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 March 31, 2001

                                       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 0-26676

                     MULTIMEDIA CONCEPTS INTERNATIONAL, INC.
             (Exact Name of Registrant as Specified in its Charter)

        Delaware                                13-3835325
(State or Other Jurisdiction of         (IRS Employer Identification No.)
Incorporation or Organization)

               1385 Broadway, Suite 814, New York, New York 10018
                    (Address of Principal Executive Offices)

                                 (212) 391-1111
              (Registrant's Telephone Number, Including Area Code)

           Securities registered pursuant to Section 12(b) of the Act:

          Title of each class Name of each exchange on which registered
                                      NONE

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $0.01 par value
                                (Title of Class)

         Check whether the Issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]

         Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is 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 Registrant's revenues for its fiscal year ended March 31, 2001 were
$2,223,600.

         The aggregate market value of the voting stock on July 1, 2001,
(consisting of Common Stock, par value $0.01 per share) held by non-affiliates
was approximately $319,140 based upon the closing price for such Common Stock on
said date ($0.18), as reported by a market maker. On such date, there were
3,005,000 shares of Registrant's Common Stock outstanding.
<PAGE>
                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

History

     Multimedia Concepts International, Inc. (the "Company") is a Delaware
corporation which was organized in June 1994 under the name U.S. Food
Corporation. The Company changed its name to American Eagle Holdings Corporation
in April 1995 and then to its present name in June 1995. The Company was formed
initially as a holding company for the purpose of forming an integrated clothing
design, manufacturing, and distribution operation. It is currently, in
principle, a holding company for its wholly-owned operating subsidiary, U.S.
Apparel Corp., a New York corporation ("USAC"). The Company's other subsidiary,
United Textiles & Toys Corp. ("United Textiles") ceased all operating activities
in 1998. The Company and its subsidiaries are hereinafter referred to in the
aggregate as the "Company" except as otherwise required for clarity.

Cessation of Business Operations

     In June 1994, the Company acquired 55% of the outstanding shares of common
stock of American Eagle Industries Corp. ("American Eagle"), which acquired 100%
of the outstanding shares of Match II, Inc. ("Match II"). American Eagle
designed and manufactured a line of private label cotton "T-shirts" and "polo"
type tops predominantly for men. Match II, a wholly owned subsidiary of American
Eagle, sold its own brand name ladies knit tops and coordinates under the
trade-name "Match II". In June 1995, the Company acquired 34% of the outstanding
shares of common stock of Multi Media Publishing, Inc. ("MMP"). MMP was a
company which produced CD-ROM versions of medical clinical study books.

         In January 1997, the Company, through a vote of its stockholders, voted
to cease funding the operations of American Eagle, Match II, and MMP. The
Company terminated its relationship with American Eagle and MMP due to continued
losses.

     In February 1997, the Company formed a new subsidiary, USAC, to commence
operations as a designer and manufacturer of product lines similar to those of
American Eagle and Match II.

Ownership of the Company

     At fiscal year end March 31, 2001, 1,465,000 (or 49%) of the Company's
shares of common stock were owned by U.S. Stores Corp. ("USSC"), a New York
corporation of which the Company's chief executive officer, president and a
director is the chief executive officer, president and a director. USSC is owned
100% by American Telecom PLC ("ATPLC"), a British public corporation, which is
owned approximately 80.0% by Europe American Capital Foundation ("EACF"), a
Liechtenstein trust.
<PAGE>
         The Company owns 3,571,429 (or 78.5%) of the shares of United Textiles
common stock and 100% of the shares of USAC.

         The following chart depicts the Company's ownership structure as of
March 31, 2001:

                       Europe American Capital Foundation
                                      (80%)
                                       ||
                                       \/

                              American Telecom PLC
                                     (100%)
                                       ||
                                       \/
                                U.S. Stores Corp.
                                      (49%)
                                       ||
                                       \/
                     Multimedia Concepts International, Inc.
                                     (78.5%)
                                       ||               \\
                                       \/                \\
                                                                          (100%)
                                                              U.S. Apparel Corp.
                          United Textiles & Toys Corp.

