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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended February 29, 2004

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from ______________ to _____________

                         Commission file number: 0-25758

                       MULTI-MEDIA TUTORIAL SERVICES, INC.
                      ------------------------------------
            (Name of small business issuer specified in its charter)

           Delaware                                              73-1293914
---------------------------------                                ----------
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                   1214 East 15th Street Brooklyn, New York 11230
                   ----------------------------------------------
          (Address of principal executive offices, including zip code)

                                  718-758-3807
                                  ------------
                (Issuer's telephone number, including area code)

         Securities registered under Section 12(b) of the Exchange Act:

                                                 Name of each exchange
       Title of each class                       on which registered
       -------------------                       -------------------
              None                                       None

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

                     Common Stock, $0.01 par value per share
                               Redeemable Warrants
                               -------------------
                                (Title of Class)




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Check whether the issuer: (i) 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 (ii) 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. [ ]

The issuer's revenues for the fiscal year ended February 29, 2004 were $844,438.

The number of shares outstanding of the issuer's Common Stock as of May, 2004
was 19,920,667 shares. The aggregate market value of the Common Stock
(18,669,273) held by non-affiliates, based on the approximate average of the bid
and asked prices ($.050) of the Common Stock as of May 25, 2004 was $933,464.

Transactional Small Business Disclosure Format (Check one):  Yes [ ]  No [X]

         This Annual Report on Form 10-KSB (the "Report") may be deemed to
contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Forward-looking statements in
this Report or hereafter included in other publicly available documents filed
with the Securities and Exchange Commission (the "Commission"), reports to the
Company's stockholders and other publicly available statements issued or
released by the Company involve known and unknown risks, uncertainties and other
factors which could cause the Company's actual results, performance (financial
or operating) or achievements to differ from the future results, performance
(financial or operating) or achievements expressed or implied by such
forward-looking statements. Such future results are based upon management's best
estimates based upon current conditions and the most recent results of
operations. These risks include, but are not limited to, the risks set forth
herein, each of which could adversely affect the Company's business and the
accuracy of the forward-looking statements contained herein.

         As of May 24, 1999, the Company effected a one-for-ten reverse stock
split of its issued and outstanding Common Stock, and increased the Company's
authorized Common Stock to 20,000,000 shares. Except as set forth herein, the
discussion set forth in this Annual Report on Form 10-KSB reflects the effect of
the one-for-ten reverse split.

                                       2

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                                     PART I

ITEM 1.  BUSINESS

GENERAL

         The Company produces, acquires and distributes a variety of products to
educational institutions and consumers using direct marketing through
television, radio, print advertising and internet advertising. The Company's
principal product to date has been proprietary tutorial education programs on
videotape, DVD and CD Rom for use by adults and children in homes, workplaces,
schools, libraries and other locales. This principal product line, which is
marketed under the brand Math Made Easy(TM), consists of a series of over 100
videotapes, DVD's,CD Roms and supplemental materials on mathematics. The Math
Made Easy(TM) line uses colorful computer graphics and real life vignettes and
is the most complete line of mathematics videotapes available.

         The Company generates leads through television, radio advertisements
and internet advertising. The Company utilizes its own inbound and outbound
telephone sales force to convert these leads into sales. The Company uses
different 800 numbers for each channel on which it advertises, which permits the
Company to track the effectiveness of its advertising. Payment is made by credit
card or direct debit to a checking account. The product is then shipped to the
customer. The Company's products have been purchased by over 250,000 customers
over the last ten years.

         The Company's objective is to become the premiere resource for parent
and students across the country for their tutorial and remedial home study
programs. To accomplish this objective, the Company has relaunched, in
September, 2002 a nationally based advertising campaign promoting its products.
Subject to the availability of additional financing, the Company intends to
expand product offerings for sale to individual consumers by developing,
licensing or acquiring new complementary educational products. Over the next
year, the Company intends to seek out additional products in a wide array of
other academic subjects including, but not limited to, tutorial programs in
reading, communications and science. The Company's website, Mathmadeeasy.com,
provides a full menu of the Company's tutorial programs with easy to use
ordering facilities. The Company has experienced a steady increase in both
visitors to its website as well as sales conducted through the website.

THE PRODUCTS

         The Company's products consist of an extensive line of "Math Made
Easy(TM)" and "Reading Made Easy(TM)" videotapes and ancillary material for
direct sale to consumers via direct marketing through national and local TV and
radio advertising. See "Sales Marketing & Distribution"

CURRENT PRODUCTS

         The Company's Math Made Easy line covers all levels of math from
pre-school through elementary school as well as high school and college levels.
These products are intended to provide a comprehensive review of the subject
matter in a condensed and efficient format. Typically, an entire year's course
is condensed into less than five hours of programming consisting of videotape
lesson reviews accompanied by computer graphics and exercises. The average math
consumer order consists of a set of five educational videotapes at a price of
$150. Sets of five videotapes are sold to schools at a price of $200, and $9.95
per each additional workbook. The Company has also entered into non-exclusive
agreements with various companies to distribute tapes of reading and literacy
educational products as part of its Reading Made Easy(TM) series. The products
include reading readiness, letter identification, grammar, and reading
comprehension which cover topics from preschool through junior high school. The
various titles include videotapes, audiotapes and workbooks and flash cards. The
Company purchases these products at discounted rates from the respective
manufacturers or distributors and then distributes them through the Company's
direct marketing division. The average reading consumer order consists of five
videotapes at a price of $159 for each order.

NEW FORMATS

         The Company has converted its videotapes into the more popular DVD
format. This format enables the customer to use the Company's programming on his
computer where a DVD drive is included. It also enables the customer to skip
easily from one topic to another topic.


                                       3

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PRODUCT DEVELOPMENT

         The Company produces many of its own math videotape and DVD products
and supplemental workbooks developed by the Company's educational coordinators.
The Company employed Dr. Meryle Kohn, chairperson of the mathematics and science
departments at New York Institute of Technology, as its curriculum coordinator
in the production of many of its programs. The Company's educational writers are
independent contractors retained on a project-by-project basis. Total cost of a
videotape production is approximately $10,000 to $15,000.

         Many of the Company's videotapes include colorful computer graphics and
real life vignettes, certain of which are scripted by professional writers. The
curriculum writers seek to augment comprehension of the materials by numerous
examples, which are solved on a step by step basis. The curriculum invites
interaction by requesting the viewer to pause and to solve designated problems
before restarting the videotape to view the step by step solution.

PRODUCT ACQUISITION

         In addition to developing its own math product, the Company purchases
or licenses product from third parties, such as the Reading Made Easy(TM) line
and student versions of Verbal Advantage.

THE MARKET

         GENERAL. Education is second only to health care in annual expenditures
in the U.S. representing almost ten percent of GNP, $400 to $600 billion. Fully
40 percent of students encounter some difficulty at various times mastering
mathematics and science. The loss of individualized instruction in many school
districts places an additional burden on the home, requiring supplemental
education products that are both informative and challenging.

         The situation is against the backdrop of 50 to 75 million students in
our school system at any one time. There are currently 106,000 schools offering
education to students in grades K-12 in the U.S. representing a total of over 52
million children in the U.S. This population has access to the Internet with a
growth rate that has doubled every year since 1996 and is likely to continue
through 2002.

         Much of the activity in the for-profit education industry lies in
post-secondary education and in niches around the margins of traditional
pre-collegiate education. Those niches include tutoring, test preparation,
college counseling, electronic learning and the education of at-risk children.

         The Company's Math Made Easy website lies at the intersection of the
consumer market for educational and developmental products for children, and the
increasing acceptance of Internet-based commerce. Traditional retailers of
educational products, including mass market retailers, typically lack a focus on
education, do not evaluate the products they offer and may not understand the
development needs of individual children.

         In addition, these retailers often have a narrow product selection due
to physical space limitations, have high facilities and staffing costs, offer
limited service, and lack merchandising flexibility and shopping convenience.
Because of the limitations of the traditional retail distribution channel, the
Internet has the potential to become a key resource utilized by parents to pick
from a broad range of educational products and services to meet their children's
needs.

         Education has boomed as a for-profit industry in the past few years for
the following reasons:

         o        The 1990's saw one report after another decrying the condition
                  of public education.

         o        Parents are more willing than ever to spend money to
                  supplement their children's schooling and give them a leg-up
                  in the college admissions process. That trend has particularly
                  benefited tutoring and test-prep companies.

         o        Strength of the economy has created new wealth that has
                  allowed entrepreneurs to turn their business ideas into
                  realities. Education businesses have raised some $6 billion in
                  private capital over the past decade.


                                       4

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         Specialty educational and creative toy and game retailers that are
focused on education often lack the expertise or time to analyze a child's
specific needs. As a result, the traditional retail channel fails to satisfy
parents' needs for selection, convenience, personalized service, advice and
information.

         EDUCATION AND THE INTERNET. As a result of a number of societal trends,
including constraints on school budgets and the increasing use of standardized
tests, many parents are taking a more active role in their children's education.
In their efforts to help their children learn, improve their children's
standardized test scores and make learning fun, parents are increasingly
purchasing educational books, toys and games, and software over the internet.

         Parents are faced with the challenge of finding quality educational
products and selecting the right products for their children. With thousands of
educational products to choose from and few reliable sources of information,
finding the appropriate products for a specific child's needs and goals can be
overwhelming and confusing. Parents seek a resource for comprehensive and
trusted educational content and product information to help them make informed
purchase decisions. The Company's management vision is to develop a broad array
of focused tutorial programs offered by sale and subscription over the internet
and to be identified as the premier source in this category.

         SUPPLEMENTAL EDUCATION AT HOME. The Company believes that parents are
increasingly concerned about the quality of their children's education and are
seeking to supplement the existing curricula. In particular, they are seeking to
use televisions and videotape players now found in most homes for educational
purposes. In addition, the Company believes that adults going back to school to
prepare for career moves or promotions are an ever growing potential market for
its educational videotapes. The Company has found that its primary customers are
parents with children in the educational system. The Company's efforts to date
have resulted in a database of more than 445,000 names, of which 260,000 ordered
product, and approximately 185,000 names of potential customers.

         SCHOOLS. As part of the drive to improve education, the Company
believes that school districts may increasingly allocate available funds to the
acquisition of educational tools. The Company believes that the possible
expansion of this market and the increased availability of funds may present an
important opportunity for its products.

         In the fiscal year ended February 29, 2004, consumer videotape and DVD
sales and school videotape and DVD sales constituted approximately 80%, and 20%
of total educational sales, respectively. For the fiscal year ended February 28,
2003, consumer videotape sales and school videotape sales constituted
approximately 80% and 20% of total educational sales, respectively.

SALES, MARKETING AND DISTRIBUTION

         The Company sells its programs on videotape and DVD to schools and
consumers. Whereas in the past the Company procured its leads exclusively from
national radio advertising, in the last several quarters the Company has been
able to reduce its lead cost by shifting to internet advertising. The Company
maintains an in house sales force and is able to convert generally 25% of its
leads into customers. As the Company continues to expand its sales force it will
seek out new internet advertising opportunities and radio advertising
opportunities to increase its volume of leads.

         The Company conducts an active outbound sales program to its past
customers in which it provides previous customers the follow-up course at a
discounted price.

         The Company maintains active relationships with several school and
library distributors who order a wide array of the Company's programs.
Additionally, the Company deals directly with a significant number of school
districts who order the Company's programs from time to time.

         Credit cards are the preferred method of payment, both for the Company
and for its customers. These cards are either billed in full or in partial
monthly payments. The Company also offers consumers who do not wish to use their
credit card another means of payment; an automatic check debit, in which the
customer is shipped the merchandise after he offers the Company his bank name
and checking account number.

                                       5

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ADVERTISING

         In the radio advertising test which the Company conducted from October,
2002 to July, 2003, the Company found its advertising to be cost effective in
national formats that met the Company's demographics and allowable cost per
thousand. Nevertheless, it often found these national formats sold out. The
Company has found internet advertising to be more effective and less subject to
inventory availability.

PERSONNEL AND TRAINING

         The Company believes that the quality of its employees is a key factor
in its effort to develop a profitable sales business. All salespeople receive a
detailed review of each product they will be selling. In addition, the Company
trains its salespeople in the art of converting an inquiry into a sale. A
salesperson is in training for approximately 5 days, prior to working on a
full-time basis. Furthermore, the Company continually monitors sales
conversations to assure quality and customer satisfaction. Compensation is
based on a combination of salary and commission. See "Risk Factors."

