UNITED STATES SECURITIES AND EXCHANGE COMMISSION









Washington, D.C. 20549











Form 10-KSB







(X)      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934













For the Fiscal Year Ended:   June30, 2002













Commission file number: 000-49903







PRODIGITAL FILM LABS, INC.

















(Name of small business issuer in its charter)

















Nevada, United States

(State or other jurisdiction of incorporation or
organization)



91-2048620

(I.R.S. Employer ID Number)





















3675 Pecos-Mcleod, Suite 1400, Las Vegas, Nevada 89121-3881

(Address of principal executive offices)













(877) 804-3394



(Issuer's Telephone Number)





Page
1

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







Securities
to be registered pursuant to Section 12(g) of the Act:   4,678,400
Common Shares, $0.0001 par value







(Title of Class)









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













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











State the
issuer's revenues for its most recent fiscal year:   $ None











The aggregate market value of the voting and non-voting common equity held by
non-affiliates based upon the average bid and asked price at June 30, 2002 was
$162,500.











As of June 30, 2002, issuer had 4,678,400 shares of common equity issued and
outstanding.











Transitional Small Business Disclosure Format: Yes ___ No X





Page 2







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PRODIGITAL FILM LABS, INC.











Form 10-KSB









TABLE OF CONTENTS

















PART I











Item
1.     Description of Business























Item
2.     Description of Property











Item
3.     Legal Proceedings











Item
4.     Submission of Matters to a Vote of Securities
Holders











PART II











Item
5.     Market for Common Equity and Related Stockholder
Matters











Item
6.     Management's Discussion and Analysis or Plan of
Operation











Item
7.     Financial Statements











Item
8.     Changes In and Disagreements With Accountants on
AccountingAnd Financial Disclosure













PART III











Item
9.     Directors, Executive Officers, Promoters and Control
Persons,Compliance With Section 16(a) of the Exchange
Act













Item
10.    Executive Compensation











Item
11.    Security Ownership of Certain Beneficial Owners
andManagement













Item
12.    Certain Relationships and Related Transactions











Item
13.    Exhibits and Reports on Form 8-K





Page 3





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PART I











ITEM 1.     DESCRIPTION OF
BUSINESS











History and Development of the Company



Prodigital Film Labs, Inc. (The
"Company" or "Prodigital") was originally incorporated in the State of Nevada on May 2, 2000,
for the purpose of providing Film and Television production studios and digital
equipment, and full and complete digital post-production editing suites. Currently, Prodigital does not own any production
facilities or digital post- production labs. It is a development stage company
that currently has no revenues nor employees, either full time or part time.







Business of the Company



Prodigital has been created to provide
"Class A" digital production studio sound stages and digital post-production
facilities (editing suites and animation studios) to meet an increasingly unmet
market demand.  The eventual business goal will be that Prodigital will create
its own purely digital productions.  The Company will become a technologically
advanced Digital Movie and High Definition television production company that
uses only digital imaging processes in the creation, development, and production
of movies and High Definition television features.  Prodigital is a "New-Media
Technology" business.







British Columbia was
chosen as the location for these Studios because of the incredible growth of the
Film Industry in this Province, arising from the interest and activity in and
around the city of Vancouver, B.C., also known as "Hollywood North."  In 1999
and 2000 combined, the Film Industry spent over 2 billion dollars in British
Columbia, creating an economic impact of over 6 billion dollars.

Lions Gate, The Bridge, and Vancouver
Film Studios are the three major studios in Vancouver.  Through our research and
interviews with the BC Film Commission, we have found that, because of the
tremendous growth of the industry, there is a shortage of "Class A" Production
sound stages.  "Class A" production sound stages are purpose-built, architecture-specific
buildings - they are not converted warehouses, or steel clad buildings. 
There is not much competition for owners of Class A sound stages as there are
more productions than there are professional facilities. Of the major studios in
Vancouver, only Lions Gate has Class A production sound stages and no more
room (real-estate) to build more.



Although most of the filming activity in
B.C. takes place in and around Vancouver, the Okanagan Valley, (in close
proximity-less than an hour flight) has been the location of such noteworthy
full-length feature films as The Pledge, Snow Falling on Cedars, My American
Cousin, and Lunch With Charles.  Many TV commercials and other TV shows have
been filmed there also.  Prodigital will have the only "Class A" sound stages in
the Okanagan, where the real-estate costs are
considerably lower than Vancouver and vacinity. Available to Prodigital's production needs, a large talent pool of key and supportive film
industry personnel currently reside in the Okanagan Valley, and a local film
school will serve as a resource of cutting-edge talent.  The Okanagan Valley
offers, within less than an hour's drive: vineyards,  orchards, semi-desert
locales, alpine vistas and mountain lakes, beaches, ski hills, working
paddle-wheelers and a steam locomotive running on 20km of track.  Cities of the Okanagan, such as Kelowna and Penticton, are popular resort destinations for
golfing, beach and water activities, and skiing.  All in all, the Okanagan is a
very sensible and attractive business alternative to the congestion, stress,
frustrating coastal weather/shooting conditions, and lengthy waits for urban
Class A sound stages: factors which negatively impact big city studio
production, and will make Prodigital very competitive.





For these reasons, the founders of
Prodigital Film Labs, Inc., Darone Davis and David Huck have, over the last two
years, searched the Okanagan valley for just the right property to serve the
needs of both production sound stages and post-production facilities.  Two
separate properties were located that met all of the carefully researched
criteria.  The first property, located in the City of Penticton, BC, is slated
to become the site of the post-production facility.  It consists of two city
lots with a 3000-square foot building on the first, and a parking lot on the
bordering second lot.  The location is a prime spot on Main Street, very visible
and desirable, and easily expandable.  The second separate property, which has
been chosen as the site of the production sound stages, is a beautiful 102-acre
mountain-view lot located approximately 10 minutes highway driving from the
post-production property.