United Textiles & Toys Corp.

         On January 2, 1998, the Company was issued 3,571,429 shares of common
stock of United Textiles, at a price of $0.28 per share ($0.01 above the closing
price on December 31, 1997) in repayment of a $1 million loan made by the
Company to United Textiles. United Textiles is a company of which the Company's
chief executive officer, president and a director is also chief executive
officer, president and a director. In addition, such two entities share certain
other executive officers and board members. As a result of the transaction, the
Company became the parent of United Textiles, owning 78.5% of its outstanding
shares of the common stock.

         United Textiles is a Delaware corporation which was organized in March
1991 and commenced operations in October 1991. It formerly designed,
manufactured, and marketed a variety of lower priced women's dresses, gowns, and
separates (blouses, camisoles, jackets, skirts, and pants) for special occasions
and formal events. In April 1998, United Textiles ceased all operating
activities.

U.S. Apparel Corp.

         In February 1997, the Company formed a wholly-owned subsidiary, USAC, a
New York corporation of which the Company's chief executive officer, president
and a director is the chief executive officer, president and a director.
<PAGE>
         USAC designs and manufactures a line of private label knit cotton tops
(such as T-shirts and polo shirts) for boys and men. USAC's garments consist of
original designs and modifications and copies of existing designs. Typically,
USAC's customers provide it with designs they desire to use which USAC forwards
to a subcontractor in Honduras. The subcontractor creates the pattern from the
design provided it and sews sample garments which are delivered to USAC's
customers for approval. Once the samples are approved, customers place their
orders with USAC, typically four months in advance. USAC sends the orders to the
subcontractor which manufactures the final product and ships same LDP (i.e.,
land and duty paid) to a public warehouse in Florida where USAC's customers
retrieve the goods. USAC maintains a showroom at 1385 Broadway in New York City
and is continually seeking to design and market new products.

Supplies and Inventory

         USAC purchases all of its fabrics and non-fabric sub-materials
(zippers, buttons, and trimmings) directly from the subcontractor which sews the
garments and purchases only so much as is required to fill orders placed with
it. USAC has found that this process is the most cost-effective means of
operating its business and expects to continue its operations in this manner in
the future, though it may use other or additional manufacturers. Although
management of USAC is of the opinion that the fabrics and non-fabric
sub-materials it uses are readily available and that there are numerous
manufacturers for such goods who offer similar terms and prices, there can be no
assurance that management is correct in such belief. The unavailability of
fabrics or the absence of clothiers, or the availability of either at
unreasonable cost, could adversely affect the operations of USAC and, hence, the
Company.

         Since USAC purchases only finished garments from the overseas
subcontractor, it does not buy or maintain an inventory of fabrics or
sub-materials. While USAC has not experienced difficulty in satisfying finished
garment requirements and considers its source of supply adequate, there can be
no assurance that such supply will continue to be available or that it will
continue to be available on terms or at prices USAC deems reasonable.

Quality Control

         USAC conducts limited quality control in Honduras to ensure that
finished goods meet USAC's standards. A quality control person inspects samples
of garments on a random basis to ensure compliance with USAC's specifications.

Marketing and Sales

         Sales to K-Mart accounted for 100% of USAC's revenues for the years
ended March 31, 2001 and March 31, 2000. USAC bills its clients on a net 30-day
basis. Late or non-payment could cause material adverse effects on USAC's cash
flow and operations, especially since all of USAC's sales for the past two
fiscal years have been to one customer.
<PAGE>
         USAC does not sell on consignment and does not accept return of
products other than imperfect goods or goods shipped in error. Imperfect goods
are generally replaced with new, conforming goods. USAC believes that a key
feature of its business is its ability to design, manufacture, and sell low cost
garments which are similar in style and appearance to more expensive garments.

