# U.S. SECURITIES AND
EXCHANGE COMMISSIONWashington, DC 20549

# FORM 10-KSB

|    |                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|[X] | Annual
          report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
          for the fiscal year ended December 31, 2004, or

|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|[ ] | Transition report pursuant to
section 13 or 15(d) of the Securities Exchange act of 1934 for the transition period from _____
to _____

Commission File No.
0-23015

RED HORSE ENTERTAINMENT
CORPORATION(Name of Small Business Issuer as specified in its charter)

|                                                                       |  |                                  
|---------------------------------------------------------------------- |  | ---------------------------------
|Nevada                                                                 |  | 87-0450232                       
|(State or Other Jurisdiction of
        Incorporation or Organization) |  | (IRS Employer Identification No.)

11828 La Grange Avenue, Los Angeles, CA  90025
(Address of Principal Executive Offices and Zip Code)

Issuers Telephone
Number: (310) 473-0213

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

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

Common Stock, Par Value
$0.001

Check whether the issuer (1) filed
all reports required to be filed by sections 13 or 15(d) of the Exchange Act during the
past 12 months (or such shorter period that the issuer 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 in response to Item 405 of Regulation S-B in this form,and no
disclosure will be contained, to the best of registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

The issuer's revenues (consisting
only of interest income) for its most recent fiscal year:  $2,021.

The aggregate market value of voting
stock held by non-affiliates computed on the basis of the high bid price on March 23,
2005, was $32,569.

As of December 31, 2004, the
Registrant had outstanding 455,073shares of Common Stock, par value $0.001.

Documents incorporated by
reference: None.

---



# TABLE OF CONTENTS

|                        |     
|----------------------- | ----
|ITEM NUMBER AND CAPTION | Page

|           |                                                                                                             |   
|---------- | ----------------------------------------------------------------------------------------------------------- | --
|           |                                                                                                             |   
|Part I    
|           |                                                                                                             |   
|1          | Description of Business                                                                                     | 3 
|           |                                                                                                             |   
|2          | Description of Property                                                                                     | 6 
|           |                                                                                                             |   
|3          | Legal Proceedings                                                                                           | 7 
|           |                                                                                                             |   
|4          | Submission of Matters to a Vote of Security Holders                                                         | 7 
|           |                                                                                                             |   
|Part II   
|           |                                                                                                             |   
|5          | Market for Common Equity,
        Related Stockholder Matters and Registrant Purchases of Equity Securities | 7 
|           |                                                                                                             |   
|6          | Management's Discussion and Analysis or Plan of Operation                                                   | 7 
|           |                                                                                                             |   
|7          | Financial Statements                                                                                        | 9 
|           |                                                                                                             |   
|8          | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                        | 9 
|           |                                                                                                             |   
|8A         | Controls and Procedures                                                                                     | 9 
|           |                                                                                                             |   
|8B         | Other Information                                                                                          
|           |                                                                                                             |   
|Part III  
|           |                                                                                                             |   
|9          | Directors and Executive Officers of the Registrant                                                          | 10
|           |                                                                                                             |   
|10         | Executive Compensation                                                                                      | 11
|           |                                                                                                             |   
|11         | Security Ownership
        of Certain Beneficial Owners and Management and Related Stockholder Matters      | 12
|           |                                                                                                             |   
|12         | Certain Relationships and Related Transactions                                                              | 13
|           |                                                                                                             |   
|13         | Exhibits                                                                                                    | 13
|           |                                                                                                             |   
|14         | Principal Accountant Fees and Expenses                                                                      | 14
|           |                                                                                                             |   
|Signatures |                                                                                                             | 15

2

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# PART I

# ITEM 1. DESCRIPTION OF
BUSINESS

# Recent Development

| | For the past seven years the Red
Horse Entertainment Corporation (Red Horse or the Company) has had
no active business operations, and has been seeking to acquire an interest in a business
with long-term growth potential. On March 22, 2005 the final signatures were obtained on a
Stock Exchange Agreement dated March 8, 2005, pursuant to which Red Horse will acquire all
of the issued and outstanding capital stock of Silverstrand International Holdings Limited
for 10,102,333 shares of Red Horse common voting stock, par value $0.001. The Red Horse
common stock issued to the stockholders of Silverstrand International and their designees
will represent approximately 95.7 percent of the issued and outstanding common stock of
Red Horse immediately following the exchange. Consequently, there will be a change in
control of Red Horse, and new officers and directors of Red Horse designated by
Silverstrand International will be appointed.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Silverstrand International is a
closely held limited liability company organized in the Hong Kong Special Administrative
Region in The Peoples Republic of China. Through its wholly owned operating
subsidiary, Silverstrand International is engaged in the business of private property
development primarily in the city of Shenyang. Shenyang, a city in Liaoning Province of
the Peoples Republic of China with a population of approximately 7.2 million, is
located in the central area of northeastern Asia, and is the central city of northeastern
China. Shenyang is one of the major cities and key industrial bases in China.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The closing of the transaction is
subject to a number of conditions, including, but not limited to:
| | ---------------------------------------------------------------------------------------------------

| |  |                                                                                                                                                                                    
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Each
        party completing and being satisfied with the due diligence review of the other,                                                                                      
| |  |                                                                                                                                                                                    
| |  | Silverstrand International preparing and delivering audited financial statements in accordance with US
                  GAAP for the most recent year ended December 31, 2004, and
| |  |                                                                                                                                                                                    
| |  | The absence prior to closing of any material change in the assets, operations, or financial condition of
                  either party.                                           
| |  |                                                                                                                                                                                    

| | Consequently, there is no assurance
the proposed acquisition will close.
| | ------------------------------------------------------------------------

# General

| | The following discussion describes
the Companys business objectives and considerations with respect to its search for a
business venture in which to participate. If the proposed acquisition of Silverstrand
International described above does not close, Red Horse will once again embark on its
search for a business venture in which to participate.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Selection of a Business

| | The Company anticipates that
businesses for possible acquisition will be referred by various sources, including its
officers and directors, professional advisors, securities broker-dealers, venture
capitalists, members of the financial community, and others who may present unsolicited
proposals. The Company will not engage in any general solicitation or advertising for a
business opportunity, and will rely on personal contacts of its officers and directors and
their affiliates, as well as indirect associations between them and other business and
professional people. By relying on word of mouth, the Company may be limited
in the number of potential acquisitions it can identify. While it is not presently
anticipated that the Company will engage unaffiliated professional firms specializing in
business acquisitions or reorganizations, such firms may be retained if management deems
it in the best interest of the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation to a finder or business
acquisition firm may take various forms, including one-time cash payments, payments based
on a percentage of revenues or product sales volume, payments involving issuance of
securities (including those of the Company), or any combination of these or other
compensation arrangements. Consequently, the Company is currently unable to predict the
cost of utilizing such services.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

