U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

[x]  Annual report pursuant to section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the fiscal year ended December 31, 2000, or

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

                           Commission File No. 0-23015

                             J-BIRD MUSIC GROUP LTD.
           (Name of Small Business Issuer as specified in its charter)

         PENNSYLVANIA                                           06-1411727
(State or Other Jurisdiction of                               (IRS Employer
Incorporation or Organization)                               Identification No.)

                   396 DANBURY ROAD, WILTON, CONNECTICUT 06897
              (Address of Principal Executive Offices and Zip Code)

Issuer's Telephone Number: (203) 761-9393

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

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

                         Common Stock, Par Value $0.001

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


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 1O-KSB or any amendment to
this Form 1O-KSB. [ X ]


The issuer's revenues for its most recent fiscal year: $1,026,714.

The aggregate market value of voting stock held by non-affiliates computed on
the basis of the last sale price on March 8, 2001 was $2,794,284.

As of December 31, 2000, the Registrant had outstanding 35,778,295 shares of
Common Stock, par value $0.001.

Documents incorporated by reference: None.


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                                TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                                     Page

Part I

1.       Description of Business                                               3


2.       Description of Properties                                             7

3.       Legal Proceedings                                                     7


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

Part II


5.       Market for Common Equity and Related Stockholder Matters              8


6.       Management's Discussion and Analysis of Financial Condition

         and Results of Operations                                             8

7.       Financial Statements                                                 10


8.       Changes in and Disagreements with Accountants on Accounting

         and Financial Disclosure                                             11


Part III

9.       Directors, Executive Officers, Promoters and Control


         Persons; Compliance with Section 16(a) of the Exchange Act           13

10.      Executive Compensation                                               13

11.      Security Ownership of Certain Beneficial Owners and Management       14

12.      Certain Relationships and Related Transactions                       15

13.      Exhibits and Reports on Form 8-K                                     15



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                        FORWARD-LOOKING STATEMENT NOTICE

     When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," and similar expressions are
intended to identify forward-looking statements within the meaning of Section
27a of the Securities Act of 1933 and Section 2le of the Securities Exchange Act
of 1934 regarding events, conditions, and financial trends that may affect the
Company's future plans of operations, business strategy, operating results, and
financial position. Persons reviewing this report are cautioned that any
forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may differ materially
from those included within the forward-looking statements as a result of various
factors. Such factors are discussed under the headings "Item 1. Description of
Business," and "Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations," and also include general economic factors
and conditions that may directly or indirectly impact the Company's financial
condition or results of operations.

                                     PART I

                         ITEM 1. DESCRIPTION OF BUSINESS

GENERAL



     J-Bird Records began in 1996 as "The First World Wide Web Recording Label"
(jbirdrecords.com), signing, promoting and selling its artists' CDs exclusively
online. The company quickly developed a traditional brick and mortar presence to
enhance its efforts, thereby creating a hybrid label combining the best of both
offline and online worlds. J-Bird Records is an independent label with a roster
of over 350 artists including Rockapella, John Entwistle, the Guess Who, Mitch
Ryder, Jimmie Van Zant, Lee Rocker, Billy Squier and more. The label utilizes
traditional and online marketing and distribution methods for the promotion of
its artists. The Navarre Corporation is the label's exclusive North American
distributor to retail accounts. Navarre is the leading independent distributor
of music and music-related products throughout North America.

     J-Bird Records' business model combines sustained profitability in the
traditional retail marketplace along with the online world, thus enabling it to
withstand the dot-com fallout as compared to exclusive online music-related
companies, who have not. As a result, the company has emerged as a strong
industry competitor, anticipating profitability in 2001.

     J-Bird Records attracts a wide array of established and emerging talent by
offering artists a greater level of creative control and involvement. J-Bird
Records offers recording contracts which allow artists to exercise a large
amount of self-direction in their career planning, while driving those careers
toward a successful future. In addition to its expanding talent list, J-Bird is
also building its base of assets by acquiring existing libraries of recordings
including collections of music from Duke Ellington and Bing Crosby.

     The J-Bird website, www.jbirdrecords.com, acts as a highly effective,
cost-sensitive sales and marketing vehicle for its artists. The site is a
completely interactive and user-friendly one offering a broad selection of music
from its extensive catalog. Consumers can review artists biographies, view CD
artwork, listen to full song samples



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in streaming audio format, check artists' tour dates, read press reviews and
purchase the full CD via J-Bird's e-commerce functionality. Furthermore, J-Bird
is immune to the legal ghosts that haunt many music-related sites which offer
free MP3 downloads since J-Bird only offers free downloads with the full
permission and approval from its artists.

     The Company's emphasis is to sign and develop artists, create consumer
demand and strategically align itself with other companies to enhance its
presence in the marketplace.


     Methods of artist development include the review and critique of music,
imaging, artist management, tour support and merchandising. Consumer demand is
created through both traditional industry methods and strategic cutting edge
promotions via the Internet and other emerging technologies. Traditional methods
include but are not limited to publicity campaigns, radio promotions, retail
placement & programs, and television appearances. Methods of Internet marketing
include downloads, streaming audio, online promotions with traditional retail
partners, cybercasts, chats, Internet radio, contests, giveaways, online retail
placement and satellite TV & radio.

The Company has already begun positioning itself to take advantage of the new
opportunities for promotion and revenue growth from online sources. According to
Jupiter Communications, US online music sales are expected to reach $5.4 billion
in the year 2005, up from $387 million in 1999. These numbers are based on
combined digital music downloads and physical product sold via online resources.
Online music is expected to secure approximately one fourth of the total US
market sales in 4 years, with digitally distributed products representing 28% of
total online dollars (or $1.5 billion by 2005). With peer-to-peer file sharing
(such as Napster) coming under fire for not allowing the artist to be
compensated for sharing of digital music files, the distribution of digital
music appears ready to move to subscriptions to digital music services that will
allow the consumer access to music files and reward the artist and label as
well.


The Company is poised to take advantage of the financial and promotional
opportunities presented to it by aligning itself with third-party digital music
providers by licensing its catalog and marketing its services to media and
commerce partners, already established as destination sites for music, who
provide networked sharing subscription services and digital downloads. These
services, industry-wide, are expected to reach approximately $1 billion in 2005,
and music downloads will grow to $530 million in the same timeframe. Physical
music products (CDs) purchased online are expected to grow from $380 million in
1999 to $3.8 billion in 2005.