RETURNS, GUARANTY AND WARRANTY POLICIES

         The Company offers its customers a 90 day money back guarantee during
which period they may return the merchandise for an exchange or full credit. The
Company believes that a money back guaranty policy is essential to the success
of its sales efforts. In addition, management of the Company has implemented
policies and procedures intended to minimize the number of returned products.
These policies and procedures include increasing the appeal of the Company's
products by designing more attractive packaging, and enclosing with its
shipments full color catalogues and parent guides. In addition, the customer
service department, which must be contacted before merchandise is returned, has
been trained to specifically reduce returns. See "Risk Factors."

SEASONALITY

         The Company's educational sales business is highly seasonal. Demand
falls off significantly during summer and mid-winter school vacation periods.
This seasonality greatly affects the Company's advertising campaigns, which must
be timed to coincide with the annual periods when demand is traditionally high.

ADVERTISING AVAILABILITY

         Should the Company move back into radio advertising, it will be
subjected to wide swings in airtime availability. In the internet arena, as more
advertisers compete for web customers, advertising prices may significantly
increase, reducing the company's profitability.

PROPRIETARY RIGHTS

         The Company has received certificates of registration with the United
States Trademark Office for the following trademarks: MATH MADE EASY, PASSPORT
TO MATH SUCCESS, LEARNING TRENDS, AND REAL LIFE MATH. The Company has filed
applications with the United States Trademark Office for the registration of
READING MADE EASY.

EMPLOYEES

         As of May 28, 2004, the Company had 20 employees, of whom 2 were
executive officers, 15 were engaged in sales, and 3 were in marketing, support
and administrative staff. The Company has made significant reductions in
personnel in order to reduce overhead expenses. The Company retains outside
consultants to augment its computer, telephone and telemarketing expertise. The
Company also relies on several outside consultants for expertise in hardware,
software and curriculum development. The Company believes that its relationship
with its employees is generally satisfactory.

                                  RISK FACTORS

         The Company's business involves a high degree of risk. Shareholders and
investors should carefully consider the following risk factors and the other
information included in this Report. Financial Condition of the Company; History
of Losses; Going Concern Qualification in Certified Public Accountant's Report;
Company Highly Leveraged.


                                       6

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       HISTORY OF OPERATING LOSSES

         The Company has experienced significant losses from operations since
inception. It experienced losses of $ $477,725 and $722,749 for the fiscal years
ended February 29, 2004 and February 28, 2003. As of February 29, 2004, the
Company had a working capital deficit of $6.227,164 and an accumulated deficit
of $18,765,804. The Company's working capital requirements have been met
primarily from loans and private sales of securities provided by management and
other investors, but there can be no assurance the Company will be able to
obtain such funds in the future. As of February 29, 2004, the Company had
outstanding investor loans and advances aggregating $2,329,566 of which a
certain amount may be converted into equity. All but $60,000 of this amount is
currently due and payable, and there can be no assurance the Company will be
able to convert the debt to equity, or generate the funds from operations or
further financings to repay these obligations. The Company is in default on one
of its capitalized leases. Currently, the Company's sales volume is not
sufficient to repay this indebtedness. In addition, the Company's operating
expenses are anticipated to increase significantly in the future if the Company
is able to implement its expanded marketing strategy. Although the Company is
seeking additional funds to allow it to repay its current debt, expand its
customized sales operations and develop its e-commerce business plan, there can
be no assurance that the Company will not continue to experience such losses or
will ever generate revenues at levels sufficient to support profitable
operations. The Company has received a report from its current and former
independent public accountants, that includes an explanatory paragraph
describing the uncertainty as to the ability of the Company's operations to
continue as a going concern. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Consolidated Financial
Statements."

NEED FOR ADDITIONAL FINANCING

         The Company has limited resources and has not been able to finance its
activities with the proceeds from operations and there can be no assurance it
will be able to do so in the future. The Company is seeking additional financing
in order to meet its debt repayment obligations and to maintain and potentially
expand its current operations. Even if the Company is able to obtain funding,
there can be no assurance that a sufficient level of sales will be attained to
fund such operations or that unbudgeted costs will not be incurred. Future
events, including the problems, delays expenses and difficulties frequently
encountered by similarly situated companies, as well as changes in economic,
regulatory or competitive conditions, may lead to cost increases that could make
the net proceeds of any new funding and cash flow from operations insufficient
to fund the Company's capital requirements. There can be no assurances that the
Company will be able to obtain such additional funding from management or other
investors on terms acceptable to the Company, if at all. Additional financings
may result in dilution for then current stockholders. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

FUTURE ISSUANCES OF STOCK; DILUTION TO CURRENT STOCKHOLDERS

         The Company currently has outstanding options, warrants and other
rights to acquire an aggregate of approximately 16,481,689 shares of Common
Stock at exercise or conversion 19,920,667 shares of Common Stock and as of June
1, 2004, the price of the Company's current stock as quoted on the NASD
Electronic Bulletin Board was approximately $.05 per share. Any future issuances
may substantially dilute the holdings of the Company's current stockholders.
Furthermore, such issuances could result in a change of control of the Company.
See "Need for Additional Financing."

RETURNS

       The Company typically experiences returns of 15-25% which is standard for
the industry.

SEASONALITY AND AVAILABILITY OF MEDIA TIME

         As the Company has shifted its advertising dollars from radio to
internet, the Company has effectively eliminated its dependence on the
availability of advertising inventory which fluctuates widely according to
seasonality and demand versus supply. The Company may return to radio and be
subject to these fluctuations. In the internet arena, as more advertisers
compete for web customers, advertising prices may significantly increase,
reducing the company's profitability.

                                       7

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INFLUENCES OF THE ECONOMY

         The economic climate, if it worsens, may diminish the performance of
the Company's own advertising campaign on behalf of its own Math Made Easy(TM)
products.

LIMITED PRODUCT LINE

         In the fiscal year ended February 29, 2004, most of the Company's
educational sales were from the Math Made Easy(TM) product line. The Company is
currently selling its math programs in both videotape, DVD, and CD Rom formats.
Many of the educational product companies have reconfigured their videotape
based programs into interactive computer software. The Company has plans to do
this as well but may lack the financing to successfully complete this project.

         Although the Company is continually seeking to introduce additional
product lines there can be no assurance that these new product lines will
generate significant sales. In the event that the popularity of the Math Made
Easy(TM) product line decreases or faces increased competition, the Company's
sales would be adversely affected and if not replaced by substantially increased
sales from other products, the Company could be forced to cease operations.

CREDIT CARD FRAUD

         Credit card fraud perpetrated by disreputable telemarketing operations
have adversely affected the willingness of the consumers to make use of their
credit cards by telephone. This may adversely affect the Company's ability to
secure credit card orders.

TURNOVER RATE

         Recruiting, training and retaining qualified salespeople is essential
for the Company. There is a high turnover rate among salespeople as a result of
the frustration of the sales process, the high pressure atmosphere, and the
reliance on commissions as a major component of salaries. The training of
salespeople is a lengthy process, which involves learning a complex product line
and special sales techniques. In addition, it is essential that the Company
utilize the optimal number of salespeople for its level of advertisements and
the number of clients it is servicing. Too many advertisements may overwhelm the
salespeople while too few advertisements may lead to a drop in the commissions,
which will cause the salespeople to leave the Company. Furthermore, the ability
of the Company to convert leads into sales is largely dependent on the expertise
of its salespeople. There can be no assurance that the Company will be able to
continue to recruit and retain a qualified team of salespeople.

COMPETITION

         The Company's educational videotape and DVD offerings compete with a
variety of software related tutorials of well established companies, who market
their materials in computer software related stores. These companies typically
provide a significant advertising budget to support their retail sales programs.
In addition, the Company's self help tutorial programs compete with local and
national privately owned learning centers such as Sylvan Learning Corp as well
as Kaplan's educational testing centers. These companies allocate many millions
of dollars to support the branding of these centers. Almost all of these
competitors have greater financial resources, greater public and industry
recognition and broader marketing capabilities than the Company. The market is
also characterized by numerous small companies, with whose products the Company
may be unfamiliar, and which may be competitive with the Company's products. The
Company's products also compete with other methods of education such as private
tutors and televised programs. With respect to the Company's new marketing
through internet advertising, the Company recognizes that the internet currently
hosts many other educational and children related sites that include competitive
educational videos and software. This could ultimately diminish demand for the
Company's products.

DEPENDENCE ON MANAGEMENT

         The Company's business is significantly dependent upon the personal
efforts and continued availability of Barry Reichman, its Chief Executive
Officer. The loss or unavailability to the Company of Mr. Reichman could have a
materially adverse effect upon the Company's business operations and prospects.
To the extent that the services of Mr. Reichman are unavailable to the Company
for any reason, the Company would be required to procure other personnel to
manage and operate the Company. There can be no assurance that the Company would
be able to locate or employ such personnel on acceptable terms, if at all.

                                       8

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GOVERNMENT REGULATION

         In response to the concerns of consumer advocacy groups and as a result
of the practices of a number of unscrupulous telemarketing companies, the
Federal Trade Commission and the Federal Communications Commission have
promulgated rules regulating the telemarketing industry. The Company is not
directly affected by the new government regulations restricting unsolicited
calls to consumers who place themselves on a "do not call" list since the
Company does not initiate any cold calls to consumers who have not made a prior
inquiry to the Company. Nevertheless, the pervasive negative opinion on
telesales calls could adversely affect the Company's sales campaigns.

DELISTING FROM NASDAQ SMALL CAP MARKET; MAINTENANCE CRITERIA FOR NASDAQ
SECURITIES; PENNY STOCK RULES

         On April 17, 1997, the National Association of Securities Dealers, Inc.
Automated Quotation System Stock Market ("NASDAQ") delisted the Company's Common
Stock and Warrants from trading on the NASDAQ Small-Cap Market because the
minimum bid price of the Company's Common Stock had been below the requirement
of $1.00 per share. In order to regain a listing for the Company's securities on
the NASDAQ Small-Cap Market, the Company's Common Stock must have a minimum bid
price of $4.00 per share and at least three market makers for the trading
securities. In addition, the Company must either have $4,000,000 in net tangible
assets, a market capitalization of at least $50,000,000, or net income of at
least $750,000 in its most recently completed fiscal year or in two of the three
last completed fiscal years, and the Company must have at least 1,000,000
publicly traded shares not held by affiliates of the Company ("public float"),
with a market value of at least $5,000,000, and at least 300 stockholders of
record. There can be no assurances that the Company will be able to meet the
requirements for relisting on the NASDAQ Small Cap Market.

         If the Company's securities are again listed on the NASDAQ Small-Cap
Market, in order to maintain such listing the Company must continue to be
registered under Section 12(g) of the Securities Exchange Act of 1934 (the
"Exchange Act"). In addition, NASDAQ has proposed increasing the requirements
for maintaining a NASDAQ Small-Cap listing to require either: (1) net tangible
assets of at least $2,000,000, (2) a market capitalization of $35,000,000 or (3)
net income in at least two of the last three years of $500,000, and at least 300
holders of record, a minimum bid price of $1.00 per share, at least two market
makers and a public float of at least 500,000 shares with a market value of at
least $1,000,000. There can be no assurance that the Company would be able to
meet the requirements for maintaining a listing on the NASDAQ Small-Cap Market.

         Failure to regain or to maintain NASDAQ Small-Cap Market listing will
probably depress the market value of the Common Stock and purchasers likely
would find it more difficult to dispose of, or to obtain accurate quotations as
to the market value of, the Common Stock.

         In addition, if the Company cannot obtain a NASDAQ Small-Cap Market
listing for its securities, and no other exclusion from the definition of a
"penny stock" under the Exchange Act is available, then the Company's stock will
continue to be subject to additional federal and state regulatory requirements.
Rule 15g-9 under the Exchange Act, among other things requires that
broker/dealers satisfy sales practice requirements, including making
individualized written suitability determinations and receiving any purchaser's
written consent prior to any transaction. The Company's securities could also be
deemed penny stocks under the Securities Enforcement and Penny Stock Reform Act
of 1990, which requires additional disclosure in connection with trades in the
Company's securities, including the delivery of a disclosure schedule explaining
the nature and risks of the penny stock market. Such requirements can severely
limit the liquidity of the Company's securities and the ability of purchasers to
sell their securities in the secondary market.

