SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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, 2003
                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES AND EXCHANGE ACT OF 1934

                       For the transaction period from to
                        Commission File Number 000-31048

                     Pacificap Entertainment Holdings, Inc.
                 (Name of Small Business Issuer in its charter)

              Nevada                                  33-0766069
   State or other jurisdiction                    (I.R.S. Employer
        of incorporation                           Identification No.)


      12868 Via Latina, Del Mar,CA                         92014
(Address of principal executive offices)                 (Zip code)

                    Issuer's telephone number (858) 481-2207
                Securities registered under Section 12(b) of the
                                  Exchange Act:
                Securities registered under Section 12(g) of the
                                 Exchange Act:
                    Common Stock, par value, $$.001 per share
                                (Title of class)

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

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

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

Aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant as of April 7, 2004: $6,818,924.76.

Number of outstanding shares of the registrant's par value $0.001 common stock
as of April 7, 2004: 23,509,557.

<PAGE>
                                TABLE OF CONTENTS

PART I                                                                   PAGE

Item 1.  Business and Development of the Company                           2

Item 2.  Description of Property                                           6

Item 3.  Legal Proceedings                                                 6

Item 4.  Submission of Matters to a Vote of Security Holders               7

PART II

Item 5.  Market for Registrant's Common Equity and Related
         Stockholder Matters                                               7

Item 6.  Management's Discussion and Analysis or Plan of Operation         9

Item 7.  Financial Statements                                             14-
                                                                        (F1-F36)

Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure                                         15

Item 8A. Controls and Procedures                                          15

PART III

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

Item 10. Executive Compensation                                           18

Item 11. Security Ownership of Certain Beneficial Owners and Management   18

Item 12. Certain Relationships and Related Transactions                   20

Item 13. Exhibits and Reports on Form 8-K                                 20

Item 14. Principal Accounting Fees and Services                           22

         Signatures                                                       23

ITEM 1.  DESCRIPTION OF BUSINESS

Business and Development of the Company

Pacificap Entertainment Holdings, Inc. ("we", "us", "Cavalcade" or "the
Company") is a development stage company engaged in the film financing business.
Our business plan was modeled to restructure the risk profile of film
production, while maximizing the ancillary profits from marketing, merchandising
and licensing. The management of Pacificap Entertainment, Inc., the California
subsidiary that is now part of the Company, has over 20 years of experience in
financing, marketing and merchandising in the movie, music, and corporate
industry.

Change of Control

On September 19, 2003, the Company completed a Plan and Agreement of
Reorganization ("Plan") with Pacificap Entertainment Holdings, Inc., a
private-held company organized under the laws of the State of California with no
significant assets or operations.

Pursuant to the Plan, all previously outstanding common stock owned by Pacificap
stockholders was exchanged for an aggregate of 18,000,000 shares of the
Company's common stock.

As a result of the transaction, the Company's control changed and the Company's
new management took the following steps to restructure the Company :

     o    The Company changed its name to Pacificap Entertainment Holdings, Inc.
          from Cavalcade of Sports Media, Inc.

     o    The  Company's  Board of Directors  effected a one for thirty  reverse
          stock split

Pacificap had developed a structured approach that evolved from altering the
risk profile of investing in movies, while participating in the equity profit of
the film by participating in the following ways:

- Leveraging film-financing funding;

- Aligning with strategic content providers;

- Acting as a merchant bank from the risk profile in the production of films;

                                       2
<PAGE>
- Developing continued cash flow from production fees, licensing fees,
marketing, and merchandising; - Participating in the equity profit of each film
without deploying corporate capital;

     Pacificap is taking a structured approach that evolved from altering the
risk profile of investing in movies, while participating in the equity profit of
the film. The operating schematic is made up of several divisions: The Urban
Division; the Animation Division; the Specialty Opportunity Division; and the
Urban Division.

     This genre has a specific appeal to a young demographic segment of the
population that is 10-25 years of age, and in Management's opinion, highly
merchandisable. By targeting this segment, the Company will directly address one
of the entertainment industry's most lucrative sectors: a $60 billion dollar
teen and youth market. Content providers in this space can be affiliated with
the music, sports and fashion industry. Examples of these types of films would
be "American Pie", "Final Destination", " Barbershop", and "Drumline".

     Management believes the key to successfully exploiting this genre is to
develop partnerships with content providers with a history of elevating
financial returns through lower production cost. Pacificap is currently under
negotiations with a number of reputable content providers in this market space.

Comparable Films American Pie     Barbershop      Final Destination   Drumline
---------------- ---------------- --------------- ---------------- -------------
Total Budget     $12 million      $23 million     $20 million        $11 million
---------------- ---------------- --------------- ---------------- -------------
US Box Office    $75 million      $53 million     $55 million       $102 million
---------------- ---------------- --------------- ---------------- -------------
Gross Profit     $63 million      $30 million     $35 million        $91 million
---------------- ---------------- --------------- ---------------- -------------

The gross profit of these comparable films does not include TV, soundtracks,
DVD, Foreign Box Office or merchandising.

Animation Division

     Historically, computer animated motion pictures have cost on average in
excess of $100 million per film to produce. Recent technological advances make
it possible to produce comparable quality films for under $30 million. Pacificap
Animation's mission is to create family entertainment franchises/brands and
launch as full-length computer animated motion pictures and exploit them in all
markets worldwide. The Company will provide a platform so the animated movies
can merchandise and license products on international bases.

Some pertinent facts are about this market include:

* The Largest historical licensing/merchandising properties have been motion
pictures (Star Wars, Lion King, Pokeman, Batman). All have generated retail
product sales in excess of $1 billion and continue to generate revenue.

* Family entertainment properties generate more home video revenue per title
than non-family entertainment films. Parents tend to purchase these videos
rather than rent. Shrek has generated over $400 million in video revenue and
continues to sell well. "Ice Age" is expected to be the largest home video title
in the history of 20th Century Fox.

* Computer animated theatrically released films are an excellent platform for
introducing kid's franchises/brands into the marketplace. A successful franchise
will generate significant revenues for many years from a variety of markets.

* Video Games based on computer-animated films are among the hottest titles in
the gaming business.

* Toys based on entertainment licenses represent over 60% of the industry in the
U.S.

The Company's present management team has over 20 years of experience in
promotions; licensing and merchandising with movie studios, music studios and
business entities. For example, management has developed marketing and
merchandising alliances with McDonald's, Disney, Paramount, and many others.
This strategically positions the Company to drive corporate revenue and create
shareholder value by:

     1. Partnering with animation studios that can closely monitor the
     development and labor-intensive computer animation work;
     2. Partnering with major motion picture studios to finance the P & A and/or
     distribute the films;
     3. Retaining control of underlying property rights and managing the
     exploitation of those rights through TV, video games, publishing,
     merchandising, and licensing;
     4. Creating a recognized branded enterprise with long-term value; 5.
     Pre-selling licensing/merchandising rights and video game rights; 6.
     Seeking tax-related incentives offered by governments worldwide.

                                       3
<PAGE>
Pacificap will form strategic alliances with numerous entities in the following
industries:

Film/TV
Video Games
Toys/Licensing
Advertising/Consumer products
Retail

Comparable Films
<TABLE>
<CAPTION>
                          Shrek    Neutron    Monsters   Story     Story II   Antz       Life      Age       Total      Average
                        --------- -------- ---------- --------- --------- --------- ---------- -------- ---------- ------------

<S>                     <C>        <C>       <C>       <C>       <C>        <C>       <C>      <C>        <C>           <C>
US Box Office           268,000    81,000    260,000   192,000   246,000    91,000    185,000  150,000  1,473,000     184,125
Dom Theater Rentals     120,600    36,450    117,000    86,400   110,700    40,950     83,250   67,500    662,850      82,856
Intl Theater Rentals     60,300    18,225     58,500    43,200    55,350    20,475     41,625   33,750    331,425      41,428
WW Video                361,800   109,350    351,000   259,200   332,100   122,850    249,750  202,500  1,988,550     248,569
Pay TV                   20,000    14,580     20,000    20,000    20,000    16,380     20,000   20,000    150,960      18,870
Network                  50,000    20 000     50,000    25,000    25,000     5,000      5 000   15,000    195,000      24 375
Syndication              10,000     7,290     10,000    10,000    10,000     8,190     10,000   10,000     75,480       9,435
WW TV                    40,000    20,935     40,000    27,500    27,500    14,785     17,500   22,500    210,720      26,340

Total rentals           662,700   226,830    646,500   471,300   580,650   228,630    427,125  371,250  3,614,985     451,873

Negative Cost           115,000    28,000    130,000   130,000   130,000    80,000    130,000   45,000    788,000      98,500
Total Release Costs     268,000    81,000    260,000   192,000   246,000    91,000    185,000  150,000  1,473,000     184,125
Residuals                57,876    19,810     56,461    41,160    50,710    19,967     37,302   32,423    315,709      39,464
Participations           11,091     4,901     10,002     5,407     7,697     1,883      3,741    7,191     51,914       6,489
Total costs             451,967   133,711    456,463   368,567   434,407   192,850    356,043  234,614  2,628,623     328,578

Gross Profit            210,733    93,119    190,637   102,733   146,243    35,780     71,082  136,636    986,362     123,295
Assumption:
1. Many of the numbers are estimated due to difficulty in accessing  current figures .Box Office numbers from Variety
</TABLE>

Special Opportunity Division

     Special Opportunity films are those that are brand oriented, have a unique
marketing opportunity and have an existing viewer base. This category of film is
either event driven or franchise driven.

     An event driven project would be one that has an existing fan base such as
sports (NFL Football) or a sports event (NASCAR Racing) or a topical event that
has a strong viewer appeal. These films monetize an existing fan demographic
through fan attendance, and are highly merchandisable through fan loyalty.

    Franchise driven films are those that are popular through an already
existing public profile within a different medium. The most obvious is a popular
book series that has core support and will lend itself to marketing, video
games, merchandising, and licensing.

     It is the Company's strategy to have corporate sponsorship, which allows
corporations to participate in the negative costs as well as branding through
merchandising and marketing. This provides lower production cost and greater
return on each film. Management's strength is its experience in product branding
in the entertainment industry. Company CEO Allan Brown is recognized as the
industry leader in product branding.

Cavalcade of Sports Media Division

Our Cavalcade of Sports division is engaged in the broadcast entertainment
business, focusing on nostalgic sports entertainment and ethnic broadcasting.
Additionally, our business plan includes our making of multiple acquisitions of
small to medium sized low- power television stations to further our broadcast
capability, while exploring syndication and advertising revenue opportunities.

Our nostalgic sports division offers a programming format that features both
college and professional sports, as well as international sports competitions of
many varieties, with emphasis on the more popular sports, such as baseball,
football, basketball, hockey and boxing. We plan to expand, and vary the format,
to include certain live sporting events as well as "talking head" sports shows.
Our channel will be offered, at no charge, to the various cable TV operators
(e.g., Comcast, Adelphi, AOL Time Warner) and to the satellite TV ("small dish")
operators (e.g., Direct TV, Echostar and Pegasus). Our revenue will be generated
from advertisers, direct response marketers and infomercials.

                                       4
<PAGE>
In April of 2004, we signed an agreement to create "The Boxing Channel" in
conjunction with Global Boxing Promotions of Las Vegas. This development will
allow Pacificap's Cavalcade of Sports division to showcase its nostalgic fights,
which includes some of the greatest fights recorded, featuring Archie Moore,
Carmen Basilo, Joe Louis, Muhammad Ali, George Forman and many others. This
channel is associated with Sterling Promotions of Las Vegas, Nevada. Sterling
Promotions President, Sterling McPherson, a former lightweight champion, will
produce live boxing matches as well as innovative boxing programs for this new
seven-day a week channel.

The Company owns approximately 5,000 hours of vintage sports film with
negotiations in process to acquire in excess of an additional 2,500 hours of
footage. The Cavalcade library includes vintage sporting events and coverage
dating back to the 1940's, with over 10,000 hours of programming available to
the Company. Although in our financial statements, we have recorded no value for
the library due to its non use for the past two years, we intend to utilize it
in the near future. It is our mission to deliver compelling, informative and
historic programming in an efficient fashion. Cavalcade will provide an
entertaining and economical nostalgic sports programming alternative. Sports
programming is big business. In 1997, ESPN paid $175 million to buy U.S. Classic
Sports Network. In 2001, Classic Sports was valued at $1 billion and reached 43
million homes.

We have not yet generated any revenue, and do not expect to generate revenue
until the third quarter of 2003.

Organizational/Historical Background

In September of 1999, we changed our business model from a shoe manufacturing
and distributing company to an entertainment company focusing on the nostalgic
sports broadcasting business. On December 17, 1999, we amended our Articles of
Incorporation to change our name to Cavalcade of Sports Media, Inc., and on
December 22, 1999, Cavalcade of Sports Network, Inc., a New York corporation,
was merged with and into the Company, leaving Cavalcade of Sports Media, Inc.,
the Nevada corporation, as the survivor. A mirror Certificate of Merger was
filed in New York on December 30, 1999. Subsequent to the Company's decision to
enter its current business, the holders of 1999-Global Group Series of Preferred
Stock elected to convert their 855,000 shares to Common Stock, valued at $855,
of Global International, Inc. in September 2000. At the time of the conversion
and disposal of the shoe business segment, the segment had liabilities in excess
off its assets and had no operations and continued to be in default under the
terms of the License Agreements. As a result of the conversion, the Company's
interest in Global Group International, Inc. was reduced from 100% to zero.

On September 19, 2003, Cavalcade of Sports Media, Inc. and Pacificap
Entertainment, Inc. effectuated a Plan and Agreement of Reorganization (the
"Plan") in accordance with 368(a)1(B) of the Internal Revenue Act. In accordance
with that Plan, all of the 18,000,000 issued and outstanding Common Stock shares
of Pacificap Entertainment, Inc. were exchanged for 18,000,000 new shares of the
Common Stock of Cavalcade of Sports Media, Inc. The exchange ratio, therefore,
was one (1) share of Cavalcade of Sports Media, Inc. Common Stock for each
single (1) share of Cavalcade of Sports Media, Inc. (1:1).

SHORT FORM PARENT/SUBSIDIARY MERGER

After the Plan took effect, the President of the dissolved Pacificap
Entertainment, Inc., Michael Riley, joined the Board of Directors. The Company's
Board now consists of: Michael Riley, Chairman of the Board; Ed Litwak,
Director, and Don Parsons, Director. Ed Litwak and the Company have entered into
a three year Employment Agreement, and he will serve as interim President
through June of 2004 or until a suitable replacement is found, after which time
Mr. Litwak shall become President of the Cavalcade Broadcast Division of the
Company. Management believes that this change of business direction will
increase our profitability and the total value of the corporation to our
investors.

As scheduled in the Plan, a short form merger was filed by Cavalcade of Sports
Media, Inc. and its wholly owned subsidiary, Pacificap Entertainment, Inc.
Contemporaneously with the closing, the Company's name changed to Pacificap
Entertainment Holdings, Inc.

                                       5
<PAGE>
To effectuate the short form merger, the Company complied with the merger
statutes of Nevada and California, which entailed the filing of Articles of
Merger and Plan and Agreement of Reorganization with the Secretary of State of
Nevada, and the filing of a Certificate of Ownership with the Secretary of State
of California which reflected that Pacificap Entertainment, Inc. was wholly
owned (100%) by Cavalcade of Sports Media, Inc. The new symbol for the Company
is "PFEH".

MEMORANDUM OF UNDERSTANDING WITH ITN MEDIA

On January 13, 2004, we signed a memorandum of understanding with ITN Media
Services, Inc. to acquire 100% of that entity in a stock and cash transaction.
We are seeking funding to finalize this acquisition, among other things. ITN
Media Services, Inc. We believe that by the middle of the second quarter, we
will close on our funding and complete this transaction.

ITN Media, which operates under the name "MediaOne", is a leading independent
originator, repurposer and distributor of video content on the West Coast,
providing services for broadcasters worldwide. Its services include origination
and transmission of 24-hour programming for a variety of broadcast and cable
clients (CNN, Fox News, MSNBC) while also providing state-of-the-art large venue
connectivity solutions. MediaOne transmits via satellite, fiber and Internet
from its in-house studios as well as from dedicated remote origination
locations. With its unique model of pre-wired infrastructure, it is presently
the exclusive host broadcast provider for the San Francisco Giants and Pacific
Bell Park.

We plan to further strengthen MediaOne's reach in the international media market
by merging its existing broadcast capabilities with Pacificap's Cavalcade of
Sports division (www.cavalcadetv.com), utilizing our comprehensive library of
sports programming to provide sports content to cable and satellite carriers on
an ongoing basis.

ITEM 2. DESCRIPTION OF PROPERTY

Offices

We maintain our principal office at 12868 Via Latina, Del Mar, California 92014
until August 2003. Our telephone number at that office is (858) 481-2207 and our
facsimile number is also (858) 481-2207. The office space, which is provided to
us for $3,200 per month, has approximately 2,200 square feet, consisting of two
separate offices, a conference room, a small kitchen and a bathroom. Starting
September 2003, we share office space with Outlook Films, Inc. on a
month-to-month basis in Beverly Hills, California at a rate of approximately
$2,200 per month.

Film Library

Our film library consists of approximately several hundred tapes, many of which
have been transferred to Beta SP format and some of which are in the process of
being transferred. As of the date of this annual report, we own approximately
5,000 hours of sports footage, of which approximately 3,500 hours have been
digitized.

During the year ended December 31, 2003, we performed an evaluation of our film
library for purposes of determining the implied fair value of the assets at
December 31, 2003. The test indicated that the recorded remaining book value of
our film library exceeded its fair value, as determined by discounted cash
flows. As a result, upon completion of the assessment, we recorded a non-cash
impairment charge of $372,304, net of tax, or $0.12 per share during the year
ended December 31, 2003 to reduce the carrying value of the film library to its
estimated value of $0.