Page
4



During 2000-2001 an option to purchase the
102-acre property was negotiated.  This offer
contained several conditions that had to be met before Prodigital bought the
property.  The conditions included: the ability for the property to be
appropriately rezoned to fit Prodigital's projected use;  the property needed an
Environmental Impact Study and Assessment completed based on Prodigital's
planned use and;  the last pre-condition was based on Prodigital's ability to obtain
financing to purchase the land.  The
founders worked to re-zone the property from a rural classification to a
commercial classification in order that the zoning matched Prodigital's
projected use.  After an Environmental Impact Study and Assessment of the
property was completed, municipal meetings held and public notices provided,
Prodigital was successful in working with the Regional District to create a
completely new zoning classification, and the district re-zoned this property
with this new classification to enable the building of production sound stages. 
This rezoning makes this 102-acre property the only site in the entire Okanagan
Valley on which large sound stages can be constructed.  By comparison, Lion's
Gate Studios, in Vancouver, has only 14 acres for its eight sound stages, with
minimal availability of expansion property, if any.  Since Prodigital
was not able to obtain the necessary financing to purchase
the property within the terms of the offer, an extention was granted.  This
extention period also expired and the vendors took the property off of the
market.  There is a verbal agreement and understanding with the vendor that
Prodigital can still purchase the property at the price previous agreed to. 
There is no current agreement or contract between the vendor and Prodigital.







During the early part of 2002, Prodigital
Film Labs, Inc. secured its option to purchase the post-production site in
Penticton, BC, by issuance of 250,000 common shares of our stock.  This
exclusive real estate purchase option secures a highly desirable and valuable
piece of property for Prodigital.  The option will expire in 5 years.





The business future of Prodigital is well
underway.  The founders have located several key film industry personnel to
manage the different aspects of the Company. Mr. Terry Edge, a former Operations
Director for Lion's Gate Studios in Vancouver and Mr. Tom Horton, a former
Online Editor at Fox Digital in Los Angeles, have joined the Advisory Board for Prodigital as of June 2002.  The experience, knowledge, and the close working
relationships that these film industry veterans enjoy with other industry
players combine to be a huge and valuable asset to the Company. There are no contracts or written agreements with either
of these gentlemen until Prodigital has finances to fund the company. 
Prodigital has negotiated and obtained "Letters of Intent" from several
potential productions, animations, and TV series, committing them to use of Prodigital's facilities once they are built.







Fiscal Year 2002 Business Summary of ProDigital
Film Labs, Inc.



Financial Summary



Fiscal Year 2002 was a very busy
quarter for the principals of Prodigital Film Labs, Inc.  The major focus
during this fiscal year was to locate private placement money and the first
round of financing for the Company.  The first round of financing was to
purchase the land and buildings that we had located and identified as necessary to the Company's
success.



There were 2 loans made to the Company from
shareholders during the year.  The first loan was deposited into the
Company's cash account that paid some outstanding bills.  All of the other
company expenses, have been, and continue to be paid by the principals of the
company.  They will be reimbursed when the company is more completely funded. 
The second loan was a transfer of a shareholders account (credit) to the
Company's account with the company's attorney.  This loan has provided Prodigital Film Labs with the necessary funds to file it's Form 10SB and become
a "reporting company".



On April 1, 2002, an $18,000 loan to the Company
was paid back to the lender.  The lender, through a "Conversion Notice" letter,
requested and exercised their option to convert the loan and any unpaid interest
into common shares of Prodigital.  This conversion notice was received by the
Company and accepted. 18,300 shares have been issued and the debt eliminated.



Advisory Board Members



One of the Company's goals is to appoint well
known individuals with talent and experience to lead the various aspects of
Prodigital's business.  Initially, these people will serve as the Advisory
Board, where their unique and specific skills, film industry contacts,
experience and expertise will aid the  successful development of the Company. 
They will be compensated with stock or stock options until Prodigital is funded
and at that time, they may become Directors and/or Managers of the specific area
they helped to build.



Property Acquisition



The properties that the Company has located for
the Sound/ Production stages and Post-production facilities are superbly suited
for ProDigital's business.  Negotiations have resulted in an Exclusive Option to
Purchase Agreement for the buildings and property for the Post-production
facility.  This was accomplished by providing a non-refundable deposit of
250,000 common shares of Prodigital.  This exclusive real estate purchase option
expires in 5 years.  This agreement is attached to the Company's Form 10-SB as Exhibit 10.1.  Negotiations
are still underway for securing the same type of option agreement for the
102-acre property for the Sound/ Production Stages.



Page 5

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Trading Status















Prodigital
conducted a registered offering in Nevada (Section 90.490 of the Nevada Revised
Statutes) under Federal exemptions available in Rule 504 of Regulation D, and
our stock now trades on the over-the-counter market.  The Company is receiving,
through its website (www.pdfilm.com), more and more inquiries from all over
North America and the rest of the world. Some of these inquiries are leading to
potential business for the Company once the facilities are in place.  Although
there are no specific contracts for sound/production stage use, the Company has
a list of many producers and directors who are regularly updated with the
Company's progress.  Prodigital has received some letters of intent from
production companies for digital animation and other use of the Company's
post-production facilities, once built.