     In addition to the above strategies, J-Bird has recently streamlined
operating costs, reduced overhead and consolidated inventory, all helping to
reduce the company's breakeven point. These combined factors are designed to
enable the Company to achieve profitability in the year 2001.


STRATEGIC ALLIANCES

                               NAVARRE CORPORATION

     In 1997 the Company signed a distribution agreement with Navarre
Corporation providing J-Bird with a North American presence and sales force in
both the traditional retail establishment and the online retail community. The
agreement also provides for the manufacturing of J-Bird products and retail
cooperative advertising with the associated costs offset by sales. Navarre's
independent music division's unique programs



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and policies provide a rapid response competitive edge for artists, labels and
trends, that the majors and other independents cannot match. These services
allow Navarre to entice a higher quality label and artist. In addition to
J-Bird, Navarre distributes titles from artists such as Kenny Rogers, Willie
Nelson, Charlie Daniels, Vonda Shepard and The Irish Tenors.

                        BIANCO MUSIC & ENTERTAINMENT LTD.


     In November, 2000 the Company entered into an exclusive agreement with
London-based Bianco Music & Entertainment Ltd. for the distribution of J-Bird's
music to retail accounts throughout Europe and the UK. Bianco is an independent
music and entertainment company offering a wide-ranging selection of music to a
worldwide audience. Bianco is exclusively distributed by BMG, one of the largest
and most-established music distribution houses in the world. With this
agreement, J-Bird titles are now available at key accounts throughout Europe and
the UK including Tower Records, HMV, Borders, MVC and all leading One-Stops.


                                    VITAMINIC


     In August, 2000 the Company entered into a promotional license agreement
with Vitaminic, Inc. Vitaminic is Europe's leading Internet community for the
legal promotion and delivery of music in digital format. Several J-Bird artists
have enjoyed being featured at Vitaminic since the new relationship began
between the two companies, proving the viability of the J-Bird roster of talent.
Featured J-Bird artists on Vitaminic's homepage include the John Entwistle Band
and Pornosonic, both charting on the site's top 10 most downloaded tracks.
J-Bird's Duke Ellington compositions have also had two tracks in the top 10 for
over two months. This has created added exposure to the label and traffic to its
web site from music lovers in the US and abroad. Founded in April 1999,
Vitaminic presently has offices in eight countries, with seven in Europe --
Italy, Germany, The United Kingdom, France, Spain, The Netherlands and Sweden --
and one in the United States. Vitaminic is a platform open to new standards and
formats and to new broadband and wireless communication technologies, through
which artists and record companies can promote and sell their music in digital
format. Meanwhile, consumers can choose from a catalog organized into over 250
genres of music. The sites in the Vitaminic network generated over 8,000,000
page views and 2,500,000 delivered songs in June 2000 alone. Since operations
began, over 300 record companies and more than 10,000 artists have uploaded over
45,000 tracks and put them on sale on the Vitaminic Network, while registered
users currently number over 250,000.


                               LAPPEN ENTERPRISES


In December, 2000 the Company entered into a non-exclusive agreement with Los
Angeles-based music business consulting firm Lappen Enterprises. Lappen
Enterprises will represent J-Bird's catalog for placement in film, TV and
soundtrack projects including outlets such as ABC, CBS, NBC, MTV, Fox, Sony
Pictures, Walt Disney, New Line Cinema, Paramount, Miramax and more. Lappen has
already been able to secure placement of music by J-Bird recording group Funk
Kin in an action sports motocross video that will be widely available throughout
North America in April 2001. Lappen Enterprises past and current associations
include consulting for Ringo Starr's All-Star Band 3-CD box set, Casey Kasem
Presents America's Top 40 7-CD box set, spoken word albums from Ray Manzarek
(The Doors) & Paul Kantner (Jefferson Airplane/Starship) and representing
clients including the legendary Sun Records, Razor & Tie Entertainment and more.


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<PAGE>

                                  OXYGEN MEDIA


In July, 2000 the Company entered into a licensing agreement with Oxygen Media,
allowing Oxygen to use music by J-Bird artists during its television
programming. In November, 2000 J-Bird artist Rockapella performed live on Oxygen
Media's Pure Oxygen program. Also, on several occasions, Oxygen's music
producers have selected J-Bird artists Rockapella and Barry Kingston & the
Screaming Souls as "Artists of the Day". This means that during Oxygen's
television programming, these artists' music has been used exclusively during
live segments and been acknowledged and credited visually on-screen. Oxygen
Media is an integrated media brand that serves modern women by combining the
best qualities of the Internet and cable television. Founded in 1998 by
Geraldine Laybourne and in partnership with Marcy Carsey, Tom Werner, Caryn
Mandabach and Oprah Winfrey, Oxygen consists of a growing network of popular
websites, and a 24-hour cable network, which launched in February, 2000. The
Oxygen cable programming is available in over 9 million households.


                              OTHER MEDIA EXPOSURE

     In addition to the above strategic alliances, J-Bird has independently
secured valuable placement of music by its artists on major media programming
outlets including Good Morning America, Home Shopping Network, VH-1, MTV and
various independent films.


CATALOG EVALUATION

     The Company's catalog of 350 artists is currently not valued for accounting
purposes in accordance with generally accepted accounting principles as
described in the 2000 Annual Report on 10K-SB. Therefore the Company's catalog
could be a significant off balance sheet asset worth more than currently
represented in the December 31, 2000 balance sheet.



HISTORY


     On October 7, 1997, Caltron, Inc. entered into a Stock Purchase Agreement
with the shareholders of J- Bird Records, Inc., to acquire shares of J-Bird
Records, Inc., for the equivalent number of shares of Caltron, Inc. The total
number of shares exchanged in this transaction was 4,480,000. On October 8,
1997, Caltron, Inc. changed its name to J-Bird Music Group LTD.




GOVERNMENTAL REGULATION

     There is no material government regulation of the Company's business.



COMPETITION


     The Company encounters intense competition throughout the music industry.
The company believes, however, that in the aggregate it competes successfully
and has a



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strong growing position in its principal product line, although the strength of
its position varies with products and markets.


     The Company believes that its attractive product planning, the high quality
of its products, employee experience, dedication, knowledge, ability to secure
strong relationships and its marketing and servicing efforts are important
factors in advancing its competitive position.

     The music business is a historically volatile and dynamic industry and the
Company's competitive position is affected by changing technology and product
introductions, limited product life cycles, popularity of music titles,
seasonality, consumer spending and other economic trends.