ITEM 3. LEGAL PROCEEDINGS

With the exception of the actions described below, we are not aware of any legal
proceedings pending, threatened or contemplated against any of our officers or
directors, respectively, in their capacities as such.

On March 12, 2003, a complaint was filed in the Supreme Court of the State of
New York, County of New York County entitled Simon Deutsche v. Cavalcade of
Sports Media, Inc. (Index No. 108721/2003) for a recovery on a Capital Note of
$10,000 plus interest. On June 2, 2003, the Court granted summary judgment in
favor of Simon Deutsche and against Cavalcade in the amount of $15,694.45.

On December 17, 2003, we received a copy of an SEC letter complaint written by
Randal Crawford, an investor in a company called WSPN. Investors in that entity
were offered shares of Cavalcade of Sports Media, Inc. upon the filing of a
registration by the Company and the delivery of WSPN shares to the company by
the holder for an exchange. This office has been in touch with Randal Crawford
and he has agreed to withdraw his complaint.

                                       6
<PAGE>
On March 19, 2004, the Company received a letter from attorney's for Banbino's
Cafe requesting damages in the amount $1,350 for its receipt of an unsolicited
fax transmission allegedly from the Company in violation of Federal Law, 47 USC
227. The Company has represented that it had no knowledge of any fax
solicitation campaign and does not believe that the plaintiff will prevail if a
complaint is filed.

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

There were no matters submitted to a vote of shareholders in the fourth quarter
of 2003.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION

Market Information

The Company's Common Stock is traded over-the-counter on the Over the Counter
Bulletin Board maintained by the National Association of Securities Dealers
under the symbol "CVOS". There is no certainty assurance that the Common Stock
will continue to be quoted or that any liquidity exists for the Company's
shareholders.

The following table sets forth the quarterly quotes of high and low prices for
the Company's Common Stock on the OTC Bulletin Board during the fiscal years
2002 and 2003.

 Fiscal 2002                           High      Low

June 30, 2002                          $3.30    $0.82
September 30, 2002                     $0.65    $0.55
December 31, 2002                      $0.48    $0.31

  Fiscal 2003

March 31, 2003                         $0.20    $0.04
June 30, 2003                          $0.06    $0.02
September 30, 2003                     $1.01    $0.05
December 31, 2003 (1)                  $2.05    $2.45

(1) The figures for the fourth quarter of 2003 reflect the 1 for 30 reverse
split effectuated on September 4, 2003.

The source of this information is Yahoo Historical Stock Quotes and
broker-dealers making a market in the Company's Common Stock. These prices
reflect inter-dealer prices, without retail markup, mark-down or commission and
may not represent actual transactions.

Number of Stockholders

The approximate number of holders of record of our Common Stock, which is our
only class of common equity, is 1,436.

Dividends

We have not begun business operations and accordingly have not generated any
revenues nor had net profits on operations and therefore are currently
proscribed under the Delaware General Corporation Law from declaring dividends.
We have not paid any cash dividends on our Common Stock or our Preferred Stock.
Our Board of Directors has no present intention of declaring any cash dividends,
as we expect to re-invest all profits in the business for additional working
capital for continuity and growth. The declaration and payment of dividends in
the future will be determined by our Board of Directors considering the
conditions then existing, including the Company's earnings, financial condition,
capital requirements, and other factors.

SALES OF UNREGISTERED SECURITIES DURING 2002

The issuances of unregistered securities which occurred during the fiscal year
2002 were as follows:

Capital Notes

During 2002, we issued two accredited investors $31,250 Convertible Subordinated
Capital Notes, one for $25,000 and the other for $6,250. The Notes were sold in
a Rule 506 Offering, made pursuant to Regulation D. Shares will be issued upon
conversion by the holder, and at that time, those issuances will be considered
exempt under Section 4(2) of the Securities Act of 1933 (the "Act").

                                       7
<PAGE>
Common Stock

Each of the issuances described below is considered by the Company to be exempt
from registration by reason of Section 4(2) of the Securities Act of 1933.

On January 14, 2002, we issued 1,667 shares of our Common Stock to a sports
broadcasting consultant in exchange for investment in a baseball team.

On March 4, 2002, we issued 8,333 shares to an attorney in exchange for legal
services.

On June 4, 2002, we issued a total of 18,890 shares of our Common Stock to three
consultants for their digital cable marketing, broadcasting and related
services. Also in June, we issued 2,667 shares in exchange for a $100,000 debt.

In July of 2002, we issued 717 shares to two consultants in exchange for
advertising and legal work. Also in July, we issued 159,653 shares in connection
with our acquisition of Cineports.com.

On August 13, 2002, we issued 467 shares to Michael Carroll for his service on
our Advisory Board of Directors, and 1,066 shares to a consultant for his
website development services. 600 shares were issued to a consultant for
services rendered.

On September 19, 2002, we issued 10,000 shares of our Common Stock to two
individuals in exchange for their marketing consulting services.

In October of 2003, we issued 507 shares in exchange for accrued interest of a
loan made to the Company.

On October 11, 2002, we issued 4,000 shares of our Common Stock to two
consultants in exchange for their marketing services.

On October 24, 2002, we issued to a single investor 18,019 shares of our Common
Stock for an investment of $125,000.

On November of 2002, we issued 1,084 shares of our Common Stock in exchange for
loans and accrued interest made to the Company by two individuals.

On November 11, 2002, we issued 1,997 to Robert Stulman for his service as
Secretary of the Company.

On November 21, we issued 50,000 shares of our Common Stock to investors in
exchange for cash of $40,200, net of costs and fees.

On December 30, 2002, we issued 9,333 shares to a consultant in exchange for
financial advisory services.

SALES OF UNREGISTERED SECURITIES DURING 2003

Each of the issuances described below is considered by the Company to be exempt
from registration by reason of Section 4(2) of the Securities Act of 1933.

On January 11, 2003, we issued 9,167 shares of our Common Stock to two attorneys
for legal services rendered.

On February 18, 2003, we issued to a single investor 6,667 shares of our Common
Stock for an investment of $7, 977, net of costs and fees.

On March 5, 2003, we issued 6,667 shares of our Common Stock to a consultant for
general business consulting services rendered.

On April 9, 2003, we issued 22,960 shares of our Common Stock for financing
expenses in connection with debt obligations of the Company.

On April 9, 2003, we issued to a single investor 4,334 shares of our Common
Stock for an investment of $5,000, net of costs and fees

On April 22, 2003, we issued 22,223 shares of our Common Stock for expenses paid
on behalf of the Company.

On May 7, 2003 we issued 2,591 shares of our Common Stock for financing expenses
in connection with debt obligations of the Company.

On May 19, 2003 we issued to a single investor 13,333 shares of our Common Stock
for an investment of $10,000, net of costs and fees.

On May 21, 2003, we issued 22,167 shares of our Common Stock for expenses paid
on behalf of the Company.

                                       8
<PAGE>
On May 30, 2003, we issued to a single investor 3,333 shares of our Common Stock
for an investment of $5,000, net of costs and fees.

On July 8, 2003, we issued 3,517 shares of our Common Stock to five consultants
for general and accounting services rendered.

On July 15, 2003, we issued 14,333 shares of our Common Stock for a settlement
of debt owed by the Company.

On July 23, 2003, we issued 10,333 shares of our Common Stock to two consultants
for general business consulting services rendered.

On July 31, 2003, we issued 37,487 shares of our Common Stock for financing
expenses in connection with our debt obligations of the Company.

On August 5, 2003, we issued 9,333 shares of our Common Stock to two consultants
for general business consulting services rendered

On August 8, 2003, we issued 3,333 shares of our Common Stock to a consultant
for general business consulting services rendered.

On August 11, 2003, we issued 10,000 shares of our Common Stock to a consultants
for legal services rendered.

On August 11, 2003, we issued 32,000 shares of our Common Stock for a settlement
of debt owed by the Company.

On August 12, 2003, we issued 15,000 shares of our Common Stock to a consultant
for general business consulting services rendered.

On August 14, 2003, we issued 11,667 shares of our Common Stock for a settlement
of debt owed by the Company.

On September 2, 2003, we issued 2,917 shares of Common Stock to a consultant for
general business consulting services rendered.

On September 22, 2003, we issued 262,000 shares of Common Stock to two
consultants for general business consulting services rendered.

On October 24, 2003, we issued 960,000 shares of Common Stock to twenty four
consultants for legal, accounting and general business consulting services
rendered.

On November 3, 2003, we issued 10,000 shares of Common Stock for interest costs
in connection with a debt obligation of the Company.

On November 25, 2003, we issued 43,000 shares of Common Stock to four
consultants for general business consulting services rendered.

On November 26, 2003, we issued 14,000 shares of Common Stock for financing
expenses in connection with debt obligations of the Company.

On November 27, 2003, we issued 18,000,000 shares of Common Stock under a Plan
and Agreement of Reorganization whereby the Company's shares were exchanged for
equal number of shares in Pacificap Entertainment Holdings, Inc.

On December 11, 2003, we issued 4,500 shares of Common Stock to a consultant for
general business consulting services rendered.

On December 12, 2003, we issued 25,000 shares of Common Stock to a consultant
for general business consulting services rendered.

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

The following discussion contains forward-looking statements that are subject to
significant risks and uncertainties about us, our current and planned products,
our current and proposed marketing and sales, and our projected results of
operations. There are several important factors that could cause actual results
to differ materially from historical results and percentages and results
anticipated by the forward-looking statements. The Company has sought to
identify the most significant risks to its business, but cannot predict whether
or to what extent any of such risks may be realized nor can there be any
assurance that the Company has identified all possible risks that might arise.
Investors should carefully consider all of such risks before making an
investment decision with respect to the Company's stock. In particular,
investors should refer to the section entitled, "Risk Factors that May Affect
Future Results and Market Price of Stock."

The following discussion and analysis should be read in conjunction with the
financial statements of the Company and notes thereto. This discussion should
not be construed to imply that the results discussed herein will necessarily
continue into the future, or that any conclusion reached herein will necessarily
be indicative of actual operating results in the future. Such discussion
represents only the best present assessment from our Management.

                                       9
<PAGE>
Overview

Critical Accounting Policies

     The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting policies
affecting our consolidated financial statements; we believe the following
critical accounting policies involve the most complex, difficult and subjective
estimates and judgments:

     o    business combinations

     o    stock-based compensation.

Business combinations

     The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards ("SFAS") No. 141, Business Combinations, which
established accounting and reporting standards for business combinations and
requires that all business combinations be accounted for by the purchase method.
Under the purchase method of accounting, the cost, including transaction costs,
is allocated to the underlying net assets, based on their respective estimated
fair values. The excess of the purchase price over the estimated fair values of
the net assets acquired is recorded as goodwill.

     The judgments made in determining the estimated fair values and expected
useful lives assigned to each class of assets and liabilities acquired can
significantly impact net income. For example, different classes of assets will
have useful lives that differ. Consequently, to the extent a longer-lived asset
is ascribed greater value under the purchase method than a shorter-lived asset,
there may be less amortization recorded in a given period.

     Determining the fair value of certain assets and liabilities acquired is
subjective in nature and often involves the use of significant estimates and
assumptions. We use a one-year period following the consummation of acquisitions
to finalize estimates of the fair values of assets and liabilities acquired. Two
areas, in particular, that require significant judgment are estimating the fair
values and related useful lives of identifiable intangible assets. While there
are a number of different methods used in estimating the value of acquired
intangibles, there are two approaches primarily used: the discounted cash flow
and market comparison approaches. Some of the more significant estimates and
assumptions inherent in the two approaches include: projected future cash flows
(including timing); discount rate reflecting the risk inherent in the future
cash flows; perpetual growth rate; determination of appropriate market
comparables; and the determination of whether a premium or a discount should be
applied to comparables. Most of the foregoing assumptions are made based on
available historical information.

Stock-Based Compensation

     In December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based
Compensation - Transition and Disclosure. This statement amends SFAS No. 123 -
Accounting for Stock-Based Compensation, providing alternative methods of
voluntarily transitioning to the fair market value based method of accounting
for stock based employee compensation. FAS 148 also requires disclosure of the
method used to account for stock-based employee compensation and the effect of
the method in both the annual and interim financial statements. The provisions
of this statement related to transition methods are effective for fiscal years
ending after December 15, 2002, while provisions related to disclosure
requirements are effective in financial reports for interim periods beginning
after December 31, 2002.

     The Company elected to continue to account for stock-based compensation
plans using the intrinsic value-based method of accounting prescribed by APB No.
25, "Accounting for Stock Issued to Employees," and related interpretations.
Under the provisions of APB No. 25, compensation expense is measured at the
grant date for the difference between the fair value of the stock and the
exercise price.

Results of Operations

                                       10
<PAGE>
The Company is in the development stage and to date, and has not generated
revenues. The risks specifically discussed are not the only factors that could
affect future performance and results. In addition the discussion in this annual
report concerning us, our business and our operations contain forward-looking
statements. Such forward-looking statements are necessarily speculative and
there are certain risks and uncertainties that could cause actual events or
results to differ materially from those referred to in such forward-looking
statements. We do not have a policy of updating or revising forward-looking
statements and thus it should not be assumed that silence by our Management over
time means that actual events or results are occurring as estimated in the
forward-looking statements herein.

As a development stage company, we have yet to earn revenues from operations. We
may experience fluctuations in operating results in future periods due to a
variety of factors., including our ability to obtain additional financing in a
timely manner and on terms favorable to us, our ability to successfully develop
our business model, the amount and timing of operating costs and capital
expenditures relating to the expansion of our business, operations and
infrastructure and the implementation of marketing programs, key agreements, and
strategic alliances, and general economic conditions specific to our industry.

As a result of limited capital resources and no revenues from operations from
its inception, the Company has relied on the issuance of equity securities to
non-employees in exchange for services. The Company's management enters into
equity compensation agreements with non-employees if it is in the best interest
of the Company under terms and conditions consistent with the requirements of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation." In order to conserve its limited operating capital resources, the
Company anticipates continuing to compensate non-employees for services during
the next twelve months. This policy may have a material effect on the Company's
results of operations during the next twelve months.

Revenues

We have generated no operating revenues from operations from our inception. We
believe we will begin earning revenues from operations in 2004 from actual
operation as the Company transitions from a development stage company to that of
an active growth and acquisition stage company.

Costs and Expenses

From our inception through December 31, 2003, the Company had not generated any
revenues and have incurred cumulative losses of $43,381,825. Incurred this year
and as part of the cumulative loss was a recapitalization charge to earning of
$29,160,000 as part of a reorganization plan with Pacificap Entertainment
Holdings, Inc. In addition, a significant part of the overall remaining costs
are associated principally with equity-based compensation to employees and
consultants, product development costs and professional services rendered.

Liquidity and Capital Resources

As of December 31, 2003, the Company had a working capital deficit of $2,803,641
as compared to a deficit of $2,071,983 as of December 31, 2002. From the
Company's inception to December 31, 2003; the Company has incurred a operating
cash flow deficit of $1,655,053 which as been principally financed through the
issuance of capital and other notes payable of $1,268,665 (net of repayments);
private placement of our common stock of $272,200 and advances from Company
shareholders and officers of $264,813.

While the Company has raised funds to meet its working capital and financing
needs in the past, additional financing is required in order to meet our current
and projected cash flow deficits from operations and development. Although the
Company is seeking financing to support its working capital needs, the Company
has no commitments or assurances that it will be successful in raising the funds
required.

The Company believes that it will be successful in meeting the working capital
needs to fund the current level of operating activities, capital expenditures
and debt and other obligations through the next 12 months. However, if during
that period or thereafter, the Company is not successful in generating
sufficient capital resources, on terms acceptable to the Company, this could
have a material adverse effect on the Company's business, results of operations
liquidity and financial condition.

The independent auditor's report on the Company's December 31, 2003 financial
statements included in this Annual Report states that the Company's recurring
losses raise substantial doubts about the Company's ability to continue as a
going concern.

Recent Accounting Pronouncements

                                       11
<PAGE>
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." Interpretation 46 changes the criteria by which one
company includes another entity in its consolidated financial statements.
Previously, the criteria were based on control through voting interest.
Interpretation 46 requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. A company that consolidates a variable
interest entity is called the primary beneficiary of that entity. The
consolidation requirements of Interpretation 46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply to older entities in the first fiscal year or interim period beginning
after June 15, 2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The Company does not expect the
adoption to have a material impact to the Company's financial position or
results of operations.

In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES. SFAS 149 amends SFAS No. 133 to provide clarification on the
financial accounting and reporting of derivative instruments and hedging
activities and requires that contracts with similar characteristics be accounted
for on a comparable basis. The provisions of SFAS 149 are effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of SFAS 149 did not
have a material impact on the Company's results of operations or financial
position.

In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN FINANCIAL
INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. SFAS 150
establishes standards on the classification and measurement of certain financial
instruments with characteristics of both liabilities and equity. The provisions
of SFAS 150 are effective for financial instruments entered into or modified
after May 31, 2003 and to all other instruments that exist as of the beginning
of the first interim financial reporting period beginning after June 15, 2003.
The adoption of SFAS 150 did not have a material impact on the Company's results
of operations or financial position.

In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS' DISCLOSURES
ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS - AN AMENDMENT OF FASB
STATEMENTS NO. 87, 88, AND 106. This statement retains the disclosure
requirements contained in FASB statement no. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits, which it replaces. It requires
additional disclosures to those in the original statement 132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The required
information should be provided separately for pension plans and for other
postretirement benefit plans. The revision applies for the first fiscal or
annual interim period ending after December 15, 2003 for domestic pension plans
and June 15, 2004 for foreign pension plans and requires certain new disclosures
related to such plans. The adoption of this statement did not have a material
impact on the Company's results of operations or financial positions.