LIMITED PUBLIC TRADING MARKET FOR THE COMPANY'S SECURITIES, VOLATILITY

         There is only a limited public trading market for the Company's
securities and no assurances can be given that a liquid market will develop or,
if developed, that it will continue to be maintained. There can be no assurance
that a more active trading market will develop or, if developed, that it will be
maintained. In addition, there can be no assurance that the Company will obtain
relisting of its securities on NASDAQ. See "Maintenance Criteria for NASDAQ
Securities; Delisting from NASDAQ Small Cap Market; Penny Stock Rules."

                                       9

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LIMITATION OF USE OF NET OPERATING LOSS CARRYFORWARDS

         As of February 29, 2004 and February 28, 2003, the Company had federal
net operating loss carryforwards of approximately $11,553,000 and $11,302,000,
respectively, portions of which expire yearly through 2014 (subject to certain
limitations). This balance gives effect to annual limitations on the utilization
of the loss carryforwards caused by "ownership changes" as defined in Section
382 of the Internal Revenue Code. If there is any additional ownership change,
there can be no assurance as to the specific amount of net operating loss
carryforwards available in any post-change year since the calculation is based
upon a fact-dependent formula. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources."

NO DIVIDENDS

         The Company has never paid any dividends on its Common Stock. The
payment of future dividends will be dependent upon earnings, financial
requirements of the Company and other factors deemed relevant by the Company's
Board of Directors. For the foreseeable future it is anticipated that any
earnings which may be generated from operations of the Company will be used to
finance the growth of the Company and that cash dividends will not be paid to
holders of Common Stock.

ISSUANCE OF PREFERRED STOCK; POTENTIAL ANTI-TAKEOVER EFFECT

         Certain provisions of Delaware law and the Company's certificate of
incorporation and by-laws could make more difficult a merger, tender offer or
proxy contest involving the Company, even if such events could be beneficial to
the interests of the stockholders. The Board of Directors has the authority to
issue up to 1,000,000 shares of Preferred Stock in one or more series and to fix
the number of shares constituting any such series, the voting powers,
designation, preferences and relative participation, optional or other special
rights and qualifications, limitations or restrictions thereof, including the
dividend rights and dividend rate, terms of redemption (including sinking fund
provisions), redemption price or prices, conversion rights and liquidation
preferences of the shares constituting any series, without any further vote or
action by the stockholders. The issuance of preferred stock by the Board of
Directors could adversely affect the rights of the holders of Common Stock. For
example, such issuance could result in a class of securities outstanding that
would have preferences with respect to voting rights and dividends and in
liquidation over the Common Stock, and could (upon conversion or otherwise)
enjoy all of the rights appurtenant to Common Stock. The authority possessed by
the Board of Directors to issue preferred stock could potentially be used to
discourage attempts by others to obtain control of the Company through a merger,
tender offer, proxy contest or otherwise by making such attempts more difficult
to achieve or more costly. Such provisions could limit the price that certain
investors might be willing to pay in the future for shares of the Company's
Common Stock or preferred stock.

ITEM 2.  PROPERTIES

         The Company leases an approximately 1,400 square foot facility at 1214
East 15th Street, Brooklyn, New York, which houses its telemarketing and other
staff. This lease, which currently calls for monthly rent of $2,500 is scheduled
to expire in February, 2006.

ITEM 3.  LEGAL PROCEEDINGS

         The Company had made a settlement with one of its creditors that had
begun litigation on January 6, 2000 in Superior Court, Judicial District of
Stanford/Norwalk, whereby it has settled a $235,000 claim for $190,000 with a
29-month payout schedule. The Company has paid approximately $30,000 in honor of
this settlement; however, since the creditor has not honored the terms of the
settlement agreement to activate and to provide upgrades of its software, the
Company has discontinued its schedule of payments. The Creditor sued the Company
in the state of Connecticut but the court ruled that the creditor could not
proceed with the suit in the State of Connecticut.

                                       10

<PAGE>

         The Company has reached payment agreements with certain of its vendors
relating to obligations in the aggregate amount of approximately $700,000. There
is no assurance that the Company's future revenues will be adequate to meet such
payment schedules. Moreover, the Company's revenues have not always been
sufficient to enable the Company to fully comply with these payment schedules.
However, The Company has been able to receive extensions of the payments due
under these schedules where it has not been able to comply with the agreed
schedules including one with its largest creditor who had received a judgment
against the Company in 2001. The creditor has agreed to take no action against
the Company with respect to its judgment so long as the Company is in compliance
with its oral agreement with the creditor as may be modified from time to time.
Other creditors have given extensions in the form of agreements on a periodic
basis. There is no assurance that any of these creditors will not, at some point
in the future, declare the Company in default of its obligations. The company
presently makes scheduled payments to creditors from operating cash flow. In
addition, the Company has, from time to time, obtained additional funding from
investors, which have enabled it to make up some of the shortages in the
scheduled payments. Failure to cure a default in payment schedules could result
in the entry of a judgment against the Company. The Company is subject to a
claim for Federal and Unemployment Taxes for approximately, $400,000, and
$100,000 respectively which the Company is disputing. With regard to the Federal
payroll tax the Company has received notice of a levy in the amount of
$83,448.33 against certain of the Company's assets. It has also received notice
from the Federal Government and the Department of Labor of various liens with
regard to the above arrears. The Company is in the process of filing a 941c
adjustment which should eliminate all or at least a substantial portion of these
tax arrears. It is doing so under advise of legal counsel who specializes in
payroll tax issues. There is no assurance that the Company will be successful in
resolving this dispute and having these liens removed.

         One of the Company's creditors has obtained a default judgment against
the Company for an amount of approximately $29,000. The complaint was filed on
February 2, 2003 in Civil Court, Kings County. The judgment was vacated in
April, 2004 in civil court, Kings County. The creditor still has a judgment
against the Company in Oklahoma and could bring another action in New York.

         Another creditor is suing the Company for $82,000. The complaint was
filed on February 6, 2003 in NY State Supreme Court, Suffolk County. The suit
deals with equipment leased to the Company. The Company has answered the
complaint by denying the claim. The creditor did not answer the motion and the
case was dismissed.

         In May, 2004 the company was served with a lawsuit by a California law
firm which is suing the Company for $70,000 for unpaid legal bills. A case
management conference is scheduled for October 8, 2004 in the Superior Court
Alternative Dispute Resolution Center in San Francisco. The Company is in the
process of retaining counsel to review the merits of the Company's case and to
prepare a response to this suit.

         As of February 2, 2000, the Company converted an account payable of
$135,500 due to its former accountants, Holtz Rubenstein & Co., LLP, into a
one-year Series B Note, in the principal amount of $135,500, bearing interest at
the rate of 10% PER ANNUM. As of February 2001, this note has expired and Holtz
Rubinstein & Co has received a judgment for $120,000. The complaint by Holtz
Rubenstein was entered April, 2001 in Supreme Court, Suffolk County.

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

         Not applicable.

                                     PART II

ITEM 5.  MARKET PRICE OF REGISTRANT'S COMMON EQUITY AND EQUITY AND RELATED
         STOCKHOLDER MATTERS

         The Company's Common Stock and Warrants are listed for trading on the
NASD Electronic Bulletin Board under the symbols MMTS and MMTSW, respectively.

         The following table sets forth the high and low sales price for the
Company's Common Stock in each quarter of the fiscal years ended February 28,
2002 and 2003 and the initial quarter of the fiscal year ending February 28,
2004, and further reflects the period preceding and following May 24, 1999, the
date on which the Company effected a one-for-ten reverse split of the issued and
outstanding Common stock. These quotations have been reported by the National
Association of Securities Dealers, Inc. and represent quotations by dealers
without adjustments for retail mark-ups, mark-downs or commissions and may not
represent actual transactions.

                                       11

<PAGE>

COMMON STOCK

                                         Bid Prices              Asked Prices
                                         ----------              ------------
                                       High        Low           High      Low
                                       ----        ---           ----      ---
Year Ending February 28, 2003

1st Quarter                            0.035      0.11           0.045    0.016
2nd Quarter                            0.016      0.014          0.016    0.016
3rd Quarter                            0.013      0.013          0.013    0.013
4th Quarter                            0.011      0.011          0.011    0.011

Year Ending February 29, 2004
1st Quarter                            0.012      0.012          0.012    0.012
2nd Quarter                            0.012      0.008          0.015    0.011
3rd Quarter                            0.008      0.006          0.011    0.01
4th Quarter                            0.18       0.007          0.19     0.011


Year Ending February 28, 2005
1st Quarter                            0.13       0.038          0.15     0.045

         The closing bid and asked sales prices of the Common Stock, as traded
in the over-the-counter market, on May 28, 2004 were approximately $.05 and
$.06, respectively. These prices are based upon quotations between dealers,
without adjustments for retail mark-ups, mark-downs or commissions, and
therefore may not represent actual transactions.

         The Company has not paid a cash dividend on its Common Stock since its
inception and, by reason of its present financial status and its contemplated
financial requirements, does not anticipate paying and cash dividends in the
foreseeable future. It is anticipated that earnings, if any, which may be
generated from operations will be used to finance the operations of the Company.

SALES OF UNREGISTERED SECURITIES

         As of May 24, 1999, the Company effected a reverse split of its issued
and outstanding Common Stock on a one-for-ten basis. Except as set forth below,
the following discussion gives effects to the reverse split.

         In May and June 1997, the Company secured approximately $350,000 of
loans ("1997 Loans"), which were used for working capital and for debt
repayment. As of June 9, 2000, the noteholders had converted all of the loans
into 5,200,000 shares of Common Stock.

         In 1996, the Company issued an aggregate amount of $1,000,000 principal
amount of convertible promissory notes. $750,000 of principal of these loans
remain outstanding and are currently due and payable. With respect to the
assignment of $600,000 of these notes by the original noteholders to certain
other persons, the Company issued 546,672 shares of Common Stock during the
fiscal year ended February 29, 2000, and recognized interest charges of
$142,135, as of February 29, 2000.

         The Company issued 230,769 shares of Common Stock to an employee in
cancellation of $30,000 of accrued and unpaid salary.

         In December, 1999, the Company entered into an agreement with Gaspra,
Inc., a software development company, to develop a website and to convert a
portion of the Company's "MathMadeEasy" video into on-line learning programs
utilizing flash technology. The Company agreed to pay $130,000 for these
services, and has issued 433,333 shares of Common Stock in satisfaction of
$65,000 of this obligation.

         In May, 1999, the Company issued 670,000 shares of Common Stock in
satisfaction of an obligation of $201,000 to its former counsel, Oscar Folger,
for services rendered.

         In December, 1999, the Company issued 250,000 shares of Common Stock,
as a finance charge of $60,000 for a bridge financing.

         In December, 1999, the Company issued 230,769 shares of Common Stock to
Anne Reichman in cancellation of $30,000 of certain obligations.


                                       12

<PAGE>

         From November, 1999, to July, 2000, the Company issued approximately
$763,000 of convertible, unsecured promissory notes. The notes bear interest at
the rate of 10% per annum, and are due 10-months following the date of issuance.
The notes are convertible into Common Stock at the lesser of: (i) $0.50 per
share, or (ii) 50% of the average of the closing bid price for the Common Stock
during the five (5) days immediately preceding conversion. However, the notes
may not be converted at a price of less than $0.10 per share. The notes may be
converted into a number of shares of common stock of the Company's subsidiary,
The Tutorial Channel.com, equal to 1% of the issued and outstanding shares of
common stock of such subsidiary for each $25,000 principal amount with respect
to $600,000 of certain of these notes (Class A Notes), and equal to 0.25% of the
issued and outstanding shares of common stock of such subsidiary for each
$25,000 principal amount with respect to $163,000 of certain of these notes
(Class B Notes). Each class of these notes is convertible on the earlier of (i)
the last business day preceding the filing of the first registration statement
for the common stock of such subsidiary, or (ii) December 1, 2000. From July,
2000 through September, 2000 $573,361.10 of these notes were converted into
5,733,611 shares of common stock at $.10 per share.

         In March, 2000, the Company issued 150,000 shares of Common Stock to a
public relations consultant for $21,000 of services rendered. The Company
recognized a consulting expense of $10,500 during the fiscal year ended February
29, 2000.