     Success in the music entertainment business is dependent to a large extent
upon the artistic and creative abilities of employees and outside talent and is
subject to the vagaries of public taste. Its competitive position in the future
depends on its continuing ability to attract and develop talent that can achieve
a high degree of public acceptance.

     Consumers have a wide range of choices, technologies and medias for their
entertainment expenditures. The Company competes for these consumer dollars on
the basis of the types of music it selects for distribution and the marketing of
its selections through traditional and non-traditional methods in both the
on-line and off-line environments.


EMPLOYEES

         The Company has 3 employees.

                        ITEM 2. DESCRIPTION OF PROPERTIES


     The Company's principal place of business is an office located at 396
Danbury Road, Wilton, Connecticut 06897. The office facility consists of
approximately 1800 square feet purchased by J-Bird Music Group on November 1,
2000 for $422,000. A down payment of $22,000 was made and the Company mortgaged
the property with a fifteen (15) year mortgage of $400,000 which requires a
monthly mortgage payment of $4,057.



                            ITEM 3. LEGAL PROCEEDINGS

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




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

No matter was submitted to a vote of security holders in the fourth quarter of
2000.


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                                    PART III

        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The following table sets forth for the respective periods indicated the
prices of the Company's Common Stock in the over-the-counter market, as reported
and summarized by the OTC Bulletin Board. Such prices are based on inter-dealer
bid and asked prices, without markup, markdown, commissions, or adjustments and
may not represent actual transactions.

CALENDAR QUARTER ENDED                      HIGH BID                   LOW BID

March 31, 1998                              $0.75                      $0.3125
June 30, 1998                               $1.75                      $0.28125
September 30, 1998                          $1.59375                   $0.5625
December 31, 1998                           $1.25                      $0.5313

 March 31, 1999                             $0.562                     $0.531
June 30, 1999                               $0.74                      $0.625
September 30, 1999                          $0.467                     $0.41
December 31, 1999                           $0.32                      $0.32

March 31, 2000                              $ 0.9531                   $0.7969
June 30, 2000                               $0.2188                    $0.2188
September 30,2000                           $0.1094                    $0.0781
December 31, 2000                           $0.0625                    $0.0469

     There are approximately 146 shareholders of record, which figure does not
take into consideration those shareholders whose certificates are held in the
name of broker-dealers.

     As of the date hereof, the Company has not paid or declared any cash
dividends. The Company can give no assurance that it will generate future
earnings from which cash dividends can be paid. Management has followed the
policy of retaining earnings to finance the development of the business. Such a
policy is likely to be maintained as long as necessary to provide working
capital for the Company's operations.


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

OVERVIEW

     The following discussion and analysis provides information that management
believes is relevant to an assessment and understanding the Company's
consolidated results of operations and financial condition for the years ended
December 31, 2000 and 1999. The discussion should be read in conjunction with
the Company's consolidated financial statements and accompanying notes.

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<PAGE>

     The Company derives its revenues from three principle sources: a (i) sale
of compact discs ("CDs") directly to the artists for resale to consumers; (ii)
CD sales on the Company's website; and (iii) retail CD sales.

     The Company's strategy to develop products and services for the music
entertainment business was primarily responsible for its net loss for the years
ended December 31, 2000 and 1999. The Company has only a limited operating
history in its operations upon which an evaluation of J-Bird and its prospects
can be based. Accordingly, J-Bird believes that the results of its operations in
the past, during which time the Company had minimal revenues, are not meaningful
indications of future performance. The Company incurred losses from continuing
operations of, $2,633,006 and $2,147,064 for the years ended December 31, 2000
and 1999.


     As a start-up entity in 1997, the Company sold directly to retail markets
with minimal results. In the second half of 1997 the Company was able to obtain
two distribution agreements with regional distributors, Twinbrook and City Hall.
This enabled the Company to establish a regional presence and provided
credentials that assisted in signing a Distribution Agreement with Navarre
Corporation.in December 1997. The agreement with Navarre provides the Company
with a national presence in approximately 52,000 traditional retail
establishments while also providing the Company with a national sales force that
has existing relationships with the major retail outlets in the country.



LIQUIDITY AND CAPITAL RESOURCES


     The Company has financed its operations and capital expenditures primarily
from equity financing and loans from shareholders. On December 31, 2000 the
Company had a cash overdraft of $47,289. In 2000 the Company received $800,000
in cash from the sale of stock through subscription agreements. There is no
amount due under stock subscriptions at December 31, 2000.


     In January 1999 the Company obtained a $100,000 line of credit with a
commercial bank. The line of credit bears interest at 2% above the bank's prime
rate. Certain officers and shareholders have personally guaranteed the debt. The
Company has borrowed $49,936 as of December 3l, 2000 under the line of credit.



RESULTS OF OPERATIONS- YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED
DECEMBER 31, 1999


A comparison of the 2000 results to the 1999 results is as follows

                                                         2000           1999
                                                   ----------       --------
Net Sales                                          $1,026,714       $498,190
------------
Cost of Sales                                      $  781,973       $207,370

     Sales increased in 2000 over 1999 primarily as a result of the distribution
agreement with Navarre. Sales also increased due to the increased number of
artists signed by the Company in 2000, including several nationally recognized
performers.


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     The Company has 350 artists under agreements at December 31, 2000, compared
to 278 at December 31, 1999.


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

Advertising and Promotion Expenses                   $188,766        $83,804
----------------------------------


The increase in advertising and promotion is due to increased levels of
promoting artists.


Professional Fees                                     $94,573       $370,134
-----------------

The decrease in professional fees is due to the lower level of legal fees
incurred in 2000.


Salaries                                             $107,542       $156,958
--------


The decrease in salary expense is due to the decrease in the number of
employees, partially offset with more labor out sourced.


Financing Fee-Sale of Discounted Stock                     $0       $671,400
--------------------------------------


Financing fees related to the non-cash charge in 1999 for the purchase of
restricted common stock at a discount to the market value of the stock.


Administrative Expenses                            $1,665,558     $1,000,096
-----------------------


Increase is due to the increased use of consultants in operations of the
Company.


Interest Expenses                                      $5,944        $18,632
-----------------


Interest expense has been reduced due to a lower level of borrowing under the
Company's line of credit in 2000.



                          ITEM 7. FINANCIAL STATEMENTS


     The financial statements of the Company appear in this report beginning
with the Index to Financial Statements on page F-1.