Product Research and Development

We do not anticipate performing research and development for any products during
the next twelve months.

Acquisition or Disposition of Plant and Equipment

We do not anticipate the sale of any significant property, plant or equipment
during the next twelve months. We do not anticipate the acquisition of any
significant property, plant or equipment during the next 12 months, other than
computer equipment and peripherals used in our day-to-day operations. We believe
we have sufficient resources available to meet these acquisition needs.

Number of Employees

From our inception through the period ended December 31, 2003, we have relied on
the services of outside consultants for services and had no employees. In order
for us to attract and retain quality personnel, we anticipate we will have to
offer competitive salaries to future employees. We anticipate an employment base
of four (4) full and part time employees during the next 12 months. These
employees will be Ed Litwak, our Chief Executive Officer, Michael Riley, our
President, a CFO/ Treasurer to be hired, a National Distribution Manager and an
Administrative Assistant. The Company has entered into an three year Employment
Agreement with Ed Litwak.

The Company also plans to use the advice of its Advisory Board on an as needed
basis. As we continue to expand, we will incur additional cost for personnel.
This projected increase in personnel is dependent upon our generating revenues
and obtaining sources of financing. There is no guarantee that we will be
successful in raising the funds required or generating revenues sufficient to
fund the projected increase in the number of employees.

                                       12
<PAGE>
Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to
our business, but we cannot predict whether, or to what extent, any of such
risks may be realized nor can we guarantee that we have identified all possible
risks that might arise. Investors should carefully consider all of such risk
factors before making an investment decision with respect to our Common Stock.

Cautionary Factors that may Affect Future Results

We provide the following cautionary discussion of risks, uncertainties and
possible inaccurate assumptions relevant to our business and our products. These
are factors that we think could cause our actual results to differ materially
from expected results. Other factors besides those listed here could adversely
affect us.

Limited Operating History Anticipated Losses; Uncertainty of Future Results

We have refocused our business plan from that of a nostalgic sports channel to a
film financing company. Therefore, we have a limited operating history upon
which an evaluation of our Company and our prospects can be based. We feel that
our decision to change direction was in the best interest of our present and
future shareholders; however, we are in the position of a company with very
limited operating history.

Our prospects must be evaluated with a view to the risks encountered by a
company in an early stage of development, particularly in light of the
uncertainties relating to the new and evolving distribution methods with which
we intend to operate and the acceptance of our business model. We will be
incurring costs to to establish marketing relationshipsand to to build an
organization. To the extent that such expenses are not subsequently followed by
commensurate revenues, our business, results of operations and financial
condition will be materially adversely affected. We, therefore, cannot insure
that we will be able to immediately generate sufficient revenues. We expect
negative cash flow from operations to continue for the next 12 months as we
continue to develop and market our business. If cash generated by operations is
insufficient to satisfy our liquidity, we may be required to sell additional
equity or debt securities. The sale of additional equity or convertible debt
securities would result in additional dilution to our stockholders. Our initial
operations may not be profitable, since time will be required to build our
business to the point that our revenues will be sufficient to cover our total
operating costs and expenses. Our reaching a sufficient level of sales revenues
will depend upon a large number of factors, including availability of sufficient
working capital, the number of viewers we are able to attract, the rates which
we can charge for the advertising, our ability to deliver content, customer
acceptance of our nostalgic concept, customer perception of value (as compared
with premium or other satellite packages), and our sales receivables. (See
"Description of Business").

Liquidity and Working Capital Risks; Need for Additional Capital to Finance
Growth and Capital Requirements

We have had limited working capital and we are relying upon capital notes
(borrowed funds) to operate. We may seek to raise capital from public or private
equity or debt sources to: (i) provide working capital to meet our general and
administrative costs until net revenues make the business self- sustaining. We
cannot guarantee that we will be able to raise any such capital on terms
acceptable to us or at all. Such financing may be upon terms that are dilutive
or potentially dilutive to our stockholders. If alternative sources of financing
are required, but are insufficient or unavailable, we will be required to modify
our growth and operating plans in accordance with the extent of available
funding.

New Business

We are a new business and you should consider factors which could adversely
affect our ability to generate revenues, which include, but are not limited to,
maintenance of positive cash flow, which depends on our ability both to raise
capital and to obtain additional financing as required, as well as the level of
sales revenues.

Dependence Upon Management

Our future performance and success are dependant upon the efforts and abilities
of our Management. To a very significant degree, we are dependent upon the
continued services of Messrs Litwak and Riley our President and Chairman of the
Board, respectively.

If we lost the services of Mr. Litwak or Mr. Riley or other key employees before
we could get a qualified replacement, that loss could materially adversely
affect our business. At present, we do not have employment contracts with any
other of our officers or members of Management. We do not maintain key man life
insurance on any of our Management.

                                       13
<PAGE>
Limited Number of Independent Directors

There is no guarantee that our Board of Directors will have a majority of
independent directors in the future. In the absence of a majority of independent
directors, our executive officers, who are also principal stockholders and
directors, could establish policies and enter into transactions without
independent review and approval thereof. This could present the potential for a
conflict of interest between the Company and its stockholders generally and the
controlling officers, stockholders or directors. Presently, Don Parsons is our
only outside Director.

Limitation of Liability and Indemnification of Officers and Directors

Our officers and directors are required to exercise good faith and high
integrity in our Management affairs. Our Articles of Incorporation provide,
however, that our officers and directors shall have no liability to our
shareholders for losses sustained or liabilities incurred which arise from any
transaction in their respective managerial capacities unless they violated their
duty of loyalty, did not act in good faith, engaged in intentional misconduct or
knowingly violated the law, approved an improper dividend or stock repurchase,
or derived an improper benefit from the transaction. Our Articles and By-Laws
also provide for the indemnification by us of the officers and directors against
any losses or liabilities they may incur as a result of the manner in which they
operate our business or conduct the internal affairs, provided that in
connection with these activities they act in good faith and in a manner that
they reasonably believe to be in, or not opposed to, the best interests of the
Company, and their conduct does not constitute gross negligence, misconduct or
breach of fiduciary obligations. To further implement the permitted
indemnification, we have entered into Indemnity Agreements with our officers and
directors. (See "Indemnification of Directors and Officers")

Continued Control by Current Officers and Directors

The present officers and directors own 13.08% of the outstanding shares of
Common Stock, and therefore are in a position to elect all of our Directors and
otherwise control the Company, including, without limitation, authorizing the
sale of equity or debt securities of the Company, the appointment of officers,
and the determination of officers' salaries. Shareholders have no cumulative
voting rights. (See "Security Ownership of Certain Beneficial Owners and
Management")

Management of Potential Growth

We anticipate rapid growth, which will place a significant strain on our
managerial, operational, and financial systems resources. To accommodate our
current size and manage growth, we must continue to implement and improve our
financial strength and our operational systems, and expand, train and manage our
sales and distribution base. There is no guarantee that we will be able to
effectively manage the expansion of our operations, or that our facilities,
systems, procedures or controls will be adequate to support our expanded
operations. Our inability to effectively manage our future growth would have a
material adverse effect on us.

Competition could reduce the market share of our businesses and harm our
financial performance.

ITEM 7. FINANCIAL STATEMENTS

The Company is subject to other legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters should not have a material adverse effect on its financial position,
results of operations or liquidity.

                                       14
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2003 AND 2002


                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A Development Stage Company)
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)

                          Index to Financial Statements
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Page No
                                                                                                ---------
<S>                                                                                                  <C>
Report of Independent Certified Public Accountants                                                 F-3
Consolidated Balance Sheets at December 31, 2003 and 2002                                          F-4
Consolidated Statements of Losses for the years ended December 31, 2003 and 2002, and
for the period July 29, 1997 (date of inception) to December 31, 2003                              F-5
Consolidated Statements of Deficiency in Stockholders' Equity for the years ended
December 31, 2003 and 2002, and for the period July 29, 1997 (date of inception) to
December 31, 2003                                                                               F-6 ~ F-10
Consolidated Statements of Cash Flows for the years ended December 31, 2003 and 2002,
and for the period July 29, 1997  (date of inception) to December 31, 2003                     F-15 ~ F-17
Notes to Consolidated Financial Statements                                                     F-18 ~ F-36
</TABLE>

                                       F-2
<PAGE>

                    RUSSELL BEDFORD Stefanou MIRCHANDANI LLP
                          CERTIFIED PUBLIC ACCOUNTANTS



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




Board of Directors
Pacificap Entertainment Holdings, Inc.
Del Mar, California

     We have audited the accompanying consolidated balance sheets of Pacificap
Entertainment Holdings, Inc. (formerly Cavalcade of Sports Media, Inc.) and its
wholly-owned subsidiaries (the "Company"), a development stage Company, as of
December 31, 2003 and 2002 and the related consolidated statements of losses,
deficiency in stockholders' equity, and cash flows for the years then ended and
for the period July 29, 1997 (date of inception) to December 31, 2003. These
financial statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based upon
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. 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 our audits provide a reasonable
basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
the Company as of December 31, 2003 and 2002, and the results of its operations
and its cash flows for the years then ended, and from July 29, 1997 (date of
inception) to December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.

     The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note M to
the consolidated financial statements, the Company has suffered recurring losses
from operations, is in default under the terms of its debt obligations and has
not established a source of revenue. This raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note M. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



                                  /s/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                                      Russell Bedford Stefanou Mirchandani LLP
                                      Certified Public Accountants
McLean, Virginia
April 16, 2004

                                       F-3
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2003 and 2002
<TABLE>
<CAPTION>

                                                                         2003                      2002
<S>                                                                      <C>                        <C>
ASSETS
Current assets:
Cash and cash equivalents                                          $       1,062          $          4,295
                                                                   -------------          ----------------
Total current assets                                                       1,062                     4,295

Property, plant and equipment:
Office furniture, net of accumulated depreciation of
$1,020 and $680 at December 31, 2003 and 2002,
respectively                                                                 670                     1,010

Other assets:

Film library, at cost (Note D)                                                 -                   372,304

Total assets                                                       $       1,732         $         377,609
                                                                   =============         =================
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses (Note E)                     $     979,137         $         483,158

Other accrued liabilities (Note G)                                       380,000                   380,000

Notes payable (Note F)                                                 1,136,165                   983,165

Advances from related parties (Note I)                                   264,401                   184,955

Other advances                                                            45,000                    45,000
                                                                 ---------------         -----------------
Total current liabilities                                              2,804,703                 2,076,278


Commitments and contingencies (Note L)                                         -                         -

Deficiency in stockholders' equity: (Note G)
Preferred stock, par value, $0.001 per share;
50,000,000 shares authorized; none issued and
outstanding at December 31, 2003 and December 31, 2002                         -                         -
Common stock, par value, $0.001 per share; 300,000,000
shares authorized ; 21,818,255 and 624,700 shares
issued at December 31, 2003 and December 31, 2002,
respectively                                                              21,818                       625

Additional paid-in-capital                                            40,557,036                 6,276,690

Deficit accumulated during development stage                         (43,381,825)               (7,975,984)
                                                               -----------------        ------------------
Total deficiency in stockholders' equity                              (2,802,971)               (1,698,669)

Total liabilities and deficiency in stockholders' equity          $        1,732         $         377,609
                                                               =================        ==================
</TABLE>

           See accompanying notes to consolidated financial statements


                                       F-4
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                        CONSOLIDATED STATEMENTS OF LOSSES

<TABLE>
<CAPTION>

                                                                                             For the Period July
                                                                                               29, 1997 (Date of
                                                  For The Year Ended December 31                 Inception) to
                                                      2003                      2002            December 31, 2003
<S>                                                   <C>                        <C>                     <C>
Costs and Expenses:                                   ----                      ----           -------------------
Selling, general and administrative              $     5,625,850       $     2,492,272            $   10,112,974
Acquisition of Pacificap Entertainment
Holdings, Inc. (Note B)                               29,160,000                     -                29,160,000
Acquisition of Cineports.com, Inc. (Note
B)                                                             -             2,248,461                 2,248,461
Impairment of film library (Note D)                      372,304                     -                   372,304

Impairment of investment (Note G)                              -                62,500                    62,500

Depreciation                                                 340                   340                   197,205
                                                -----------------     -----------------        ------------------
Total operating expenses                              35,158,494             4,803,573                42,153,444
                                                -----------------     -----------------        ------------------

Loss from operations                                 (35,158,494)           (4,803,573)              (42,153,444)

Other Income (expenses), net (Note E and
I)                                                             -               109,992                   114,758

Interest expenses, net                                  (247,347)             (222,751)                 (774,926)

                                                        (247,347)             (112,759)                 (660,168)

Loss from continuing operations, before
income taxes and discontinued operations             (35,405,841)           (4,916,332)              (42,813,612)

Income (taxes) benefit                                         -                     -                         -

Loss from continuing operations, before
discontinued operations                              (35,405,841)           (4,916,332)              (42,813,612)
                                                -----------------     -----------------        ------------------
Loss from discontinued operations                              -                     -                  (352,905)
Income (loss) on disposal of discontinued
operations, net                                                -                     -                    78,974

Net loss                                        $    (35,405,841)     $     (4,916,332)           $  (43,087,543)

Cumulative effect of accounting change
(Note C)                                                       -              (294,282)                 (294,282)
                                                -----------------     -----------------        ------------------

Net loss applicable to common shares            $    (35,405,841)     $     (5,210,614)              (43,381,825)
                                                =================     =================        ==================
Income (loss) per common share (basic and
assuming dilution) (Note J)                     $         (11.49)     $         (10.79)            $      (55.72)
                                                =================     =================        ==================
Continuing operations                           $         (11.49)     $         (10.79)            $      (55.37)
Discontinued operations                         $              -      $              -             $       (0.35)


Weighted average shares outstanding                    3,081,611               483,036                 778,534
</TABLE>
           See accompanying notes to consolidated financial statements

                                       F-5
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
          CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
<TABLE>
<CAPTION>
                                                                                                     Deficit
                                                                                 Common               Accumulated
                                                                                 Stock    Additional  During
                                            Preferred  Stock    Common   Stock   subscri   Paid       Development Treasury
                                             Shares    Amount   Shares   Amount  -ption   in Capital  Stage        Stock      Total
                                            ---------- ------- --------  ------- ---------- --------- ---------  -------- ----------
<S>                                            <C>      <C>       <C>      <C>      <C>        <C>     <C>          <C>        <C>
Shares issued at date of inception (July
29, 1997) to founders in exchange for
contribution of organization costs valued
at $27.38 per shares, as restated                  -  $      -      422  $     1 $      -  $ 11,552   $     -    $      -  $ 11,553

Net Loss                                           -         -        -        -        -         -         -           -         -
Balance at December 31, 1997                       -  $      -      422  $     1 $      -  $ 11,552         -    $      -  $ 11,553
                                          ==========  ======== ======== ======== ========= ======== ========= =========== ==========
Shares issued December 22, 1998 to
consultants in exchange for services
valued at $.054 per shares                         -         -   37,083       37        -     1,965         -           -     2,002
Shares issued December 22, 1998 to
President in exchange for debt valued at
$.054 per shares                                   -         -  277,778      278        -    14,722         -           -    15,000
Operating expenses incurred by principal
shareholder                                        -         -        -        -        -     8,925         -           -     8,925

Net loss                                           -         -        -        -        -         -  (212,773)          -  (212,773)
                                         ----------- --------- -------- -------- -------- --------- ----------  --------- ----------
Balance at December 31, 1998                       -   $     -  315,283 $    316 $      -  $ 37,164  (212,773)  $       -  (175,293)
                                         =========== ========= ======== ======== ======== ========= ========== ========== ==========
Shares issued on April 13, 1999 for cash
in connection with private placement at
$30.08 per share                                   -         -      133        -        -     4,000         -           -     4,000
Shares issued on April 13, 1999 to
consultants in exchange for services
valued at $30.00per share                          -         -    6,000        6        -   179,994         -           -   180,000
Shares issued May 28, 1999 in exchange
for services valued at $.001 per share       855,000       855        -        -        -         -         -           -       855
Contribution of shares to treasury o
September 30, 1999 by principal
shareholder                                        -         -  (94,048)       -        -        94         -         (94)        -
Shares issued on November 12, 1999 for
cash in connection with private placement
at $3.00 per share                                 -         -   33,333       33        -    99,967         -           -   100,000
Release of shares held in treasury and
acquisition of Cavalcade of Sports
Network, Inc on December 16, 1999                  -         -   94,048        -        -   282,050         -          94   282,144
Operating expenses incurred by principal
shareholder                                        -         -        -        -        -     6,000         -           -     6,000

Net Loss                                           -         -        -        -        -         -  (438,045)          -  (438,045)
                                         ----------- --------- -------- -------- --------  -------- ---------- ----------- ---------
Balance at December 31, 1999                 855,000  $    855  354,749 $    355  $     - $ 609,269  (650,818)          -   (40,339)
                                         =========== ========= ======== ======== ======== ========= ========== =========== =========
</TABLE>
           See accompanying notes to consolidated financial statements