         In March, 2000, the Company issued 52,000 shares of Common Stock to
consultant for $13,000 of services rendered.

         During the year ended February 28, 2001 the Company converted certain
vendor obligations valued at $28,000 into 280,000 shares of common stock.

         During the year ended February 28, 2001, 433,333 shares of common stock
were issued in satisfaction of $65,000 of services in relation to the Gaspra
agreement.

         In September, 2000, the Company received $100,000 for which it issued
1,000,000 common shares and 1,000,000 warrants exercisable at $.25 per share.

         In May, 2001, the Company issued 110,000 shares of common stock for
$3300 of financing costs.

         In July, 2001, the Company issued 405,457 common shares in satisfaction
of $16,046 of consulting services.

         In January, 2001, the Company received $25,000 cash and issued 125,000
shares and 125,000 warrants exercisable at $.25 per share and a debenture in the
amount of $25,000.

         In May and December, 2001 the Company issued 235,000 shares of common
stock for interest.

         In December, 2001 the Company issued 500,000 shares of common stock for
services.

         In May, 2001 458,380 of committed shares were converted into actual
shares of common stock.

         In May 2002 the Company committed to issue 7,590 common shares in
satisfaction of $759 of interest charges.

         In August 2002 the Company committed to issue 20,570 common shares in
satisfaction of $2,057 of interest charges.

         In November 2002 the Company committed to issue 10,760 common shares in
satisfaction of $1,076 of interest charges

         In February 2003, the Company committed to issue 500,000 common shares
in connection with the issuance of a $50,000 unsecured convertible promissory
note. These shares were issued in the year ended February 29, 2004.

         During the year ended February 28, 2003, the Company committed to issue
163,920 shares of common stock for $13,517 of interest expense incurred.

         During the year ended February 29,2004, the Company issued 645,000
shares of common stock that had been committed in the previous year.


                                       13

<PAGE>

         During the year ended February 29, 2004, the Company issued 325,000
shares of common stock for $3,250 of interest expense incurred.

         During the year ended February 29, 2004, the Company issued 150,000
shares of common stock for $1,500 of legal services incurred.

         During the year ended February 29, 2004, the Company issued 100,00
shares in connection with the issuance of a $10,000 unsecured convertible
promissory note.

         In addition to the various issuances of securities referenced above in
this Report, the Company issued options to purchase 7,275,000 shares of Common
Stock at exercise prices ranging from $.01 to $.25 to various employees and
consultants of the Company during the fiscal years ended February 28, 2001 to
February 28, 2003.

         These transactions were exempt from registration pursuant to Section
4(2) of the Securities Act of 1933.

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

         THIS REPORT, INCLUDING THE DISCLOSURES BELOW, CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS THAT INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES.
WHEN USED HEREIN, THE TERMS "ANTICIPATES," "EXPECTS," "ESTIMATES," "BELIEVES"
AND SIMILAR EXPRESSIONS, AS THEY RELATE TO THE COMPANY OR ITS MANAGEMENT, ARE
INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY'S ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED
OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH MATERIAL DIFFERENCES INCLUDE THE FACTORS DISCLOSED IN THE
"RISK FACTORS" SECTION OF THIS ANNUAL REPORT ON FORM 10-KSB, WHICH READERS OF
THIS REPORT SHOULD CONSIDER CAREFULLY.

RESULTS OF OPERATIONS

         RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED FEBRUARY 28, 2003 AND
2002. Net sales for the fiscal year ended February 29, 2004 (the "2004 Period")
were $844,438 compared to $1,168,058 in the fiscal year ended February 29, 2002
(the "2003 Period"). This is a direct result of the Company having shifted its
business away from its telesales servicing to a return to the sale of the
Company's core business of marketing its own educational products. The Company
did this in response to having experienced the whittling away of profit margins
from telesales due to the competition originating from India's teleservicing
companies.

         Gross profit was $777,947 in the 2004 Period compared to $1,129,284
in the 2003 Period.

         Selling and marketing expenses were $461,830 in the 2004 Period
compared to $684,760  for the 2003 Period.

         General and administrative expenses were $480,935 in the 2004 Period
compared to $693,840  in the 2003 Period.

         Interest expense was $268,485 in the 2004 Period compared to $411,208
in the 2003 Period. Of those amounts, $4,250 and $13,517 respectively, resulted
from non-recurring, non-cash interest charges related to securities issued by
the Company in connection with certain debt.

         Net loss from operations before depreciation, amortization, interest
expense and non-cash charges was $164,818 in the 2004 period compared to
$249,316 in the 2003 period. The smaller loss reflects an improvement in the
Company's advertising results. The Company's management has learned through
testing over the last eighteen months which advertising mediums render the lower
cost per leads and the Company has allocated its advertising budget towards
those efficient mediums. Furthermore, management had made continuous
improvements in its training programs for new recruits, which has improved
conversion of leads to sales. The Company has also introduced a new DVD version
of its product as a replacement for the videotape version. This format is much
more popular with consumers The percentage of sales in the DVD format has risen
to an approximate 80% of the Company's volume. This has resulted in a drop in
the Company's cost of goods since the cost of DVD replication is approximately
10% less than that of videotape duplication.


                                       14

<PAGE>

         Net loss was $ 477,725 in the 2004 Period compared to $722,749 in the
2003 Period. The non-recurring, non-cash interest charges constituted $4,250 of
the losses in the 2004 Period. Losses before non-recurring, non-cash interest
charges, and depreciation and amortization were $430,553 and $647,005 for the
fiscal years ended February 29, 2004 and February 28, 2003, respectively.

         In the 2004 period, the Company continued its advertising test over
radio and the internet. The results have demonstrated that advertising is cost
effective for the Company's products under certain limitations of cost of media
and the type of programming that meets the Company's demographics. In the second
half of 2004 the Company has gradually reduced radio and increased internet
based advertising which has turned out to be more profitable and less subject to
wide fluctuations in advertising inventory.

         In order to optimize the Company's advertising results, it is necessary
for the Company to test and retest all the appropriate advertising venues to
determine which programming would be profitable for the Company's campaign. In
the course of this testing, the Company has been able to find certain venues
which produce an acceptable ROI. However, in the course of this testing, the
Company has had to incur advertising expenses relating to those venues that have
not produced positive results. This has partially contributed to the Company's
losses for the period.

         LIQUIDITY AND CAPITAL RESOURCES. The Company's cash and restricted cash
decreased to $5,364 at February 29, 2004 from $10,846 at February 29, 2003. The
Company had a cash balance of $2,864 at February 29, 2004.

         Net cash used in operating activities in the 2004 Period was $42,302
compared to $24,273 in the 2003 Period.

         Net cash provided by investing activities in the 2004 Period was
$18,320 compared to net cash used of $6,693 in the 2003 Period.

         Net cash provided from financing activities in the 2004 Period was
$18,500, compared to $66,990 in the 2003 Period.

         As of May 24, 1999, the Company effected a reverse split of its issued
and outstanding Common Stock on a one-for-ten basis.

         In April 1996, the Company received gross proceeds of $500,000 from the
issuance of convertible notes. The notes bear interest at 10% per annum and an
accelerated rate of 17% per annum beginning April 17, 1997. The noteholders have
the right to convert the principal and accrued interest into common shares of
the Company at a price of (i) $1.2656 per share or (ii) 75% of the closing bid
for the five trading days immediately preceding the conversion. In the event of
default, as defined, the Company will not have the right to compel conversion.
The Company placed 909,090 shares of common stock into escrow for the benefit of
the noteholders. During the nine months ended November 30, 1996, $250,000 was
converted into 34,190 shares and $250,000 of principal remain outstanding and
are currently due and payable. As a result of the conversion, 45,455 shares
remained in escrow.

         The Company arranged a six month short term loan that yielded the
Company in the months of September 1996 and October 1996 approximately
$1,000,000 which was used to retire existing debt and fund working capital.
$750,000 of principal of these loans remain outstanding and are currently due
and payable. With respect to the assignment of $600,000 of these notes by the
original noteholders to certain other persons, the Company issued 546,672 shares
of Common Stock during the fiscal year ended February 29, 2000. Interest charges
for the year ended February 28, 2003 were $60,000.

         In May and June 1997, the Company secured approximately $350,000 of
loans ("1997 Loans"), which were used for working capital and for debt
repayment. As of June 9, 2000, the noteholders had converted all of the loans
into 5,200,000 shares of Common Stock.

         The Company has received advances aggregating $375,000, which bear
interest at the rate of 10% per year, and are currently due and payable.

         At February 29, 2000, the Company maintained advances of $83,224 from
Barry and Anne Reichman, who are directors and executive officers of the
Company. The advances were paid in the year ended February 28, 2001. In
December, 1999, the Company issued 230,769 shares of Common Stock to Anne
Reichman (on a post-split basis) in cancellation of $30,000 of these
obligations.


                                       15

<PAGE>

         In December, 1999 the Company entered into a consulting agreement with
a software consulting firm. The consultants were to develop a web site and a CD
Rom program. The agreement was valued at $130,000 and called for an initial fee
of $65,000 with $65,000 due upon completion. Pursuant to the agreement, the
Company will pay all fees with stock. The Company has issued 433,333 shares of
common stock. The web site is operational but the CD Rom is not as yet
completed.

         In May, 1999, the Company issued 670,000 shares of Common Stock in
satisfaction of an obligation of $201,000 to its former counsel, Oscar Folger,
for services rendered.

         In December, 1999, the Company issued 250,000 shares of Common Stock,
as a finance charge of $60,000 for a bridge financing.

         From November, 1999, to July, 2000, the Company issued approximately
$763,000 of convertible, unsecured promissory notes. The notes bear interest at
the rate of 10% PER ANNUM, and are due 10-months following the date of issuance.
The notes are convertible into Common Stock at the lesser of: (i) $0.50 per
share, or (ii) 50% of the average of the closing bid price for the Common Stock
during the five (5) days immediately preceding conversion. However, the notes
may not be converted at a price of less than $0.10 per share. The notes may be
converted into a number of shares of common stock of the Company's subsidiary,
The Tutorial Channel.com, equal to 1% of the issued and outstanding shares of
common stock of such subsidiary for each $25,000 principal amount with respect
to $600,000 of certain of these notes (Series A Notes), and equal to 0.25% of
the issued and outstanding shares of common stock of such subsidiary for each
$25,000 principal amount with respect to $163,000 of certain of these notes
(Series B Notes). Each class of these notes is convertible on the earlier of (i)
the last business day preceding the filing of the first registration statement
for the common stock of such subsidiary, or (ii) December 1, 2000. From July,
2000 through September, 2000, $573,336.10 of these shares were converted into
5,733,611 shares of common stock at $.10 per share.

         In December, 1999, the Company issued 230,769 shares of Common Stock to
Anne Reichman in cancellation of $30,000 of certain obligations.

         From November, 1999 to February, 2000, the Company issued $100,000 of
unsecured, demand promissory notes, bearing interest at the rate of 10% per
annum.

         As of February 2, 2000, the Company converted an account payable of
$135,500 due to its former accountants, Holtz Rubenstein & Co., LLP, into a
one-year Series B Note, in the principal amount of $135,500, bearing interest at
the rate of 10% PER ANNUM. As of February 2001, this note has expired and Holtz
Rubinstein & Co has received a judgment for $120,000.

         In March, 2000, the Company issued 150,000 shares of Common Stock for
public relations consultant for $21,000 for services rendered. The Company
recognized a consulting expense of $10,500 during the fiscal year ended February
29, 2000.

         In March, 2000, the Company issued 52,000 shares of Common Stock to
consultant for $13,000 of services rendered.

         During the year ended February 28, 2001 the Company converted certain
vendor obligations valued at $28,000 into 280,000 shares of common stock.

         During the year ended February 28, 2001, 433,333 shares of common stock
were issued in satisfaction of $65,000 of services in relation to the Gaspra
agreement.

         In September, 2000, the Company received $100,000 for which it issued
1,000,000 common shares and 1,000,000 warrants exercisable at $.25 per share.

         In May, 2001, the Company issued 110,000 shares of common stock for
$3300 of financing costs.

         In July, 2001, the Company issued 405,457 common shares in satisfaction
of $16,046 of consulting services.