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ITEM 2.     DESCRIPTION OF
PROPERTY







The Company presently maintains offices at 3675
Pecos-McLeod, Suite 1400, Las Vegas, Nevada 89121-3881, at 1621 S. Latawah
Street, Spokane, Washington 99203 and at 749 Main Street, Penticton, B.C. V2A
5E1 and can be reached at (877) 804-3394.  There is no rent obligation for the
offices in Las Vegas and Spokane.  The term of these leases is month to month in
each location and the cost is $2,800(Canadian Dollars) per month for the
Penticton location.  The real estate purchase option on the above Penticton
location is included in this document as Exhibit 10.1 and the lease agreement
for the Penticton location is included in this document as Exhibit 10.2 to the
Company's Form 10-SB.  The
Company at present owns no equipment.





Prodigital has been
working on securing the real estate purchase option for the 102 acre property
that the principals have targeted as the production Sound Stage site.  This
property was rezoned previously by the principals making it the only large piece
of property in the Okanagan Valley suitable to build the production Sound
Stages.







---













ITEM 3.     LEGAL
PROCEEDINGS

































To the knowledge of the officers and directors of Prodigital, neither Prodigital
nor any of its officers or directors is a party to any material legal proceeding
or litigation and such person know of no material legal proceeding or litigation
contemplated or threatened.  There are no judgments against Prodigital or its
officers or directors.  None of the officers or directors has been convicted of
a felony or misdemeanor relating to securities or performance in corporate
office.





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













None.



Page 6

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PART II













ITEM 5.     MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS





The Company is currently listed on and
trading its shares in the "pink sheets" marketplace.  At the date of this
filing, the Company has 41 shareholders who acquired 800,000 shares in the Rule
504 offering, an unknown number of shareholders who bought their shares in the
market, and 4 shareholders who have held their shares at least one year, and in
most cases, for more than two years since the date of issuance.  All of the
shareholders holding restricted shares would be eligible for transactions under
Rule 144, governed, however, by the volume limitations of 144(e) with respect to
any existing or former shareholders that are officers, directors or affiliates
(or were at the time of the issuance of the shares).  No dividends have
been earned or declared since the inception of the Company.



Holders of the Company's Common Stock are entitled to receive dividends when
declared by the Board of Directors out of funds legally available for
distribution.  Any such dividends may be paid in cash, property or shares
of the Company common stock.  The Company has not paid any dividends since
its inception, and it is not likely that any dividends on its Common Stock will
be declared at any time in the foreseeable future.  Any dividends will be
subject to the discretion of the Company's Board of Directors, and will depend
upon, among other things, the operating and financial condition of the Company,
its capital requirements and general business conditions.  Therefore, there
can be no assurance that any dividends on the Company's Common Stock will be
paid in the future.





---









Stock Trading Activity







|Quarter
      Ended | High       | Low       
|------------------- | ---------- | ----------
|6-30-02             | 0.75       | 0.01      
|3-31-02             | No Trading | No Trading
|12-31-01            | No Trading | No Trading
|9-30-01             | No Trading | No Trading
|6-30-01             | No Trading | No Trading
|3-31-01             | No Trading | No Trading









Page 5

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ITEM 6.     MANAGEMENT'S DISCUSSION AND
ANALYSIS AND RESULTS OF OPERATIONS







We are planning on purchasing the latest
in digital movie reproduction equipment and building Class A production Sound
Stages.  We will equip our studios with non-traditional digital equipment and
staff that is acquainted with the digital-production and post-production
processes.  Digital technology enables marketers in this industry to distribute
movies and film through a file medium as opposed to a large "can" holding
hundreds of meters of celluloid tape and weighing ten kilograms.  The digital
film market is a cutting-edge marketplace that will embrace the Internet, the
High Definition Television marketplace and digital movie theatre productions.  Prodigital will position itself to fill the role of satisfying the demand for
digital production and post-production facilities in British Columbia since the
availability of large "Class A" Sound Stages is very limited and the cost saving
advantages of digital imaging are very attractive.

In addition, other film studios have made
statements that they wish to "acquire" smaller companies that have already set
up their studios in the digital format rather than convert their own labs and
substantial non-digital equipment inventory.  These acquisitions are very
attractive in the industry at this time since most production efforts are being
spent on film production to meet the increasing demand for viable products in
the marketplace

We are relying on
funds committed by the principals and a moderation of our growth prospects to
sustain operations for the next twelve months.  If additional cash is not
raised, the Company can not maintain its goal of purchasing the latest in
digital movie reproduction equipment and equipping its studios with talented
staff, experienced and knowledgeable with the digital production,
post-production and animation processes.  The search for additional capital
would continue until sufficient funding is located to purchase the property and
equipment and hire the necessary personnel.





Page 8

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ITEM 7.     FINANCIAL
STATEMENTS













Reference
is made to the financial statements and related notes and supplemental data
under Item 13 filed with this report.







PRODIGITAL FILM LABS, INC.

(A
Development Stage Company)



Financial Statements

U.S.
Dollar



June
30, 2002





Contents

Page

|                                       |      
|-------------------------------------- | -----
|Auditors' Report                       | 9    
|                                       |      
|Balance Sheet                          | 10   
|                                       |      
|Statement of Loss
    and Deficit      | 11   
|                                       |      
|Statements of
    Shareholders' Equity | 12   
|                                       |      
|Statement of Cash
    Flows            | 13   
|                                       |      
|Notes to Financial
    Statements      | 14-17



---



AUDITORS'REPORT



To
the Shareholders of

ProDigital Film Labs, Inc.



We have audited the balance sheet of ProDigital Film Labs, Inc.
(A Development Stage Company) as at June 30, 2002, 2001 and 2000 and the
statements of loss and deficit, shareholders' equity and cash flows for each of
the years in the three year period ended June 30, 2002.  These financial
statements are the responsibility of the company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit.