                                       F-6
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
<TABLE>
<CAPTION>


                                           Preferred     Stock        Common                      Common Stock    Additional Paid
                                            Shares        Amount      Shares      Stock Amount    Subscription       in Capital
                                           ---------     -------      --------    ------------    ------------    ---------------
<S>                                            <C>           <C>        <C>           <C>             <C>                 <C>
Balance Forward
                                              855,000     $  855      354,749     $      355         $      -      $    609,269
Shares issued in March 2000 in exchange
for debt at $37.50 per share                        -          -        2,060              2                -            77,245
Shares issued March 28, 2000 in
exchange for services at $37.50 pershare            -          -           70              -                -             2,625
Shares issued April 27, 2000 in
exchange for services at $37.50 per
share                                               -          -          250              -                -             9,375
Shares issued May 8, 2000 in exchange
for services at $37.50 per share                    -          -          417              1                -            15,624
Shares issued May 17, 2000 in exchange
for services at 37.50 per share                     -          -          833              1                -            31,249
Shares issued June 2000 in exchange for
debt at $37.59 per share                            -          -          133              -                -             5,000
Shares issued June 2000 in exchange for
services at $37.46 per share                        -          -          589              1                -            22,082
Shares issued July 25, 2000 in exchange
for debt at $37.88 per share                        -          -           33              -                -             1,250
Shares issued August 2000, in exchange
for services at $37.50 per share                    -          -        2,167              2                -            81,248
Conversion of preferred stock on
September 18, 2000                          (855,000)      (855)            -              -                -                 -
Shares issued October 13, 2000, in
exchange for services at $37.86 per
share                                               -          -           35              -                -             1,325
Shares issued October 30, 2000 in
exchange for services at $37.48 per
share                                               -          -          667              1                -            24,999
Shares issued November 9, 2000 in
exchange for services at $37.65 per
share                                               -          -           83              -                -             3,125
Shares issued December 1, 2000 in
exchange for services at $36.76 per
share                                               -          -           17              -                -               625
Operating expenses incurred by
principal shareholder                               -          -            -              -                -             6,000

Net Loss                                            -          -            -              -                -                 -
                                          ----------- ---------- ------------    -----------        ---------      ------------
Balance at December 31, 2000                        -   $      -      362,103      $     363        $       -      $    891,041
                                          =========== ========== ============    ===========        =========      ============
</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-7
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
<TABLE>
<CAPTION>

                                                  Deficit
                                                  Accumulated
                                                  During               Treasury
                                                  DevelopmentStage       Stock         Total
                                                  ----------------  ------------ --------------
<S>                                                       <C>              <C>            <C>
Balance Forward
                                                       (650,818)              -        (40,339)
Shares issued in March 2000 in exchange
for debt at $37.50 per share                                  -               -         77,247
Shares issued March 28, 2000 in
exchange for services at $37.50 per
share                                                         -               -          2,625
Shares issued April 27, 2000 in
exchange for services at $37.50 per
share                                                         -               -          9,375
Shares issued May 8, 2000 in exchange
for services at $37.50 per share                              -               -         15,625
Shares issued May 17, 2000 in exchange
for services at 37.50 per share                               -               -         31,250
Shares issued June 2000 in exchange for
debt at $37.59 per share                                      -               -          5,000
Shares issued June 2000 in exchange for
services at $37.46 per share                                  -               -         22,083
Shares issued July 25, 2000 in exchange
for debt at $37.88 per share                                  -               -          1,250
Shares issued August 2000, in exchange
for services at $37.50 per share                              -               -         81,250
Conversion of preferred stock on
September 18, 2000                                            -               -           (855)
Shares issued October 13, 2000, in
exchange for services at $37.86 per
share                                                         -               -          1,325
Shares issued October 30, 2000 in
exchange for services at $37.48 per
share                                                         -               -         25,000
Shares issued November 9, 2000 in
exchange for services at $37.65 per
share                                                         -               -          3,125
Shares issued December 1, 2000 in
exchange for services at $36.76 per
share                                                         -               -            625
Operating expenses incurred by
principal shareholder                                         -               -          6,000

Net Loss                                               (856,968)              -       (856,968)
                                                   -------------     -----------    -----------
Balance at December 31, 2000                       $ (1,507,786)      $       -     $ (616,382)
                                                   =============     ===========    ===========
</TABLE>
           See accompanying notes to consolidated financial statements

                                       F-8
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
<TABLE>
<CAPTION>
                               Preferred      Stock                                   Common Stock
                                Shares       Amount     Common Shares  Stock Amount   Subscription
                              ------------ ------------ -------------- -------------- --------------
<S>                                        <C>                <C>      <C>            <C>
Balance Forward                         -  $         -        362,103  $         363  $           -
Shares issued in January
2001, in exchange for
services at $37.50 per share            -            -          6,667              7              -
Shares issued in April
2001, in exchange for
services at $37.50 per share            -            -          4,000              4              -
Shares issued in April
2001, in exchange for
advances from officers at
$37.50 per share                        -            -          3,333              3              -
Shares issued in  2001, in
exchange for services at
$37.50 per share                        -            -          2,500              3              -
Shares issued in  2001, in
exchange for services at
$37.50 per share                        -            -          1,000              1              -
Fractional shares                       -            -             (5)             -              -
Shares canceled  in
November 2001, for services
that were not performed and
shares were previously
issued in October 2001                  -            -           (667)            (1)             -
Shares issued in December
2001, to board of directors
members for services at
37.50 per share                         -            -          2,100              2              -
Operating expenses incurred
by principal shareholder                -            -              -              -              -

Net loss                                -            -              -              -              -
                              ------------ ------------ -------------- -------------- --------------
Balance at December 31, 2001            -  $         -        381,031  $         382  $           -
                              ============ ============ ============== ============== ==============

           See accompanying notes to consolidated financial statements

                                       F-9

<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003

                                                              Deficit Accumulated
                                           Additional Paid     During Development      Treasury
                                              in Capital             Stage              Stock         Total
                                          ----------------- ----------------------- ------------- -------------
Balance Forward                           $        891,041  $           (1,507,786) $          -  $   (616,382)

Shares issued in January
2001, in exchange for
services at $37.50 per share                       249,993                       -             -       250,000
Shares issued in April
2001, in exchange for
services at $37.50 per share                       149,996                       -             -       150,000
Shares issued in April
2001, in exchange for
advances from officers at
$37.50 per share                                   124,997                                             125,000
Shares issued in  2001, in
exchange for services at
$37.50 per share                                    93,747                       -             -        93,750
Shares issued in  2001, in
exchange for services at
$37.50 per share                                    37,499                       -             -        37,500

Fractional shares                                        -                       -             -             -
Shares canceled  in
November 2001, for services
that were not performed and
shares were previously
issued in October 2001                             (24,999)                      -             -       (25,000)
Shares issued in December
2001, to board of directors
members for services at
37.50 per share                                     78,748                       -             -        78,750
Operating expenses incurred
by principal shareholder                             6,000                       -             -         6,000

Net loss                                                 -              (1,257,584)            -    (1,257,584)
                                          ----------------- ----------------------- ------------- -------------
Balance at December 31, 2001              $      1,607,022             $(2,765,370) $          -  $ (1,157,966)
                                          ================= ======================= ============= =============
</TABLE>

           See accompanying notes to consolidated financial statements

                                      F-10
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
<TABLE>
<CAPTION>
                                                                Preferred    Stock       Common     Stock
                                                                 Shares      Amount      Shares     Amount
                                                                ---------- ----------- ----------- ----------
<S>                                                                        <C>            <C>      <C>
Balance Forward                                                         -  $        -     381,031  $     382
Shares issued in January 2002, in exchange for investment at
$37.50 per share                                                        -           -       1,667          2
Shares issued in March 2002, in exchange for services at
$37.50 per share                                                        -           -       8,333          8
Shares issued in June 2002, in exchange for services at
approximately $40.15 per share                                          -           -      18,890         19
Shares issued in June 2002, in exchange for debts at $37.50
per share                                                               -           -       2,667          2
Shares issued in July 2002, in exchange for services at
$10.84 per share                                                        -           -         717          1
Shares issued in July 2002, in connection with acquisition of
Cineports.com, Inc. at approximately $7.50 per share (Note B)           -           -     159,653        160
Shares issued in August 2002, in exchange for services at
approximately $10.84 per share                                          -           -       2,133          2
Shares issued in September 2002, in exchange for services at
approximately $10.84 per share                                          -           -      10,000         10
Shares issued in October 2002, in exchange for services at
approximately $11.69 per share                                          -           -       4,000          4
Shares issued in October 2002 for cash in connection with
private placement at $6.94 per share                                    -           -      18,018         18
Shares issued in October 2002, in exchange for interest at
approximately $11.68 per share                                          -           -         507          -
Shares issued in November 2002, in exchange for services at
approximately $8.70 per share                                           -           -       1,667          2
Shares issued in November 2002 for cash in connection with
private placement at $10.20 per share                                   -           -       1,000          1
Shares issued in November 2002 for cash in connection with
private placement at $7.50 per share                                    -           -       4,000          4
Shares issued in November 2002, in exchange for debts at
$37.49 per share                                                        -           -         867          1
Shares issued in November 2002, in exchange for interest at
$37.56 per share                                                        -           -         217          -
Shares issued in December 2002, in exchange for services at
approximately $12.26 per share                                          -           -       9,333          9
Warrants issued in connection with acquisition of Cineports
(Note B)                                                                -           -           -          -
Options issued in exchange for services rendered (Note H)               -           -           -          -

Net loss                                                                -           -           -          -
                                                                ---------- ----------- ----------- ----------
Balance at December 31, 2002                                            -  $        -     624,700  $     625
                                                                ========== =========== =========== ==========

           See accompanying notes to consolidated financial statements

                                      F-11
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
                                                                                          Deficit
                                                                                        Accumulated
                                                                         Additional       During
                                                                          Paid in      Development    Treasury
                                                                          Capital         Stage         Stock       Total
                                                                      -------------- --------------- ---------- -------------
Balance Forward                                                       $   1,607,022  $   (2,765,370) $       -  $ (1,157,966)
Shares issued in January 2002, in exchange for investment at
$37.50 per share                                                             62,498               -          -        62,500
Shares issued in March 2002, in exchange for services at
$37.50 per share                                                            312,492               -          -       312,500
Shares issued in June 2002, in exchange for services at
approximately $40.15 per share                                              758,356               -          -       758,375
Shares issued in June 2002, in exchange for debts at $37.50
per share                                                                    99,998               -          -       100,000
Shares issued in July 2002, in exchange for services at
$10.84 per share                                                              7,769               -          -         7,770
Shares issued in July 2002, in connection with acquisition of
Cineports.com, Inc. at approximately $7.50 per share (Note B)             1,197,237               -          -     1,197,397
Shares issued in August 2002, in exchange for services at
approximately $10.84 per share                                               23,127               -          -        23,129
Shares issued in September 2002, in exchange for services at
approximately $10.84 per share                                              108,410               -          -       108,420
Shares issued in October 2002, in exchange for services at
approximately $11.69 per share                                               46,736               -          -        46,740
Shares issued in October 2002 for cash in connection with
private placement at $6.94 per share                                        124,982               -          -       125,000
Shares issued in October 2002, in exchange for interest at
approximately $11.68 per share                                                5,920               -          -         5,920
Shares issued in November 2002, in exchange for services at
approximately $8.70 per share                                                14,498               -          -        14,500
Shares issued in November 2002 for cash in connection with
private placement at $10.20 per share                                        10,199               -          -        10,200
Shares issued in November 2002 for cash in connection with
private placement at $7.50 per share                                         29,996               -          -        30,000
Shares issued in November 2002, in exchange for debts at
$37.49 per share                                                             32,499               -          -        32,500
Shares issued in November 2002, in exchange for interest at
$37.56 per share                                                              8,150               -          -         8,150
Shares issued in December 2002, in exchange for services at
approximately $12.26 per share                                              114,371               -          -       114,380
Warrants issued in connection with acquisition of Cineports
(Note B)                                                                  1,051,065               -          -     1,051,065

Options issued in exchange for services rendered (Note H)                   661,365               -          -       661,365

Net loss                                                                          -      (5,210,614)         -    (5,210,614)
                                                                      -------------- --------------- ---------- -------------
Balance at December 31, 2002                                          $   6,276,690  $   (7,975,984) $       -  $ (1,698,669)
                                                                      ============== =============== ========== =============
</TABLE>
           See accompanying notes to consolidated financial statements

                                      F-12
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
<TABLE>
<CAPTION>
                                                                               Preferred    Share       Common       Share
                                                                                 Shares     Amount      Shares       Amount
                                                                               ----------- ---------- ------------ ----------
<S>                                                                                        <C>            <C>      <C>
Balance forward                                                                         -  $       -      624,700  $     625
Shares issued in January 2003 in exchange for services at approximately
$4.63 per share                                                                         -          -       56,300         56
Shares issued in February 2003 in exchange for services at $2.10 per share              -          -       36,683         37
Shares issued in February 2003 for cash in connection with private placement
at $1.20 per share                                                                      -          -        6,667          6
Shares issued in February 2003 in exchange for services at $1.50 per share              -          -        6,667          6
Shares issued in April, 2003 in exchange for services at $.90 per share                 -          -       14,000         14
Shares issued in April 2003 in exchange for expenses paid by shareholders at
$.90 per share                                                                          -          -       22,222         22
Shares issued in April 2003 in exchange for financing expenses at $.90 per
share                                                                                   -          -       22,960         23
Shares issued in April 2003 for cash in connection with private placement at
$1.20 per share                                                                         -          -        4,333          4
Shares issued in May 2003 in exchange for financing expenses at $1.65 per
share                                                                                   -          -        2,591          3
Shares issued in May 2003 in exchange for services at $1.50 per share                   -          -       17,667         18
Shares issued in May 2003 for cash in connection with private placement at
$.90 per share                                                                          -          -       16,667         17
Shares issued in May 2003 in exchange for expenses paid by shareholders at
$.90 per share                                                                          -          -       22,167         22
Shares issued in July 2003 in exchange for services at $2.10 per share                  -          -       13,850         14
Shares issued in July 2003 in exchange for debts at $.70 per share                      -          -       14,334         14
Shares issued in July 2003 in exchange for financing expenses at $3.60 per
share                                                                                   -          -       37,487         38
Shares issued in August 2003 in exchange for services at $3.14 per share                -          -       37,667         38
Shares issued in August 2003 in exchange for debts at $.81 per share                    -          -       43,667         44
Shares issued in September 2003 in exchange for services at $1.80 per share             -          -      264,916        265
Fractional shares issued in September 2003 due to rounding resulted from
reverse stock split                                                                     -          -        1,210          1
Shares issued in October 2003 in exchange for financing expenses at $2.00
per share                                                                               -          -       50,000         50
Shares issued in October 2003 in exchange for services at $1.59 per share               -          -    2,405,000      2,405
Shares issued in November 2003 in exchange for services at $1.18 per share              -          -       43,000         43
Shares issued in November 2003 in exchange for interest expenses at $1.25
per share                                                                               -          -       10,000         10
Shares issued in November 2003 in exchange for financing expenses at $1.75
per share                                                                               -          -       14,000         14
Shares issued in December 2003 in exchange for services at $1.28 per share              -          -       29,500         29
Shares issued in connection with acquisition of Pacificap (Note B)                      -          -   18,000,000     18,000

Net loss                                                                                -          -            -          -
                                                                               ----------- ---------- ------------ ----------
Balance at December 31, 2003                                                            -  $       -   21,818,255  $  21,818
                                                                               =========== ========== ===========  ==========

           See accompanying notes to consolidated financial statements

                                      F-13
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
    CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY (Continued)
   FOR THE PERIOD JULY 29, 1997 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2003
                                                                                               Deficit
                                                                                              Accumulated
                                                                               Additional       during
                                                                                Paid in       Development   Treasury
                                                                                Capital          Stage        Stock        Total
                                                                             --------------- -------------- ----------- ------------
Balance forward                                                              $    6,276,690  $  (7,975,984) $        -  $(1,698,669)
Shares issued in January 2003 in exchange for services at approximately
$4.63 per share                                                                     260,434              -           -      260,490
Shares issued in February 2003 in exchange for services at $2.10 per share           77,000              -           -       77,037
Shares issued in February 2003 for cash in connection with private placement
at $1.20 per share                                                                    7,994              -           -        8,000
Shares issued in February 2003 in exchange for services at $1.50 per share            9,994              -           -       10,000
Shares issued in April, 2003 in exchange for services at $.90 per share              12,586              -           -       12,600
Shares issued in April 2003 in exchange for expenses paid by shareholders at
$.90 per share                                                                       19,978              -           -       20,000
Shares issued in April 2003 in exchange for financing expenses at $.90 per
share                                                                                20,641              -           -       20,664
Shares issued in April 2003 for cash in connection with private placement at
$1.20 per share                                                                       4,996              -           -        5,000
Shares issued in May 2003 in exchange for financing expenses at $1.65 per
share                                                                                 4,272              -           -        4,275
Shares issued in May 2003 in exchange for services at $1.50 per share                25,882              -           -       25,900
Shares issued in May 2003 for cash in connection with private placement at
$.90 per share                                                                       14,983              -           -       15,000
Shares issued in May 2003 in exchange for expenses paid by shareholders at
$.90 per share                                                                       19,978              -           -       20,000
Shares issued in July 2003 in exchange for services at $2.10 per share               29,006              -           -       29,020
Shares issued in July 2003 in exchange for debts at $.70 per share                    9,986              -           -       10,000
Shares issued in July 2003 in exchange for financing expenses at $3.60 per
share                                                                               134,915              -           -      134,953
Shares issued in August 2003 in exchange for services at $3.14 per share            117,762              -           -      117,800
Shares issued in August 2003 in exchange for debts at $.81 per share                 35,456              -           -       35,500
Shares issued in September 2003 in exchange for services at $1.80 per share         280,085              -           -      280,350
Fractional shares issued in September 2003 due to rounding resulted from
reverse stock split                                                                      (1)             -           -            -
Shares issued in October 2003 in exchange for financing expenses at $2.00
per share                                                                            99,950              -           -      100,000
Shares issued in October 2003 in exchange for services at $1.59 per share         3,826,895              -           -    3,829,300
Shares issued in November 2003 in exchange for services at $1.18 per share           50,707              -           -       50,750
Shares issued in November 2003 in exchange for interest expenses at $1.25
per share                                                                            12,490              -           -       12,500
Shares issued in November 2003 in exchange for financing expenses at $1.75
per share                                                                            24,486              -           -       24,500
Shares issued in December 2003 in exchange for services at $1.28 per share           37,871              -           -       37,900
Shares issued in connection with acquisition of Pacificap (Note B)               29,142,000              -           -   29,160,000