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


     There have been no changes in or disagreements with accountants in the past
three years except as follows: As described in the Company's 8-K filed November
8, 1999, the independent auditors of the Company for 1998 were Schnitzer &
Kondub, P.C. On October 28, 1999, the Company replaced Schnitzer & Kondub with
the accounting firm of Caracansi Ramey & Associates, LLC to audit the Company's
1999 financial statements. The Board of Directors of the Company approved this
change. The reason for the change in independent auditors to Caracansi Ramey &
Assoc. was due to a mutual agreement between the Company and Schnitzer & Kondub
to terminate the engagement based upon Schnitzer & Kondub's desire to focus its
practice on non-public companies.




                                    PART III

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

DIRECTORS AND OFFICERS

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

NAME                          AGE      POSITIONS                           SINCE

Hope D. Trowbridge            39       President, Treasurer & Director     1991


Asa L. Fish                   34       Secretary and Director              1997


Darren N.. Nowicki            29       Director                            2000

All executive officers are elected by the Board and hold office until the next
Annual Meeting of stockholders and until their successors are elected and
qualify.

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



HOPE D. TROWBRIDGE: President of J-Bird Music Group LTD since December 2000.
Treasurer and Director of J-Bird Music Group LTD since June 7, 1991. Corporate
Secretary from June 7, 1991 to December, 2000. From December 1992 to the present
Ms. Trowbridge has served as the Corporate Secretary and a Director of Marcorp,
Inc., an inactive publicly held corporation with no assets. She is currently the
President, Treasurer and a director of the J-Bird Music Group LTD subsidiary,
J-Bird Records, Inc.


ASA L. FISH, Corporate Secretary since December 2000. Director of J-Bird Music
Group LTD since April 1997. Mr. Fish has been Promotions Director for the
Company since May, 1998. He is responsible for hiring and overseeing independent
radio promotion teams to secure airplay for selected J-Bird artists. He directly
contacts radio



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program and music directors on a weekly basis. He secures radio morning show
interviews and airplay for artists, having relationships with top-rated shows in
most major and secondary markets including WPLJ-New York and KLOS-Los Angeles.
He has secured relationships with various online and traditional entertainment
companies for the promotion of J-Bird artists. Some Companies with which J-Bird
has ongoing relationships as a result of Mr. Fish's efforts are Oxygen Media,
RioPort, Launch, Winstar Radio Services, Vitaminic, and more. Mr. Fish is
currently the Corporate Secretary and Director of the J-Bird Music Group LTD
subsidiary, J-Bird Records, Inc.

DARREN N. NOWICKI: Director of J-Bird Music Group LTD since September 2000. Mr.
Nowicki is currently responsible for A&R (artist & repertoire)/Artist
Development. Prior to assuming his current position he joined J-Bird Records in
November, 1996 as an A&R Representative based in Philadelphia. Notable artists
he is responsible for signing to the J-Bird label include Mitch Ryder,
Pornosonic, Dr. Duke Tumatoe and Funk Kin. Prior to joining J-Bird, he was a
music news writer & editorial assistant at leading industry trade publication
Friday Morning Quarterback (FMQB). Other previous experience includes work at
WMMR, Philadelphia, WCSX, Detroit and independent promotion.


The following is information about the business experience of all control
persons, key personnel and consultants.

DOUGLAS G. McCASKEY. General Manager. Chairman and Director of J-Bird Music
Group from October, 1997 to April, 2000. President and Director of Marcorp,
Inc., an inactive publicly held corporation with no assets.


ROBERT MORRISON, National Sales Manager, J-Bird Music Group. Mr. Morrison has
been with the company since April, 1997. He is in charge of J-Bird's retail
sales division. Prior to joining J-Bird, he was with Alliance Entertainment
Group, serving as the Director of Purchasing. With over 12 years of purchasing
and inventory management background, his understanding of the retail buyer's
environment has put J-Bird a step ahead of its competitors. He has developed
terms and policies that support the current retail climate and has built
relationships with buyers based on common grounds.


CHRISTOPHER S. HENSLEY, Consultant. Mr. Hensley is currently under contract as a
consultant to the Company. He has over 25 years of experience in entertainment
marketing and project development. He has held Vice President positions for
major label groups EMI, Elektra and RCA Records where he was instrumental in
developing artists including The Eagles, Linda Ronstadt, Jackson Browne, Queen,
Warren Zevon, ZZ Top, Dave Matthews, Michael Penn, Ray Davies (Kinks), Joan Baez
and Robert Palmer.

In the new media world, he was a founding partner for Mediagraphics
International, a company that developed and marketed high concept advertising
and imaging vehicles for domestic and international clients including Coca-Cola,
the United Nations, Ogilvy-Mather, the Columbus Pavilion in Genoa, Italy and
Atlanta's Hartsfield Airport. As General Manager for N2K Encoded Music, he
oversaw start-up and marketing strategies for the first internet positioned
recording label, and was part of the management team that led N2K, Inc. to a
successful IPO less than 12 months after inception. Recent activities include
serving on the Board of Directors for the Interactive Music Expo (IMX),
executive producing gospel recording artist Cece Winan's first broadcast and
home video, and developing the internet affiliate network for "Live From The
Lamb Theater."

BRIAN J. MURPHY, Consultant. Mr. Murphy joined J-Bird in December 2000 to help
the Company become a fully integrated entertainment company. His focus is on


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<PAGE>

developing new markets for J-Bird in the areas of entertainment, including
television and live events. He will also concentrate on artist development and
corporate sponsorships, increasing J-Bird's overall growth and presence in the
entertainment industry. Mr. Murphy is CEO of Fearless Entertainment, Inc. which
is a multi-faceted entertainment company. Previously, he was an Executive Vice
President and General Manager of Warner Custom Music, a Time Warner Company. He
was responsible for the corporate marketing and promotion of the Warner Music
Group where he developed and implemented third party funded, music driven
strategic marketing and promotional relationships.

     While at Warner, he negotiated multi-year marketing agreements with major
corporations including General Motors, Sony Electronics, The House of Seagram,
Hard Rock Cafe International and Kraft/General Foods. His client list included
Turner Sports, AT & T, National Football League (NFL), National Basketball
Association (NBA), Coca-Cola, Audi, Miller Beer and MasterCard.


     He later went on to become the Managing Partner/Consultant for Warner/TBA
where he created and produced television broadcasts, live events and music
tours. Among the television productions he was Executive Producer for were Music
in High Places, TV series, 2000; Montreux Jazz Festival (PPV), 2000; Hard Rock
RockFest (MTV, VH1), 1999 and 1997; The Original Bad Company Reunion (PPV),
1999; NASCAR Rocks (TNN,CMT), 1999; CMA Awards Backstage Pass (PPV), 1999; and
Goodwill Games Opening Celebration and Closing Ceremonies (TBS), 1998.