We conducted our audit in accordance with Canadian and United
States of America generally accepted auditing standards.  Those standards
require that we plan and perform an audit to obtain reasonable assurance 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.



In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as at June 30, 2002,
2001, and 2000 and the results of its operations and its cash flows for each of
the years in the three year period ended June 30, 2002 in accordance with
Canadian and U.S. generally accepted accounting principles on a basis consistent
with that of the preceding year.



The company has incurred operating losses for the past few years
and has a working capital deficiency as at June 30, 2002.  The company's
continuance as a going concern is dependent upon its ability to obtain adequate
financing and to reach profitable levels of operation.  It is not readily
predictable whether financing efforts will be successful or whether the company
will attain profitable levels of operations.  These financial statements have
been prepared assuming the company will continue as a going concern. 
Adjustments to the assets and liabilities that may have to be made if this
assumption is not valid are not reflected in these financial statements.



/s/ White Kennedy

CHARTERED ACCOUNTANTS



Penticton, British Columbia

October 5, 2002

Page 9

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PRODIGITAL FILM LABS, INC.

(A
Development Stage Company)

BALANCE SHEET

As of
June 30, 2002, With Comparative Figures for 2001



|                                             | 2002
    $US |  | 2001
    $US
|-------------------------------------------- | ------------ |  | ------------
|ASSETS                                       |              |  |             
|CURRENT                                      |              |  |             
|Cash                                         | 113          |  | 12,057      
|Amounts
    Receivable                       | 1,771        |  | -           
|Prepaid
    Expenses                         | 6,675        |  | 10,392      
|                                             |              |  |             
|CAPITAL (Note
    2)                         | 8,559        |  | 22,449      
|                                             | 219          |  | 275         
|                                             | 8,778        |  | 22,724      
|LIABILITIES AND
    SHAREHOLDERS' DEFICIENCY |              |  |             
|CURRENT                                      |              |  |             
|Accounts
    payable and accrued liabilities | 22,495       |  | 6,641       
|Convertible notes (Note 3)                   | 7,001        |  | -           
|Share
    subscriptions payable              | -            |  | 32,500      
|                                             | 29,496       |  | 39,141      
|                                             |              |  |             
|DUE TO
    RELATED PARTY (Note 4)            | 7,744        |  | 1,731       
|                                             | 37,240       |  | 40,872      
|                                             |              |  |             
|SHAREHOLDERS'
    DEFICIENCY                 |              |  |             
|Share
    Capital (Note 5)                   | 109,700      |  | 49,300      
|Deficit                                      | (138,162)    |  | (67,448)    
|                                             | (28,462)     |  | (18,148)    
|                                             |              |  |             
|COMMITMENTS
    (Note 6)                     | 8,778        |  | 22,724      
|                                             |              |  |             



Page 10

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PRODIGITAL FILM LABS, INC.

(A
Development Stage Company)

STATEMENT OF LOSS AND DEFICIT

For the
Year Ended June 30, 2002, With Comparative Figures for the Year Ended June 30,
2001 and The Two Months ended June 30, 2000



|                                                  | 2002
    $US |  | 2001
    $US |  | Date of
    Inception to June 30, 2002 $US
|------------------------------------------------- | ------------ |  | ------------ |  | ------------------------------------------
|REVENUE                                           | -            |  | -            |  | -                                         
|                                                  |              |  |              |  |                                           
|EXPENSES                                          |              |  |              |  |                                           
|Rent                                              | 21,026       |  | 22,823       |  | 47,730                                    
|Professional
    fees                             | 11,299       |  | 1,708        |  | 13,007                                    
|Telephone                                         | 6,031        |  | 4,288        |  | 10,541                                    
|Property
    taxes                                | 5,529        |  | 4,818        |  | 10,347                                    
|Travel                                            | 5,479        |  | 7,736        |  | 16,028                                    
|Contract fees                                     | 5,303        |  | 1,053        |  | 10,386                                    
|Brokerage
    fees                                | 5,085        |  | -            |  | 5,085                                     
|Automotive                                        | 4,256        |  | 5,970        |  | 11,223                                    
|Utilities                                         | 1,415        |  | 1,570        |  | 3,244                                     
|Office and
    Sundry                             | 1,311        |  | 835          |  | 2,291                                     
|Bank charges
    and interest                     | 1,127        |  | 749          |  | 1,975                                     
|Insurance                                         | 577          |  | 127          |  | 704                                       
|Repairs and
    maintenance                       | 577          |  | 1,134        |  | 1,715                                     
|Licenses,
    dues and fees                       | 472          |  | -            |  | 612                                       
|Advertising
    and promotion                     | 191          |  | 462          |  | 1,012                                     
|Amortization                                      | 55           |  | 59           |  | 119                                       
|                                                  | 69,733       |  | 53,332       |  | 136,019                                   
|LOSS FROM
    OPERATIONS                          | (69,733)     |  | (53,332)     |  | (136,019)                                 
|                                                  |              |  |              |  |                                           
|OTHER INCOME                                      |              |  |              |  |                                           
|Investment
    and sundry                         | 26           |  | 28           |  | 60                                        
|Loss on
    foreign exchange                      | (1,007)      |  | (1,123)      |  | (2,203)                                   
|                                                  | (981)        |  | (1,095)      |  | (2,143)                                   
|                                                  |              |  |              |  |                                           
|NET LOSS                                          | (70,714)     |  | (54,427)     |  | (138,162)                                 
|DEFICIT, beginning
    of year                    | (67,448)     |  | (13,021)     |  | -                                         
|                                                  |              |  |              |  |                                           
|DEFICIT, end of
    year                          | (138,162)    |  | (67,448)     |  | (138,162)                                 
|                                                  |              |  |              |  |                                           
|Basic loss per
    share                          | (0.016)      |  | (0.017)      |  | (0.036)                                   
|                                                  |              |  |              |  |                                           
|Weighted average
    number of shares outstanding | 4,660,555    |  | 3,119,068    |  | 3,806,540                                 
|                                                  |              |  |              |  |                                           



Page 11

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PRODIGITAL FILM LABS, INC.