Net loss                                                                                  -    (35,405,841)          -  (35,405,841)
                                                                             --------------- -------------- ----------- ------------
Balance at December 31, 2003                                                 $   40,557,036  $( 43,381,825) $        -  $(2,802,971)
</TABLE>

           See accompanying notes to consolidated financial statements

                                      F-14
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                  For the Period
                                                                                                                July 29, 1997(Date
                                                                       For The Year Ended December 31,           of Inception) to
                                                                           2003                  2002            December 31, 2003
                                                                   ------------------     ------------------     ------------------
Cash flows from operating activities:
<S>                                                                <C>                    <C>                    <C>
Net loss for the period from continuing operations                 $     (35,405,841)     $      (5,210,614)     $     (43,107,894)
Loss from discontinued operations                                                  -                      -               (352,905)
Disposal of business segment, net                                                  -                      -                 78,974
Adjustments to reconcile net losses  to net cash (used in)
operating activities:
Cumulative effect of accounting change                                             -                294,282                294,282
Depreciation                                                                     340                    340                197,205
Organization and acquisition costs expensed                                        -                      -                 11,553
Common stock issued in exchange for services (Note G)                      4,731,144              1,385,814              7,087,796
Common stock issued in exchange for previously incurred debt
(Note G)                                                                           -                      -                233,498
Common stock issued in exchange for interest (Note G)                         12,500                 14,070                 26,570
Common stock issued in exchange for expenses paid by shareholders
(Note G and I)                                                                40,000                      -                 65,000
Common stock issued in connections with acquisition of Pacificap
(Note B and G)                                                            29,160,000                      -             29,160,000
Common stock issued in exchange for financing expenses (Note F
and G)                                                                       284,392                      -                284,392
Common stock issued in connection with acquisition of Cineports
(Note B and G)                                                                     -              1,197,396              1,197,396
Warrants issued in connection with acquisition of Cineports (Note
B and H)                                                                           -              1,051,065              1,051,065
Stock options issued in exchange for services rendered (Note H)                    -                661,365                661,365
Preferred stock issued in exchange for services (Note G)                           -                      -                    855
Conversion of preferred stock (Note G)                                             -                      -                   (855)
Write off of  acquired asset                                                       -                      -                  5,000
Write off of  un-collectable other receivable (Note I)                             -                 30,000                 30,000
Debt forgiveness from creditors (Note E)                                           -               (139,992)              (139,992)
Write off of capitalized production costs (Note D)                                 -                150,273                150,273
Write off of other investment previously paid with common stock
(Note G)                                                                           -                 62,500                 62,500
Expenses paid by principal shareholders (Note I)                              90,090                      -                117,015
Impairment of film library (Note D)                                          372,304                      -                372,304
(Increase) decrease in:
Other receivable (Note I)                                                          -                      -                (30,000)
Increase (decrease)  in:
Accounts payable and accrued expenses, net                                   495,980                304,731                889,550
                                                                   ------------------     ------------------     ------------------
Net cash (used in) operating activities                            $        (219,091)     $        (198,770)     $      (1,655,053)

</TABLE>
           See accompanying notes to consolidated financial statements

                                      F-15
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
                                                                                                               For the Period
                                                                                                             July 29, 1997(Date
                                                                       For The Year Ended December 31,        of Inception) to
                                                                             2003                2002         December 31, 2003
                                                                      ------------------  ------------------  ------------------
Cash flows from investing activities:
<S>                                                                   <C>                                     <C>
Acquisition of film library and footage production costs              $               -                   -   $        (183,080)
Acquisition of office furniture                                                       -                   -              (1,690)
Cash acquired in connection with acquisition                                          -                   -              35,207
Net cash (used in) investing activities                                               -                   -            (149,563)
Cash flows from financing activities:
Advances from related parties, net of repayments                                 34,858              (8,844)            219,813
Other advances, net                                                                   -                   -              45,000
Proceeds from issuance of notes payable                                         153,000              31,250           1,268,665
Proceeds from issuance of common stock (Note G)                                  28,000             165,200             272,200
                                                                      ------------------  ------------------  ------------------
Net cash provided by financing activities                                       215,858             187,606           1,805,678

Net decrease in cash and equivalents                                             (3,233)            (11,164)              1,062
Cash and cash equivalents at the beginning of the period                          4,295              15,459                   -
                                                                      ------------------  ------------------  ------------------
Cash and cash equivalents at the end of the period                    $           1,062   $           4,295   $           1,062
                                                                      ==================  ==================  ==================
</TABLE>
           See accompanying notes to consolidated financial statements

                                      F-16
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
                                                                                                               For the Period July
                                                                                                                 29, 1997(Date of
                                                                        For The Year Ended December 31,          Inception) to
                                                                             2003               2002           December 31, 2003
                                                                      ------------------  ------------------  ------------------
Supplemental Disclosures of Cash Flow Information:
<S>                                                                   <C>                 <C>                 <C>
Cash paid during the period for interest                              $               -   $               -   $               -
Cash paid during the period for taxes                                                 -                   -                   -
Common stock issued in exchange for services (Note G)                         4,731,144           1,385,814           7,087,796
Common stock issued in exchange for previously incurred
debt (Note G)                                                                         -                   -             233,498
Common stock issued in exchange for interest (Note G)                            12,500              14,070              26,570
Common stock issued in exchange for expenses paid by
shareholders (Note G and I)                                                      40,000                   -              65,000
Common stock issued in connections with acquisition of
Pacificap (Note B and G)                                                     29,160,000                   -          29,160,000
Common stock issued in exchange for financing expenses
(Note F and G)                                                                  284,392                   -             284,392
Common stock issued in connection with acquisition of
Cineports (Note B and G)                                                              -           1,197,396           1,197,396
Warrants issued in connection with acquisition of Cineports
(Note B and H)                                                                        -           1,051,065           1,051,065
Stock options issued in exchange for services rendered
(Note H)                                                                              -             661,365             661,365
Preferred stock issued in exchange for services (Note G)                              -                   -                 855
Conversion of preferred stock (Note G)                                                -                   -                (855)
Write off of  acquired asset                                                          -                   -               5,000
Write off of  un-collectable other receivable (Note I)                                -              30,000              30,000
Debt forgiveness from creditors (Note E)                                              -            (139,992)           (139,992)
Write off of capitalized production costs (Note D)                                    -             150,273             150,273
Write off of other investment previously paid with common
stock (Note G)                                                                        -              62,500              62,500
Impairment of film library (Note D)                                             372,304                   -             372,304
Expenses paid by principal shareholders (Note I)                                 90,090                   -             117,015
Common stock issued in exchange for other advances                               45,500                   -              45,500
Accrued interest paid by principal shareholder                                        -                                       -
Acquisition:
Assets acquired                                                                       -                   -             379,704
Goodwill                                                                              -                   -             490,467
Accumulated deficit                                                                   -                   -                   -
Liabilities assumed                                                                   -                   -            (588,027)
Common stock Issued                                                                   -                   -            (282,144)
                                                                      ------------------  ------------------  ------------------
Net cash paid for acquisition                                         $               -   $               -   $               -
                                                                      ==================  ==================  ==================
Liabilities disposed of in disposition of business, net               $               -   $               -   $          79,374
                                                                      ==================  ==================  ==================
Net cash received in disposition of business                          $               -   $               -   $               -
                                                                      ==================  ==================  ==================
</TABLE>
           See accompanying notes to consolidated financial statements

                                      F-17
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE A-SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying financial statements follows.

Business and Basis of Presentation

Pacificap Entertainment Holdings, Inc. (the "Company"), formerly Cavalcade of
Sports Media, Inc., is in the development stage and its efforts in the past have
been principally devoted to developing a sports entertainment business, which
will provide 24 hours per day broadcasting from a library of nostalgic sports
films and footage to paid subscribers. To date the Company has generated no
revenues, has incurred expenses, and has sustained losses. Consequently, its
operations are subject to all risks inherent in the establishment of a new
business enterprise. For the period from inception through December 31, 2003,
the Company has accumulated losses of $43,381,825.

Change of Control

On September 19, 2003, the Company completed a Plan and Agreement of
Reorganization ("Plan") with Pacificap Entertainment Holdings, Inc., a
private-held company organized under the laws of the State of California with no
significant assets or operations. Pursuant to the Plan, all previously
outstanding common stock owned by Pacificap stockholders was exchanged for an
aggregate of 18,000,000 shares of the Company's common stock.

As a result of the transaction, the Company's control changed and the Company's
new management took the following steps to restructure the Company:

     o    Changed the Company's name to Pacificap  Entertainment  Holdings, Inc.
          from Cavalcade of Sports Media, Inc.
     o    Focused the Company's efforts on developing a film financing and
          marketing company modeled to restructure the risk profile of film
          production, while maximizing the ancillary profits from marketing,
          merchandising and licensing (see Note B).
     o    The Company's Board of Directors effected a one for thirty reverse
          stock split (see Note G). All references in the consolidated financial
          statements and notes to financial statements, numbers of shares and
          share amounts have been restated to reflect the reverse split.

The  consolidated   financial  statements  include  the  accounts  of  Pacificap
Entertainment  Holdings,  Inc. and its wholly-owned  subsidiaries,  Cavalcade of
Sports Network, Inc, Cineports.com,  Inc., Sports Broadcasting Network, Inc. and
Ethnic Broadcasting  Company,  Inc.  Significant  intercompany  transactions and
accounts have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the Statements of Cash Flows, the Company considers all highly
liquid debt instruments purchased with a maturity date of three months or less
to be cash equivalents.

                                      F-18
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

Property and Equipment

Property and equipment is stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the assets.

Long-Lived Assets

The Company has adopted Statement of Financial Accounting Standards No. 144
("SFAS 144"). The Statement requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undercounted cash flows. Should an impairment in value be indicated,
the carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less costs to sell.

Income Taxes

The Company has implemented the provisions on Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires
that income tax accounts be computed using the liability method. Deferred taxes
are determined based upon the estimated future tax effects of differences
between the financial reporting and tax reporting bases of assets and
liabilities given the provisions of currently enacted tax laws.

Net Loss Per Common Share

The Company computes earnings per share under Financial Accounting Standard No.
128, "Earnings Per Share" ("SFAS 128"). Net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock and
dilutive common stock equivalents outstanding during the year. Dilutive common
stock equivalents consist of shares issuable upon conversion of convertible
preferred shares and the exercise of the Company's stock options and warrants
(calculated using the treasury stock method). During the year ended December 31,
2003 and 2002, and for the period from July 29, 1997 (date of inception) to
December 31, 2003, common stock equivalents are not considered in the
calculation of the weighted average number of common shares outstanding because
they would be anti-dilutive, thereby decreasing the net loss per common share.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

                                      F-19
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

Revenue Recognition

For revenue from product sales, the Company recognizes revenue in accordance
with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and
determinable; and (4) collectibility is reasonably assured. Determination of
criteria (3) and (4) are based on management's judgments regarding the fixed
nature of the selling prices of the products delivered and the collectibility of
those amounts. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same
period the related sales are recorded. The Company defers any revenue for which
the product has not been delivered or is subject to refund until such time that
the Company and the customer jointly determine that the product has been
delivered or no refund will be required.

Advertising

The Company follows the policy of charging the costs of advertising to expenses
as incurred. The Company incurred no advertising costs during the years ended
December 31, 2003 and 2002, and for the period from July 29, 1997 (date of
inception) to December 31, 2003.

Research and Development

The Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs".
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and developments costs are expensed when the
contracted work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. The Company incurred no
expenditures on research and product development for the year ended December 31,
2003, 2002, and the period from July 29, 1997 (date of inception) to December
31, 2003.

Liquidity

To date the Company has generated no sales revenues, has incurred expenses, and
has sustained losses. As shown in the accompanying consolidated financial
statements, the Company incurred a net loss of $35,405,841 during the year ended
December 31, 2003 and $5,210,614 during the year ended December 31, 2002. The
Company's current liabilities exceeded its current assets by $2,803,641 as of
December 31, 2003. For the period from inception through December 31, 2003, the
Company has accumulated losses of $43,381,825. Consequently, its operations are
subject to all risks inherent in the establishment of a new business enterprise.

                                      F-20
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company
to concentrations of credit risk, consist primarily of cash, cash equivalents
and related party receivables. The Company places its cash and temporary cash
investments with credit quality institutions. At times, such investments may be
in excess of the FDIC insurance limit. The Company periodically reviews its
trade receivables in determining its allowance for doubtful accounts. The
Company does not have accounts receivable and allowance for doubtful accounts at
December 31, 2003 and 2002.

Comprehensive Income

Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company does not have any items of comprehensive
income in any of the periods presented.

Stock Based Compensation

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 ("SFAS 148"), "Accounting for Stock-Based Compensation-Transition and
Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company has chosen to continue to account for stock-based
compensation using the intrinsic value method prescribed in APB Opinion No. 25
and related interpretations. Accordingly, compensation expense for stock options
is measured as the excess, if any, of the fair market value of the Company's
stock at the date of the grant over the exercise price of the related option.
The Company has adopted the annual disclosure provisions of SFAS No. 148 in its
financial reports for the year ended December 31, 2003 and 2002 and will adopt
the interim disclosure provisions for its financial reports for subsequent
period. The Company has no awards of stock-based employee compensation
outstanding at December 31, 2003.

                                      F-21
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

Segment Information

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131") establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
how to allocate resources and assess performance. The information disclosed
herein materially represents all of the financial information related to the
Company's principal operating segment.

New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." Interpretation 46 changes the criteria by which one
company includes another entity in its consolidated financial statements.
Previously, the criteria were based on control through voting interest.
Interpretation 46 requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. A company that consolidates a variable
interest entity is called the primary beneficiary of that entity. The
consolidation requirements of Interpretation 46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply to older entities in the first fiscal year or interim period beginning
after June 15, 2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The Company does not expect the
adoption to have a material impact to the Company's financial position or
results of operations.

In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES. SFAS 149 amends SFAS No. 133 to provide clarification on the
financial accounting and reporting of derivative instruments and hedging
activities and requires that contracts with similar characteristics be accounted
for on a comparable basis. The provisions of SFAS 149 are effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of SFAS 149 did not
have a material impact on the Company's results of operations or financial
position.

In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN FINANCIAL
INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. SFAS 150
establishes standards on the classification and measurement of certain financial
instruments with characteristics of both liabilities and equity. The provisions
of SFAS 150 are effective for financial instruments entered into or modified
after May 31, 2003 and to all other instruments that exist as of the beginning
of the first interim financial reporting period beginning after June 15, 2003.
The adoption of SFAS 150 did not have a material impact on the Company's results
of operations or financial position.

                                      F-22
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE A-SUMMARY OF ACCOUNTING POLICIES (Continued)

New Accounting Pronouncements (Continued)

In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS' DISCLOSURES
ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS - AN AMENDMENT OF FASB
STATEMENTS NO. 87, 88, AND 106. This statement retains the disclosure
requirements contained in FASB statement no. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits, which it replaces. It requires
additional disclosures to those in the original statement 132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The required
information should be provided separately for pension plans and for other
postretirement benefit plans. The revision applies for the first fiscal or
annual interim period ending after December 15, 2003 for domestic pension plans
and June 15, 2004 for foreign pension plans and requires certain new disclosures
related to such plans. The adoption of this statement did not have a material
impact on the Company's results of operations or financial positions.

Reclassifications

Certain reclassifications have been made in prior year's financial statements to
conform to classifications used in the current year.

NOTE B - BUSINESS COMBINATIONS

Cineports.com, Inc.

In July 2002, the Company acquired Cineports.com,  Inc. ("Cineports") through an
Agreement and Plan of Merger ("Agreement"). Pursuant
to the Agreement, Cineports became a wholly-owned subsidiary of the Company.

In connection with the acquisition of Cineports, the Company issued to
Cineports's shareholders a total of 159,653 shares (4,789,582 pre-split shares),
or $1,197,396 (see Note G), of the Company's restricted common stock. The
Company also agreed to issue to Cineports's shareholders 206,091 warrants
(6,182,733 pre-split warrants), or $1,051,065 (see Note H), each giving the
holder the right to purchase a share of the Company's common stock, within a
two-year period after issuance, at an exercise price of $1.20 per share.

Cineports has no assets and liabilities and has no business activities as of
December 31, 2003. The excess of the aggregate purchase price over the fair
market value of net assets acquired was recorded as acquisition costs and
expensed in the period incurred. The acquisition is being accounted for as a
purchase, and accordingly, the operating results of the acquired company have
been included in the Company's financial statements since the date of
acquisition.

                                      F-23
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE B - BUSINESS COMBINATIONS (Continued)

The following summarizes the acquisition of Cineports:

Issuance of 159,653 shares of common stock                     $ (1,197,396)
Issuance of 206,091 warrants                                     (1,051,065)
Assets acquired                                                            -
Liabilities assumed                                                        -
Acquisition costs                                                  2,248,461
                                                            ----------------
                                                                    $      -
                                                            ================

Pacificap Entertainment Holdings, Inc.

On September 19, 2003, the Company completed a Plan and Agreement of
Reorganization ("Plan") with Pacificap Entertainment Holdings, Inc.
("Pacificap"), a private-held company organized under the laws of the State of
California with no significant assets or operations. Pacificap is a film
financing and marketing company and is uniquely modeled to restructure the risk
profile of film production, while maximizing the ancillary profits from
marketing, merchandising and licensing.

Pursuant to the Plan, all previously outstanding common stock owned by Pacificap
stockholders was exchanged for an aggregate of 18,000,000 shares of the
Company's common stock. The Company accounted the shares issued in November 2003
at the fair market value at the date of acquisition. Subsequent to the
acquisition, the Company changed its name to Pacificap Entertainment Holdings,
Inc.