| | The Company will not restrict its
search to any particular business, industry, or geographical location, and management
reserves the right to evaluate and enter into any type of business in any location. The
Company may participate in a newly organized business venture or a more established
company entering a new phase of growth or in need of additional capital to overcome
existing financial problems. Participation in a new business venture entails greater risks
since in many instances management of such a venture will not have proved its ability, the
eventual market of such ventures product or services will likely not be established,
and the profitability of the venture will be unproved and cannot be predicted accurately.
If the Company participates in a more established firm with existing financial problems,
it may be subjected to risk because the financial resources of the Company may not be
adequate to eliminate or reverse the circumstances leading to such financial problems.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In seeking a business venture, the
decision of management will not be controlled by an attempt to take advantage of any
anticipated or perceived appeal of a specific industry, management group, product, or
industry, but will be based on the business objective of seeking long-term capital
appreciation in the real value of the Company.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The analysis of new businesses will
be undertaken by or under the supervision of the officers and directors. In analyzing
prospective businesses, management will consider, to the extent applicable, the available
technical, financial, and managerial resources; working capital and other prospects for
the future; the nature of present and expected competition; the quality and experience of
management services which may be available and the depth of that management; the potential
for further research, development, or exploration; the potential for growth and expansion;
the potential for profit; the perceived public recognition or acceptance of products,
services, or trade or service marks; name identification; and other relevant factors.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The decision to participate in a
specific business may be based on managements analysis of the quality of the other
firms management and personnel, the anticipated acceptability of new products or
marketing concepts, the merit of technological changes, and other factors which are
difficult, if not impossible, to analyze through any objective criteria. It is anticipated
that the results of operations of a specific firm may not necessarily be indicative of the
potential for the future because of the requirement to substantially shift marketing
approaches, expand significantly, change product emphasis, change or substantially augment
management, and other factors.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company will analyze all
available factors and make a determination based on a composite of available facts,
without reliance on any single factor. The period within which the Company may participate
in a business cannot be predicted and will depend on circumstances beyond the
Companys control, including the availability of businesses, the time required for
the Company to complete its investigation and analysis of prospective businesses, the time
required to prepare appropriate documents and agreements providing for the Companys
participation, and other circumstances.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Acquisition of a Business

| | In implementing a structure for a
particular business acquisition, the Company may become a party to a merger,
consolidation, or other reorganization with another corporation or entity; joint venture;
license; purchase and sale of assets; or purchase and sale of stock, the exact nature of
which cannot now be predicted. Notwithstanding the above, the Company does not intend to
participate in a business through the purchase of minority stock positions. On the
consummation of a transaction, it is likely that the present management and shareholders
of the Company will not be in control of the Company. In addition, a majority or all of
the Companys directors may, as part of the terms of the acquisition transaction,
resign and be replaced by new directors without a vote of the Companys shareholders.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In connection with the Companys
acquisition of a business, the present shareholders of the Company, including officers and
directors, may, as a negotiated element of the acquisition, sell a portion or all of the
Companys Common Stock held by them at a significant premium over their original
investment in the Company. As a result of such sales, affiliates of the entity
participating in the business reorganization with the Company would acquire a higher
percentage of equity ownership in the Company. Management does not intend to actively
negotiate for or otherwise require the purchase of all or any portion of its stock as a
condition to or in connection with any proposed merger or acquisition. Although the
Companys present shareholders did not acquire their shares of Common Stock with a
view towards any subsequent sale in connection with a business reorganization, it is not
unusual for affiliates of the entity participating in the reorganization
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

---



| | to negotiate to
purchase shares held by the present shareholders in order to reduce the number of
restricted securities held by persons no longer affiliated with the Company
and thereby reduce the potential adverse impact on the public market in the Companys
Common Stock that could result from substantial sales of such shares after the
restrictions no longer apply. Public investors will not receive any portion of the premium
that may be paid in the foregoing circumstances. Furthermore, the Companys
shareholders may not be afforded an opportunity to approve or consent to any particular
stock buy-out transaction.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In the event sales of shares by
present shareholders of the Company, including officers and directors, is a negotiated
element of a future acquisition, a conflict of interest may arise because directors will
be negotiating for the acquisition on behalf of the Company and for sale of their shares
for their own respective accounts. Where a business opportunity is well suited for
acquisition by the Company, but affiliates of the business opportunity impose a condition
that management sell their shares at a price which is unacceptable to them, management may
not sacrifice their financial interest for the Company to complete the transaction. Where
the business opportunity is not well suited, but the price offered management for their
shares is high, Management will be tempted to effect the acquisition to realize a
substantial gain on their shares in the Company. Management has not adopted any policy for
resolving the foregoing potential conflicts, should they arise, and does not intend to
obtain an independent appraisal to determine whether any price that may be offered for
their shares is fair. Stockholders must rely, instead, on the obligation of management to
fulfill its fiduciary duty under state law to act in the best interests of the Company and
its stockholders.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | It is anticipated that any securities
issued in any such reorganization would be issued in reliance on exemptions from
registration under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of the transaction, the Company may agree to register
such securities either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. Although the terms of such registration
rights and the number of securities, if any, which may be registered cannot be predicted,
it may be expected that registration of securities by the Company in these circumstances
would entail substantial expense to the Company. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in the
Companys securities may have a depressive effect on such market.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | While the actual terms of a
transaction to which the Company may be a party cannot be predicted, it may be expected
that the parties to the business transaction will find it desirable to structure the
acquisition as a so-called tax-free event under sections 351 or 368(a) of the
Internal Revenue Code of 1986, (the Code). In order to obtain tax-free
treatment under section 351 of the Code, it would be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving entity. In such
event, the shareholders of the Company would retain less than 20% of the issued and
outstanding shares of the surviving entity. Section 368(a)(1) of the Code provides for
tax-free treatment of certain business reorganizations between corporate entities where
one corporation is merged with or acquires the securities or assets of another
corporation. Generally, the Company will be the acquiring corporation in such a business
reorganization, and the tax-free status of the transaction will not depend on the issuance
of any specific amount of the Companys voting securities. It is not uncommon,
however, that as a negotiated element of a transaction completed in reliance on section
368, the acquiring corporation issue securities in such an amount that the shareholders of
the acquired corporation will hold 50% or more of the voting stock of the surviving
entity. Consequently, there is a substantial possibility that the shareholders of the
Company immediately prior to the transaction would retain less than 50% of the issued and
outstanding shares of the surviving entity. Therefore, regardless of the form of the
business acquisition, it may be anticipated that stockholders immediately prior to the
transaction will experience a significant reduction in their percentage of ownership in
the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Notwithstanding the fact that the
Company is technically the acquiring entity in the foregoing circumstances, generally
accepted accounting principles will ordinarily require that such transaction be accounted
for as if the Company had been acquired by the other entity owning the business and,
therefore, will not permit a write-up in the carrying value of the assets of the other
company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

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| | The manner in which the Company
participates in a business will depend on the nature of the business, the respective needs
and desires of the Company and other parties, the management of the business, and the
relative negotiating strength of the Company and such other management.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company will participate in a
business only after the negotiation and execution of appropriate written agreements.
Although the terms of such agreements cannot be predicted, generally such agreements will
require specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the conditions
which must be satisfied by each of the parties prior to such closing, will outline the
manner of bearing costs if the transaction is not closed, will set forth remedies on
default, and will include miscellaneous other terms.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Operation of Business
After Acquisition

| | The Companys operation
following its acquisition of a business will be dependent on the nature of the business
and the interest acquired. The Company is unable to predict whether the Company will be in
control of the business or whether present management will be in control of the Company
following the acquisition. It may be expected that the business will present various
risks, which cannot be predicted at the present time.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Governmental Regulation

| | It is impossible to predict the
government regulation, if any, to which the Company may be subject until it has acquired
an interest in a business. The use of assets and/or conduct of businesses which the
Company may acquire could subject it to environmental, public health and safety, land use,
trade, or other governmental regulations and state or local taxation. In selecting a
business in which to acquire an interest, management will endeavor to ascertain, to the
extent of the limited resources of the Company, the effects of such government regulation
on the prospective business of the Company. In certain circumstances, however, such as the
acquisition of an interest in a new or start-up business activity, it may not be possible
to predict with any degree of accuracy the impact of government regulation. The inability
to ascertain the effect of government regulation on a prospective business activity will
make the acquisition of an interest in such business a higher risk.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Competition

| | The Company will be involved in
intense competition with other business entities, many of which will have a competitive
edge over the Company by virtue of their stronger financial resources and prior experience
in business. There is no assurance that the Company will be successful in obtaining
suitable investments.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Employees

| | The Company is a development stage
company and currently has no employees. In 2004, two executive officers devoted 120 hours,
or an average of 10 hours per month per person, to the affairs of the Company and it is
expected they will make a similar time commitment in 2005. These officers may devote
additional time in the future as they deem appropriate seeking and acquiring a business
venture. Management of the Company expects to use consultants, attorneys, and accountants
as necessary, and does not anticipate a need to engage any full-time employees so long as
it is seeking and evaluating businesses. The need for employees and their availability
will be addressed in connection with a decision whether or not to acquire or participate
in a specific business industry.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 2. DESCRIPTION OF
PROPERTIES

| | The Company utilizes office space at
11828 La Grange Avenue, Los Angeles, CA 90025, provided by a private company owned by
Wayne M. Rogers, an officer, director and principal shareholder of the Company. The costs
associated with the use of the office space are deemed insignificant, as Mr. Rogers uses
the office space almost entirely for other business purposes. The Company reimburses Mr.
Rogers for rent, clerical, and office expenses, such as telephone charges, copy charges,
overnight courier service, and similar costs incurred on Company matters. In 2004 the
total payments to Mr. Rogers for such items were approximately $958.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6