(A
Development Stage Company)

STATEMENT OF SHAREHOLDERS' EQUITY

As of
June 30, 2002



|                                                         | Common Issued |  | Stock Amount
    $US |  | Deficit
    $US |  | Total
    Shareholders'
    Equity
    $US
|-------------------------------------------------------- | ------------- |  | -------------------- |  | --------------- |  | ------------------------------------------
|                                                         |               |  |                      |  |                 |  |                                           
|Cumulative totals
    to May 1, 2000                     | -             |  | -                    |  | -               |  | -                                         
|                                                         |               |  |                      |  |                 |  |                                           
|Issuance of common
    shares for cash
    - restricted  | 3,000,000     |  | 300                  |  |                 |  | 300                                       
|                                                         |               |  |                      |  |                 |  |                                           
|Net loss for the
    two months ended
    June 30, 2000  | -             |  | -                    |  | (13,021)        |  | (13,021)                                  
|                                                         |               |  |                      |  |                 |  |                                           
|Balance, June 30,
    2000                               | 3,000,000     |  | 300                  |  | (13,021)        |  | (12,721)                                  
|                                                         |               |  |                      |  |                 |  |                                           
|Issuance of common
    shares for cash
    - restricted  | 820,000       |  | 49,000               |  | -               |  | 49,000                                    
|                                                         |               |  |                      |  |                 |  |                                           
|Net loss for the
    year ended June 30, 2001            | -             |  | -                    |  | (54,427)        |  | (54,427)                                  
|                                                         |               |  |                      |  |                 |  |                                           
|Balance, June 30,
    2001                               | 3,820,000     |  | 49,300               |  | (67,448)        |  | (18,148)                                  
|                                                         |               |  |                      |  |                 |  |                                           
|Issuance of common
    shares for cash
    - restricted  | 40,000        |  | 2,000                |  | -               |  | 2,000                                     
|                                                         |               |  |                      |  |                 |  |                                           
|Issuance of common
    shares for cash                   | 600,000       |  | 30,000               |  | -               |  | 30,000                                    
|                                                         |               |  |                      |  |                 |  |                                           
|Issuance of common
    shares for cash                   | 200,000       |  | 10,000               |  | -               |  | 10,000                                    
|                                                         |               |  |                      |  |                 |  |                                           
|Issuance for
    common shares for cash
    - restricted | 18,400        |  | 18,400               |  | -               |  | 18,400                                    
|                                                         |               |  |                      |  |                 |  |                                           
|Net loss for the
    year ended June 30, 2002            | -             |  | -                    |  | (70,714)        |  | (70,714)                                  
|                                                         |               |  |                      |  |                 |  |                                           
|Balance, June 30,
    2002                               | 4,678,400     |  | 109,700              |  | (138,162)       |  | (28,462)                                  
|                                                         |               |  |                      |  |                 |  |                                           



Page 12

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PRODIGITAL FILM LABS, INC.

(A
Development Stage Company)

STATEMENT OF CASH FLOWS

For the
Years Ended June 30, 2002, 2001 and 2000



|                                                                 | 2002
    $US |  | 2001
    $US |  | Date of
    Inception to June 30, 2002 $US
|---------------------------------------------------------------- | ------------ |  | ------------ |  | ------------------------------------------
|                                                                 |              |  |              |  |                                           
|CASH FLOWS FROM
    OPERATING ACTIVITIES                         |              |  |              |  |                                           
|Net loss                                                         | (70,714)     |  | (54,427)     |  | (138,162)                                 
|Adjustments
    for:
    Amortization                            | 55           |  | 59           |  | 119                                       
|                                                                 | (70,659)     |  | (54,368)     |  | (138,043)                                 
|Net change in
    non-cash working capital items
    (Note 7)    | 17,801       |  | (3,259)      |  | 14,049                                    
|                                                                 | (52,858)     |  | (57,627)     |  | (123,994)                                 
|                                                                 |              |  |              |  |                                           
|CASH FLOWS FROM
    FINANCING ACTIVITIES                         |              |  |              |  |                                           
|Increase in
    advances to related party                        | -            |  | -            |  | (8,409)                                   
|Received from
    related party                                  | 6,013        |  | 10,140       |  | 16,153                                    
|Proceeds from
    share subscriptions                            | (32,500)     |  | 3,500        |  | -                                         
|Proceeds from
    issuance of share capital                      | 60,400       |  | 49,000       |  | 109,700                                   
|Proceeds from
    convertible notes                              | 7,001        |  | -            |  | 7,001                                     
|                                                                 |              |  |              |  |                                           
|                                                                 | 40,914       |  | 62,640       |  | 124,445                                   
|CASH FLOWS FROM
    INVESTING ACTIVITIES                         |              |  |              |  |                                           
|Capital
    property acquired                                    | -            |  | (68)         |  | (338)                                     
|                                                                 |              |  |              |  |                                           
|NET INCREASE
    (DECREASE) IN CASH AND
    CASH
    EQUIVALENTS | (11,944)     |  | 4,945        |  | 113                                       
|                                                                 |              |  |              |  |                                           
|CASH AND CASH
    EQUIVALENTS, beginning of year                 | 12,057       |  | 7,112        |  | -                                         
|                                                                 |              |  |              |  |                                           
|CASH AND CASH
    EQUIVALENTS, end of year                       | 113          |  | 12,057       |  | 113                                       
|                                                                 |              |  |              |  |                                           



Page 13

---

PRODIGITAL FILM LABS, INC.