The following summarizes the acquisition of Pacificap:

       Issuance of 18,000,000 shares of common stock             $ 29,160,000
       Assets acquired                                                      -
       Liabilities assumed                                                  -
                                                                 ------------
       Acquisition costs                                         $ 29,160,000
                                                                 ============

NOTE C - GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF SFAS 142

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141 "Business Combinations" ("SFAS 141") and
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142"). SFAS 141 addresses financial accounting and
reporting for business combinations. This statement requires the purchase method
of accounting to be used for all business combinations, and prohibits the
pooling-of-interests method of accounting. This statement is effective for all
business combinations initiated after June 30, 2001 and supercedes APB Opinion
No. 16, "Business Combinations" as well as Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 38, "Accounting for
Preacquisition Contingencies of Purchased Enterprises."

SFAS 142 addresses how intangible assets that are acquired individually or with
a group of other assets should be accounted for in financial statements upon
their acquisition. This statement requires goodwill amortization to cease and
for goodwill to be periodically reviewed for impairment for fiscal years
beginning after December 31, 2001. SFAS No. 142 supercedes APB Opinion No. 17,
"Intangible Assets." The Company adopted the provisions of this standard for its
second quarter of fiscal 2002. F-20 PACIFICAP ENTERTAINMENT HOLDINGS, INC.
(FORMERLY CAVALCADE OF SPORTS MEDIA, INC.) (A development stage company) NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 AND 2002

                                      F-24
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE C - GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF SFAS 142 (Continued)

Upon adoption of SFAS 142 in the second quarter of 2002, the Company recorded a
one-time, non-cash charge of $294,282 to reduce the carrying value of its
goodwill. Such charge is non-operational in nature and is reflected as a
cumulative effect of an accounting change in the accompanying consolidated
statement of losses. In calculating the impairment charge, the fair value of the
impaired reporting unit was estimated at the fair value of assets underlying the
business, thereby eliminating the goodwill element entirely.

The following table presents the impact of SFAS 142 on net income (loss) and net
income (loss) per share had SFAS 142 been in effect for the year ended December
31, 2003 and 2002, and for the period from July 29, 1997 (date of inception) to
December 31, 2003:
<TABLE>
<CAPTION>
                                                                                                 For the period from
                                                                                                 July 29, 1997 (date
                                                                                                   of inception) to
                                                                  2003             2002            December 31, 2003
                                                                  ----             ----            ------------------
<S>                                                           <C>                <C>                   <C>
Net Loss                                                      $ (35,405,841)     $ (5,210,614)         $ (43,381,825)
Adjustments:
Amortization of goodwill
Impairment of goodwill
                                                                          -                 -                196,185
                                                                          -           294,282                294,282
                                                            ----------------    ----------------    -----------------
Adjusted net (loss)                                           $ (35,405,841)     $ (4,916,332)         $ (42,891,358)
Shares used to compute basic and diluted net loss per
common share                                                      3,081,611           483,036                778,534
Adjusted basic and diluted net loss per common share             $   (11.49)       $   (10.18)           $    (55.09)
                                                            ================    ================    =================
Reported basic and diluted net loss per common share             $   (11.49)       $   (10.79)           $    (55.72)
                                                            ================    ================    =================
</TABLE>

NOTE D - FILM LIBRARY

The Company's film library is comprised of nostalgic sports film and footage.
Cost principally consists of direct acquisition costs of the films and footage
of previously televised programs and events, post-production costs, and
production overhead. As of December 31, 2002, direct acquisition cost of the
films was $372,304, and post production cost capitalized was $150,273. The
company did not have any production activities for the year ended December 31,
2002, and does not anticipate to completing the production of the footages for
distribution in the near future, due to lack of working capital. The Company
therefore recognized a charge of $150,273 on the capitalized production costs to
its operations for the year ended December 31, 2002 to reduce the carrying value
of its film library.

During the year ended December 31, 2003, the Company management performed an
evaluation of its intangible assets for purposes of determining the implied fair
value of the assets at December 31, 2003. The test indicated that the recorded
remaining book value of its film library exceeded its fair value, as determined
by discounted cash flows. As a result, upon completion of the assessment,
management recorded a non-cash impairment charge of $372,304, net of tax, or
$0.12 per share during the year ended December 31, 2003 to reduce the carrying
value of the film library to its estimated value of $ 0. Considerable management
judgment is necessary to estimate fair value. Accordingly, actual results could
vary significantly from managements' estimates.

                                      F-25
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE E - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at December 31, 2003 and 2002 are as
follows:

                                              2003                    2002
                                              ----                    ----
        Accounts payable                   $ 316,820               $  82,811
        Accrued interest                     662,317                 400,347
                                       --------------            ------------
        Total                              $ 979,137               $ 483,158
                                       ==============            ============

For the year ended December 31, 2002, one of the Company creditors agreed to
reduce the balance due and legally released the Company from its obligation of
$139,992. The Company recorded the amount as other income in connection with the
extinguishment of the debt.

NOTE F - NOTES PAYABLE

Notes payable at December 31, 2003 and 2002 are as follows:
<TABLE>
<CAPTION>

                                                                                2003                   2002
                                                                                ----                   ----

<S>                                                                             <C>                     <C>
 12 %  convertible  subordinated  payable,  unsecured and due
 December  31,  2000;  Noteholder  has the  option to convert
 unpaid  note  principal  together  with  accrued  and unpaid
 interest  to the  Company's  common  stock  thirty (30) days
 following  the  effectiveness  of  the  registration  of the
 Company's common stock under the Securities Act of 1933 at a
 rate of $1.25 per share.  In the event the unpaid  principal
 amount of the notes,  together  with any  accrued and unpaid
 interest, are not converted, or paid in full by December 31,
 2000,  then interest  accrues at 18% per annum until paid in
 full.  The Company is in default under the terms of the Note
 Agreements.                                                                  $ 457,000              $ 457,000

12 % convertible subordinated payable, unsecured and due December 31, 2001;
 Noteholder has the option to convert unpaid note principal together with
 accrued and unpaid interest to the Company's common stock thirty (30) days
 following the effectiveness of the registration of the Company's common stock
 under the Securities Act of 1933 at a rate of $1.25 per share. In the event the
 unpaid principal amount of the notes, together with any accrued and unpaid
 interest, are not converted, or paid in full by December 31, 2001, then
 interest accrues at 18% per annum until paid in full. The Company is in default
 under the terms of the Note
 Agreements.                                                                    342,500                342,500
</TABLE>

                                      F-26
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE F - NOTES PAYABLE (Continued)
<TABLE>
<CAPTION>

                                                    (Continued)
                                                                                        2003                   2002
                                                                                        ----                   ----

<S>                                                                                     <C>                    <C>

 12 % convertible subordinated payable, unsecured and due December 31, 2002;
 Noteholder has the option to convert unpaid note principal together with
 accrued and unpaid interest to the Company's common stock thirty (30) days
 following the effectiveness of the registration of the Company's common stock
 under the Securities Act of 1933 at a rate of $1.25 per share. In the event the
 unpaid principal amount of the notes, together with any accrued and unpaid
 interest, are not converted, or paid in full by December 31, 2002, then
 interest accrues at 18% per annum until paid in full. The Company is in default
 under the terms of the Note Agreements.
                                                                                        31,250                 31,250
 Note payable on demand to accredited investor; interest payable monthly at 18%
 per annum; unsecured; guaranteed by the Company's President
                                                                                        52,415                 52,415
 Note payable on demand to accredited investor; interest payable monthly at 18%
 per annum; unsecured; guaranteed by the Company's
 President                                                                             100,000                100,000

 Note payable on demand to accredited investor; interest  payable

 monthly at 8% per annum; unsecured                                                    153,000
                                                                                ---------------           -------------
                                                                                                                    -
                                                                                     1,136,165                983,165
 Less: current portion                                                              (1,136,165)              (983,165)
                                                                                ---------------           -------------
                                                                                  $          -             $        -
                                                                                ===============           =============
</TABLE>
During the year ended December 31, 2003, the Company issued an aggregate of
127,038 shares of its common stock to note holders in exchange for notes payable
and unpaid accrued interest. As of December 31, 2003, the conversion of debt to
equity has not been completed and the additional numbers of shares to be issued
are still to be determined. The Company accounted the 127,038 shares issued to
notes holders as of December 31, 2003 as financing expenses at the fair market
value of the time the shares were issued. Total financing expenses charged to
operations during the year ended December 31, 2003 amounted $ 284,392 (see Note
G).

NOTE G - CAPITAL STOCK

The Company has authorized 50,000,000 shares if preferred stock, with a par
value of $.001 per share. As of December 31, 2003 and 2002, the Company has no
preferred stock issued and outstanding. The company has authorized 300,000,000
shares of common stock, with a par value of $.001 per share. On September 4,
2003, the Company effected a one one-for-thirty reverse stock split of its
authorized and outstanding shares of common stock, $.001 par value. Total
authorized shares and par value remain the unchanged. All references in the
financial statements and notes to financial statements, numbers of shares and
share amounts have been retroactively restated to reflect the reverse split. The
Company has 21,818,255 and 624,700 shares of common stock issued and outstanding
as of December 31, 2003 and 2002, respectively.

                                      F-27
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE G - CAPITAL STOCK (Continued)

The Company's predecessor was Tren Property Corp., an inactive company with no
significant operations incorporated under the laws of the State of Delaware in
July 1997. The Company issued 422 shares of common stock to the initial
shareholders in exchange for initial organization costs. The stock issued was
valued at $11,553, which represents the fair value of the services received.

In April 1998, the shareholders of Tren Property Corp. exchanged all of their
outstanding shares on a share for share basis for shares of the common stock of
Gemma Global, Inc., an inactive company with no significant operations,
organized under the laws of the State of Nevada ("Company"). Tren Property Corp.
changed its name to Gemma Global, Inc.

In December 1998, the Company issued 37,083 shares of common stock to
non-employees in exchange for legal and financial advisory services rendered to
the Company. The stock issued was valued at approximately $2,002 per share,
which represents the fair value of the services received, which did not differ
materially from the value of the stock issued.

In December 1998, the Company issued 277,778 shares of common stock in exchange
for a $15,000 loan payable to the Company's principal shareholder and Chief
Executive Officer.

In March 1999, the Company was renamed Pioneer 2000, Inc. In December 1999 the
Company was renamed Cavalcade of Sports Media, Inc.

In April 1999, the Company issued 133 shares of common stock in exchange for
$4,000 in connection with a private placement memorandum.

In April 1999, the Company issued 6,000 shares of common stock to a non-employee
in exchange for financial advisory services rendered to the Company. The stock
issued was valued at $180,000, which represents the fair value of the stock
issued, which did not differ materially from the value of the services received.

In May 1999, the Company authorized and issued a series of 855,000 shares of the
Company's preferred stock as convertible preferred stock ("1999 Global Group
Series") to the Company's management and advisors who had been unsuccessful in
developing the Company's shoe apparel business segment in exchange for those
individuals continuing to devote their services to developing the shoe business
segment. The stock issued was valued at approximately $.001 per share, which
represents the fair value of the stock issued, which did not differ materially
from the value of the services rendered.

In December 1999, the Company issued 33,333 shares of common stock in exchange
for $75,000 and payment of $ 25,000 of Company expenses, in connection with a
private placement to accredited investors.

                                      F-28
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE G - CAPITAL STOCK (Continued)

In connection with the acquisition of Cavalcade of Sports Network, Inc. in
December 1999, the Company assumed $380,000 of liability representing advances
by private investors to Cavalcade of Sports Network, Inc. Subject to the Company
registering its common stock, the Company has agreed to offer shares of the
Company's common stock to the investors in exchange for the advances based upon
the price per share of the registration.

In September 2000, the holders of the Company's preferred stock elected to
convert their shares to common stock of Global Group International, Inc. The
Company cancelled all previously issued and outstanding 855,000 shares of the
convertible preferred stock.

During the year ended December 31, 2000, the Company issued 2,226 shares of
common stock in exchange for debts assumed by the Company in connection with its
acquisition of Cavalcade of Sports Network, Inc. The Company valued the shares
issued at $83,497, which approximated the fair value of the shares at the dates
of issuance.

During the year ended December 31, 2000, the Company issued 5,128 shares of the
Company's common stock to consultants in exchange for services provided to the
Company. The Company valued the shares issued at $192,283, which approximated
the fair value of the shares issued during the periods the services were
rendered. The compensation cost of $192,283 was charged to income during the
year ended December 31, 2000.

During the year ended December 31, 2001, the Company issued 15,600 shares of the
Company's common stock to consultants in exchange for services provided to the
Company. The Company valued the shares issued at $585,000, which approximated
the fair value of the shares issued during the periods the services were
rendered. The compensation cost of $585,000 was charged to income during the
year ended December 31, 2001.

During the year ended December 31, 2001, the Company issued 3,333 shares of the
Company's common stock to the President of the Company in exchange for monies
advanced to the Company. The Company valued the shares issued at $125,000, which
approximated the fair value of the shares at the date of issuance.

In connection with the acquisition of Cineports (see Note B), the Company issued
an aggregate of 159,653 shares of the Company's restricted common stock to
Cineports's shareholders in July 2002. The shares were valued at $1,197,396,
which did not differ materially from the fair value of the shares issued during
the period the acquisition occurred.

During the year ended December 31, 2002, the Company issued an aggregate of
55,073 shares of common stock to consultants for services in the amount of
$1,385,814. All valuations of common stock issued for services were based upon
the value of the services rendered, which did not differ materially from the
fair value of the Company's common stock during the period the services were
rendered. In addition, the Company issued 3,533 shares of common stock in
exchange for $132,500 of previously incurred debt and 724 shares for $14,070 of
previously accrued interest. The Company also issued an aggregate of 23,018
shares of common stock in exchange for $165,200 net of costs and fees and 1,667
shares for $62,500 of investment. The Company determined the value of the
investment was impaired and recorded an impairment loss of $62,500 during the
year ended December 31, 2002.

                                      F-29
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE G - CAPITAL STOCK (Continued)

In January 2003, the Company issued an aggregate of 56,300 shares of common
stock to consultants for services in the amount of $260,490. All valuations of
common stock issued for services were based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered.

In February 2003, the Company issued an aggregate of 43,350 shares of common
stock to consultants for services in the amount of $87,037. All valuations of
common stock issued for services were based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered. In addition, the
Company issued an aggregate of 6,667 shares of common stock in exchange for
$8,000 net of costs and fees.

In April 2003, the Company issued an aggregate of 14,000 shares of common stock
to consultants for services in the amount of $12,600. All valuations of common
stock issued for services were based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. In addition, the Company
issued an aggregate of 4,333 shares of common stock in exchange for $5,000 net
of costs and fees. The Company also issued an aggregate of 22,222 shares of
common stock to shareholders in exchange for operating expenses of $20,000
previously paid by the shareholders.

In May 2003, the Company issued an aggregate of 17,667 shares of common stock to
consultants for services in the amount of $25,900. All valuations of common
stock issued for services were based upon the value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. In addition, the Company
issued an aggregate of 16,667 shares of common stock in exchange for $15,000 net
of costs and fees. The Company also issued an aggregate of 22,167 shares of
common stock to shareholders in exchange for operating expenses of $20,000
previously paid by the shareholders.

In July 2003, the Company issued an aggregate of 13,850 shares of common stock
to consultants for services in the amount of $29,020. All valuations of common
stock issued for services were based upon value of the services rendered, which
did not differ materially from the fair value of the Company's common stock
during the period the services were rendered. In addition, the Company issued an
aggregate of 14,334 shares of common stock in exchange for $10,000 of previously
incurred debt.

In August 2003, the Company issued an aggregate of 37,667 shares of common stock
to consultants for services in the amount of $117,800. All valuations of common
stock issued for services were based upon value of the services rendered, which
did not differ materially from the fair value of the Company's common stock
during the period the services were rendered. In addition, the Company issued an
aggregate of 43,667 shares of common stock in exchange for $35,500 of previously
incurred debt.

In September 2003, the Company issued an aggregate of 264,916 shares of common
stock to consultants for services in the amount of $280,350. All valuations of
common stock issued for services were based upon value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.

                                      F-30
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE G - CAPITAL STOCK (Continued)

In October 2003, the Company issued an aggregate of 2,405,000 shares of common
stock to consultants for services in the amount of $3,829,300. All valuations of
common stock issued for services were based upon value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.

In November 2003, the Company issued an aggregate of 43,000 shares of common
stock to consultants for services in the amount of $50,750. All valuations of
common stock issued for services were based upon value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered. In addition, the Company
issued an aggregate of 10,000 shares of common stock in exchange for $12,500 of
accrued interest.

In December 2003, the Company issued an aggregate of 29,500 shares of common
stock to consultants for services in the amount of $37,900. All valuations of
common stock issued for services were based upon value of the services rendered,
which did not differ materially from the fair value of the Company's common
stock during the period the services were rendered.

The Company also issued an aggregate of 18,000,000 shares of its common stock
pursuant to a Plan and Agreement of Reorganization ("Plan") with Pacificap
Entertainment Holdings, Inc. ("Pacificap"). The Company accounted the shares
issued at the fair market value at the date of acquisition, which approximately
$29,160,000. The Company charged the acquisition costs of $29,160,000 to
operations for the year ended December 31, 2003 and the Company changed its name
to Pacificap Entertainment Holdings, Inc. subsequent to the acquisition (see
Note B).

During the year ended December 31, 2003, the Company issued an aggregate of
127,038 shares of common stock to its note holders in exchange for financing
expenses of $284,392 (see Note F).

Share amounts presented in the consolidated balance sheets and consolidated
statements of stockholders' equity reflect the actual share amounts outstanding
for each period presented.