         In January, 2001, the Company received $25,000 cash and issued 125,000
shares and 125,000 warrants exercisable at $.25 per share and a debenture in the
amount of $25,000.


                                       16

<PAGE>

         In May and December, 2001 the Company issued 235,000 shares of common
stock for interest.

         In December, 2001 the Company issued 500,000 shares of common stock for
services.

         In May, 2001 458,380 of committed shares were converted into actual
shares of common stock.

         In May 2002 the Company committed to issue 7,590 common shares in
satisfaction of $759 of interest charges.

         In August 2002 the Company committed to issue 20,570 common shares in
satisfaction of $2,057 of interest charges.

         In November 2002 the Company committed to issue 10,760 common shares in
satisfaction of $1,076 of interest charges.

         During the year ended February 28, 2003, the Company committed to issue
163,920 shares of common stock for $13,517 of interest expense incurred.

         During the year ended February 28,2004, the Company issued 645,000
shares of common stock that had been committed in the previous year.

         During the year ended February 28, 2004, the Company issued 325,000
shares of common stock for $3,250 of interest expense incurred.

         During the year ended February 28, 2004, the Company issued 150,000
shares of common stock for $1,500 of legal services incurred.

         In February 2003 the Company received $50,000 for the issuance of its
"C" unit, which includes a convertible, unsecured promissory note. The note
accrues interest at the rate of 10 percent per annum payable in cash upon
maturity, and the note is due in three years from the date of issuance. In
connection with the "C" unit, the Company has committed to issue to the investor
500,000 shares of unregistered common stock. The notes are convertible into
common stock at the lesser of: (i) $0.50 per share, or (ii) 50% of the average
of the closing bid price for the Common Stock during the five days immediately
preceding conversion. However, the notes may not be converted at a price of less
than $0.10 per share. The Company received $10,000 during the year ended
February 29, 2004 through the issuance of a second note due July, 2006 having
the same terms and conditions as the previous note described herein.

         The Company had made a settlement with one of its creditors that had
begun litigation on January 6, 2000 in Superior Court, Judicial District of
Stanford/Norwalk, whereby it has settled a $235,000 claim for $190,000 with a
29-month payout schedule. The Company has paid approximately $30,000 in honor of
this settlement; however, since the creditor has not honored the terms of the
settlement agreement to activate and to provide upgrades of its software, the
Company has discontinued its schedule of payments. The Creditor sued the Company
in the state of Connecticut but the court ruled that the creditor could not
proceed with the suit in the State of Connecticut.


                                       17

<PAGE>

         The Company has reached payment agreements with certain of its vendors
relating to obligations in the aggregate amount of approximately $700,000. There
is no assurance that the Company's future revenues will be adequate to meet such
payment schedules. Moreover, the Company's revenues have not always been
sufficient to enable the Company to fully comply with these payment schedules.
However, The Company has been able to receive extensions of the payments due
under these schedules where it has not been able to comply with the agreed
schedules including one with its largest creditor who had received a judgment
against the Company in 2001. The creditor has agreed to take no action against
the Company with respect to its judgment so long as the Company is in compliance
with its oral agreement with the creditor as may be modified from time to time.
Other creditors have given extensions in the form of agreements on a periodic
basis. There is no assurance that any of these creditors will not, at some point
in the future, declare the Company in default of its obligations. The company
presently makes scheduled payments to creditors from operating cash flow. In
addition, the Company has, from time to time, obtained additional funding from
investors, which have enabled it to make up some of the shortages in the
scheduled payments. Failure to cure a default in payment schedules could result
in the entry of a judgment against the Company. The Company is subject to a
claim for Federal and Unemployment Taxes for approximately, $400,000, and
$100,000 respectively which the Company is disputing. With regard to the Federal
payroll tax the Company has received notice of a levy in the amount of
$83,448.33 against certain of the Company's assets. It has also received notice
from the Federal Government and the Department of Labor of various liens with
regard to the above arrears. The Company is in the process of filing a 941c
adjustment which should eliminate all or at least a substantial portion of these
tax arrears. It is doing so under advise of legal counsel who specializes in
payroll tax issues. There is no assurance that the Company will be successful in
resolving this dispute and having these liens removed.

         One of the Company's creditors has obtained a default judgment against
the Company for an amount of approximately $29,000. The complaint was filed on
February 2, 2003 in Civil Court, Kings County. The judgment was vacated in
April, 2004 civil court, Kings County. The creditor still has a judgment against
the Company in Oklahoma and could bring another action in New York.

         Another creditor is suing the Company for $82,000. The complaint was
filed on February 6, 2003 in NY State Supreme Court, Suffolk County. The suit
deals with equipment leased to the Company. The Company has answered the
complaint by denying the claim. The creditor did not answer the motion and the
case was dismissed.

         In May, 2004 the company was served with a lawsuit by a California law
firm which is suing the Company for $70,000 for unpaid legal bills. A case
management conference is scheduled for October 8, 2004 in the Superior Court
Alternative Dispute Resolution Center in San Francisco. The Company is in the
process of retaining counsel to review the merits of the Company's case and to
prepare a response to this suit.

         As of February 2, 2000, the Company converted an account payable of
$135,500 due to its former accountants, Holtz Rubenstein & Co., LLP, into a
one-year Series B Note, in the principal amount of $135,500, bearing interest at
the rate of 10% PER ANNUM. As of February 2001, this note has expired and Holtz
Rubinstein & Co has received a judgment for $120,000. The complaint by Holtz
Rubenstein was entered April, 2001 in Supreme Court, Suffolk County.

         The Company continues to meet its working capital requirements through
debt and equity funding from outside sources and internally generated funds. In
September, 2000 the Company received $100,000 in funding and issued 1,000,00
shares of common stock and 1,000,000 warrants. In January 2001, the Company
received $25,000 in funding and issued 125,000 shares and 125,000 warrants and a
debenture in the amount of $25,000. In addition, the Company may have increased
capital requirements as it seeks to expand its product lines and customized
telemarketing services. In order to meet its current and future cash
requirements, the Company is in discussions to negotiate additional debt and
equity financing. There can be no assurance that any financing will be
successful nor that the Company will be able to fund internally its working
capital requirements or meet its debt repayment obligations. In the event that
the Company is unable to secure additional financing, it may be obligated to
significantly reduce its operations and seek to sell assets, which would have a
material adverse affect on the Company's prospects and financial results.

         The Company has received a report from its independent public
accountants, that includes an explanatory paragraph describing the uncertainty
as to the ability of the Company's operations to continue as a going concern.

                                       18

<PAGE>

         The Company's operations have not been materially affected by the
impact of inflation.

YEAR 2000

         The Company has updated its computer systems to address issues related
to year 2000 compliance. Financial and operational systems were developed to
address systems modification requirements to become year 2000 compliant. The
financial impact of making the required systems changes was not material to the
Company's consolidated financial position, liquidity and results of operations.
In the first week of January, 2000, the Company experienced a year 2000 problem
relating to the operations of its voice mail system. The problem has been
resolved with minimal expense, and the problem did not have a material adverse
effect on the operations of the Company during the weeklong period and the
Company does not anticipate that there will be a material adverse effect on the
Company relating to the matter for the foreseeable future.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The financial statements are included herein commencing on page F-1.

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

         a. On December 14, 1999, the Company terminated its relationship with
Holtz Rubenstein & Co., LLP ("Holtz Rubenstein"), as principal independent
accountants for the Company.

         In connection with the audits for the two (2) most recent fiscal years
ended February 28, 1999 and 1998 and the subsequent interim periods through
December 14 1999, there were no disagreements between Holtz Rubenstein and the
Company, on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which disagreements, if
not resolved to the satisfaction of Holtz Rubenstein would have caused Holtz
Rubenstein to make reference in connection with its report for the related
periods with respect to the subject matter of the disagreement.

         Except for a qualification with respect to the ability of the Company
to continue as a going concern stated in the opinion of Holtz Rubenstein, dated
as of April 25, 1997, the audit reports of Holtz Rubenstein on the consolidated
financial statements of the Company, as of and for the fiscal years ended
February 28, 1997 and 1996, did not contain any adverse opinion, or disclaimer
of opinion, nor were they qualified or modified as to uncertainty, audit scope,
or accounting principles.

         b. As of November 14, 1999, the Company engaged Singer Lewak Greenbaum
& Goldstein ("SLGG"), as the Company's principal independent accountants. Prior
to engaging SLGG, neither the Company nor someone on its behalf consulted SLGG
regarding either: (i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Company's financial statements, or (ii) any matter that
was either the subject of a disagreement or a reportable event.

         c. On June 15, 2001, the Company terminated its relationship with
Singer, Lewak, Greenbaum and Goldstein ("SLGG"), as principal independent
accountants for the Company.

         In connection with the audits for the two (2) most recent fiscal years
ended February 28, 2000 and 1999 and the subsequent interim periods through June
15, 2000, there were no disagreements between SLGG and the Company, on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of SLGG would have caused SLGG to make reference in connection with
its report for the related periods with respect to the subject matter of the
disagreement.

         Except for a qualification with respect to the ability of the Company
to continue as a going concern stated in the opinion of SLGG, dated as of May
20, 2000, the audit reports of SLGG on the consolidated financial statements of
the Company, as of and for the fiscal years ended February 28, 2000 and 1999,
did not contain any adverse opinion, or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles


                                       19

<PAGE>

         d. As of June 15, 2001, The Company engaged Don Fuchs, CPA , as the
Company's principal independent accountant. Prior to engaging Don Fuchs, neither
the Company nor someone on its behalf consulted SLGG regarding either: (i) the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's financial statements, or (ii) any matter that was either the
subject of a disagreement or a reportable event.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Officers and Directors

         The officers and directors of the Company, as of May 28,2004, are as
follows:

     NAME                    AGE                    POSITION
     ----                    ---                    --------

 Barry Reichman               53            Chief Executive Officer,
                                            Chief Financial Officer and Director

 Anne Reichman                50            Director

         BARRY REICHMAN has been Chief Executive Officer and a Director of the
Company since August 1994, and Chief Financial Officer since September, 1999.
From 1985 until 1994, he was Secretary and a Director of VTS. Mr. Reichman holds
a B.A. in Economics from Yeshiva University and an M.B.A. from Baruch College.
He is the husband of Anne Reichman, a Director of the Company.

         ANNE REICHMAN has been a Director of the Company since October 1994.
Ms. Reichman was elected Secretary of the Company in March 1995. From 1985 until
1994 she developed and oversaw the computer and order fulfillment system for VTS
and supervised internal accounting. Ms. Reichman was also an assistant producer
in a number of VTS mathematics videotape productions and authored several math
workbooks. Ms. Reichman holds a B.A. in Mathematics from Yeshiva University. Ms.
Reichman is the wife of Barry Reichman, President and a Director of the Company.

ITEM 10. EXECUTIVE COMPENSATION

         The following table sets forth information with respect to compensation
paid by the Company for services to the Company during the two (2) fiscal years
ended February 29, 2004, to the Company's Chief Executive Officer and other
officers of the Company who received annual compensation in excess of $100,000.

                                       20

<PAGE>

                           SUMMARY COMPENSATION TABLE

         SUMMARY COMPENSATION TABLE. The following table sets forth certain
information concerning compensation of certain of the Company's executive
officers (the "Named Executives"), including the Company's Chief Executive
Officer and all executive officers whose total annual salary and bonus exceeded
$100,000, for the years ended February 29, 2004 and February 28, 2003:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                 ANNUAL COMPENSATION                        LONG TERM COMPENSATION

                                             Awards                                                  Payouts
-----------------------------------------------------------------------------------------------------------------
                                                          Restricted     Securities
Name and                                   Other annual     Stock        Underlying      LTIP        All other
Principal                                  Compensation    Award(s)     Options/ SARs   Payouts    Compensation
Position        Year    Salary     Bonus        ($)          ($)             (#)          ($)           ($)
-----------------------------------------------------------------------------------------------------------------
<S>             <C>     <C>        <C>         <C>          <C>          <C>              <C>           <C>

Barry
Reichman        2004    $100,000   -0-         -0-          -0-          4,000,000        -             -

Barry           2003    $100,000   -0-         -0-          -0-          3,000,000        -             -
Reichman(1)
</TABLE>

----------
(1) Mr. Reichman has served as Chief Executive Officer since July 31, 1999.

