     =================

Exercise price for options outstanding, end of period       $0.40 - $1.00               $1.00
                                                        =====================     =================
</TABLE>

*Cancelled for non-performance on November 9, 2005.

NOTE 10- INVESTMENT IN WOW EVENTS, LLC

         On September 3, 2003, the Company entered into an agreement to form WOW
Events, LLC with David McLane Enterprises,  Inc., David McLane, Jeanie Buss, and
John Corcoran,  wherein Stereo Vision  Entertainment,  Inc. contributed services
and an agreement to provide loans to the Company to fund WOW's startup costs for
a 50 percent ownership in the LLC. In the event that Stereo Vision Entertainment
fails or  refuses  to  disburse  all or any part of the  agreed  upon loan their
percentage  interest and units shall be reduced and assigned and  transferred to
David McLane Enterprises.







                                     F - 34

<PAGE>


                        STEREO VISION ENTERTAINMENT, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 10- INVESTMENT IN WOW EVENTS, LLC

         During the quarter  ending June 2004, the Company ceased its funding of
the project and was later issued a notice of  termination  and default,  wherein
its ownership was  decreased to 3.167%.  The Company had loaned WOW Events,  LLC
$190,000  which is to be  repaid  in the  event  that WOW  Events,  LLC  becomes
profitable.  As the repayment is contingent on the  profitability  of WOW, it is
uncertain if the loan will be collectible,  and thus it has been written off and
will be recorded as a gain in future years if the loan is repaid.

NOTE 11 - LEGAL PROCEEDINGS

         In  September of 2001 the company  entered into a promissory  note with
Duncan  MacPhearson  to be payable within the year. A dispute arose and the note
was not timely paid,  which led to a court action  styled R. Duncan  MacPhearson
vs. Stereo Vision  Entertainment,  et. al., Case No. LC 0611749, in Los Angeles,
California.  Subsequently,  the  parties,  on January 26,  2004,  entered into a
Settlement Agreement, including default provisions if scheduled payments did not
occur as agreed.  25,000 shares of  restricted  stock,  valued at $25,000,  were
delivered and $42,500 of payments were made, but the final $10,000 was not paid.
According  to  the  stipulated  judgement   agreement,   this  resulted  in  the
plaintiff's entry of a judgment, according to notice received by the company, of
$37,411,  which was then  appealed by the Company as  incorrect.  The  appellate
court  disagreed  and allowed the entry of judgment as filed,  stating  that the
25,000  shares had "no value" and  allowing  $37,411 to be imposed  against  the
Company.  Therefore, the company has paid $42,500 in cash, $25,000 in restricted
stock,  and owes $37,411,  which has been accrued as a liability in the June 30,
2005 and 2004 financial statements, for a total lawsuit resolution of $104,911.

         The Company has  informed  counsel  for its former  President  and CEO,
Lance Robbins, who resigned on December 5, 2004 and was unanimously fired by the
Board of  Directors  for cause on  December  9,  2004,  that it  intends to seek
recision of any and all  agreements  with him as well as return of all sums paid
to him, a return of all shares of stock that were issued to him and cancellation
of any stock options currently outstanding.  As of June 30, 2005, this issue had
not been resolved.  No adjustments have been made to the June 30, 2005 financial
statements with regards to this issue.

NOTE 12 - INVESTMENT IN JAMOAKIE PRODUCTIONS

         On May 2, 2005,  the Company signed an agreement with Mr. Jamie Oldaker
to acquire a 10% interest in JamOakie  Productions which entitles the company to
10% of the profits from the album,  "Mad Dogs and Oakies" which has subsequently
been  released.  The  Company  has the right but not the  obligation  to finance
future JamOakie projects.  The price paid was 20,000  unregistered common shares
of the Company which were worth $6,000 at the time, and $5,893 in cash.

                                     F - 35

<PAGE>






                                   SIGNATURES


         Pursuant to the  requirements  of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.

                        STEREO VISION ENTERTAINMENT, INC.

Dated: November 14, 2005                    By  /S/     John Honour
                                            -----------------------
                                            C.E.O., President, Director

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the  Registrant  and in the  capacities  indicated  on this 14th day of November
2005.

Signatures & Title

/S/     John Honour
--------------------
John Honour
C.E.O., President, Director
(Principal Executive and Financial Officer)



--------------------
Tom Noonan
Vice Chairman


/S/ Herky Williams
--------------------
Herky Williams
Secretary-Treasurer/Director

/S/ John C. Bodziak
--------------------
John C. Bodziak
Director