(A
Development Stage Company)

Notes to Financial Statements

For the
Year Ended June 30, 2002



Nature of Operations  The company was incorporated on May 2, 2000 under the laws of the state of
  Nevada, and substantially all operations are located in Canada.  Its principal
  business activity consists of developing a post production digital film studio
  and a digital film studio facility.   1.Summary of Significant Accounting Policies  CAPITAL  Capital properties are recorded at cost.  Amortization is provided over the
  estimated useful life of the capital property using the declining balance
  method at the following annual rate:  Furniture and equipment            20%   FINANCIAL INSTRUMENTS  The company's financial instruments consist of cash, amounts receivable,
  accounts payable and accrued liabilities, convertible notes payable and
  amounts due to a related party.  Unless otherwise noted, it is management's
  opinion that the company is not exposed to significant interest, currency or
  credit risks arising from these financial instruments.  The fair values of
  these financial instruments approximate their carrying values, unless
  otherwise noted.  FOREIGN CURRENCY TRANSLATION  The company translates monetary assets and liabilities denominated in a
  foreign currency at the rate of exchange at the balance sheet date.  Revenues
  and expenses are translated at the average rate of exchange for the year. 
  Translation gains and losses are included in earnings.  LOSS PER SHARE  Basic loss per share computations are based on the weighted average number of
  shares outstanding during the year.  Fully diluted earnings per share reflect
  the maximum dilution of current earnings which potential conversions,
  exercises and contingent issuances would have caused had they occurred at the
  beginning of the year.  MANAGEMENT ESTIMATES  The preparation of financial statements in conformity with generally accepted
  accounting principles requires management to make estimates and assumptions
  that affect the reported amounts of assets and liabilities and disclosure of
  contingent amounts and revenues and expenditures during the reported periods. 
  Actual results could differ from those estimates.  INCOME TAXES  The company follows the asset and liability method of accounting for income
  taxes, whereby future tax assets and liabilities are recognized for the
  expected future tax consequences attributable to differences between the
  financial statement carrying amount of existing assets and liabilities and
  their respective tax bases and operating loss and tax credit carry forwards. 
  Future tax assets and liabilities are measured using enacted or substantially
  enacted tax rates expected to apply to taxable income in the years in which
  those temporary differences are expected to be recovered or settled.  Page 14


PRODIGITAL FILM LABS, INC.  (A DEVELOPMENT STAGE COMPANY)   NOTES TO FINANCIAL STATEMENTS (Continued) For the Year Ended June 30, 2002    2.     Capital   Net Book Value Cost
      $US
      
      Accumulated
      Amortization
      $US
      
      2002
      $US
      
      2001
      $USFurniture and
      Equipment
      338
      
      119
      
      219
      
      275  3.Convertible Note  2002
      $US
      
      2001
      $USNote, payable in
      U.S. dollars, bearing interest at 6%, due March 15, 2003.  Convertible to
      1 common share for each $1 of principal or interest.
      5,000
      
      -Note, payable in
      U.S. dollars, bearing interest at 6%, due April 15, 2003.  Convertible to
      1 common share for each $1 of interest or principal.
      2,000
      
      -7,000
      
      -    4.      Related Party Transactions   Relationship                                2002                               
  2001 $U.S.                                $U.S.  Payable to: Sigma Consulting Ltd.            
          Common shareholder                         7,7441,731   The related party amounts are non-interest bearing and have no specific terms
  of repayment.   Type of                                 Received                         
  (Paid)  Related
  Party                               
  Relationship                               
  Transaction                                2002                               
  2001 $U.S.                               
  $U.S.  Sigma Consulting Ltd.          Common
  shareholder                                Rent                               
  (21,026)                          (22,823) Sigma Consulting Ltd.          Common shareholder                         
  Vehicle lease                            (2,596)                            (3,347) Sigma Consulting Ltd.          Common
  shareholder                         Contract
  fees                                      -                             
  (1,000)  ___________________________________________________________________________________________  The shareholder of Sigma Consulting Ltd. is a significant shareholder and one
  of the directors of the company.   Page 15  PRODIGITAL FILM LABS, INC.  (A DEVELOPMENT STAGE COMPANY)   NOTES TO FINANCIAL STATEMENTS (Continued) For the Year Ended June 30, 2002    5.      Share Capital  Authorized: 10,000,000 Common shares with par value of $0.0001   Start of                  
                                 
                                                       End of Year                       Issued                      
  Redeemed                                Year $                              $                                   
  $                                           $ Issued: 3,878,400 Common shares,
  restricted                 49,300                    
  20,400-                                    69,700 800,000 Common shares, unrestricted-                     40,000                                
  -40,000  49,300                    60,400                                 -109,700   The company had 3,820,000 restricted shares issued as at June 30, 2001 and
  3,000,000 restricted shares with a value of $300 as at June 30, 2000.    6.   Commitments  The company has entered into an operating lease for its premises which expires
  on May 31, 2003.  The lease may be renewed at the option of the company for a
  period of one year.  Future minimum payments under the premises lease are
  approximately U.S. $17,795.    7.Net ChangeIn Non-cash Working
  CapitalItems    20022001                                 2000 $U.S.                                $U.S.                               
  $U.S.  Decrease (increase) in: Amounts receivable(1,771) Prepaid
  expenses                                                3,717(9,096)                              (1,296) Increase (decrease) in: Accounts payable and accrued
  liabilities    15,8555,837                                    803  17,801                             
  (3,259)                                  (493)     8.      Income Tax Loss Carry Forwards  The company has non-capital losses available to carry forward in the amount of
  $138,247.  These losses can be used to reduce future years' taxable income and
  will expire as follows:   $U.S.  2007                   12,633 2008                   63,390 200962,224  138,247  The potential future tax benefits of these income tax losses have not been
  recognized in the accounts of the company.    Page 16


PRODIGITAL FILM LABS, INC.