# ITEM 3. LEGAL
PROCEEDINGS

| | The Company is not a party to any
legal proceedings, and to the best of its knowledge, no such proceedings by or against the
Company have been threatened.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | No matter was submitted to a vote of
security holders in the fourth quarter of 2004.
| | ------------------------------------------------------------------------------------

# PART II

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

| | Although quotations for the
Companys common stock appear on the OTC Bulletin Board, there is no established
trading market for the common stock. Transactions in the common stock have been sporadic
over the past two calendar years. During the two years prior to the fourth quarter of 2004
quotations for the common stock have consisted primarily of bid and no asked
and the bid price has predominately been approximately $0.08 per share. In the fourth
quarter of 2004 the high bid price was $0.13 and the low was $0.08, and no trading volume.
Consequently, the Company is of the opinion that any published prices cannot be attributed
to a liquid and active trading market and, therefore, do not indicate any meaningful
market value.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | All shares of common stock
outstanding may be sold without restriction under Rule 144(k) promulgated under the
Securities Act of 1933, except 241,808 shares, which are held by officers, directors, and
holders of more than 10 percent of the outstanding common stock (Control
Shares). Control Shares may be sold subject to complying with all of the terms and
conditions of Rule 144, except the one-year holding period, which has been satisfied.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Since its inception, no dividends
have been paid on the Companys common stock.
| | -------------------------------------------------------------------------------

| | At March 15, 2005, there were
approximately 152 holders of record of the Companys Common Stock.
| | ------------------------------------------------------------------------------------------------

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

# Recent Development

| | For the past seven years the Red
Horse has had no active business operations, and has been seeking to acquire an interest
in a business with long-term growth potential. On March 22, 2005 the final signatures were
obtained on a Stock Exchange Agreement dated March 8, 2005, pursuant to which Red Horse
will acquire all of the issued and outstanding capital stock of Silverstrand International
Holdings Limited for 10,102,333 shares of Red Horse common voting stock, par value $0.001.
The Red Horse common stock issued to the stockholders of Silverstrand International and
their designees will represent approximately 95.7 percent of the issued and outstanding
common stock of Red Horse immediately following the exchange.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Silverstrand International is a
closely held limited liability company organized in the Hong Kong Special Administrative
Region in The Peoples Republic of China. Through its wholly owned operating
subsidiary, Silverstrand International is engaged in the business of private property
development primarily in the city of Shenyang. Shenyang, a city in Liaoning Province of
the Peoples Republic of China, is located in the central area of northeastern Asia,
and is the central city of northeastern China. Shenyang is one of the major cities and key
industrial bases in China.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The closing of the transaction is
subject to a number of conditions, including, but not limited to:
| | ---------------------------------------------------------------------------------------------------

| |  |                                                                                                                                                                                    
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Each party completing and being satisfied with the due diligence review of the other,                                                                                              
| |  |                                                                                                                                                                                    
| |  | Silverstrand International preparing and delivering audited financial statements in accordance with US
                  GAAP for the most recent year ended December 31, 2004, and
| |  |                                                                                                                                                                                    

7



| |  |                                                                                                                                         
| |  | ----------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                         
| |  | The absence prior to closing of any material change in the assets, operations, or financial condition of
                  either party.
| |  |                                                                                                                                         

| | Consequently, there is no assurance
the proposed acquisition will close. Should the acquisition be completed, there will be a
substantial change in the financial condition and results of operations of Red Horse,
which can not be predicted at this time.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The following discussion assumes that
the acquisition of Silverstrand does not close, and Red Horse will continue with its
search for a business opportunity.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------

# Plan of Operation

| | The Company had no revenue from
continuing operations for the years ended December 31, 2004 and 2003. The Companys
plan is to seek a business venture in which to participate. The selection of a business
opportunity in which to participate is complex and extremely risky and will be made by
management in the exercise of its business judgment. There is no assurance that the
Company will be able to identify and acquire any business opportunity that will ultimately
prove to be beneficial to the Company and its shareholders.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company anticipates that
businesses for possible acquisition will be referred by various sources, including its
officers and directors, professional advisors, securities broker-dealers, venture
capitalists, members of the financial community, and others who may present unsolicited
proposals. The Company will not engage in any general solicitation or advertising for a
business opportunity, and will rely on personal contacts of its officers and directors and
their affiliates, as well as indirect associations between them and other business and
professional people. By relying on word of mouth, the Company may be limited
in the number of potential acquisitions it can identify. While it is not presently
anticipated that the Company will engage unaffiliated professional firms specializing in
business acquisitions or reorganizations, such firms may be retained if management deems
it in the best interest of the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Compensation to a finder or business
acquisition firm may take various forms, including one-time cash payments, payments based
on a percentage of revenues or product sales volume, payments involving issuance of
securities (including those of the Company), or any combination of these or other
compensation arrangements. Consequently, the Company is currently unable to predict the
cost of utilizing such services.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The activities of the Company are
subject to several significant risks that arise primarily as a result of the fact that the
Company has no specific business and may acquire or participate in a business opportunity
based on the decision of management which will, in all probability, act without the
consent, vote, or approval of the Companys shareholders. A description of the manner
in which the Company will pursue the search for and participation in a business venture is
described under Item 1. Business, above.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Although the Company has no
operations, it does incur expenses in connection with complying with reporting
requirements under the Securities Exchange Act of 1934. General and administrative
expenses for the years ended December 31, 2004 and 2003, consisted of general corporate
administration, officer compensation, legal and professional expenses, and accounting and
auditing costs. These expenses were $36,392, and $33,792 for 2004 and 2003, respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company had no interest expense
in 2004 or 2003. Interest income resulted from the investment of funds in short-term,
liquid cash equivalents. Interest income was $2,021 in 2004 and $802 in 2003.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As a result of the foregoing factors,
the Company realized a net loss of $34,371 in 2004, as compared to a net loss of $32,990
in 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------

| | At December 31, 2004, the Company had
working capital of $139,103. Working capital consisted substantially of short-term
investments, and cash and cash equivalents. Management believes that the Company has
sufficient cash and short-term investments to meet the anticipated needs of the
Companys operations through at least the next 12 months. However, there can be no
assurances to that effect, as the Company has no significant revenues and the
Companys need for capital may change dramatically if it acquires an interest in a
business opportunity during that period. The Companys
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8



| | current operating plan is to
handle the administrative and reporting requirements of a public company and search for
potential businesses, products, technologies and companies for acquisition. At present,
the Company has no understandings, commitments or agreements with respect to the
acquisition of any business venture, and there can be no assurance that the Company will
identify a business venture suitable for acquisition in the future. Further, there can be
no assurance that the Company would be successful in consummating any acquisition on
favorable terms, if at all, or that it will be able to profitably manage the business
venture it acquires.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Forward-Looking
Statement Notice

| | When used in this report, the words
may, will, expect, anticipate,
continue, estimate, project, intend, and
similar expressions are intended to identify forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934 regarding events, conditions, and financial trends that may affect the
Companys future plans of operations, business strategy, operating results, and
financial position. Persons reviewing this report are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks and
uncertainties and that actual results may differ materially from those included within the
forward-looking statements as a result of various factors. Such factors are discussed
under the headings Item 1. Description of Business, and Item 6.
Managements Discussion and Analysis of Financial Condition and Results of
Operations, and also include general economic factors and conditions that may
directly or indirectly impact the Companys financial condition or results of
operations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 7. FINANCIAL
STATEMENTS

| | The financial statements of the
Company appear at the end of this report beginning with the Index to Financial Statements
on page 16.
| | -------------------------------------------------------------------------------------------------------------------------------------