         (1) This chart assumes a market price of $0.06 for the Common Stock,
the approximate closing market price for the Company's Common Stock in the over
the counter market, as of February 28, 2001 as the assumed market price for the
Common Stock with respect to determining the "potential realizable value" of the
shares of Common Stock underlying the options described in the chart, as reduced
by any lesser exercise price for such options. Each of the options reflected in
the chart was granted at exercise prices, which the Company believes to have
been determined based on the fair market value of the Common Stock as of the
date of grant. Further, the chart assumes the annual compounding of such assumed
market price over the relevant periods, without giving effect to commissions or
other costs or expenses relating to potential sales of such securities. The
Company's Common Stock has a very limited trading history. These values are not
intended to forecast the possible future appreciation, if any, price or value of
the Common Stock. See "Item 5-Market Price of Common Equity and Related
Stockholder Matters" and "Executive Compensation-Stock Option Plan."

EMPLOYMENT AGREEMENTS

         The Company has entered into employment agreements with Barry Reichman,
Anne Reichman and Harold Reichman pursuant to which they are paid annual base
salaries of $100,000, $50,000 and $75,000, respectively. In addition, Anne
Reichman and Harold Reichman were granted options to purchase up to 500,000 and
200,000 shares of Common Stock, respectively, at an exercise price equal to 50%
of the market price of the Common Stock during the year ended February 29, 2000.
The options vest in 20% increments, on each January 5 of the term of the
agreements, commencing January 5, 2000. The agreements terminate on December 31,
2004.

STOCK OPTION PLAN

         The Company's 1995 Stock Option Plan (the "Stock Option Plan") provides
for the granting of options to purchase not more than an aggregate of 350,000
shares of Common Stock, subject to adjustment under certain circumstances. Such
options may be Incentive Stock Options ("ISO") within the meaning of the
Internal Revenue Code of 1986, as amended, or Non-Qualified Options ("NQO"). The
Stock Option Plan expires on March 31, 2004. The Company has granted 279,953
options under the Stock Option Plan.

                                       21

<PAGE>

         The Stock Option Plan is administered by the Board of Directors or by a
stock option committee (the "Committee") which may be appointed by the Board of
Directors. To date the Board has not appointed a Committee. The Committee has
full power and authority to interpret the provisions, and supervise the
administration, of the Stock Option Plan. The Committee determines, subject to
the provisions of the Stock Option Plan, to whom options are granted, the number
of shares of Common Stock subject to each option, whether an option shall be an
ISO or a NQO and the period during which each option may be exercised. In
addition, the Committee determines the exercise price of each option, subject to
the limitations provided in the Stock Option Plan, including that (i) for a NQO
the exercise price per share may not be less than 85% of the fair market value
per share of Common Stock on the date of grant and (ii) for an ISO the exercise
price per share may not be less than the fair market value per share of Common
Stock on the date of grant (110% of such fair market value if the grantee owns
stock possessing more than 10% of the combined voting power of all classes of
the Company's stock). In determining persons to whom options will be granted and
the number of shares of Common Stock to be covered by each option, the Committee
considers various factors including each eligible person's position and
responsibilities, service and accomplishments, anticipated length of future
service and other relevant factors. Options may be granted under the Stock
Option Plan to all officers, directors and employees of the Company and, in
addition, NQO may be granted to other parties who perform services for the
Company. No options may be granted under the Stock Option Plan, after March 31,
2004. The Stock Option Plan may be amended from time to time by the Board of
Directors of the Company. The Board of Directors may not, however, without
stockholder approval, amend the Stock Option Plan to increase the number of
shares of Common Stock which may be issued under the Stock Option Plan (except
upon changes in capitalization as specified in the Stock Option Plan), decrease
the minimum exercise price provided in the plan or change the class of persons
eligible to participate in the plan.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, 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 ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.

         Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during the fiscal year ended February 29, 2004, no reports
required under Section 16 (a) of the Exchange Act were made by any of the
Company's executive officers, directors or 10% beneficial owners, if any, and
that all such reports remain delinquent. The Company intends determine which
reports, if any, are required to be filed by such persons, and to be in
compliance with the filing requirements of Section 16(a).

                                       22

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of May 28, 2004, as adjusted for the
one-for-ten reverse split, information regarding the beneficial ownership of the
Common Stock based upon the most recent information available to the Company for
(i) each person known by the Company to own beneficially more than five percent
of the Common Stock, (ii) each of the Company's directors and (iii) all officers
and directors of the Company as a group. Unless otherwise indicated, each
stockholder's address is c/o the Company, 1214 East 15th Street Brooklyn, NY
11230


Name and Address
of Beneficial Owner               Number of Shares          Percent of Total #
-------------------               ----------------          ------------------

Barry Reichman (1)                    11,501,361              37

Anne Reichman (1)                     11,501,361              37

Custer Company, Inc. (2)              1,685,556               8.5

Josh B. Scheinfeld
  and Steve G. Martin (3)             3,978,611               19.6

Jacob Wizman (4)                      2,720,556               13.7

All officers and directors
  as a group (2 persons)(6)           6,501,361               38.4

----------

#        Pursuant to the rules of the Commission, shares of Common Stock which
         an individual or group has a right to acquire within 60 days pursuant
         to the exercise of options or warrants are deemed to be outstanding for
         the purpose of computing the percentage ownership of such individual or
         group, but are not deemed to be outstanding for the purpose of
         computing the percentage ownership of any other person shown in the
         table.

(1)      Mr. and Mrs. Reichman are husband and wife. Mr. Reichman is an officer
         and director of the Company. Mrs. Reichman is a director of the
         Company. Includes options to purchase up to 4,224,967 shares granted to
         Mr. Reichman, options to purchase up to 2,025,000 shares granted to
         Mrs. Reichman, 230,769 shares owned by Mrs. Reichman, and 20,625 shares
         owned by Mr. Reichman.

(2)      The address for Custer Company, Inc. is 10911 Petal Street, Dallas
         Texas 75238.

(3)      The address for Josh Scheinfeld and Steve Martin is 222 Merchandise
         Mart Plaza Suite 9-112 Chicago, IL 60654. Includes warrants to purchase
         1,375,000 shares of common stock.

(4)      The address for Mr. Wizman is 211 South Beverly Drive, Suite 108,
         Beverly Hills, California 90210. Includes promissory notes convertible
         into up to 875,000 shares of Common Stock.


(5)      See Footnotes 1 and 2 above.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Not Applicable.

                                       23
<PAGE>

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

         (a) 1. Financial Statements and Schedules.

                  The financial statements are listed in the Index to Financial
                  Statements on page F-1 and are filed as part of this annual
                  report.

             2. Exhibits.

                  The Index to Exhibits set forth below indicates the exhibits
                  which are being filed herewith and the exhibits which are
                  incorporated herein by reference.

                                    EXHIBITS

3.1      Certificate of Incorporation, as amended (1)
3.2      By-Laws (1)
4.1      Form of Warrant Agreement entered into between Registrant and
           American Stock Transfer & Trust Company (1)
4.2      Specimens of Registrant's Stock, Redeemable Warrant and Unit
           Certificate (1)
10.1     Form of 1995 Stock Option Plan (1)
10.2     Employment Agreement between Registrant and Barry Reichman
16.1     Letter  re change in certifying accountant (2)
31       Certification of Barry Reichman pursuant to 18 U.S.C. Section 1350, as
         adopted to section 302 of the Sarbanes-Oxley Act of 2002
32       Certification of Barry Reichman pursuant to 18 U.S.C. Section 1350, as
         adopted to section 906 of the Sarbanes-Oxley Act of 2002

--------------------------------------------------------------------------------

(1)      Incorporated by reference from the Company's Registration Statement on
         Form SB-2 (No. 33-88494) effective April 13, 1995.

(2)      Incorporated by reference from the Company's Annual Report on Form
         10-KSB for the fiscal year ended February 28, 1999.

                                       24
<PAGE>

                                   SIGNATURES

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

                                 MULTI MEDIA TUTORIAL SERVICES, INC.

Dated: May 28, 2004             By: /S/ Barry Reichman
                                     -------------------------------------------
                                     Barry Reichman, Chief Executive Officer,
                                     Chief Financial Officer and Director

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below as of June 1, 2004 by the following persons
on behalf of Registrant and in the capacities indicated.

                                     /S/ Barry Reichman
                                     -------------------------------------------
                                     Barry Reichman, Chief Executive Officer
                                     Chief Financial Officer and Director

                                     /S/ Anne Reichman
                                     -------------------------------------------
                                     Anne Reichman, Director

                                       25
<PAGE>

                                             MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                  AND SUBSIDIARY
                                                                        CONTENTS
                                                               FEBRUARY 29, 2004

--------------------------------------------------------------------------------

                                                                        Page

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                       F-1

FINANCIAL STATEMENTS

     Consolidated Balance Sheet                                       F-2 - F-3

     Consolidated Statements of Operations                               F-4

     Consolidated Statements of Stockholders' Deficit                    F-5

     Consolidated Statements of Cash Flows                            F-6 - F-9

     Notes to Consolidated Financial Statements                      F-10 - F-15




<PAGE>

                                    DON FUCHS
                           CERTIFIED PUBLIC ACCOUNTANT
                              1040 EAST 22ND STREET
                               BROOKLYN, NY 11210

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Multimedia Tutorial Services, Inc

I have audited the accompanying consolidated balance sheets of Multimedia
Tutorial Services, Inc. and Subsidiary as of February 29, 2004 and February
28,2003, and the related consolidated statements of operations, stockholders'
deficit and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. My responsibility is to express
an opinion on these financial statements based on my audit.

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

In my opinion, the consolidated financial statements referred to above represent
fairly, in all material respects, the financial position of Multimedia Tutorial
Services, Inc. and Subsidiary as of February 29, 2004 and February 28, 2003, and
the results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company incurred a net loss of $ 476,725 and had an
accumulated deficit of $18,764,804 as of February 29, 2004. In addition, the
Company is currently in default on various obligations. These factors, among
others, as discussed in Note 2 to the financial statements, raise doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

/s/ Don Fuchs, CPA

Brooklyn, New York
May 31, 2004

                                       F-1




<PAGE>

                                             MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                  AND SUBSIDIARY
                                                      CONSOLIDATED BALANCE SHEET
                                         FEBRUARY 29, 2004 and FEBRUARY 28, 2003

--------------------------------------------------------------------------------

                                     ASSETS

                                                         2004             2003
                                                       --------         --------
CURRENT ASSETS
     Cash                                              $  2,864         $  8,346
     Accounts receivable                                 29,730           16,228
     Inventories                                         55,411           61,675
     Prepaid expenses                                     5,261           73,171
                                                       --------         --------

         Total current assets                            93,266          159,420

FURNITURE AND EQUIPMENT, net                             32,329           54,285
INTANGIBLE ASSETS, net                                   52,559           73,525
RESTRICTED CASH                                           2,500            2,500
OTHER ASSETS                                              2,500           20,820
                                                       --------         --------

                  TOTAL ASSETS                         $183,154         $310,550
                                                       ========         ========

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

                                       F-2




<PAGE>

                                             MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                  AND SUBSIDIARY
                                                      CONSOLIDATED BALANCE SHEET
                                         FEBRUARY 29, 2004 and FEBRUARY 28, 2003
--------------------------------------------------------------------------------

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                       2004            2003
                                                   -------------   -------------
CURRENT LIABILITIES
     Short-term notes payable                      $  1,520,676     $ 1,502,176
     Convertible promissory notes                       738,890         738,890
     Capital lease obligation                           146,369         156,369
     Accounts payable                                 1,610,190       1,620,010
     Accrued payroll and other expenses               1,026,551         902,222
     Accrued interest                                 1,277,754       1,063,519
     Due to related party                                -                1,665
                                                   -------------   -------------
          Total Current Liabilities                $   6,320,430    $ 5,984,851

LONG-TERM LIABILITIES
     Convertible promissory note                         60,000          50,000
                                                   -------------   -------------

          Total Liabilities                        $  6,380,430     $ 6,034,851
                                                   -------------   -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
     Preferred stock, Series A, $0.01 par value
         1,000,000 shares authorized
         no shares issued and outstanding                    --              --
     Preferred stock, Series B, $0.01 par value
         50 shares authorized
         no shares issued and outstanding                    --              --
     Common stock, $0.01 par value
         20,000,000 shares authorized
         18,770,667 shares issued and outstanding  $    187,708    $    176,508
     Common stock committed, $0.01 par value             28,925          45,550
     Additional paid-in capital                      12,351,895      12,341,720
     Accumulated deficit                            (18,765,804)    (18,288,079)
                                                   -------------   -------------