Work in Progress; Backlog

         A significant portion of USAC's sales are generated from short term
purchase orders placed on an as-needed basis. USAC typically manufactures its
products upon receipt of orders from its customers and generally delivers goods
within four weeks of receipt of an order. USAC generally manufactures
approximately 10% more goods than is ordered by customers in anticipation of
reorders from customers. Information relative to open purchase orders at any
date may be materially affected by, among other things, the timing of recording
of orders and shipments. Accordingly, the Company does not believe that the
amount of its unfilled orders at any time is meaningful. At March 31, 2001, USAC
had no unfilled purchase orders.

Financing

         USAC bills its clients on a net 30-day basis. Although it is customary
in the garment industry to finance receivables through "factoring" (financing
secured by the accounts receivable of the borrower's customers), USAC does not
factor any of its receivables. Although USAC has no present intention to do so,
it may rely on factoring to finance future operations.

Competition

         There is intense competition in the apparel industry. USAC designs,
manufactures, and markets a line of T-shirts and polo shirts to department
stores and competes with many other manufacturers in this market, many of which
are larger and have greater financial and other resources than USAC. There are
relatively insignificant barriers to entry in the business in which USAC is
engaged and numerous companies compete for the same customers. USAC is in direct
competition with local, regional, and national clothing manufacturers, many of
which have greater resources and more extensive distribution and marketing
capabilities than USAC. In addition, many large retailers have commenced sales
of "store brand" garments which compete with those sold by USAC. Management
believes that USAC's market share is insignificant in its product lines.

         Many of the national clothing manufacturers have extensive advertising
campaigns which develop and reinforce brand recognition. In addition, many of
such manufacturers have agreements with department stores and national retail
clothing chains to jointly advertise and market their products. It can be
expected that a retail shopper will buy a garment from a "brand name" entity
before that of an unknown entity, if all other factors are equal. Since USAC
advertises only via its showroom presentation, it has no agreements with
department stores or national retail chains to advertise any of its products.
<PAGE>
Employees

         As of June 15, 2001, the Company, including USAC, had two executive
officers and no employees.

 ITEM 2. PROPERTIES

     The Company currently occupies office space at 1385 Broadway, Suite 814,
New York, New York 10018. Such facilities are provided to the Company on a
rent-free basis by USAC, a wholly-owned subsidiary of the Company. The lease
agreement, dated June 29, 1999, entered into by USAC calls for a base monthly
rent of $2,813.25 monthly or $33,759.00 per annum through June 2001 and
$2,904.00 monthly or $34,848.00 per annum through the conclusion of the lease on
June 29, 2002.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is not a party to any material litigation and is not aware of
any threatened litigation that would have a material adverse affect on its
business. Neither the Company's officers, directors, affiliates, nor owners of
record or beneficially of more than five percent of any class of the Company's
Common Stock is a party to any material proceeding adverse to the Company or has
a material interest in any such proceeding adverse to the Company or its parent
or subsidiary.

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

         None.


<PAGE>
                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock and Warrants were quoted on the Nasdaq
SmallCap Stock Market until they were delisted in March 1997. Since April 1997,
the Company's Common Stock and Warrants have been quoted on the OTC Bulletin
Board; however, there was no market for the Company's Warrants from April 8,
1997 until their expiration on November 8, 1997, and no Warrants were exercised
prior to expiration. The following table sets forth representative high and low
bid quotes as reported by the OTC Bulletin Board whereon the Company's Common
Stock is quoted, during the periods stated below. Bid quotations reflect prices
between dealers, do not include resale mark-ups, mark-downs, or other fees or
commissions, and do not necessarily represent actual transactions.
<TABLE>
<CAPTION>

                                                                       Common Stock
                                 Calendar Period                   Low              High
                                    1999

<S>                     <C>                                              <C>              <C>
                        01/01/99 - 03/31/99                              0.12             1.75
                        04/01/99 - 06/30/99                              0.16             0.34
                        07/01/99 - 09/30/99                              0.22             0.40
                        10/01/99 - 12/31/99                              0.19             0.78