(A DEVELOPMENT STAGE COMPANY)



NOTES TO FINANCIAL STATEMENTS (Continued)

For the Year Ended June 30, 2002







9.  
Subsequent Events



Subsequent to the year end, the company issued 250,000 restricted shares, with a
value of U.S. $12,500, to a related party in exchange for a non-refundable
deposit for the purchase of a building.







Page 17

---

---





PART II (continued)



ITEM 8.     CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS













None.

































PART III





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











The table below lists, as of June 30, 2002, the names of the Directors and Executive
Officers of the Company. The Directors have served in their respective
capacities since their election and/or appointment and will serve until the next
Annual Shareholders' Meeting or until a successor is duly elected, unless the
office is vacated in accordance with the Articles/By-Laws of the Company. The
Executive Officers serve at the pleasure of the Board of Directors. All
Directors and Executive Officers are residents and citizens of the United
States.







Directors and Executive Officers







> Name
>     Age
>     Date Elected or
>       AppointedDarone Davis,
>     President/Director
>     38
>     May 2, 2002David Huck,
>     Secretary/Treasurer/Director
>     56
>     May 2, 2002

Darone Davis

Darone Davis, 38,
President and Director of Prodigital, is an entrepreneur with several years of
experience in the Capital Markets industry and in asset management.  He brings
to Prodigital this experience and is a very active President working full time on this project.  He has
aggressive and dedicated skills in building investment oriented working
companies.

During the two years
before creating Prodigital Film Labs Inc., Mr. Davis was instrumental in the
initial strategies involved in creation and successful structuring of several US
companies, believing strongly that there is no replacement for a public company
to start with a good foundations, sound direction and talented management. He
has served as different officers and director of many companies. After the
creation of these companies, he was directly involved in raising start-up
financing, including a $6 million private placement for a company developing an
AIDS vaccine.



During the last 7
years, Mr. Davis has served as an Asset and Financial Manager, managing many
different wealthy family and International Trusts, and provided other sound and
creative Estate Planning solutions.

David Huck

David Huck, 56,
is the Secretary, Treasurer and Director of Prodigital.  He is an entrepreneur
who has over twenty years of proactive successful business projects under his
belt.  He is a Financial Analyst and is also a Computer Systems Analyst.  He has
over 15 years of successful Management Consulting experience and brings with him
International Business Marketing expertise.  David
splits his time between conducting
and teaching business classes for a university, finishing his masters degree and
working on this project.

David has over 16
years of direct Business Management and Consulting Experience. During the past
five years, David has been active in the field of Business Consulting for many
corporations completing contracts for Market Analysis, Feasibility Studies and
other business management tasks including Business Planning.  The Summerland
Credit Union and the South Okanagan Regional Health Services have been David's
clients.

For over 10
years, in his capacity as an Instructor, David has delivered business courses
under a private contract for a local University and for several government
funded agencies. David is also qualified as a Trust Officer, and has acted as a
trustee on several trusts carrying out fiduciary responsibilities where
necessary.







Involvement in Certain Legal Proceedings













None of the
officers or directors has been involved in a bankruptcy, criminal conviction, or
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated by any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type
of business, securities or banking activities, or found to be guilty of any
securities laws infractions.















Family Relationships













There are
no family relationships between any of the officers and/or directors.



Page 18













---









ITEM 10.     EXECUTIVE
COMPENSATION

















SUMMARY COMPENSATION TABLE

> Name and
>       Principal Position
>       (a)
>       Year
>       (b)
>       Annual Compensation
>       Long-Term Compensation
>       All Other Compensation
>       ($)
>       (i)Salary
>       ($)
>       (c)
>       Bonus
>       ($)
>       (d)
>       Other Annual
>       Compensation
>       ($)
>       (e)
>       Awards
>       PayoutsRestricted
>       Stock Award(s)
>       ($)
>       (f)
>       Securities
>       Underlying Options/SARs
>       (#)
>       (g)
>       LTIP Payouts
>       ($)
>       (h)Darone Davis
>       2002
>       0
>       0
>       0
>       0
>       0
>       0
>       0President
>       2001
>       0
>       0
>       0
>       0
>       0
>       0
>       02000
>       0
>       0
>       0
>       0
>       0
>       0
>       0David
>       Huck
>       2002
>       0
>       0
>       0
>       0
>       0
>       0
>       0Secretary/Treas.
>       2001
>       0
>       0
>       0
>       0
>       0
>       0
>       02000
>       0
>       0
>       0
>       0
>       0
>       0
>       0Page 19

---









ITEM 11.     SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT













The Registrant is a publicly owned corporation, the shares of which are owned by
Canadian residents. The Registrant is not controlled directly or indirectly
by another corporation or any foreign government.











The table below lists, as of June 30, 2002, all persons/companies the Registrant is
aware of as being the beneficial owner of more than five percent (5%) of the
common stock of the Registrant.



5% Shareholders



> Title of Class
>     Name of Beneficial Owner
>     Amount &
>       Nature of
>       Beneficial
>       Ownership
>     Percent of ClassCommon
>     Darone Davis
>     1,500,000
>     30.55%Common
>     David Huck
>     1,500,000
>     30.55%Common
>     Summer Holdings,
>     LLC
>     820,000
>     16.70%Common
>     Spectrum
>     Management
>     600,000
>     12.22%Common
>     Sigma Business
>     Consulting, Ltd.
>     250,000
>     5.09%Total
>     
>     4,670,000
>     95.11%





The table below lists all Directors and Executive Officers who beneficially own
the Registrant's voting securities and the amount of the Registrant's voting
securities owned by the Directors and Executive Officers as a group, as of June 30, 2002.