      Total Stockholders' Deficit                  $ (6,197,276)   $ (5,724,301)
                                                   -------------   -------------

      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT  $    183,154    $    310,550
                                                   =============   =============

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

                                       F-3




<PAGE>

                                             MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                  AND SUBSIDIARY
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   FOR THE YEARS ENDED FEBRUARY,

--------------------------------------------------------------------------------

                                                     2004              2003
                                                 -------------     -------------

NET SALES                                        $    844,438         1,168,058

COST OF SALES                                          66,491            38,774
                                                 -------------     -------------

GROSS PROFIT                                     $    777,947      $  1,129,284
                                                 -------------     -------------

OPERATING EXPENSES
     Selling and marketing                       $    461,830      $    684,760
     General and administrative                       480,935           693,840
     Depreciation and amortization                     42,922            62,227
     Stock-based compensation                           1,500                --
                                                 -------------     -------------

         Total operating expenses                     987,187         1,440,827
                                                 -------------     -------------

LOSS FROM OPERATIONS                             $   (209,240)     $   (311,543)
                                                 -------------     -------------

OTHER EXPENSE
     Non-cash interest charges                         (4,250)          (13,517)
     Interest expense                                (264,235)         (397,689)
                                                 -------------     -------------

         Total other expense                         (268,485)         (411,208)
                                                 -------------     -------------

NET LOSS                                         $   (477,725)         (722,749)
                                                 =============     =============

BASIC LOSS PER SHARE                             $      (0.03)     $      (0.04)
                                                 =============     =============

DILUTED LOSS PER SHARE                           $      (0.03)     $      (0.04)
                                                 =============     =============

WEIGHTED-AVERAGE SHARES OUTSTANDING                18,218,516        17,650,667
                                                 =============     =============

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

                                       F-4


<PAGE>

<TABLE>
                                                                                         MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                                                              AND SUBSIDIARY
                                                                            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                                                                               FOR THE YEARS ENDED FEBRUARY,

----------------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                  Common Stock          Common      Additional
                                            ------------------------     Stock       Paid-In      Accumulated
                                               Shares       Amount     Committed     Capital        Deficit         Total
                                      --------------  --------------  --------------  --------------  --------------  --------------
<S>                                   <C>             <C>             <C>             <C>             <C>             <C>


Balance, February 28, 2002               17,650,667   $     176,508   $      32,033   $  12,341,720   $ (17,565,330)    ($5,015,069)

Common stock committed for
       Interest expense                                                      13,517                                          13,517

Net Loss                                                                                                   (722,749)       (722,749)
                                      --------------  --------------  --------------  --------------  --------------  --------------

Balance, February 28, 2003               17,650,667   $     176,508   $      45,550   $  12,341,720   $ (18,288,079)  $  (5,724,301)


Issuance of Common Stock for:
       Prior year shares committed          645,000           6,450         (16,625)         10,175                             -0-
       Interest                             325,000           3,250                                                           3,250
       Services                             150,000           1,500                                                           1,500


Net Loss                                                                                                   (477,725)       (477,725)
                                      --------------  --------------  --------------  --------------  --------------  --------------

Balance, February 29,2004                18,770,667   $     187,208   $      28,925   $  12,351,895   $ (18,765,804)  $   6,197,276
                                      ==============  ==============  ==============  ==============  ==============  ==============

                         The accompanying notes are an integral part of these financial statements.
</TABLE>
                                                            F-5




<PAGE>
<TABLE>
                                               MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                    AND SUBSIDIARY
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      FOR THE YEARS ENDED FEBRUARY
----------------------------------------------------------------------------------
<CAPTION>

                                                             2004         2003
                                                           ----------   ----------
<S>                                                        <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                 $(477,725)   $(722,749)
  Adjustments to reconcile net loss to net cash
    used in operating activities
      Depreciation and amortization                           42,922       62,227
      Common stock in lieu of interest expense                 3,250           --
      Common stock issued for services                         1,500           --
      Common stock committed in lieu of interest expense          --       13,517

  (Increase) decrease in
      Accounts receivable                                    (13,502)      49,429
      Inventories                                              6,264       11,184
      Prepaid expenses                                        67,910       (3,386)

  Increase (decrease) in
      Due to related party                                    (1,665)      (2,780)
      Accounts payable                                        (9,820)      85,168
      Accrued payroll and other expenses                     124,329      276,382
      Accrued interest                                       214,235      206,285
                                                           ----------   ----------

Net cash used in operating activities                      $ (42,302)   $ (24,273)
                                                           ----------   ----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of furniture and equipment                             --       (5,673)
  Increase in intangibles                                         --       (1,020)
  Decrease in other assets                                    18,320           --
                                                           ----------   ----------

Net cash provided by (used in) investing activities           18,320       (6,693)
                                                           ----------   ----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Repayment of capital lease obligations                     (10,000)      (5,010)
  Proceeds from issuance of notes payable                     31,000       88,000
  Repayment of notes payable                                  (2,500)     (13,000)
                                                           ----------   ----------

Net cash provided by financing activities                  $  18,500    $  69,990
                                                           ----------   ----------

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

                                        F-6

</TABLE>


<PAGE>

<TABLE>
                                                            MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                                 AND SUBSIDIARY
                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                  FOR THE YEARS ENDED FEBRUARY,
-----------------------------------------------------------------------------------------------
<CAPTION>

                                                                       2004            2003
                                                                  -------------   -------------
<S>                                                               <C>             <C>
Net increase(decrease) in cash and cash equivalents               $     (5,482)   $     38,574

CASH AND CASH EQUIVALENTS (BOOK OVERDRAFT), BEGINNING OF YEAR            8,346         (30,228)
                                                                  -------------   -------------

 CASH, END OF YEAR                                                $      2,864    $      8,346
                                                                  =============   =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

     INTEREST PAID                                                $     -0-       $     41,417
                                                                  =============   =============

     INCOME TAXES PAID                                            $        910    $        820
                                                                  =============   =============

           The accompanying notes are an integral part of these financial statements.
</TABLE>
                                              F-7




<PAGE>

                                             MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                  AND SUBSIDIARY
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE YEARS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

--------------------------------------------------------------------------------

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During the year ended February 28, 2003, the Company committed to issue 163,920
shares of common stock for $13,517 of interest expense incurred.

During the year ended February 28, 2003 the Company committed to issue 500,000
shares of common stock in connection with a convertible unsecured promissory
note of $50,000.

During the year ended February 28,2004, the Company issued 645,000 shares of
common stock that had been committed in the previous year.

During the year ended February 28, 2004, the Company issued 325,000 shares of
common stock for $3,250 of interest expense incurred.

During the year ended February 28, 2004, the Company issued 150,000 shares of
common stock for $1,500 of legal services incurred.


During the year ended February 29,2004, the Company issued options to purchase
5,200,000 shares of common stock at an exercise price of $.01 to various
employees. In addition, the Company issued options to purchase 125,000 shares of
common stock at an exercise price of $.10 to the holder of an unsecured
promissory note.

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

                                       F-8




<PAGE>

                                             MULTI-MEDIA TUTORIAL SERVICES, INC.
                                                                  AND SUBSIDIARY
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                               FEBRUARY 29, 2004

--------------------------------------------------------------------------------

NOTE 1 - DESCRIPTION OF BUSINESS

         Multi-Media Tutorial Services, Inc., a Delaware corporation, is engaged
         in the production and sales of educational videocassettes, CD's and
         DVD's through its wholly-owned subsidiary, Video Tutorial Services,
         Inc. (collectively, the "Company"). The Company sells its educational
         products and services on the Internet on the Company's website,
         Mathmadeeasy.com.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation
         ---------------------
         The accompanying consolidated financial statements have been prepared
         in conformity with generally accepted accounting principles, which
         contemplate continuation of the Company as a going concern. The Company
         incurred net losses of $ 477,725 and $722,749 during the years ended
         February 29, 2004 and February 28, 2003, respectively. In addition, the
         Company had an accumulated deficit of $ 18,765,804 and a working
         capital deficit of $ 6,237,164 as of February 29, 2004. Further, the
         Company is currently in default on its capitalized leases. Management
         recognizes that the Company must generate additional resources and the
         eventual achievement of sustained profitable operations. Management's
         plans include obtaining additional capital through debt/equity
         financing and the extension of existing debt. Management is also
         contemplating the implementation of additional products. The
         consolidated financial statements do not include any adjustments that
         might be necessary if the Company is unable to continue as a going
         concern.

         Principles of Consolidation
         ---------------------------
         The consolidated financial statements include the accounts of
         Multi-Media Tutorial Services, Inc. and its wholly-owned subsidiary,
         Video Tutorial Services, Inc. All significant intercompany transactions
         and balances have been eliminated in consolidation.

         Estimates
         ---------
         In preparing financial statements in conformity with generally accepted
         accounting principles, management makes estimates and assumptions that
         affect the reported amounts of assets and liabilities and disclosures
         of contingent assets and liabilities at the date of the financial
         statements, as well as the reported amounts of revenues and expenses
         during the reporting period. Actual results could differ from those
         estimates.

                                       F-9




<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Cash and Cash Equivalents
         -------------------------
         For purposes of the statements of cash flows, the Company considers all
         highly liquid investments purchased with original maturity of three
         months or less to be cash equivalents.

         Advertising
         -----------
         The Company uses direct-response media advertising, consisting
         primarily of television and radio commercials. The Company expenses
         advertising costs as incurred. Advertising expense was $238,109 and
         $140,540 during the years ended February 29, 2004 and February 28,
         2003, respectively.

         Inventories
         -----------
         The cost of inventories is determined by the first-in, first-out method
         and is stated at the lower of cost or market. Inventories are composed
         primarily of videocassettes, cd's,dvd's, and textbooks. Inventory
         carrying values are composed entirely of product costs.

         Furniture and Equipment
         -----------------------
         Furniture and equipment are recorded at cost. Depreciation and
         amortization are provided using the straight-line and accelerated
         methods over estimated useful lives as follows:

                  Furniture and fixtures                  5 to 7 years
                  Office equipment                        5 to 7 years
                  Computer equipment and software         3 to 5 years
                  Leasehold Improvements                  1 to 4 years

         Maintenance and minor replacements are charged to expense as incurred.
         Leasehold improvements are amortized over the lease period or the
         useful life of the asset, whichever is shorter.

         Master Production Costs
         -----------------------
         Costs incurred in producing a master video program are capitalized and
         expensed over the estimated life of the program, which is seven years.

         Patents and Copyrights
         ----------------------
         Patents and copyrights, stated at cost less accumulated amortization,
         were amortized using the straight-line method over their estimated
         useful lives of three years. As of February 29, 2004 the assets have
         been fully amortized.

                                      F-10




<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Revenue Recognition
         -------------------
         Sales revenue is recognized when products are shipped to customers. The
         Company provides a reserve for anticipated returns for customers based
         upon historical return levels.

         Impairment of Long-Lived Assets
         -------------------------------
         The Company reviews its long-lived assets for impairment whenever
         events or changes in circumstances indicate that the carrying amount of
         an asset may not be recoverable. Recoverability of assets to be held
         and used is measured by a comparison of the carrying amount of the
         assets to future net cash flows expected to be generated by the assets.
         If the assets are considered to be impaired, the impairment to be
         recognized is measured by the amount by which the carrying amount
         exceeds the fair value of the assets. To date, no impairment has
         occurred.



         Income Taxes
         ------------
         The Company utilizes Statement of Financial Accounting Standards
         ("SFAS") No. 109, "Accounting for Income Taxes," which requires the
         recognition of deferred tax assets and liabilities for the expected
         future tax consequences of events that have been included in the
         financial statements or tax returns. Under this method, deferred income
         taxes are recognized for the tax consequences in future years of
         differences between the tax bases of assets and liabilities and their
         financial reporting amounts at each period end based on enacted tax
         laws and statutory tax rates applicable to the periods in which the
         differences are expected to affect taxable income. Valuation allowances
         are established, when necessary, to reduce deferred tax assets to the
         amount expected to be realized.