# ITEM 8. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ONACCOUNTING AND
FINANCIAL DISCLOSURE

| | There are no reportable changes in or
disagreements with accountants.
| | ---------------------------------------------------------------------

# ITEM 8A. CONTROLS AND
PROCEDURES

| | With the participation of management,
the Companys chief executive officer and chief financial officer evaluated the
Companys disclosure controls and procedures on December 31, 2004. Based on this
evaluation, the chief executive officer and the chief financial officer concluded that the
disclosure controls and procedures are effective in connection with the Companys
filing of its annual report on Form 10-KSB for the year ended December 31, 2004.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During the fourth quarter of the year
ended December 31, 2004, there were no significant changes in the Companys internal
controls or in other factors that could significantly affect these controls, and no
significant deficiencies or material weaknesses of internal controls that would require
corrective action were identified during that period.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 8B. OTHER
INFORMATION

# Proposed Acquisition of
Silverstrand International Holdings Limited

| | For the past seven years the Red
Horse Entertainment Corporation (Red Horse or the Company) has had
no active business operations, and has been seeking to acquire an interest in a business
with long-term growth potential. On March 22, 2005 the final signatures were obtained on a
Stock Exchange Agreement dated March 8, 2005, pursuant to which Red Horse will acquire all
of the issued and outstanding capital stock of Silverstrand International Holdings Limited
for 10,102,333 shares of Red Horse common voting stock, par value $0.001. The Red Horse
common stock issued to the stockholders of Silverstrand International and their designees
will represent approximately 95.7 percent of the issued and outstanding common stock of
Red Horse immediately following the exchange. Consequently, there will be a change in
control of Red Horse, and new officers and directors of Red Horse designated by
Silverstrand International will be appointed.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9



| | Silverstrand International is a
closely held limited liability company organized in the Hong Kong Special Administrative
Region in The Peoples Republic of China. Through its wholly owned operating
subsidiary, Silverstrand International is engaged in the business of private property
development primarily in the city of Shenyang. Shenyang, a city in Liaoning Province of
the Peoples Republic of China, is located in the central area of northeastern Asia,
and is the central city of northeastern China. Shenyang is one of the major cities and key
industrial bases in China.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The closing of the transaction is
subject to a number of conditions, including, but not limited to:
| | ---------------------------------------------------------------------------------------------------

| |  |                                                                                                                                                                                    
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Each
        party completing and being satisfied with the due diligence review of the other,                                                                                      
| |  |                                                                                                                                                                                    
| |  | Silverstrand International preparing and delivering audited financial statements in accordance with US
                  GAAP for the most recent year ended December 31, 2004, and
| |  |                                                                                                                                                                                    
| |  | The absence prior to closing of any material change in the assets, operations, or financial condition of
                  either party.                                           
| |  |                                                                                                                                                                                    

| | Consequently, there is no assurance
the proposed acquisition will close.
| | ------------------------------------------------------------------------

# Issuance of Convertible
Notes

| | At December 31, 2004, the Company was
indebted to each of Wayne M. Rogers and Jack Gertino in the amount of $36,000 for accrued
compensation over the past several years. On March 5, 2005, the Company issued to each of
Messrs. Rogers and Gertino a convertible promissory note in the principal amount of
$36,000 that matures March 5, 2007 in complete payment of accrued compensation at December
31, 2004. Each note bears interest at the rate of six percent per annum, and the principal
is convertible to common stock of the Company at the rate of one share for each $0.163614
of principal. Consequently, each note is convertible to a total of 220,030 common shares
of the Company.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# PART III

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

# Directors and Officers

| | The following table sets forth the
names, ages, and positions with the Company for each of the directors and officers of the
Company.
| | -------------------------------------------------------------------------------------------------------------------------------------

|Name            | Age | Positions                   | Since
|--------------- | --- | --------------------------- | -----
|               
|Wayne M. Rogers | 70  | President and Director      | 1992 
|               
|Bill Rogers     | 33  | Vice President and Director | 1994 
|               
|Jack M. Gertino | 66  | Secretary and Director      | 1992 

| | All executive officers are elected by
the Board and hold office until the next Annual Meeting of stockholders or until their
successors are duly elected and qualified.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The following is information on the
business experience of each director and officer.
| | -------------------------------------------------------------------------------------

10

---



| | Wayne M. Rogers is a well-known
professional actor who has been involved in investment activities for over 20 years. Mr.
Rogers has been a director of several privately held companies, including Almaden
Vineyards and the Pantry, Inc. He has also been a director of Global Intellicom, P.H.C.,
Inc., Electronic Data Controls, Inc., Extek Micro-Systems, and Wadell Equipment Global.
Currently, Mr. Rogers is the Chairman of the Board of Kleinfeld, the leading wedding dress
retailer in the U.S. He is also the managing director of Willow Creek, a 500 home
subdivision in Florida, as well as a managing director of other residential and commercial
properties. Mr. Rogers is also the general partner of Triangle Bridge Group, LP. Wayne M.
Rogers is the father of Bill Rogers.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Bill Rogers has been a music composer
for the past ten years. He has composed the music for a number of movies, television shows
and commercials and is involved in development of musical scores and compositions for
those uses. Mr. Rogers is also involved in the development and management of real estate
for La Grange Management. Bill Rogers is the son of Wayne M. Rogers.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Jack M Gertino, has been a private
investor and business consultant in Salt Lake City, Utah, for the past five years. He is
currently pursuing a number of real estate projects. From 1986 to the present, he has
served as an officer and director of Comet Technologies, Inc., a publicly held shell
corporation seeking a business acquisition.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Due to the fact the Company has no
active operations and its assets consist entirely of cash, the board of directors
determined that it is not necessary or practical for the Company to establish an audit
committee, recruit a financial expert to serve on the board, or adopt a code of ethics
applicable to its chief executive and financial officers.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Other Shell Company
Activities

| | Mr.
          Gertino is currently a director of Comet Technologies, Inc., a publicly held
          shell corporations seeking a business acquisition. The possibility exists that
          one or more of the officers and directors of the Company could become officers
          and/or directors of other shell companies in the future, although they have no
          intention of doing so at the present time. Certain conflicts of interest are
          inherent in the participation of the Companys officers and directors as
          management in other shell companies, which may be difficult, if not impossible,
          to resolve in all cases in the best interests of the Company. Failure by
          management to conduct the Companys business in its best interests may
          result in liability of management of the Company to the shareholders.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 10. EXECUTIVE
COMPENSATION