     Among the Live Events and Music Tours he Executive Produced were Montreux
Jazz Festival US Tour, 2000; Hard Rock Rock Fest, 2000, 1999 and 1997; Goodwill
Games Global Pavilion, 1998; NFL on TNT Tailgate Parties, 1998; The Show at NBA
ALL-STAR Weekend for TNT, 2000 and 1998; Miller Lite Jamizon Tour, 1998; and
Crown Royal Country Music Series, 1996, 1995, 1994 and 1993. DVD, CD, CD-Rom &
Cassette credits include Montreux Jazz Festival Anthology (CD), 2000, JVC's
Under the Covers (DVD), 1999 and Furit of the Loom's All-Star Collection (CD),
1996.



SECTION 16(A) FILING COMPLIANCE


     Section 16(a) of the Securities Exchange Act of 1934 requires officers and
Directors of the Company and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in their ownership on Forms 3, 4, and 5 with the Securities and
Exchange Commission, and forward copies of such filings to the Company. The
Company believes that all required filings have been made.


                         ITEM 10. EXECUTIVE COMPENSATION


     John Barbieri had a loan agreement with the Company for $145,000 which was
guaranteed by 500,000 shares of J-Bird Music Group LTD. Common stock. As of
January 2000 the loan was $110,560 and was partially offset by his salary of
$42,432 paid to him in the year 2000. The remaining balance of $68,128 will be
offset by returning 100,000 shares of J-Bird Music Group LTD. common stock back
into the Company's treasury per a Letter of Agreement with the Company dated
December 26, 2000. Mr. Barbieri resigned as President/CEO/Director of J-Bird
Music Group LTD. on


                                       13
<PAGE>

November 29,2000. He concurrently resigned as President/Director of J-Bird
Records, Inc., a subsidiary of J-Bird Music Group LTD. effective November
29,2000.


ITEM II. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth as of March 19, 2001, the number and
percentage of the outstanding shares of common stock which, according to the
information supplied to the Company, were beneficially owned by (i) each person
who is currently a director of the Company, (ii) each executive officer, (iii).
all current directors and executive officers of the Company as a group and (iv)
each person who, to the knowledge of the Company, is the beneficial owner of
more than 5% of the outstanding common stock. Except as otherwise indicated, the
persons named in the table have sole voting and dispositive power with respect
to all shares beneficially owned, subject to community property laws where
applicable.

                                                       COMMON        PERCENT OF
                                                       SHARES          CLASS (2)

John J. Barbieri (4)                                1,290,000              .036
396 Danbury Road
Wilton, CT  06897

IMM International, Inc. (2)                         4,200,000              .117
#2 Springhill Road, Suite 17
Norwalk, CT  06851

Douglas G. McCaskey (3)(4)                            200,000              .005

Hope D. Trowbridge (1)(2)                             399,000              .011

Asa L. Fish (1)                                       335,000              .009

Darren N. Nowicki (1)                                 170,000              .004

All Executive officers and
  Directors as a Group (3 persons)                  5,104,000              .143

(1)  These persons are all of the executive officers and directors of the
     Company.

(2)  Hope D. Trowbridge is the sole officer, director, and shareholder of IMM
     International, Inc. Accordingly, Miss Trowbridge has voting and investment
     control over these shares.

(3)  Includes 200,000 shares held by Mr. McCaskey through a general partnership
     in which he is the general partner and principal owner. Accordingly, Mr.
     McCaskey has voting and investment control over these shares.


                                       14
<PAGE>


(4)  John J .Barbieri, former President/CEO of J-Bird Music Group LTD. Resigned
     November 29, 2000. Douglas G. McCaskey, former Chairman & Director,
     resigned April 2000.




             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


     In 1998 IMM purchased 2,000,000 shares of the Company's common stock for
$525,000. Other non-affiliate shareholders purchased 750,000 shares of stock at
prices ranging from $.25 to $.40 per share. The difference between the
subscription price and the fair market value of the stock of $1,277,500 was
recorded as a non-cash charge to operations. In 1998, IMM repaid $119,750 of
amounts outstanding under stock subscriptions at December 31,1997. At December
31, 1998, $250,000 in stock subscriptions receivable were outstanding from IMM
for 1,000,000 shares purchased at a discount to market in 1997.

     In 1999 IMM purchased 2,700,000 shares of the company's common stock for
$540,000.

                                    ITEM 13.
                        EXHIBITS AND REPORTS ON FORM 8-K

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

EXHIBITS.

  Exhibit   SEC Ref.   Tile of Document                              Location
     No.       No.

     1      (3)(i)     Articles of Incorporation, as amended (1)     Fm 10-SB
                                                                     Page E-1

     2      (3)(ii)    By-Laws (1)                                   Fm 10-SB
                                                                     Page E-8

     3      (10)       Navarre Corporation Distribution
                       Agreement (1)                                 Fm 10-SB
                                                                     Page E-35

     4      (10)       AT&T Download Agreement dated
                       May 14, 1998                                  This Filing
                                                                     Page E-1

     5      (10)       Assignment Agreement with ROSS
                       Corporation dated December 10, 1997           This Filing
                                                                     Page E-9

     6      (10)       Agreement to Discharge Promissory
                       Note with ROSS Corporation dated
                       November 12, 1998                             This Filing


                                15
<PAGE>

                                                                     Page E-11


     7      (10)       Credit Agreement with IMM
                       International, Inc. dated October 1, 1998     This Filing
                                                                     Page E-13

     8      (21)       Subsidiaries of the Registrant                This Filing
                                                                     Page E-31

     9      (27)       Financial Data Schedules (2)                     Not
                                                                     Applicable

(1)  Exhibit No.'s I and 2 are incorporated herein by this reference to the
     Company's Registration Statement on Form 1O-SB filed with the Securities
     and Exchange Commission on December 21, 1998.


(2)  The Financial Data Schedule for the year ended December 31, 1998 is
     presented only in the electronic filing with the Securities and Exchange
     Commission.

FORM 8-K FILINGS


One report on Form 8-K was filed November 1999 to establish the accountant of
record as Caracansi Ramey & Associates, LLC. One report on Form 8-K was filed
April 2000 increasing the number of common shares from 25 million to 50 million.



                                   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.

                                             J-BIRD MUSIC GROUP LTD.