         Fair Value of Financial Instruments
         -----------------------------------
         The Company measures its financial assets and liabilities in accordance
         with generally accepted accounting principles. For certain of the
         Company's financial instruments, including cash and cash equivalents,
         accounts receivable, accounts payable, and accrued payroll and other
         expenses, the carrying amounts approximate fair value due to their
         short maturities. The amount shown for short-term notes payable also
         approximates fair value because the current interest rates offered to
         the Company for debt of similar maturities are substantially the same.

                                      F-11




<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Concentrations of Credit Risk
         -----------------------------
         The financial instrument which potentially subjects the Company to
         concentrations of credit risk is cash. The Company places its cash with
         high quality financial institutions, and at times it may exceed the
         Federal Deposit Insurance Corporation $100,000 insurance limit. As of
         February 29, 2004, there were no uninsured portions.

         Net Loss per Share
         ------------------
         The Company utilizes SFAS No. 128, "Earnings per Share." Basic loss per
         share is computed by dividing loss available to common stockholders by
         the weighted-average number of common shares outstanding. Diluted loss
         per share is computed similar to basic loss per share except that the
         denominator is increased to include the number of additional common
         shares that would have been outstanding if the potential common shares
         had been issued and if the additional common shares were dilutive. For
         the years ended February 29, 2004 and February 28, 2003, the Company
         incurred net losses; therefore, basic and diluted loss per share are
         the same.

         Comprehensive Income
         --------------------
         The Company utilizes SFAS No. 130, "Reporting Comprehensive Income."
         This statement establishes standards for reporting comprehensive income
         and its components in a financial statement. Comprehensive income as
         defined includes all changes in equity (net assets) during a period
         from non-owner sources. Examples of items to be included in
         comprehensive income, which are excluded from net income, include
         foreign currency translation adjustments and unrealized gains and
         losses on available-for-sale securities. Comprehensive income is not
         presented in the Company's financial statements since the Company did
         not have any of the items of comprehensive income in any period
         presented.

NOTE 3 - FURNITURE AND EQUIPMENT

         Furniture and equipment at February 29, 2004 consists of the
         following:

            Furniture and fixtures                                 $     55,565
            Office equipment                                             20,392
            Computer equipment and software                             895,372
            Leasehold improvements                                      113,960
                                                                   -------------

                                                                       1,085,289
            Less: accumulated depreciation and amortization           1,052,960
                                                                   -------------

                     TOTAL                                         $     32,329
                                                                   =============

         Depreciation and amortization expense was $42,922 and $62,227 for the
         years ended February 29, 2004 and February 28, 2003, respectively.

                                      F-12




<PAGE>

NOTE 4 - INTANGIBLE ASSETS

         Intangible assets at February 29, 2004 consisted of the following:

             Master video production costs                         $  1,143,505
             Web Site Development Costs                                  69,050
                                                                   -------------

                                                                      1,212,555
             Less accumulated amortization                            1,159,996
                                                                   -------------

                      TOTAL                                        $     52,559
                                                                   =============

NOTE 5 - SHORT-TERM NOTES PAYABLE

         At February 29, 2004, the Company maintained short term, unsecured
         promissory notes in the amount of $750,000. The notes bear interest at
         8% per annum and were issued September and October 1996 with a
         six-month original maturity. The maturity dates were subsequently
         extended and the notes are currently due and payable.

         At February 29, 2004, the Company maintained short term, non interest
         bearing unsecured promissory notes in the amount of $212,676 which are
         payable on demand.

         During a previous year the Company raised $475,000 through short term
         unsecured bridge financing. The notes bear interest at 10% per annum
         and had a six-month maturity date. During the year ended February 28,
         2001 $100,000 of these notes were converted into common stock. These
         notes are currently due and payable.

         During the year ended February 28, 2000 the Company raised $100,000
         through the issuance of short term notes. The notes bear interest at
         10% per annum and are payable on demand. Subsequently, an additional
         $83,000 was advanced under the same terms and conditions by the same
         lender.

NOTE 6 - CONVERTIBLE PROMISSORY NOTES

         At February 29, 2004, the Company maintained short-term, convertible
         promissory notes in the amount of $250,000. The notes bear interest at
         10% per annum, and are convertible into common stock at a price of (i)
         $1.2656 per share or (ii) 75% of the closing bid for the five trading
         days prior to the conversion. Related to this debt, the Company
         maintains 45,455 shares of its common stock in escrow.

         During the year ended February 28, 2003, the Company obtained $50,000
         through an unsecured convertible promissory note due in February, 2006.
         The note bears interest at 10% per annum and is convertible into common
         stock at a price of the lesser of (i)$.50; or (ii)at fifty percent(50%)
         of the average of the closing bid price during the five trading days
         prior to the conversion. The Company received $10,000 during the year
         ended February 29, 2004 through the issuance of a second note due July,
         2006 having the same terms and conditions as the previous note
         described herein.

         During the period ended February 28, 2001, the Company obtained
         $475,690 through short term promissory notes. The conversion terms of
         these notes are the same as the aforementioned notes. Of these amounts,
         $100,000 was converted to common shares in the same period.

         During the year ended February 29, 2000, the Company converted $135,500
         of accounts payable into short-term convertible promissory notes. The
         notes bear interest at 10% per annum and are outstanding in the amount
         of $113,200 as of February 29, 2004.

         In accordance with generally accepted accounting principles, the
         Company accounts for the beneficial conversion feature of convertible
         debt securities based on the difference between the conversion price
         and the fair value of the common stock into which the security is
         convertible, multiplied by the number of shares into which the security
         is convertible. The amount attributable to the beneficial conversion
         feature is recognized as additional interest expense over the most
         beneficial conversion period. In the current period no adjustment was
         necessary as there were no new debt acquired.

                                      F-13




<PAGE>

NOTE 7 - COMMITMENTS AND CONTINGENCIES

         Leases
         ------
         In March, 2004 the Company entered into a two year operating lease at a
         new facility in Brooklyn, New York. The lease began on March 1,2004 and
         expires on February 28,2006. The Company is obligated to pay a monthly
         rent of $2,500. The future minimum commitments due under non-cancelable
         operating leases for the year ended February 28, 2004 is approximately
         $57,500. Rent expense was $64,668 and $132,064 for the years ended
         February 29, 2004 and February 28, 2003, respectively The Company was
         in default on its capital lease agreements at February 28, 2003 and as
         such, has classified the entire amount representing principal as a
         current liability.

         Software Development Agreement
         ------------------------------
         In December 1999, the Company entered into a consulting agreement with
         a software-consulting firm. The consultants were to develop a web site
         and a CD Rom program. The agreement was valued at $130,000 and called
         for an initial fee of $65,000 with $65,000 due upon completion.
         Pursuant to the agreement, the Company will pay all fees with stock.
         The Company has issued 433,333 shares of common stock and recorded the
         expenditure as web site development costs valued at $65,000. The web
         site is operational but the CD Rom is not as of yet completed. In the
         current period the asset has not been increased nor the liability
         recorded for the additional anticipated stock issuance. The Company
         amortized $9,719 of these web site development costs in the current
         period.

         Litigation
         ----------
         The Company is involved in various legal proceedings and claims which
         arise in the ordinary course of its business. Management does not
         believe that the outcome of these matters will have a material adverse
         effect on the Company's consolidated position or results of operations.

NOTE 8 - INCOME TAXES

         Significant components of the Company's deferred tax assets and
         liabilities for income taxes consisted of the following:

                  Deferred tax assets
                  Operating losses                                 $  4,510,000
                  Valuation allowance                                (4,510,000)
                                                                   -------------

                           NET DEFERRED TAX ASSET                  $         --
                                                                   =============

         Deferred tax assets consist of net operating loss carryforwards
         multiplied by the effective tax rates. The federal operating loss
         carryforwards at February 29, 2004 were approximately $11,553,000.

                                      F-14




<PAGE>

NOTE 9 - STOCKHOLDERS' DEFICIT

         Stock Purchase Warrants and Options
         -----------------------------------
         The Company has adopted only the disclosure provisions of SFAS No. 123,
         "Accounting for Stock-Based Compensation." It applies Accounting
         Principles Bulletin ("APB") Opinion No. 25, "Accounting for Stock
         Issued to Employees," and related interpretations in accounting for its
         plans and does not recognize compensation expense for its stock-based
         compensation plans other than for restricted stock and options/warrants
         issued to outside third parties. If the Company had elected to
         recognize compensation expense based upon the fair value at the grant
         date for awards under its plan consistent with the methodology
         prescribed by SFAS No. 123, the Company's net loss and loss per share
         would be increased to the pro forma amounts indicated below for the
         years ended February 29, 2004 and February 28, 2003:

                                                         2004           2003
                                                    -------------  -------------
           Net loss:
               As reported                           $  (477,725)  $   (722,749)
                 Deduct: stock-based compensation
                         expense determined under
                         fair-value based method         (18,000)       (23,151)
               Pro forma                              $ (495,725)      (745,900)

           Basic and diluted loss per common share:
               As reported                            $      (0.03)  $    (0.04)
               Pro forma                              $      (0.03)  $    (0.04)

         These pro forma amounts may not be representative of future disclosures
         because they do not take into effect pro forma compensation expense
         related to grants made before 1995. The fair value of these options was
         estimated at the date of grant using the Black-Scholes option-pricing
         model with the following weighted-average assumptions for the years
         ended February 29, 2004 and February 28, 2003: dividend yields of 0%
         and 0%, respectively; expected volatility of close to zero;risk-free
         interest rates of 4.0% and 4.03%, respectively; and an average expected
         life of five years. The weighted average fair value per option of
         options granted during 2004 and 2003 was $.003 and $.003, respectively.

         The Black-Scholes option valuation model was developed for use in
         estimating the fair value of traded options which have no vesting
         restrictions and are fully transferable. In addition, option valuation
         models require the input of highly subjective assumptions including the
         expected stock price volatility. Because the Company's employee stock
         options have characteristics significantly different from those of
         traded options, and because changes in the subjective input assumptions
         can materially affect the fair value estimate, in management's opinion,
         the existing models do not necessarily provide a reliable single
         measure of the fair value of its employee stock options.

         The following summarizes the stock option transactions:

<TABLE>
<CAPTION>
                                                                              Outside Option Plan
                                                                           -------------------------
                                                              Weighted-                    Weighted
                                             Stock Options    Average      Stock Options   Average
                                              & Warrants      Exercise      & warrants     Exercise
                                              outstanding      Price        Outstanding     Price
                                             -------------  -------------  -------------  ----------
<S>                                          <C>            <C>            <C>            <C>


 BALANCE FEBRUARY 28, 2002                      4,223,860            .42       6,625,000        .11

Granted - Year ended February 28, 2003            825,000            .02
Expired - Year ended February 28, 2003           (517,171)
                                             -------------                   ------------

Balance, February 28, 2003                      4,531,689           0.36       6,625,000       0.11
Granted - Year ended Febraury 29, 2004          5,200,000           0.01         125,000       0.10
                                             -------------                   ------------
                                                9,731,689           0.17       6,750,000       0.11
                                             =============                   ============

</TABLE>

         The weighted-average remaining contractual life of the options
         outstanding is 6.4 years at February 29, 2004.


                                      F-15



<PAGE>

NOTE 10 - ATT LITIGATION

         The Company was successful in a litigation with AT&T which resulted in
a settlement of $15,000 for all charges owed on this account. The amount of
$73,468 had been included in Accounts Payable prior to the settlement. Gneral
and Administrative expenses have been reduced by $58,468

NOTE 11 - RELEASE FROM CONTRACT

         In 1998, the Company had contracted with a vendor to supply educational
materials for resale at below-market prices, specifying a guaranteed amount of
purchases. A deposit of $68,050 was being held by the supplier against future
orders. The Company's purchases of such product fell short by approximately
$210,000 for which the vendor began a court action. A settlement was reached,
granting the vendor full possession of the deposit while dropping all claims for
additional funds. The $68,050 is included under General and Administrative
expenses.

NOTE 12 - SUBSEQUENT EVENT

         As mentioned above in Note 7, the Company moved to a new facility in
March 2004. As a result, telephone switching equipment and leasehold
improvements, having previously been fully depreciated and amortized, will be
removed from the 'Assets' section of the Balance Sheet.

         In May, 2004, a majority of the Company's shareholders approved an
increase in the number of authorized shares of common stock to 100 million
shares.