| | Wayne M. Rogers and Jack M. Gertino,
both officers and directors of the Company, received no compensation for services to the
Company prior to 2002 due to the limited amount of time spent on Company matters, which
management believes was adequately compensated through the issuance of options. The board
of directors approved in May 1999 the issuance of options to Messrs. Rogers and Gertino.
Each of them now hold options to purchase 50,000 shares of common stock at an exercise
price of $0.625 per share, which expire in May 2009. The exercise price was determined on
the basis of the last sale price for the Companys common stock in the public market
prior to approval of the options, which was also the bid price for the common stock on the
date the options were granted.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Based on the time commitment by
Messrs. Rogers and Gertino in 2002, the Company began to accrue compensation for their
services. In 2004 these executive officers devoted 120 hours, or an average of 10 hours
per month per person, to the affairs of the Company and it is expected they will make a
similar time commitment in 2005. The Company is compensating Messrs. Rogers and Gertino
for their services at the rate of $100 per hour. Consequently, Mr. Rogers and Mr. Gertino
each accrued $12,000 of compensation from the Company in 2004, or a total of $24,000. This
is all the executive compensation paid in 2004. The Company expects that it will continue
to accrue compensation for these executive officers in 2005 at the rate of $100 per hour,
and it is estimated that they will each devote approximately 10 hours per month to the
affairs of the Company. There are no other plans, understandings, or arrangements whereby
any of the Companys officers, directors, or principal stockholders, or any of their
affiliates or associates, would receive funds, stock, or other assets in connection with
the Companys participation in a business.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | On acquisition of a business, it is
possible that current management will resign and be replaced by persons associated with
the business acquired, particularly if the Company participates in a business by effecting
a stock exchange, merger, or consolidation. In the event that any member of current
management remains after effecting a business acquisition, that members time
commitment and compensation will likely be adjusted based on the nature and location of
such business and the services required, which cannot now be foreseen.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11



| | The following table sets forth
certain information with respect to unexercised options held by the Named Executive
Officers as of December 31, 2004. No outstanding options held by the Named Executive
Officers were exercised in 2004. All unexercised options expire in May 2009.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Name and
Principal
Position | Number of Securities
Underlying Unexercised Options
at FY End (#) | Value of Unexercised
In-the-Money Options
at FY End ($) (1)
|--------------------------- | ----------------------------------------------------------------- | -----------------------------------------------------------
|                           
|
|                           
|Wayne M. Rogers             | 50,000/ -0-                                                       | -0-/ -0-                                                   
|President                  
|                           
|Jack M. Gertino             | 50,000/ -0-                                                       | -0-/ -0-                                                   
|Secretary                  

| | (1)    
          This value is determined on the basis of the difference between the high bid
          price during the calendar quarter ended December 31, 2004, of the securities
          underlying the options and the exercise price.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | The following table sets forth as of
March 15, 2005, the number and percentage of the 455,073 shares of outstanding common
stock which, according to the information supplied to the Company, were beneficially owned
by (i) each person who is currently a director of the Company, (ii) each executive
officer, (iii) all current directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the beneficial owner of more
than 5% of the outstanding common stock. Except as otherwise indicated, the persons named
in the table have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where applicable.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                         | Common
Shares | Options
And Rights | Percent of
Class
|------------------------ | ------------- | ------------------ | ----------------
|
|Name and Address         |               |                    |                 
|                        
|Wayne M. Rogers (1)(2)   | 51,349        | 270,030            | 44.3            
|11828 La Grange Avenue  
|Los Angeles, CA 90025    |              
|                        
|Jack M. Gertino (1)      | 24,485        | 270,030            | 40.6            
|3374 Homestead Road     
|Park City, UT 84060      |              
|                        
|Bill Rogers (1)          | -0-           | -0-                | -0-             
|916 N. Beverly Drive    
|Beverly Hills, CA 90210  |              
|                        
|The Insight Fund, LP (3) | 62,240        | -0-                | 13.7            
|C/o Wayne M Rogers &Co. 
|11828 La Grange Avenue  
|Los Angeles, CA 90025    |              

12

---



|                              |         |         |     
|----------------------------- | ------- | ------- | ----
|                              |         |         |     
|Susan Harris Family Trust     | 51,867  | -0-     | 11.4
|C/o Wayne M Rogers &Co.      
|11828 La Grange Avenue       
|Los Angeles, CA 90025         |        
|                             
|Daniel J. Sullivan, III       | 41,494  | -0-     | 9.1 
|16830 Ventura Blvd., #300    
|Encino, CA 91436              |        
|                             
|C. Anthony Thomas             | 41,494  | -0-     | 9.1 
|and Glenn Susan Thomas       
|1888 Century Park East, #400 
|Los Angeles, CA 90067         |        
|                             
|Paul Junger Witt Family Trust | 51,867  | -0-     | 11.4
|C/o Wayne M Rogers &Co.      
|11828 La Grange Avenue       
|Los Angeles, CA 90025         |        
|                             
|All Executive officers and    | 138,074 | 540,060 | 68.8
|Directors as a Group (3)     

| | (1)    
          Messrs. Rogers, Gertino and Rogers are all of the officers and directors of the
          Company.
| | --------------------------------------------------------------------------------------------------------------------

| | (2)    
          The share figure includes 44,087 shares held by the Wayne M. Rogers Family
          Trust, in which Mr. Rogers is the trustee, and 3,631 shares held of record by
          Mr. Rogers spouse.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3)    
          Wayne M. Rogers is the general partner of The Insight Fund LP and, therefore,
          may be deemed to have voting and investment control over the shares of stock
          owned by it.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 12. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS

| | The Company utilizes office space at
11828 La Grange Avenue, Los Angeles, CA 90025, provided by a private company owned by
Wayne M. Rogers, an officer, director and principal shareholder of the Company. The costs
associated with the use of the office space are deemed insignificant, as Mr. Rogers uses
the office space almost entirely for other business purposes. The Company reimburses Mr.
Rogers for rent, clerical, and office expenses, such as telephone charges, copy charges,
overnight courier service, and similar costs incurred on Company matters. In 2004 the
total payments to Mr. Rogers for such items were approximately $958.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 13. EXHIBITS

| | Copies of the following documents are
included as exhibits to this report pursuant to Item 601 of Regulation S-B.
| | -----------------------------------------------------------------------------------------------------------------

# Exhibits.

|        |                                        
|------- | ---------------------------------------
|Exhibit | Title of Document                      
|No.    
|       
|3.1     | Articles of Incorporation, as amended *
|       
|3.2     | By-Laws *                              
|       
|10.1    | Option granted to Wayne M. Rogers **   

13



|     |                                                                          
|---- | -------------------------------------------------------------------------
|     |                                                                          
|10.2 | Option granted to Jack M. Gertino **                                     
|    
|10.3 | Stock Exchange Agreement dated March 8, 2005                             
|    
|10.4 | Convertible Note dated March 5, 2005 issued to Wayne M. Rogers           
|    
|10.5 | Convertible Note dated March 5, 2005 issued to Jack M. Gertino           
|    
|31.1 | Certification of the Chief Executive Officer and Chief Financial Officer 
|     | pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                
|    
|32.1 | Certifications of the Chief Executive Officer and Chief Financial Officer
|     | pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                

| | * These exhibits are incorporated
herein by this reference to the Companys Registration Statement on Form 10-SB filed
with the Securities and Exchange Commission on August 21, 1997.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ** These exhibits are incorporated
herein by this reference to the Companys Quarterly Report on Form 10-QSB for the
quarter ended June 30, 1999, filed with the Securities and Exchange Commission on August
13, 1999.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# ITEM 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES

| | The
aggregate fees billed by our principal accounting firm, for fees billed for fiscal years
ended December 31, 2004 and 2003 are as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------