Date:  March 20, 2001                        By: Hope D. Trowbridge, President

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

Dated:  March 20, 2001                       Hope D. Trowbridge, Director

Dated:  March 20, 2001                       Asa L. Fish, Director

Dated:  March 20, 2001                       Darren N. Nowicki, Director



                                       16
<PAGE>

                             J-BIRD MUSIC GROUP LTD.
                              FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999

                                    CONTENTS


Independent Auditors' Report.................................................F-2

Balance Sheet................................................................F-3

Statements of Operations.....................................................F-4

Statements of Stockholders' Equity...........................................F-5

Statements of Cash Flows.....................................................F-8

Notes to the Financial Statements...........................................F-11





                                       17
<PAGE>


                                       F-1


INDEPENDENT AUDITORS'REPORT

Board of Directors
J-Bird Music Group LTD.

We have audited the accompanying balance sheet of J-Bird Music Group LTD. as of
December 31, 2000 and the related statements of operations, changes in
stockholders' equity and cash flows for each of the years in the two year period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of J-Bird Music Group LTD. as of
December 31, 2000 and the results of its operations and cash flows for each of
the years in the two year period ended December 31, 2000 in conformity with
generally accepted accounting principles.

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



                                       18
<PAGE>


                                       F-2




                             J-BIRD MUSIC GROUP LTD.
                          COMPARATIVE BALANCE SHEET AT
                           DECEMBER 31, 2000 AND 1999

                                     ASSETS

<TABLE>
<CAPTION>


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

<S>                                                <C>             <C>

Cash                                                   $      0        $      0
Accounts Receivable                                      17,038         551,279
Inventory                                               161,599          72,280
Loans receivable, shareholder                            68,128          55,314
Recording advances                                       55,000          89,764
                                                   ------------    ------------
Total Current Assets                                    301,765         768,637


Fixed assets, net                                       503,369         116,347
Other assets                                                978             981
                                                   ------------    ------------


Total Assets                                           $806,112        $885,965
                                                   ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Account payable and accrued expenses               $    212,000    $    188,215
Note payable                                             49,936          81,251
Mortgage-Current                                         48,685               0
Accrued royalties                                        76,945          75,806
                                                   ------------    ------------

Total Current Liabilities                               387,566         503,514

Mortgage-Long Term                                      347,258               0
Due to IMM International, Inc.                                0         113,560
Due to shareholders and officers                              0          30,330
                                                   ------------    ------------

Total Liabilities                                       734,824         647,404


Stockholders' Equity(Deficiency)
Common stock $.001 par value 50,000,000 shares

  authorized, 35,778,395 issued and outstanding          35,878          21,698
Stock subscriptions receivable                         (250,000)       (250,000)
Paid in capital                                      11,112,047       8,864,907
Deficit                                             (10,826,637)     (8,193,630)
                                                   ------------    ------------

                                                         71,288         442,975

Total Liabilities and Deficit                      $    806,112    $    885,965
                                                   ============    ============
See accompanying notes to financial statements

</TABLE>

                                       19
<PAGE>
<TABLE>
<CAPTION>


                                       F-3



                             J-BIRD MUSIC GROUP LTD.
                            STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

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

<S>                                                <C>            <C>

NET SALES                                          $  1,026,714    $    498,190

Cost of sales                                           781,973         290,820
                                                   ------------    ------------

Operating expenses:
  Advertising and promotion                             188,766          83,804
  Professional fees                                      94,573         370,134
  Amortization and depreciation                          34,978          53,412
  Salaries                                              107,542         156,958
  Interest                                                5,944          18,632
  Selling, general and
    administrative expenses                           1,665,558       1,000,096
                                                   ------------    ------------

                                                      2,097,391       1,683,036

Net (loss) before other (expenses)                   (1,852,650)       (671,400)

Other income (expense):
  Prior Period Adjustments                             (780,355)              0
  Financing fee-sale of
    discounted common stock                                   0        (671,400)
                                                   ------------    ------------

                                                       (780,355)       (671,400)

Net loss                                           $ (2,633,006)   $ (2,147,065)
                                                   ============    ============

Net loss per common share
  (basic and diluted)                              $      (0.09)   $      (0.10)
                                                   ------------    ------------

Weighted average common shares
  outstanding                                        29,025,062      17,534,270



        See accompanying notes to financial statements


</TABLE>


                                       20
<PAGE>
<TABLE>
<CAPTION>


                                       F-4


                             J-BIRD MUSIC GROUP LTD.
                            STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Adjustments to reconcile net (loss) to net cash
  from (used in) operating activities:
                                                           2000            1999
                                                   ------------    ------------

<S>                                               <C>             <C>


Net (loss)                                         $ (2,633,006)    $(2,147,065)
Amortization and depreciation                            34,978          53,412
Financing fee-sale of common stock at discount                0         671,400
Decrease (Increase) in accounts receivable              534,241        (551,279)
Decrease (Increase) in inventory                        (89,319)        126,194
Stock issued for services                             1,441,934         103,010
Decrease (increase) in recording advances                34,764         (73,175)
Decrease (increase) other assets                              0           6,298
Notes payable                                            49,936          81,251
Increase/(Decrease) in accrued royalties                (25,630)         26,769
Increase/(Decrease) in accounts payable                 (45,795)       (233,294)
                                                   ------------    ------------
Net cash (used in) operating activities                (697,897)     (1,008,479)




Cash flows from (used in) investing activities
Purchase of fixed assets                               (422,000)        (14,590)
                                                   ------------    ------------
Net cash (used in) investing activities                (422,000)        (14,590)

Cash flows from (used in) financing activities
Stock issued for cash                                 1,016,100         886,000
Due from officer and shareholder                         68,128          55,314
Due to shareholders and officers                              0          20,000
Payments of notes payable                                35,669          20,000
Due to IMM International Inc.                                 0          42,148
                                                   ------------    ------------

Net cash from financing activities                    1,119,897        1,003,462
                                                   ------------    ------------

Net increase (decrease) in cash                              (0)        (10,806)

Cash, beginning of year                                       0           2,005
                                                   ------------    ------------
Cash, end of year                                  $          0    $          0
                                                   ============    ============

Supplemental cash flow information:
  Cash paid for interest                           $      5,944    $     18,632

See accompanying notes to financial statements

</TABLE>

                                       21

<PAGE>

                                       F-5

<TABLE>
                             J-BIRD MUSIC GROUP LTD.
                  STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
                     YEARS ENDED DECEMBER 31, 2000 AND 1999
<CAPTION>
                                                Common                          Retained
                                   Common        Stock         Paid In          Earnings     Subscription
                                   Shares       Amount         Capital          (Deficit)      Receivable           Total