Shareholdings of Directors and Executive Officers



> Title of Class
>     Name of Beneficial Owner
>     Amount &
>       Nature of
>       Beneficial
>       Ownership
>     Percent of ClassCommon
>     Darone
>     Davis
>     1,500,000
>     30.55%Common
>     David
>     Huck
>     1,500,000
>     30.55%Total
>     
>     3,000,000
>     61.1%















Page 20

---









ITEM 12.    CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS







Other than the above mentioned real estate
purchase option included as Exhibit 10.1 to the Company's Form 10-SB filing, the Company has not
acquired any assets other than in the ordinary course of business during the
preceding 5 years, and no single asset has had a value in excess of $2,000.

Furthermore,
there have been no transactions to which the Company was a party, in which any
director or executive officer had a direct or indirect material interest.









ITEM 13.    EXHIBITS AND REPORTS ON FORM
8-K













(a) The
following documents are filed as part of this report:







I.    Financial Information



Index to Financial
Statements









Independent Auditors' Reports







Balance
Sheets at June 30, 2002 and
2001







Statement of Loss and Deficit for the years ended June 30, 2002, 2001and 2000

Statement of Statement of Changes in Stockholders' Equity for the year ended
June 30, 2002









Statement of Cash Flows for the years ended September 30, 2002, 2001 and 2000















Notes to Financial Statements











II.   Financial
statement schedules required to be filed by Item 8 and paragraph (d) of this
Item 13:









All schedules
are omitted because they are not applicable or the required









information is
shown in the financial statements or notes thereto.











III. The exhibits are listed in the index of
exhibits











The
index of exhibits





3.1       Articles of
Incorporation, dated May 2, 2000*

3.2       ByLaws,
adopted on May 15, 2000*

10.1     Option to Purchase
Contract entered into between Sigma Business Consulting, Ltd. and Prodigital
on February 26, 2002*

10.2     Commercial
Property Lease entered into between Sigma Business Consulting, Ltd. and
Prodigital on  June 1, 2000*

10.3     Commercial Auto
Sublease entered into between Sigma Business Consulting, Ltd. and Prodigital on
June 13, 2000*

99.1     Certification Pursuant to
Section 13a-14 of the Securities Exchange Act of 1934

99.2     Certification Pursuant to
Section 13a-14 of the Securities Exchange Act of 1934







* previously filed

---







SIGNATURES











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







PRODIGITAL FILM LABS, INC.









a Nevada
corporation











Date: May 28, 2003



By: /s/ Darone
Davis









Darone Davis, President
and Director



Date: May 28, 2003



By: /s/ David Huck

David Huck,

Secretary/Treasurer and Director



Page 21

---





Exhibit
99.1



|Pursuant to the requirements of Rule 13a-14 of the Securities
      Exchange Act of 1934, as amended, Darone Davis provides the following
      certification.     I, Darone Davis,
    Director and President of Prodigital Film Labs, Inc. ("Company"), certify
      that:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                                                                                                                                                                                                                                                                           
|2.                                                                                                                                                                                                                                                                           
|3.                                                                                                                                                                                                                                                                           
|4.                                                                                                                                                                                                                                                                           
|5.                                                                                                                                                                                                                                                                           

|a.     | All significant deficiencies
      in the design or operation of internal controls which could adversely
      affect the Company's ability to record, process, summarize and report
      financial data and have identified for the Company's auditors any material
      weaknesses in internal controls, and                                              
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|b.     | Any fraud, whether or not
      material, that involves management or other employees who have a
      significant role in the Company's internal controls; and                                                                                                                                                                                               
|      
|**6.** | I have indicated in this annual report whether or not there were
      significant changes in internal controls or in other factors that could
      significantly affect internal controls subsequent to the date of my most
      recent evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.
|       |                                                                                                                                                                                                                                                                                                                                                               

|Date: May 28, 2003 | /s/
        Darone Davis             
|------------------ | -------------------------------------
|                   | Darone Davis,  Director and President
|                   |                                      

---

Exhibit 99.2

|Pursuant to the requirements of Rule 13a-14 of the Securities
    Exchange Act of 1934, as amended, David Huck provides the following
      certification.     I, David Huck,
    Director, Secretary and Treasurer of Prodigital Film Labs, Inc.
      ("Company"), certify that:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                                                                                                                                                                                                                                                                                
|2.                                                                                                                                                                                                                                                                                
|3.                                                                                                                                                                                                                                                                                
|4.                                                                                                                                                                                                                                                                                
|5.                                                                                                                                                                                                                                                                                

|a.     | All significant deficiencies
      in the design or operation of internal controls which could adversely
      affect the Company's ability to record, process, summarize and report
      financial data and have identified for the Company's auditors any material
      weaknesses in internal controls, and                                                 
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      
|b.     | Any fraud, whether or not
      material, that involves management or other employees who have a
      significant role in the Company's internal controls; and                                                                                                                                                                                                  
|      
|**6.** | I have indicated in this quarterly report whether or not there were
      significant changes in internal controls or in other factors that could
      significantly affect internal controls subsequent to the date of my most
      recent evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.
|       |                                                                                                                                                                                                                                                                                                                                                                  

|Date: May 28, 2003 | /s/ David Huck                                
|------------------ | ----------------------------------------------
|                   | David Huck,  Director, Secretary and Treasurer
|                   |