Audit Fee

| | The aggregate fees billed for each of
the last two fiscal years for professional services rendered by HJ Associates &
Consultants, LLP, the Companys principal accountant, for the audit of the
Companys annual financial statement and review of financial statements included in
the Companys 10-QSB reports and services normally provided by the accountant in
connection with statutory and regulatory filings or engagements were $4,200 for fiscal
year 2004 and $5,543 for fiscal year 2003.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Audit-Related Fees

| | The aggregate fees billed in each of
the last two fiscal years for assurance and related services by the principal accountant
that are reasonably related to the performance of the audit or review of the
Companys financial statements that are not reported above were $0 for fiscal year
ended 2003 and $0 for fiscal year ended 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Tax Fees

| | The aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal accountant
for tax compliance, tax advice, and tax planning were $0 for fiscal year 2004 and $120 for
fiscal year 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All Other Fees

| | The aggregate fees billed in each of
the last two fiscal years for products and services provided by the principal accountant,
other than the services reported above were $0 for fiscal year 2004 and $440 for fiscal
year ended 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The Company does not currently have
an audit committee. As a result our board of directors performs the duties of an audit
committee. The Companys board of directors will evaluate and approve in advance, the
scope and cost of the engagement of an auditor before the auditor renders audit and
non-audit services. We do not rely on pre-approval policies and procedures.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

14



# SIGNATURES

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

| |                                    
| | -----------------------------------
| | RED HORSE ENTERTAINMENT CORPORATION

|                      |     |                                         
|--------------------- | --- | ----------------------------------------
|Date:  March 25, 2005 | By: | /s/ Wayne M. Rogers                     
|                      |     | Wayne M. Rogers, Duly Authorized Officer

| | In
accordance with the Exchange Act, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Dated:  March 25, 2005 | /s/ Wayne M. Rogers      
| | ---------------------- | -------------------------
| |                        | Wayne M. Rogers, Director

| | Dated:  March 25, 2005 | /s/ Bill Rogers      
| | ---------------------- | ---------------------
| |                        | Bill Rogers, Director

| | Dated:  March 25, 2005 | /s/ Jack Gertino      
| | ---------------------- | ----------------------
| |                        | Jack Gertino, Director

15

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)

# Financial Statements

# December 31, 2004

# INDEX

|                                                                                                                                                                           |   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --
|Report of Independent
        Registered Accounting Firm ................................................................................................                  | 17
|                                                                                                                                                                          
|Balance Sheet ............................................................................................................................................................ | 18
|                                                                                                                                                                          
|Statements of Operations ..........................................................................................................................................        | 19
|                                                                                                                                                                          
|Statements of Stockholders' Equity ..........................................................................................................................              | 20
|                                                                                                                                                                          
|Statements of Cash Flows ........................................................................................................................................          | 23
|                                                                                                                                                                          
|Notes to the Financial Statements ............................................................................................................................             | 25

16

---



REPORT OF
INDEPENDENT REGISTERED ACCOUNTING FIRM

To the Board of DirectorsRed
Horse Entertainment Corporation(A Development Stage Company)Los Angeles,
California

We have audited the accompanying
balance sheet of Red Horse Entertainment Corporation (a development stage company) as of
December 31, 2004 and the related statements of operations, stockholders equity, and
cash flows for the years ended December 31, 2004 and 2003 and from the date of inception
on December 4, 1987 through December 31, 2004. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance
with 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 Red Horse Entertainment Corporation (a development stage company) as of
December 31, 2004 and the results of its operations and its cash flows for the years ended
December 31, 2004 and 2003 and from the date of inception on December 4, 1987 through
December 31, 2004 in conformity with accounting principles generally accepted in the
United States of America.

/s/ HJ Associates &
Consultants, LLP

HJ Associates &
Consultants, LLPSalt Lake City, UtahMarch 11, 2005

17

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Balance Sheet

ASSETS

|                                                                | December 31,
2004
|--------------------------------------------------------------- | -----------------
|CURRENT ASSETS                                                  |                  
|                                                               
|Cash                                                            |                  
|                                                               
|Total Current Assets                                            |                  
|                                                               
|TOTAL ASSETS                                                    |                  
|                                                               
|                                                               
|LIABILITIES AND STOCKHOLDERS' EQUITY                           
|CURRENT LIABILITIES                                             |                  
|                                                               
|Accounts payable                                                |                  
|Accrued compensation (Note 7)                                   |                  
|                                                               
|Total Current Liabilities                                       |                  
|                                                               
|                                                               
|STOCKHOLDERS' EQUITY                                            |                  
|                                                               
|Common stock; 50,000,000 shares authorized at $0.001 par value; |                  
|455,073 shares issued and outstanding                           |                  
|Additional paid-in capital                                      |                  
|Deficit accumulated during the development stage                |                  
|                                                               
|Total Stockholders' Equity                                      |                  
|                                                               
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      |                  
|                                                               

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

18

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Statements of Operations

|                           | For the Years Ended
December 31, | From
Inception on
December 4,
1987 to
December 31,
|-------------------------- | -------------------------------- | --------------------------------------------------
|
|REVENUES                   |                                  |                                                   
|                          
|EXPENSES                   |                                  |                                                   
|                          
|Officer compensation       |                                  |                                                   
|Bad debt expense           |                                  |                                                   
|Outside services           |                                  |                                                   
|Professional fees          |                                  |                                                   
|Rent                       |                                  |                                                   
|Travel                     |                                  |                                                   
|Promotion                  |                                  |                                                   
|Administrative expenses    |                                  |                                                   
|Depreciation               |                                  |                                                   
|Amortization               |                                  |                                                   
|Interest                   |                                  |                                                   
|                          
|Total Expenses             |                                  |                                                   
|                          
|OTHER INCOME               |                                  |                                                   
|                          
|Interest income            |                                  |                                                   
|                          
|Total Other Income         |                                  |                                                   
|                          
|LOSS BEFORE                |                                  |                                                   
|DISCONTINUED OPERATIONS    |                                  |                                                   
|                          
|LOSS FROM DISCONTINUED     |                                  |                                                   
|OPERATIONS (Note 3)        |                                  |                                                   
|                          
|GAIN ON DISPOSAL OF        |                                  |                                                   
|DISCONTINUED OPERATIONS    |                                  |                                                   
|(Note 3)                   |                                  |                                                   
|                          
|NET LOSS                   |                                  |                                                   
|                          
|BASIC LOSS PER SHARE       |                                  |                                                   
|                          
|WEIGHTED AVERAGE NUMBER OF |                                  |                                                   
|SHARES OUTSTANDING         |                                  |                                                   
|                          

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

19

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Statements of
Stockholders Equity

|                                 | Common Stock | Additional
Paid-in | Deficit
Accumulated
During the
Development
|-------------------------------- | ------------ | ------------------ | ------------------------------------------
|
|Balance, December 4, 1987        |              |                    |                                           
|                                
|Shares issued to                 |              |                   
|incorporators for cash           |              |                   
|$0.60 per share - restated       |              |                    |                                           
|                                
|Net loss for period ended        |              |                   
|December 31, 1987                |              |                    |                                           
|                                
|Balance, December 31, 1987       |              |                    |                                           
|                                
|Shares issued at public offering |              |                   
|$7.50 per share restated         |              |                    |                                           
|                                
|Cost of public offering          |              |                    |                                           
|                                
|Sale of warrants                 |              |                    |                                           
|                                
|Net loss for year ended          |              |                   
|December 31, 1988                |              |                    |                                           
|                                
|Balance, December 31, 1988       |              |                    |                                           
|                                
|Net loss for year ended          |              |                   
|December 31, 1989                |              |                    |                                           
|                                
|Balance, December 31, 1989       |              |                    |                                           
|                                
|Net loss for year ended          |              |                   
|December 31, 1990                |              |                    |                                           
|                                
|Balance, December 31, 1990       |              |                    |                                           
|                                
|Net loss for year ended          |              |                   
|December 31, 1991                |              |                    |                                           
|                                
|Balance, December 31, 1991       |              |                    |                                           
|                                