<S>                            <C>              <C>          <C>              <C>                <C>             <C>
Balance at January 1, 1999     14,325,395       14,325       6,161,186        (6,046,566)        (250,000)       (121,055)

Net Loss                                0            0               0        (2,147,064)               0      (2,147,064)
Payment of Stock                        0            0               0                 0                0               0
  Subscription
Financing Fee - Sale of                 0            0               0                 0                0               0
  Discounted Common
  Stock
Shares Cancelled                        0            0               0                 0                0               0

Fair Value of Employment                0            0               0                 0                0               0
  Services - Non
  Compensated
Stock Issued for Options          200,000          200         197,400                 0                0         197,600
Stock Issued for Cash           2,644,000        2,644         886,000                 0                0         888,644
Stock Issued for Services       4,429,000        4,429       1,620,321                 0                0       1,624,750
                               ----------       ------      ----------       ------------        ---------      ---------

Balance at December 31, 1999   21,598,395       21,598       8,864,907        (8,193,630)        (250,000)        442,875


Net Loss                                0            0               0        (2,633,006)               0      (2,633,006)
Payment of Stock                        0            0               0                 0                0               0
  Subscription
Financing Fee - Sale of                 0            0               0                 0                0               0
  Discounted Common
  Stock
Shares Cancelled                        0            0               0                 0                0               0

Fair Value of Employment                0            0               0                 0                0               0
  Services - Non
  Compensated
Stock Issued for Options                0            0               0                 0                0               0
Stock Issued for Cash           8,900,000        8,900       1,016,100                 0                0       1,025,000
Stock Issued for Services       4,280,000        4,280       1,231,040                 0                0       1,235,320
                               ----------       ------      ----------       ------------        ---------      ---------

Balance at December 31, 2000   34,778,395       34,778      11,112,047        (10,826,636)        (250,000)        70,189
                               ==========       ======      ==========       ============        =========      =========

See accompanying notes to financial statements

</TABLE>


                                       22

<PAGE>

                                       F-6

                             J-Bird Music Group LTD.
                   Notes to Consolidated Financial Statements
                     Years Ended December 31, 2000 and 1999

Note 1. Organization and Significant Accounting Policies

On October 7, 1997, Caltron, Inc. entered into a stock purchase agreement with
the shareholders of J-Bird Records, Inc. to purchase their shares of J-Bird
Records, Inc. for the equivalent number of shares of the Company. The total
number of Caltron common shares issued to J-Bird Records, Inc. shareholders in
this transaction was 4,480,000 and was valued at $827,466, the net assets of
Caltron at date of acquisition. The number of shares issued represents
approximately 107% of the outstanding Caltron shares at October 7, 1997. The
4,000,000 shares received by the founding shareholders of J-Bird Records, Inc.
in connection with the transaction have been shown as outstanding since the
inception of J-Bird Records, Inc. This transaction is in substance a capital
transaction, accompanied by a recapitalization and has been accounted for as a
reverse merger with J-Bird Records, Inc. being the acquiring company for
accounting purposes. Caltron, Inc. is the acquiring company for legal purposes.
The financial statements include the operations of Caltron, Inc. since October
7, 1997, date of acquisition. No goodwill was recorded in this transaction. On
October 8, 1997 Caltron changed its name to J-Bird Music Group LTD (the
"Company"). J-Bird Records, Inc. is a wholly owned subsidiary of J-Bird Music
Group LTD.

J-Bird Records, Inc. is the first World Wide Web Recording Label (TM). The
Company was officially launched on November 1, 1996 to market, distribute and
sell music via a new medium - the Internet. At its Website, located at
http://www.j-birdrecords.com, the Company attracts and signs recording artists
through its on-line office and promotes, markets and sells their recordings
through its on-line record store.

The Company has experienced operating losses since its inception and has
experienced significant cash flow problems. The Company is in the process of
raising capital through various sources to fund its operations and has
implemented certain operating strategies to obtain profitably.

The previously issued financial statements included gross goodwill of
approximately $2,206,000. Goodwill has not been recognized in the restated
financial statements.

Investments in affiliates

The Company accounts for its investments in affiliates by using the equity
method of accounting under which the Company's share of earnings of these
affiliates is reflected in the statement of operations. Investments acquired
through the issuance of the Company's stock are recorded at an average of the
most recent sales price of the stock at the date of acquisition


                                       23
<PAGE>


                                       F-7



Fixed Assets

Fixed assets are recorded at cost and are being depreciated over their estimated
useful lives (5 to 15 years).

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, J-Bird Records Inc. Material intercompany balances
and transactions have been eliminated in consolidation.

Cash

For purposes of the statement of cash flows, the Company considers cash as cash
held in operating accounts and all highly liquid investments with a maturity of
three months or less to be cash equivalents.

Inventory

Inventory of $161,599 and $72,280, in 2000 and 1999 stated at the lower of cost
or market (first in, first out), consists of musical CDs.

Revenue Recognition

Revenue is recorded when CDs are shipped from its fulfillment center. The
Company maintains its inventory at a fulfillment center, which provides the
shipping to customers. Most sales are made with the right of return of unsold
units. Estimated reserves for returns are established by management based upon
historical and industry experience and the Company's product mix and are subject
to the ongoing review and adjustment by the Company.

Recording Advances

Recording advances represent advances against future royalties of certain
recording artists. When anticipated sales appear to be insufficient to fully
recover the advances, a provision against current operations is made for
anticipated losses.

Royalties

Royalties are accrued at an average 12% of an artist's sales..

Officers' Compensation


In 2000 the chief executive officer received compensation of $42,430 and in 1999
received compensation of $120,000. The December 31, 1998 financial statements
have been adjusted to include annual compensation of $120,000, to reflect the
fair value of the services provided, as a charge to operations. Paid in capital
has been increased, accordingly. In 1999 Mr. Barbieri received $120,000 in
compensation which is reflected as a consulting fee. In 2000 Mr Barbieri's
compensation was used to offset his loan from J-Bird Records, Inc.



                                       24
<PAGE>

                                       F-8


Income Taxes

The Company accounts for income taxes under Statement of Financial Accounting
Standard No. 109, "Accounting for Income Taxes." The Company has a net loss
carry forward of approximately $8,000,000, which expires through 2013.

Earnings Per Share

In 1997 the Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share". Earnings per share are based on the weighted average
number of shares outstanding. Common stock equivalents have not been considered,
as their effect would be anti-dilutive.