NOTE H - STOCK OPTIONS AND WARRANTS

Stock Options

The following table summarizes the changes in options outstanding and the
related prices for the shares of the Company's common stock issued to the
Company consultants, after giving effect to 1:30 reverse split in common stock
in September 2003. These warrants were granted in lieu of cash compensation for
services performed to a non-employee, each option giving the holder the right to
purchase one share of the Company's common stock.

                                      F-31
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE H - STOCK OPTIONS AND WARRANTS (Continued)

Stock Options (Continued)
<TABLE>
<CAPTION>

                               Options Outstanding                                   Options Exercisable
                               -------------------                                   -------------------
                                Weighted Average
                                Remaining                   Weighed                        Weighted
   Exercise   Number           Contractual Life           Average          Number          Average
   Prices    Outstanding          (Years)               Exercise Price   Exercisable      Exercise Price
   ------   -----------     --------------------     -----------------   -----------     ---------------

<S>           <C>                <C>                      <C>              <C>           <C>
   30.00      3,333              0.33                     $ 30.00          3,333         $ 30.00
   60.00      6,667              0.42                       60.00          6,667           60.00
  105.00      3,333              0.33                      105.00          3,333          105.00
  150.00      3,333              0.33                      150.00          3,333          150.00
             --------           -----                   ----------      ---------      ----------
             16,666              0.37                   $   81.00         16,666        $  81.00
            =========          =======                  ==========      =========      ==========
</TABLE>

Transactions involving options issued to consultants are summarized as follows:

<TABLE>
<CAPTION>
                                                                                      Weighted Average
                                                                Number of Shares      Price Per Share
                                                                ----------------      ---------------
<S>                                                                     <C>                <C>
       Outstanding at January 1, 2002                                   -                  $    -
          Granted                                                 118,333                   35.70
          Exercised                                                     -                       -
          Canceled or expired                                           -                       -
                                                               -----------------       ---------------
       Outstanding at December 31, 2002                           118,333                   35.70
          Granted                                                       -                       -
          Exercised                                                     -                       -
          Canceled or expired                                    (101,667)                  28.20
                                                              ------------------       ----------------

       Outstanding at December 31, 2003                            16,666                $  81.00
                                                              ==================       ================
</TABLE>
The Company did not grant any stock options during the yaer ended December 31,
2003. The estimated value of the options granted to consultants during the year
ended December 31, 2002 was determined using the Black-Scholes pricing model and
the following assumptions: contractual term of 2 years, a risk free interest
rate of 1.67%, a dividend yield of 0% and volatility of 26%. The amount of the
expense charged to operations in connection with granting the options was
$661,365 for the year ended December 31, 2002.

Warrants

Pursuant to the Agreement and Plan of Merger ("Agreement") in July 2002 to
acquire Cineports (see Note B), the Company issued to Cineports's shareholders
6,182,733 warrants, each giving the holder the right to purchase a share of the
Company's common stock.

                                      F-32
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE H - STOCK OPTIONS AND WARRANTS (Continued)

Warrants (Continued)

The following table summarizes the changes in warrants outstanding and the
related prices for the shares of the Company's common stock, after giving effect
to 1:30 reverse split in common stock in September 2003. These warrants were
granted in lieu of cash compensation for acuqisition of Cineports.
<TABLE>
<CAPTION>

                     Warrants Outstanding                                  Warrants Exercisable
                     --------------------                                  --------------------
                                          Weighted Average         Weighed                        Weighted
                        Number           Remaining Contractual      Average       Exercisable     Average
   Exercise Prices   Outstanding             Life (Years)        Exercise Price     Number      Exercise Price
  ----------------   -----------        ----------------------   ---------------  ------------  ---------------

<S>                    <C>                      <C>                 <C>            <C>            <C>
      $36.00           206,091                  0.50                $ 36.00        206,091        $  36.00
</TABLE>

Transactions involving warrants issued to non-employees are summarized as
follows:
<TABLE>
<CAPTION>

                                                                                         Weighted Average
                                                                Number of Shares         Price Per Share
                                                                ----------------         ----------------
<S>                                                                    <C>                      <C>
       Outstanding at January 1, 2002                                          -            $          -
          Granted                                                        206,091                   36.00
          Exercised                                                            -                       -
          Canceled or expired                                                  -                       -
                                                               -----------------         ----------------
       Outstanding at December 31, 2002                                  206,091                   36.00
          Granted                                                              -                       -
          Exercised                                                            -                       -
          Canceled or expired                                                  -                       -
                                                               -----------------        ----------------
       Outstanding at December 31, 2003                                  206,091           $       36.00
                                                               =================        ================
</TABLE>

The Company did not grant any warrants during the year ended December 31, 2003.
The estimated value of the warrants granted to Cineports shareholders during
December 31, 2002 was determined using the Black-Scholes pricing model and the
following assumptions: contractual term of 2 years, a risk free interest rate of
1.67%, a dividend yield of 0% and volatility of 26%. The Company charged
$1,051,065 to operations as part of the acuqistion costs of Cineports for the
year ended December 31, 2002 (Note B).

NOTE I - RELATED PARTY TRANSACTIONS

The Company's President has advanced funds to the Company for working capital
purposes since the Company's inception in July 1997. No formal repayment terms
or arrangements exist. The amount of the advances due the Company's President at
December 31, 2003 and 2002 were $209,311 and $184,955, respectively, net of cash
repayments.

The Company's Chairman of the Board paid $90,090 of office expenses on behalf of
the Company during the year ended December 31, 2003. No formal repayment terms
or arrangements exist. The Company has repaid $35,000 to the Chairman of the
Board and the net amount of the advances due at December 31, 2003 was $55,090.

                                      F-33
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE I - RELATED PARTY TRANSACTIONS (Continued)

The Company's principal shareholders paid $40,000 of office expenses on behalf
of the Company during the year ended December 31, 2003. No formal repayment
terms or arrangements exist. The Company issued an aggregate of 44,390 shares of
its common stock to the shareholders during the year ended December 31, 2003 in
exchange for the $40,000 previously incurred debt (Note G).

Included in other receivable at December 31, 2001 is $30,000 for advances to the
Company's principal shareholder. For the year ended December 31, 2002, it was
determined that the advances are not collectable and the full amount was charged
to operations under other expenses.

NOTE J - LOSSES PER SHARE

The following table presents the computation of basic and diluted losses per
share:

<TABLE>
<CAPTION>
                                                                                                         For the period July
                                                                                                         29, 1997 (Date of
                                                                                                         Inception) through
                                                               2003                   2002               December 31, 2003
                                                               ----                   ----               -----------------
<S>                                                        <C>                       <C>                     <C>
Net income loss available to Common stockholders           $(35,405,841)             $ (5,210,614)           $ (43,381,825)
                                                           -------------             -------------           --------------
Basic and diluted earning (loss) per share                   $   (11.49)               $   (10.79)             $    (55.72)
                                                           =============             =============           ==============
Continuing operations                                        $   (11.49)               $   (10.79)             $    (55.37)
Discontinued operations                                      $        -                         -              $     (0.35)
Weighted average common shares outstanding                    3,081,611                   483,036                  778,534
</TABLE>

Net loss per share is based upon the weighted average of shares of common stock
outstanding. In September 2003, a one (1) for thirty (30) reverse stock split of
the Company's common stock was effected (See Note G). Accordingly, all
historical weighted average share and per share amounts have been restated to
reflect the reverse stock split.

NOTE K - INCOME TAXES

Financial Accounting Standard No. 109 requires the recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statement or tax returns. Under this method,
deferred tax liabilities and assets are determined based on the difference
between financial statements and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse. Temporary differences between taxable income reported for financial
reporting purposes and income tax purposes are insignificant.

                                      F-34
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE K - INCOME TAXES (Continued)

For income tax reporting purposes, the Company's aggregate unused net operating
losses approximate $43,000,000 which expire through 2023, subject to limitations
of Section 382 of the Internal Revenue Code, as amended. The deferred tax asset
related to the carryforward is approximately $14,900,000. The Company has
provided a valuation reserve against the full amount of the net operating loss
benefit, because in the opinion of management based upon the earning history of
the Company, it is more likely than not that the benefits will not be realized.
Due to significant changes in the Company's ownership, the Company's future use
of its existing net operating losses may be limited.

Components of deferred tax assets as of December 31, 2003 are as follows:

     Non current:
     Net operating loss carryforward
                                                        $14,900,000
     Valuation allowance                                (14,900,000)
                                                       ------------
     Net deferred tax asset                             $         -
                                                       ============

NOTE L - COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases office space in the residence of the Company's President on a
month-to-month basis in Del Mar, California at a rate of approximately $3,200
per month until August 2003. Starting September 2003, the Company shares office
space with Outlook Films, Inc. on a month-to-month basis in Beverly Hills,
California at a rate of approximately $2,200 per month. No formal lease
agreements exist. Rental expenses charged to operations for the year ended
December 31, 2003 and 2002 were $34,615 and $31,156, respectively.

Consulting Agreements

The Company has consulting agreements with outside contractors, certain of whom
are also Company stockholders, directors and officers. The Agreements are
generally for a term of one to two years from inception and renewable unless
either the Company or Consultant terminates such agreement by written notice.

Litigation

As described in Note F, the Company is in default under the terms of its Capital
Note Agreements. In December 2002, two of the Company's capital noteholders
filed a complaint against the Company in the Supreme Court of the State of New
York, Nassau County. In March 2003, the Court granted summary judgment in favor
of each noteholder in the amount of $35,774 plus interest at 18% per annum from
September 4, 2002. The Court also awarded summary judgment personally against
the Company's President in the amount of $25,000. As of December 31, 2003, the
Company has repaid one of the noteholders a total of $18,350 and has recorded
all unpaid principal amount of the capital notes and unpaid accrued interest.
Therefore, no additional liabilities to be recorded as a result of the judgment.

                                      F-35
<PAGE>
                     PACIFICAP ENTERTAINMENT HOLDINGS, INC.
                   (FORMERLY CAVALCADE OF SPORTS MEDIA, INC.)
                          (A development stage company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE L - COMMITMENTS AND CONTINGENCIES (Continued)

Litigation (Continued)

In March 2003, one of the Company's capital noteholders filed a complaint
against the Company in the Supreme Court of the State of New York, County of New
York for a recovery on a Capital Note of $10,000 and unpaid interest. In June
2003, the Court granted summary judgment in favor of the noteholder in the
amount of $15,694. As of December 31, 2003, the Company has recorded all unpaid
principal amount of the capital notes and has accrued 18 % of interest on all
principal amounts not paid in full by maturity dates. Therefore, no additional
liabilities to be recorded as a result of the judgment.

Subsequent to the date of financial statements, the Company received a complaint
from Banbino's Cafe requesting damages in the amount $1,350 for its receipt of
an unsolicited fax transmission allegedly from the Company in violation of
Federal Law, 47 USC 227. The Company has represented that it had no knowledge of
any fax solicitation campaign and does not believe that the plaintiff will
prevail if a complaint is filed.

The Company is subject to other legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters should not have a material adverse effect on its financial position,
results of operations or liquidity.

NOTE M - GOING CONCERN MATTERS

The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As shown in the accompanying
financial statements during the years ended December 31, 2003 and 2002, the
Company incurred losses from operations of $35,405,841 and $5,210,614,
respectively. In addition, the Company is currently in default under the terms
of the Capital Notes and notes payable obligations (see Note F). These factors
among others may indicate that the Company will be unable to continue as a going
concern for a reasonable period of time.

The Company is actively pursuing additional equity financing through discussions
with investment bankers and private investors. There can be no assurance the
Company will be successful in its effort to secure additional equity financing.

If operations and cash flows continue to improve through these efforts,
management believes that the Company can continue to operate. However, no
assurance can be given that management's actions will result in profitable
operations or the resolution of its liquidity problems.

The Company's existence is dependent upon management's ability to develop
profitable operations and resolve its liquidity problems. Management anticipates
the Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its services and additional
equity investment in the Company. The accompanying consolidated financial
statements do not include any adjustments that might result should the Company
be unable to continue as a going concern.

                                      F-36
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

ITEM 8A. CONTROLS AND PROCEDURES.

     (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Regulations under the
Securities Exchange Act of 1934 require public companies to maintain "disclosure
controls and procedures," which are defined to mean a company's controls and
other procedures that are designed to ensure that information required to be
disclosed in the reports that it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms. Our Chief Executive
Officer ("CEO"), who is also our President, and our Chief Financial Officer
("CFO") carried out an evaluation of the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on those evaluations, as of the Evaluation Date, our CEO/President and CFO
believe:

     (i) that our disclosure controls and procedures are designed to ensure that
information required to be disclosed by us in the reports we file under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms and that such
information is accumulated and communicated to our management, including the CEO
and CFO, as appropriate to allow timely decisions regarding required disclosure;
and

     (ii) that our disclosure controls and procedures are effective.

                                       15
<PAGE>
                                    PART III

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

Directors and Executive Officers. The position(s) held by each of our executive
officers and Directors as of April 14, 2003 are shown in the following table.
Biographical information for each is set forth following the table.

Name                   Age       Position

Edward E. Litwak       62        President/CFO/Treasurer, Director

Michael Riley          51        Chairman of the Board

Robert Stulman         68        Secretary

Donald P. Parson       60        Director

Our directors serve for a one-year term or until successors are elected and
qualified. Our officers hold office until the first meeting of directors
following the Annual Meeting of Shareholders and until their successors are
elected and qualified, subject to earlier removal by the Board of Directors.
Michael Carroll served as a Director for part of 2002, and is therefore, not
listed in the table above.

Edward E. Litwak. Mr. Litwak has been our President since December of 1998 and a
director since our incorporation in 1997. Prior to becoming President, Mr.
Litwak served as a consultant to the Company, which was previously headed by his
daughter, Ms. Prentice. From June 1, 1995 to the present, Mr. Litwak has been
President of Satellite Today, a cable network in development. From January 1,
1997 until December 1998 Mr. Litwak also served as the licensing agent for
Jennicor, LLC. From March 1, 1994 to June 1, 1995 he was Chairman of Merchandise
Entertainment Television Holdings, Inc. From June 1, 1991 to June 30, 1994 he
was President of Designers International, Inc. Mr. Litwak also served as Sports
Directions Director for a program series entitled the JeanNate Grand Prix. Mr.
Litwak attended Cornell University where he majored in business.

Michael Riley became Chairman of the Board in September of 2003. He has worked
for over 20 years in banking, corporate finance, and international law. From
2001 to the present, Mr. Riley has served as Chairman of Imperial Credit
Industries, Inc. In addition, he was Chairman, until it's sale, of one of
Hollywood's largest independent entertainment financing entities, the Lew
Horwitz Organization. This led Mr. Riley to establish and develop the current
entertainment financing and marketing corporation of Pacificap Entertainment,
Inc.

Mr. Riley established Recreational Holdings, the largest consolidation of
automotive/ marine/ recreational retailing in the United States. Mr. Riley also
served as Assistant State Attorney for the 17th Judicial Circuit in Florida,
special counsel to federal and state law enforcement agencies, and has conducted
seminars throughout the United States. He has received numerous honors in the
business and private sectors, most recently the Los Angeles Chapter of the
Muscular Dystrophy Association's 2003 Jerry Buss Humanitarian Award.

Robert Stulman. Mr. Stulman is Secretary to our Company, having served in that
capacity since September of 1997. He has been associated with us during our
pre-incorporation period, from January 1, 1997 through March of 1999. From 1991
to December 31, 1996 he was Vice President in charge of Importing Footwear for
L. J. Global, Inc. in New York City. Mr. Stulman's day-to- day involvement has
been substantially curtailed since we ceased to be involved in the shoe business
in September of 1999.

Donald P. Parson. Donald P. Parson is a member of our Board of Directors, having
joined us on September 19, 2000. For the past six years, beginning in 1994, he
has been of counsel to Satterlee Stephens Burke & Burke LLP. Mr. Parson has
practiced corporate, financial, business and banking law since 1968. Mr. Parson
has previously served as counsel to several brokerage firms and in the formation
of four New York and Connecticut chartered banks. He is a director of two mutual
funds, Philadelphia Fund, Inc. and Eagle Growth Shares, Inc., and Home
Diagnostics, Inc., a medical device company.

Mr. Parson is a Chairman of the Board of Visitors of Syracuse College of Law,
and a member of its National Capital Campaign. He is a director of The Rojtman
Foundation, a substantial private art foundation in New York City, and NICE
(Northern Ireland Children's Enterprise) which operates two homes for educating
young people in Northern Ireland.

Mr. Parson is a member of the American Bar Association and the New York State
Bar Association, admitted to practice in New York and before the United States
Supreme Court, the United States Court of Appeals, Second Circuit, and the
United States District Court, Southern District of New York. He earned his
undergraduate degree (B.A.) from Duke University, his law degree (J.D.) from
Syracuse College of Law, and his masters degree (LL.M.) from New York
University.

                                       16
<PAGE>
Significant Consultants

Chen-Kang Pu ("Gus"). Gus is Vice President of Satellite Service, serving in
that capacity since November of 2000. Presently, Gus is also the Satellite
Communications Manager for Merchandise Entertainment Television (MET) based in
San Diego, California, serving in that capacity since February of 1995.
Previously, from 1993 to 1995, Gus worked as a multimedia specialist for
International Telecommunications, Inc, where he developed multimedia
applications and hardware, planned and secured the entire satellite transmission
from GE Americom, Keystone Communications and Pac Bell, as well as the signal
encryption system from TV/COM International. Gus has worked with TV from Taiwan
and ATV from Hong Kong. Gus received his Masters degree from the Interactive
Telecommunication Program at New York University in 1991.

Joseph Swierczewski. Mr. Swierczewski is Vice President of Computer Services and
Operations, serving in that capacity since November of 2000. From October of
1994 to the present, he has been Vice President of Computer Services for
Merchandise Entertainment Television (MET) in San Diego, California. From 1975
though 1994, he was Senior Vice President and Chief Information Officer with
Garden Way (Troy-Built), Hanover House as a computer systems consultant to
Warner Brothers. There, Mr. Swierczewski managed the computer, customer service
telemarketing and credit/order processing operations of the company. He was also
responsible for the daily operations of Value Television (VTV). Mr. Swierczewski
is a graduate of the University of New Haven, where he received his Bachelor of
Science degree in Engineering.