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

20

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Statements of
Stockholders Equity (Continued)

|                            | Common Stock | Additional
Paid-in | Deficit
Accumulated
During the
Development
|--------------------------- | ------------ | ------------------ | ------------------------------------------
|
|Balance, December 31, 1991  |              |                    |                                           
|                           
|Shares issued to acquire    |              |                   
|100% of 127 Main            |              |                   
|Street, Inc.                |              |                    |                                           
|                           
|Net loss for year ended     |              |                   
|December 31, 1992           |              |                    |                                           
|                           
|Balance, December 31, 1992  |              |                    |                                           
|                           
|Adjustment for fractional   |              |                   
|shares in 30-for-1          |              |                   
|reverse split               |              |                    |                                           
|                           
|Exercise of warrants        |              |                    |                                           
|                           
|Net income for year ended   |              |                   
|December 31, 1993           |              |                    |                                           
|                           
|Balance, December 31, 1993  |              |                    |                                           
|                           
|Net income for year ended   |              |                   
|December 31, 1994           |              |                    |                                           
|                           
|Balance, December 31, 1994  |              |                    |                                           
|                           
|Net income for year ended   |              |                   
|December 31, 1995           |              |                    |                                           
|                           
|Balance, December 31, 1995  |              |                    |                                           
|                           
|Net income for year ended   |              |                   
|December 31, 1996           |              |                    |                                           
|                           
|Balance, December 31, 1996  |              |                    |                                           
|                           
|Net loss for the year ended |              |                   
|December 31, 1997           |              |                    |                                           
|                           
|Balance, December 31, 1997  |              |                    |                                           
|                           

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

21

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Statements of
Stockholders Equity (Continued)

|                              | Common Stock | Additional
Paid-in | Deficit
Accumulated
During the
Development
|----------------------------- | ------------ | ------------------ | ------------------------------------------
|
|Balance, December 31, 1997    |              |                    |                                           
|                             
|Net income for the year ended |              |                   
|December 31, 1998             |              |                    |                                           
|                             
|Balance, December 31, 1998    |              |                    |                                           
|                             
|Net income for the year ended |              |                   
|December 31, 1999             |              |                    |                                           
|                             
|Balance, December 31, 1999    |              |                    |                                           
|                             
|Net income for the year ended |              |                   
|December 31, 2000             |              |                    |                                           
|                             
|Balance, December 31, 2000    |              |                    |                                           
|                             
|Net loss for the year ended   |              |                   
|December 31, 2001             |              |                    |                                           
|                             
|Balance, December 31, 2001    |              |                    |                                           
|                             
|Net loss for the year ended   |              |                   
|December 31, 2002             |              |                    |                                           
|                             
|Balance, December 31, 2002    |              |                    |                                           
|                             
|Net loss for the year ended   |              |                   
|December 31, 2003             |              |                    |                                           
|                             
|Balance, December 31, 2003    |              |                    |                                           
|                             
|Net loss for the year ended   |              |                   
|December 31, 2004             |              |                    |                                           
|                             
|Balance, December 31, 2004    |              |                    |                                           
|                             

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

22

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# RED HORSE
ENTERTAINMENT CORPORATION (A Development Stage
Company)Statements of Cash Flows

|                                                 | For the Years Ended
December 31, | From
Inception on
December 4,
1987 to
December 31,
|------------------------------------------------ | -------------------------------- | --------------------------------------------------
|
|CASH FLOWS FROM OPERATING ACTIVITIES             |                                  |                                                   
|                                                
|Net loss                                         |                                  |                                                   
|Adjustments to reconcile net loss to net cash    |                                  |                                                   
|used by operating activities:                    |                                  |                                                   
|Depreciation                                     |                                  |                                                   
|Amortization                                     |                                  |                                                   
|Gain on disposal of discontinued operations      |                                  |                                                   
|Changes in operating assets and liabilities:     |                                  |                                                   
|Increase in accrued expenses                     |                                  |                                                   
|                                                
|Net Cash Used by Operating Activities            |                                  |                                                   
|                                                
|CASH FLOWS FROM INVESTING ACTIVITIES             |                                  |                                                   
|                                                
|Organization expenses                            |                                  |                                                   
|Sale of fixed assets                             |                                  |                                                   
|Purchase of equipment and leasehold improvements |                                  |                                                   
|                                                
|Net Cash Used by Investing Activities            |                                  |                                                   
|                                                
|CASH FLOWS FROM FINANCING ACTIVITIES             |                                  |                                                   
|                                                
|Proceeds from debentures                         |                                  |                                                   
|Proceeds from stock issuance                     |                                  |                                                   
|Sale of warrants                                 |                                  |                                                   
|Exercise of warrants                             |                                  |                                                   
|                                                
|Net Cash Provided by Financing Activities        |                                  |                                                   
|                                                
|INCREASE (DECREASE) IN CASH                      |                                  |                                                   
|                                                
|CASH AT BEGINNING OF PERIOD                      |                                  |                                                   
|                                                
|CASH AT END OF PERIOD                            |                                  |                                                   
|                                                

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

23

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Statements of Cash
Flows (Continued)

|                                   | For the Years Ended
December 31, | From
Inception on
December 4,
1987 to
December 31,
|---------------------------------- | -------------------------------- | --------------------------------------------------
|
|SUPPLEMENTAL CASH FLOW INFORMATION |                                  |                                                   
|                                  
|Cash paid for interest             |                                  |                                                   
|Cash paid for income taxes         |                                  |                                                   
|                                  
|NON-CASH INVESTING ACTIVITIES      |                                  |                                                   
|                                  
|Sale of subsidiary (Note 3)        |                                  |                                                   

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

24

---



# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Notes to the Financial
StatementsDecember 31, 2004 and
2003

NOTE 1 - ORGANIZATION AND
CORPORATE HISTORY

| | The
Company was incorporated in the State of Nevada on December 4, 1987, under the name of
Quantus Capital, Inc. Since its inception it has not engaged in a significant business
activity and is considered to be a development stage company. The articles of
incorporation of the Company state that its purpose is to engage in the business of making
investments and acquisition of assets, properties and businesses and to engage in any an
all other lawful business.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Pursuant
to a special meeting of shareholders held on March 9, 1992, the Company made the following
changes: (1) To issue 1,556,000 shares of stock to acquire 100% of the outstanding shares
of 127 Main Street Corporation, (the former Subsidiary) a Delaware Corporation. (2)
Adopted a plan of recapitalization whereby the issued and outstanding shares of the
Company were reverse split on a one for five basis. (3) The articles of incorporation were
amended changing the name to Red Horse Entertainment Corporation.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
September 1992, the former Subsidiary began operating a casino in Central City, Colorado,
however, two weeks later operations were terminated. The subsidiary was later sold (Note
6). In 1993, the Company affected a 1 for 30 reverse split bringing the outstanding shares
down to 103,739. All references to number of shares have been retroactively restated to
reflect the reverse stock split.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

| | a.  
Recognition of Income
| | --------------------------

| | The
Company recognizes income and expenses on the accrual basis of accounting. The fiscal year
of the Company ends on December 31.
| | ----------------------------------------------------------------------------------------------------------------------------------

| | b.  
Basic Loss Per Share
| | -------------------------

| | The
computation of basic loss per share of common stock is based on the weighted average
number of shares issued and outstanding during the period of the financial statements as
follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                         | December 31,
|---------------------------------------- | ------------
|
|Numerator - (loss)                       |             
|Denominator - weighted average number of |             
|shares outstanding                       |             
|                                        
|Loss per share                           |             
|                                        

| | The
Company has exceeded 50,000 options from the loss per share calculation as their effect is
anti-dilutive in nature.
| | -----------------------------------------------------------------------------------------------------------------------

25

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# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Notes to the Financial
StatementsDecember 31, 2004 and
2003

NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)

| | c.  
Provision for Taxes
| | ------------------------

| | Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for
deductible temporary differences and operating loss and tax credit carryforwards and
deferred tax assets are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and liabilities and
their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
deferred tax assets consist of the following components as of December 1, 2004 and 2003:
| | --------------------------------------------------------------------------------------------

|                          | 2004 | 2003
|------------------------- | ---- | ----
|Deferred tax assets:      |      |     
|NOL Carryover             |      |     
|Accrued Expenses          |      |     
|                         
|Deferred tax liabilities: |      |     
|Valuation allowance       |      |     
|                         
|Net deferred tax asset    |      |     
|                         

| | The
income tax provision differs from the amount of income tax determined by applying the U.S.
federal and state income tax rates of 39% to pretax income from continuing operations for
the years ended December 31, 2004 and 2003 due to the following:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    | 2004 | 2003
|------------------- | ---- | ----
|Book Income         |      |     
|State Tax           |      |     
|Accrued Payroll     |      |     
|Other               |      |     
|Valuation allowance |      |     
|                   
|                    |      |     
|                   

| | At
December 31, 2004, the Company had net operating loss carryforwards of approximately
$419,000 that may be offset against future taxable income from the year 2004 through 2024.
No tax benefit has been reported in the December 31, 2004 financial statements since the
potential tax benefit is offset by a valuation allowance of the same amount.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss
carryforwards for Federal income tax reporting purposes are subject to annual limitations.
Should a change in ownership occur, net operating loss carryforwards may be limited as to
use in future years.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26

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# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Notes to the Financial
StatementsDecember 31, 2004 and
2003

NOTE 2 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)

| | d.  
Cash and Cash Equivalents
| | ------------------------------

| | The
Company considers all highly liquid investments with a maturity of three months or less
when purchased to be cash equivalents.
| | ----------------------------------------------------------------------------------------------------------------------------------

| | e.  
Estimates
| | --------------

| | The
preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 3  -   DISCONTINUED OPERATIONS

| | On
September 17, 1993, the Company decided to terminate the operations of its former
subsidiary, 127 Main Street Corporation, and the casino operations located at 127 Main
Street, Central City, Colorado. Cost over runs resulting from site conditions made it
economically unfeasible to continue operations. Consequently, the facility was abandoned
and all lease options and improvements were lost. The following is a summary of income
(loss) from operations of 127 Main Street Corporation:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                            | 
|------------------------------------------- | 
|Revenue - 1992                              | 
|Revenue - 1993                              | 
|                                           
|Total Revenue                               | 
|                                           
|Operating expenses - 1992                   | 
|Operating expenses - 1993                   | 
|                                           
|Total Operating Expenses                    | 
|                                           
|Loss from Discontinued Operations           | 
|                                           
|Write off of assets - 1992                  | 
|Gain on assumption of debt - 1993           | 
|                                           
|Gain on Disposal of Discontinued Operations | 
|                                           

| | On
March 19, 1994, the Company entered into a stock purchase agreement whereby two officers
of the Company purchased all of the outstanding shares of the Companys former
subsidiary, 127 Main Street Corporation. The shares were sold for the nominal amount of
$500.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

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# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Notes to the Financial
StatementsDecember 31, 2004 and
2003

NOTE 4 - STOCK OPTIONS

| | On
February 1, 1994, the Company issued options to two of its officers, for each one to
purchase 25,000 shares of common stock at a price of $0.50 per share. The options expired
in February 1999, and were replaced with two new options to purchase 50,000 shares each at
an exercise price of $0.625 per share, which expire in May 2009.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 5 -  CONCENTRATIONS OF RISK

| | The
Company maintains a money market investment account which accounts for $211,652 of the
balance of cash. The full account is not insured by the FDIC, nor is it guaranteed by the
bank. The investment is subject to investment risk, including potential principle loss.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 6  -       NEWLY ISSUED
ACCOUNTING PRONOUNCEMENTS

| | On
December 16, 2004 the FASB issued SFAS No. 123(R), Share-Based Payment, which is an
amendment to SFAS No. 123, Accounting for Stock-Based Compensation. This new
standard eliminates the ability to account for share-based compensation transactions using
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock
Issued to Employees,and generally requires such transactions to be accounted for
using a fair-value-based method and the resulting cost recognized in our financial
statements. This new standard is effective for awards that are granted, modified or
settled in cash in interim and annual periods beginning after June 15, 2005. In addition,
this new standard will apply to unvested options granted prior to the effective date. We
will adopt this new standard effective for the fourth fiscal quarter of 2005, and have not
yet determined what impact this standard will have on our financial position or results of
operations.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
November 2004, the FASB issued SFAS No. 151, Inventory Costs  an amendment
of ARB No. 43, Chapter 4. This Statement amends the guidance in ARB
No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted material
(spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that . . .
under some circumstances, items such as idle facility expense, excessive spoilage, double
freight, and rehandling costs may be so abnormal as to require treatment as current period
charges. . . . This Statement requires that those items be recognized as
current-period charges regardless of whether they meet the criterion of so
abnormal. In addition, this Statement requires that allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the production
facilities. This statement is effective for inventory costs incurred during fiscal years
beginning after June 15, 2005. Management does not believe the adoption of this
Statement will have any immediate material impact on the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

28

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# RED HORSE
ENTERTAINMENT CORPORATION(A Development Stage
Company)Notes to the Financial
StatementsDecember 31, 2004 and
2003

NOTE 6  -       NEWLY ISSUED
ACCOUNTING PRONOUNCEMENTS (Continued)

| | In
December 2004, the FASB issued SFAS No. 152, Accounting for Real Estate Time-sharing Transactions, which amends FASB statement No. 66, Accounting for Sales of Real
Estate, to reference the financial accounting and reporting guidance for real estate
time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2,
Accounting for Real Estate Time-Sharing Transactions. This statement also amends FASB
Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate
Projects, to state that the guidance for (a) incidental operations and (b) costs incurred
to sell real estate projects does not apply to real estate time-sharing transactions. The
accounting for those operations and costs is subject to the guidance in SOP 04-2. This
Statement is effective for financial statements for fiscal years beginning after June 15,
2005. Management believes the adoption of this Statement will have no impact on the
financial statements of the Company.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2004, the FASB issued SFAS No.153, Exchange of Nonmonetary Assets. This
Statement addresses the measurement of exchanges of nonmonetary assets. The guidance in
APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle
that exchanges of nonmonetary assets should be measured based on the fair value of the
assets exchanged. The guidance in that Opinion, however, included certain exceptions to
that principle. This Statement amends Opinion 29 to eliminate the exception for
nonmonetary exchanges of similar productive assets and replaces it with a general
exception for exchanges of nonmonetary assets that do not have commercial substance. A
nonmonetrary exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. This Statement is effective
for financial statements for fiscal years beginning after June 15, 2005. Earlier
application is permitted for nonmonetary asset exchanges incurred during fiscal years
beginning after the date of this statement is issued. Management believes the adoption of
this Statement will have no impact on the financial statements of the Company.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
implementation of the provisions of these pronouncements are not expected to have a
significant effect on the Companys consolidated financial statement presentation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 7  ACCRUED
COMPENSATION

| | Officers
performed services valued at $24,000 during 2004. Similar services of equal value were
performed during 2003 but have yet to be paid.
| | ----------------------------------------------------------------------------------------------------------------------------------------------

NOTE 8  SUBSEQUENT
EVENTS

| | On
March 8, 2005 the Board of Directors approved the Stock Exchange Agreement between the
Company and Silverstrand International Holdings Limited (Silverstrand), a limited
liability company organized in China. The agreement calls for the Company to exchange
10,102,333 shares of its common stock for all the outstanding shares of Silverstrand. The
transaction will be accounted for as a reverse acquisition.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

29

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