Use of Estimates

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

Reclassifications and Restatements

In the previously issued financial statements the Company had accounted for the
acquisition of J-Bird Records, Inc. using the purchase method of accounting with
Caltron Inc. being the acquiring company. The accompanying financial statements
have been restated to reflect J-Bird Records, Inc. acquiring Caltron. In
addition certain sales of stock to shareholders at a price below the market have
been adjusted to reflect the difference between the subscription price and fair
market value of the stock as a financing fee. The financial statements have also
been adjusted to reflect the estimated fair value of services performed by the
chief executive office at no cost to the Company.

Note 2. J-Bird Records Inc.

On October 7, 1997, Caltron, Inc. entered into a stock purchase agreement with
the shareholders of J-Bird Records, Inc. to purchase their shares of J-Bird
Records, Inc. for the equivalent number of shares of the Company. The total
number of Caltron common shares issued to J-Bird Records, Inc. shareholders in
this transaction was 4,480,000 and was valued at $827,466, the net assets of
Caltron at date of acquisition. In 1997, 4,475,000 shares were issued and 5,000
shares were issued in 1998. The number of shares issued represents approximately
107% of the outstanding Caltron shares at October 7, 1997. The 4,000,000 shares
received by the founding shareholders of J-Bird Records, Inc. in connection with
this transaction has been shown as outstanding since the inception of J-Bird
Records, Inc. This transaction is in substance a capital transaction,
accompanied by a recapitalization and has been accounted for as a reverse merger
with. J-Bird Records, Inc being the acquiring company for accounting purposes.
Caltron, Inc. is the acquiring company for legal purposes.



                                       25
<PAGE>


                                       F-9



Note 3. Disposition of Long Term Assets and Investments

Laminar Fluid Controls

On April 22, 1997, the Caltron entered into an option agreement with Field
Technologies, LLC ("FTL"), a company based in Bangor, Maine. Under this
Agreement, the Caltron merged its patents into FTL for a five percent (5%)
equity position in FTL. FTL is an operating company run by the original
inventory of the patented valve technology.

In accordance with Statement of Financial Accounting Standard 121, "Accounting
for the Impairment of Long Lived Assets and for Long Lived Assets to be Disposed
Of" no value was assigned to the patents at the date of acquisition.



Note 4. Related Party Transactions

In October 1998 the Company entered into a credit agreement with IMM
International, Inc., ("IMM") a company that owns approximately 50% of the
outstanding shares of the Company, whereby IMM will provide up to $500,000 in
financing to the Company for working capital purposes. The agreement expired on
March 31,1999. Amounts outstanding under this agreement bear interest at 8% and
are due on June 30,2000. At December 31,1998 the Company had borrowed $113,560
under this agreement. Subsequent to December 31,1998 the Company borrowed an
additional $191,000 under the credit agreement.

In 1998, certain shareholders of the Company entered into stock subscription
agreements with the Company, to purchase 2,750,000 shares of stock at prices
ranging from $.25 to $.40 per share. The difference between the subscription
price and the fair market value of the stock, $1,277,500 was recorded as a
non-cash charge to operations, "financing fee-sale of discounted stock". IMM
purchased 2,000,000 shares for $525,000 in 1998 and repaid $119,750 of amounts
outstanding under stock subscriptions at December 31, 1997. At December 31,
2000, $250,000 in stock subscriptions receivable were outstanding from IMM who
had purchased the stock at a discount to market in 1997.


Note 5. Downloading Agreement

In 1998 the Company and a2b Music, a subsidiary of AT&T, entered into an
agreement whereby certain J-Bird artists would have single musical productions
available to be downloaded from a J-Bird and a2B Music co - branded web site
(that is hosted and promoted as part of the a2b Music web site). The agreement
allows for approximately 15 musical titles from the J-Bird catalog to be added
to the web site each calendar quarter The charge to consumers for downloading
the music is $1.99 per song track. A2b is responsible for collecting the fees
and maintaining the web site. Revenues will be shared equally after a2b recovers
its cost for developing the web site not to exceed $2,000. J-Bird is responsible
to pay its artists 12% of its revenue share as a royalty fee and $.071 on


                                       26
<PAGE>


                                      F-10

Note 5-Downloading Agreement (continued)

each download as part of the mechanical license. Certain artists such as Billy
Squier share equally the J-Bird revenue as a royalty fee. There was no revenue
or costs associated with this agreement in 2000.




Note 6. Fixed Assets


Fixed assets consist of:                             2000              1999
                                                     ----              ----

Building                                          $ 422,000         $       0
Computer equipment and software                     167,862           167,862
Furniture and fixtures                               40,829            40,829
Leasehold improvement                                 8,571             8,571



Accumulated depreciation                          $(135,893)        $(100,915)


Note 7. Note Payable

The amount due at December 31, 2000 consist of a $49,936 line of credit bearing
interest at the prime rate to provide the Company working capital.

Note 8. Common Stock

In 1998, the Company entered into investment advisory agreements with two firms
to assist the Company in raising capital. The firms were issued 600,000 shares
for their services. The Company recorded a charge to operations for $595,000 in
connection with these agreements. The value of the stock issued was based upon
the current market price of the stock at the date the agreements were entered
into.

At December 31, 1998, warrants to purchase 87,140 shares of common stock
exercisable through March 2002 at $.25 per share were outstanding.


At December 31, 1998, options to purchase $260,000 shares of stock at $1 per
share exercisable through 2002 were outstanding. No expense was recorded as the
option price exceeded the market price of the Company's stock at date of grant.

An original J-Bird Records Inc. stockholder was granted an option to purchase
shares, under the same terms of future subscription agreements for stock to be
issued under fair market value, to maintain a 2.3% ownership percentage of the
Company. No options have been exercised under this agreement. Approximately
30,000 shares may be issued upon exercise of the option.


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                                      F-11



Note 9. Commitments and Contingencies


(a) Operating Agreements

The Company had a one year agreement with a public relations firm that requires
monthly payments of $4,500 in 1999.

(b) Common Stock

During the years ended December 31, 2000 and 1999, the Company issued shares of
its common stock. These shares were not registered under the Securities Act of
1933 based on the exemption from registration thereunder provided by section 4
(2), thereof for offerings not involving a public offering.


Note 10. Subsequent Events


In January 1999 the Company obtained a $100,000 line of credit with a commercial
bank. The line of bears interest at 2% above the bank's prime rate. Certain
officers and shareholders have personally guaranteed the debt. The Company has
borrowed $49,936 as of December 31, 2000 under the line of credit.


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