Consulting Agreements

We have signed a Consulting and Compensation Agreement with Robert ("Bob")
Bubeck and Lynrow Associates, LLC (Thomas O'Donnell), with both having
substantial experience with, and contacts in, the television network
distribution business. They have agreed to contribute their experience and
contacts to assist us by providing their consulting services and obtaining the
necessary subscribers for the vintage sports television network.

Board of Advisors

We have formed a Board of Advisors with a strong background in the areas of
entertainment and sports. We believe that their individual and collective
expertise will assist us making certain decisions, and will open up
opportunities for us to further our business development. Currently, the Board
of Advisors consists of the following individuals:

Carol Connors. Carol Connors is an accomplished composer, lyricist, writer, and
has been nominated for ten major awards (Oscars, Emmy's, Grammy's, Golden
Globes). She wrote the lyrics for the "Gonna Fly Now", the theme from the
Academy Award Wining "Rocky", and has also written songs for many other film and
television productions. Ms. Conners has recently written theme songs for the
nations of Jamaica and Singapore. Ms. Conner's accomplishments are substantial,
and her expertise in the entertainment business is extensive.

Michael Haynes. Michael Haynes was inducted into the NFL Hall of Fame on July
26, 1997. He began his career as a three-year All-WAC star at Arizona State as a
Sun Devil, and played for the New England Patriots. He then played for seven
seasons with the Los Angeles Raiders. In the NFL, Mr. Haynes was an all-pro
choice in 1978, 1982, 1984 and an All-AFC pick eight times.

Edwin Ruh. Mr. Ruh is founder and CEO of Adventure Assets (which can be reviewed
at www.adventas.com), an Internet-based sports and entertainment studio that
develops, capitalizes and manages original sports and entertainment projects
through a $400 million Sports and Entertainment Technology Equity Fund and
exploits emerging e-commerce technologies to create a hybrid form of online
finance and entertainment. From 1995 to 1998, Mr. Ruh was Managing Director of
Gerken Capital Associates, a private investment bank, and General Partner to the
Sino-Asia Industrial Equity Fund, a $200 million direct-investment equity fund.

From 1987 to 1995, Mr. Ruh was the senior Vice President in the International
Structured Finance Division of The Fuji Bank, Limited. As the founding member of
the bank's North American project finance operation, Mr. Ruh was responsible for
directing the bank's activities in financial advisory, equity funding, private
placement, securitization, and privatization services, in addition to serving as
head of the bank's worldwide sports and entertainment business. Mr. Ruh holds a
Masters of Public Administration from Harvard University; Masters Degrees in
Business.

Administration and Public Policy from the Heinz School, Carnegie Mellon
University; a Master's Certificate in Materials Science from the University of
Michigan; and a Bachelor of Science in Biomedical Engineering from Pennsylvania
State University. Mr. Ruh is a member of the World Sports Humanitarian Hall of
Fame; the Mayflower Society and the Board of Trustees, Bay Head Chapel. He is
also a volunteer with many charitable and philanthropic organizations, including
the Orton Dyslexic Society and the Special Olympics. From 1979 to 1981, he
toured on the United States Tennis Association professional circuit.

                                       17
<PAGE>
Dennis Murphy. Dennis Murphy has been credited with creating and developing the
World Hockey Association (WHA) and the American Basketball Association (ABA).
These organizations were merged with their respective professional leagues, the
National Hockey League (NHL) and the National Basketball Association (NBA). He
also established World Team Tennis (WTT) and Roller Hockey Association (RHI),
both of which are currently operating.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

In April of 2004, we reviewed the holdings of our officers and directors to
determine if any purchase, sales or transfers were made throughout the year that
may not have been disclosed properly on a Form 4. Mr. Ed Litwak may have a
beneficial interest in the shares held by his daughter and former President of
the Company, Karen Prentice. Karen made one transfer throughout the year, and
although she is no longer an affiliate and has not been so for over three years,
a Form 5 was filed jointly by Karen Prentice and Ed Litwak, disclosing the
transfer.

CODE OF ETHICS

     We have adopted a Code of Ethics that applies to our President and Senior
Officers. A copy of our Code of Ethics is included with this Report as Exhibit
14.1.

ITEM 10. EXECUTIVE COMPENSATION

Compensation of Directors

Currently, our inside Directors are not compensated for their services, although
their expenses in attending meetings are reimbursed. Outside Directors are
compensated with shares of Common Stock: 12,000 shares as a "signing bonus" for
the agreement to serve, and 1,000 shares for each month of service. Outside
Directors also have their expenses in attending meetings reimbursed.

Compensation of Management

On January 2, 1998 we entered into a five year written Consulting Agreement with
Edward Litwak, who has served as our President/ CEO since December, 1998. Under
that Agreement, he is to be paid $5,000 per month until the Company becomes a
publicly trading company; thereafter, he is to be paid at the rate of $10,000
per month. Mr. Litwak has voluntarily deferred his monthly $5,000 salary until
the Company begins generating revenue. For the year ended December 31, 2002, his
compensation was $32,000. For the year ended December 31, 2003, his compensation
was $32,000.

In September 2003, we entered into a three year Employment Agreement with Edward
Litwak to serve as our interim President and Chief Executive Officer with annul
compensation of $120,000 through June 2004, or until a suitable replacement is
found, after which time Mr. Litwak shall become President of the Cavalcade
Broadcast division of our company. Compensation to Mr. Litwak was $40,000 for
the year ended December 31, 2003.

The following table sets forth the compensation paid to our Chief Executive
Officer or such other officer who fulfilled the duties of the Chief Executive
Officer for the periods indicated. Except for the individuals named, no
executive officers had a total annual salary and bonus of $100,000 or more:

  Name & Principal                                              Other
Position                Year      Salary         Bonus        Compensation

Edward Litwak, CEO      2001        -0-           -0-               -0-
Edward Litwak, CEO      2002       $32,000        -0-               -0-
Edward Litwak, CEO      2003       $40,000

Mr. Litwak has had a portion of his expenses reimbursed.


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

Securities Authorized for Issuance Under Equity Compensation Plans

The following table shows information with respect to each equity compensation
plan under which the Company's Common Stock is authorized for issuance as the
fiscal year ended December 31, 2003.

                                       18
<PAGE>
<TABLE>
<CAPTION>
                          EQUITY COMPENSATION PLAN INFORMATION
                                                                       NUMBER OF
                                                                      SECURITIES
                                                                       REMAINING
                          NUMBER OF                             AVAILABLE FOR FUTURE
                       SECURITIES TO BE                            ISSUANCE UNDER
                         ISSUED UPON        WEIGHTED-AVERAGE           EQUITY
                         EXERCISE OF       EXERCISE PRICE OF        COMPENSATION
                         OUTSTANDING          OUTSTANDING         PLANS (EXCLUDING
                      OPTIONS, WARRANTS    OPTIONS, WARRANTS    SECURITIES REFLECTED
                          AND RIGHTS           AND RIGHTS          IN COLUMN (a))
PLAN CATEGORY              (a)                  (b)                   (c)
====================================================================================
<S>                         <C>                 <C>                   <C>
Equity
compensation plans
approved by
security holders             -0-                  -0-                   -0-
====================================================================================
Equity
compensation plans
not approved by
security holders             -0-                  -0-                   -0-
====================================================================================
TOTAL                        -0-                  -0-                   -0-
====================================================================================

</TABLE>
Security Ownership of Certain Beneficial Owners

The following table sets forth information regarding the beneficial ownership of
our common stock as of December 31, 2003. The information in this table provides
the ownership information for:

     o    each person known by us to be the beneficial owner of more than 5% of
          our common stock;

     o    each of our directors;

     o    each of our executive officers; and

     o    our executive officers and directors as a group.

Beneficial ownership has been determined in accordance with the rules and
regulations of the SEC and includes voting or investment power with respect to
the shares. Unless otherwise indicated, the persons named in the table below
have sole voting and investment power with respect to the number of shares
indicated as beneficially owned by them.


Name And Address                         Shares of           Percentage
Of Beneficial Owners                  Common Stock        as of 3/31/04(1)

Edward Litwak                             964,043(2)           4.18%
12868 Via Latina
Del Mar, CA 92014

Donald P. Parson                           12,500               .054%
230 Park Avenue
New York, NY 10169

Robert Stulman                             40,000               .173%
12868 Via Latina
Del Mar, CA 92014

Michael Riley                           2,000,000              8.67%

Clinton Hall, LLC                       3,000,000             13.004%

all Executive Officers and
Directors as a group (4 persons)        3,016,543 (3)         13.08%

(1) Based upon 23, 069,557 shares issued and outstanding on March 31, 2004.

(2) This includes 938,908 shares held by Karen Prentice. Karen Prentice is the
daughter of Edward Litwak, President of the Company, and Edward Litwak may have
a beneficial interest in those shares.

                                       19
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Litwak has advanced funds to the Company for working capital purposes. No
written or formal loan agreement exists between Mr. Litwak and the Company for
advancement of those funds. Mr. Litwak has orally stated to the Board of
Directors that he will not seek reimbursement until such time as the Company is
generating sufficient cash flow, which will be determined by the Board of
Directors. Once the Board deems that there is sufficient cash flow, the Company
and Mr. Litwak will execute an agreement that will define the repayment terms.
The net amount of the advances due Mr. Litwak at December 31, 2003 and 2002,
respectively, were $209,311 and $184,955, respectively.

The Company's Chairman of the Board paid $90,090 of office expenses on behalf of
the Company during the year ended December 31, 2003. No formal repayment terms
or arrangements exist. The Company has repaid $35,000 to the Chairman of the
Board and the net amount of the advances due at December 31, 2003 was $55,090.

The Company's principal shareholders paid $40,000 of office expenses on behalf
of the Company during the year ended December 31, 2003. No formal repayment
terms or arrangements exist. The Company issued an aggregate of 44,390 shares of
its common stock to the shareholders during the year ended December 31, 2003 in
exchange for the $40,000 previously incurred debt.

MERGER

After the Plan took effect, the President of the dissolved Pacificap
Entertainment, Inc., Michael Riley, joined the Board of Directors. The Company's
Board now consists of: Michael Riley, Chairman of the Board; Ed Litwak,
Director, and Don Parsons, Director. Ed Litwak and the Company have entered into
a three year Employment Agreement, and he will serve as interim President
through June of 2004 or until a suitable replacement is found, after which time
Mr. Litwak shall become President of the Cavalcade Broadcast Division of the
Company. Management believes that this change of business direction will
increase our profitability and the total value of the corporation to our
investors.

As scheduled in the Plan, a short form merger was filed by Cavalcade of Sports
Media, Inc. and its wholly owned subsidiary, Pacificap Entertainment, Inc.
Contemporaneously with the closing, the Company's name changed to Pacificap
Entertainment Holdings, Inc.

We have no policy regarding entering into transactions with affiliated parties.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

There were four (4) Current Reports filed during the year 2003 on Form 8-K. They
were filed with the Securities and Exchange Commission on the following dates:
July 23, 2003; September 5, 2003, September 24, 2003 (and amended September 25,
2003); and on December 16, 2003. All such reports are hereby incorporated into
this Annual Report by reference.

EXHIBIT INDEX

(a) Index to Exhibits:

*3.1 Certificate of Incorporation of Tren Property Corp., filed July 29, 1997 in
Delaware.

*3.2 Articles of Incorporation of Gemma Global, Inc., filed July 22, 1997 in
Nevada.

*3.3 Reorganization Agreement between Tren Property Corp. and Edward E. Litwak,
dated January 1, 1998.

*3.4 Certificate of Amendment to the Certificate of Incorporation of Tren
Property Corp., changing its corporate name to Gemma Global, Inc. and increasing
capital structure, filed February 23, 1998 in Delaware.

*3.5 Certificate of Ownership and Merger of Gemma Global, Inc. (a Nevada
Corporation) with and into Tren Property Corp. (a Delaware Corporation), filed
February 23, 1998 in Delaware.

*3.6 Articles/Certificate of Merger of Gemma Global, Inc. (a Nevada Corporation)
with and into Gemma Global, Inc. formerly Tren Property Corp. (a Delaware
Corporation) filed March 4, 1998 in Nevada.

*3.7 Articles of Incorporation of Gemma Global, Inc., filed March 5, 1998 in
Nevada.

*3.8 Articles/Certificate of Merger (re-domestication) of Gemma Global, Inc.
(Delaware) with and into Gemma Global, Inc. (Nevada) filed April 21, 1998.

                                       20
<PAGE>
*3.9 Articles of Amendment to the Articles of Incorporation of Gemma Global,
Inc., changing name to Pioneer2000, Inc. and increasing capital structure, filed
March 4, 1999 in Nevada.

*3.10 Certificate of Incorporation of Cavalcade of Sports Network, Inc., filed
June 22, 1998 in New York.

*3.11 Articles of Incorporation of Global Group International, Inc., filed March
23, 1999 in Nevada.

*3.12 Certificate of Designation, Powers, Preferences and Rights of 1999-Global
Group Series of Convertible Preferred Stock, filed December 14, 1999 in Nevada.

*3.13 Articles of Amendment, filed December 17, 1999 in Nevada.

*3.14 Articles of Merger of Cavalcade of Sports Network, Inc. (New York) with
and into Cavalcade of Sports Media, Inc. (Nevada), filed December 22, 1999 in
Nevada.

*3.15 Certificate of Merger of Cavalcade of Sports Network, Inc. with and into
Cavalcade of Sports Media, Inc., filed December 30, 1999 in New York.

*3.16 Bylaws of the Registrant.

*3.17 Articles of Incorporation of Sports Broadcasting Network, Inc., filed
November 25, 2002.

3.18 Exchange Agreement with Pacificap Entertainment Holdings Inc., filed
on Form 8K, September 24, 2003.

3.19 Short Form Articles of Merger filed October 23, 2003, in Nevada.

*4.1 Subordinated Capital Note, Sample Copy

*4.2 Promissory Note

*10.1 Indemnification Agreement with Edward E. Litwak

*10.2 Indemnification Agreement with Nicolas Lagano, Jr.

*10.3 Indemnification Agreement with Carol Conners

*10.4 Indemnification Agreement with Michael Haynes

*10.5 Indemnification Agreement with Don Parson

*10.6 Indemnification Agreement with Dennis Murphy

*10.7 Indemnification Agreement with Edwin Ruh

*10.8 License Agreement with Jennifer Gucci

*10.9 License Agreement with Gemma Gucci

*10.10 Assignment of License Agreements to Gemma Global, Inc.

*10.11 Gemma Global, Inc. Assignment of License Agreements to Global
International, Inc.

*10.12 Consulting and Compensation Agreement with Robert Bubeck and Thomas
O'Donnell

*10.13 License Agreement with Soccer Camps of America, Inc. and Cosmos Soccer
Club, Inc.

*10.14 License Agreement with Sekani, Inc.

 10.15 Indemnification Agreement with Michael Riley

 10.16 Employment Agreement with Ed Litwak

 14.1 Code of Ethics

 23.1 Consent of Certified Public Accountants

 31.1 Certification of Ed Litwak, Chief Executive Officer and Chief Financial
Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1 Certification of Ed Litwak, Chief Executive Officer and Chief Financial
Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                       21
<PAGE>

* Previously filed with Form 10-SB (b) Reports on Form 8-K:

We filed Current Reports on Form 8-K four times during the 2003: On July 16,
2003 on September 4, 2003; On September 23, 2003 (and amended that date) and on
November 21, 2003. All such reports are incorporated herein by reference.

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees. The aggregate fees billed by our auditors to date, for professional
services rendered for the audit of the Company's annual financial statements for
the years ended December 31, 2003 and December 31, 2002, and for review of the
financial statements included in the Company's quarterly reports on Form 10-QSB
during those fiscal years were $ 20,081 , and $ 40,000, for the respective years
ended December 31, 2003 and 2002.

Audit-Related Fees. The aggregate fees billed for assurance and related services
by our auditors that are reasonably related to the performance of the audit or
review of our financial statements were $ 3,500 and $ 0 for the years ended
December 31, 2003 and 2002 , respectively.

Tax Fees. Fees billed by our auditors for the preparation of corporate income
tax returns were $ 0 and $ 0 for the years ended December 31, 2003 and 2002,
respectively.

All Other Fees. For the fiscal year ended December 31, 2003, the Company did not
incurred fees to auditors for services rendered to the Company, other than the
services covered in "Audit Fees," "Audit-Related Fees" or "Tax Fees."

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

     The Company currently does not have a designated Audit Committee, and
accordingly, the Company's Board of Directors' policy is to pre-approve all
audit and permissible non-audit services provided by the independent auditors.
These services may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to one year and
any pre-approval is detailed as to the particular service or category of
services and is generally subject to a specific budget. The independent auditors
and management are required to periodically report to the Company's Board of
Directors regarding the extent of services provided by the independent auditors
in accordance with this pre-approval, and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.

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<PAGE>
                                   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. PACIFICAP ENTERTAINMENT HOLDINGS, INC.


                                                /s/ Ed Litwak
May 11, 2004                                    --------------------
                                                 Ed Litwak,President,
                                                 Acting CFO,
                                                 Treasurer and
                                                 Chairman of the Board

                                                /s/ Milke Riley
May 11, 2004                                    ----------------------
                                                 Milke Riley, Chairman
                                                 of the Board of Directors

                                                /s/ Donald Parson
May 11, 2004                                    -----------------------
                                                 Donald Parson, Director


                                                /s/ Robert Stulman
May 11, 2004                                    ------------------------
                                                 Robert Stulman, Secretary



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