                                     2000

                        01/01/00 - 03/31/00                              0.38             1.38
                        04/01/00 - 06/30/00                              0.11             0.69
                        07/01/00 - 09/30/00                              0.06             0.14
                        10/01/00 -12/31/00                               0.05             0.09

                                     2001

                        01/01/01 - 03/01/01                              0.02             0.50
                        04/01/01 - 07/1/01                               0.05             0.41

                      ----------------------------------    --------------    -------------
</TABLE>

         As of July 1, 2001, there were approximately 63 holders of record of
the Company's Common Stock, although the Company believes that there are
additional beneficial owners of shares of Common Stock held in street name. As
of July 1, 2001, the number of outstanding shares of the Company's Common Stock
was 3,005,000.

Recent Sales of Unregistered Securities

         The Company sold no unregistered securities during the fiscal year
ended March 31, 2001.
<PAGE>
 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

         Statements contained in this report which are not historical facts may
be considered forward looking information with respect to plans, projections, or
future performance of the Company as defined under the Private Securities
Litigation Reform Act of 1995. These forward looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from those projected.

         The following table summarizes certain selected financial data and is
qualified in its entirety by the more detailed financial statements contained
elsewhere in this document:
<TABLE>
<CAPTION>

                                                              March 31,                  March 31,
                                                                 2001                      2000

  Balance Sheet Data:

<S>                                                              <C>                        <C>
  Working capital                                                $  1,806,222               $ 1,370,681
  Total assets                                                      3,065,194                 4,166,850
  Total current liabilities                                           185,064                 1,608,462
  Long-term obligations                                                -                          -
  Stockholders' equity                                              3,068,520                 2,709,654

  Operating data:

  Net sales                                                         3,179,771                 2,168,534
  Cost of sales                                                     2,080,866                 1,527,970
  Total operating expenses                                            751,062                   639,524
  Net income (loss)                                               $   358,866                $   73,934
  Income (loss) per common share                                    $     .12                 $     .02
  Weighted average shares outstanding                               3,005,000                 3,005,000
  ---------------------------------------------------
</TABLE>
<PAGE>
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS (continued)

Results of Operations

         In May 1998, the Company's Board of Directors voted to change the end
of the Company's fiscal year from September 30th to March 31st.

         The consolidated financial statements contained herein for the years
ended March 31, 2001 and the year ended March 31, 2000 contained in this
document reflect the operations of the Company's wholly-owned subsidiary, U.S.
Apparel Corporation ("USAC"), and the Company's 78.5% owned subsidiary United
Textiles & Toys Corp. ("United Textiles").

     For the year ended March 31, 2001 compared to the year ended March 31, 2000

         Consolidated net sales for the year ended March 31, 2001 were
$3,179,771. This represented an increase of $1,011,237, or 47% over net sales of
$2,168,534 for the year ended March 31, 2000. The net increase was due to an
increase in orders from the Company's principal customer.

         Consolidated cost of sales was $2,080,866 for the year ended March 31,
2001 as compared to $1,527,970 for the year ended March 31, 2000. This
represented an increase of $552,896 or 36%. The increase can be attributed to
the cost associated with sales volume.

         Consolidated operating expenses (total operating expenses less
depreciation and amortization) were $750,122 for the year ended March 31, 2001
as compared to $638,879 for the year ended March 31, 2000. This represented an
increase of $111,243 or 17.4%. The increase can be attributed to an increase in
travel and promotion costs to generate more sales.

         Depreciation and amortization expense in the year ended March 31, 2001
was $940 as compared to $645 in the year ended March 31, 2000. This represented
an increase of $295 or 46%.

         For the year ended March 31, 2001, subsequent to the adjustment for the
minority interest in the net loss of United Textiles, the Company reported
consolidated net income of $358,866 or $.12 per common share. For the year ended
March 31, 2000, subsequent to the minority interest adjustment, the Company
reported a restated consolidated net loss of $73,934 or $.02 per common share.

     For the year ended March 31, 2000 compared to the year ended March 31, 1999

         Consolidated net sales for the year ended March 31, 2000 were
$2,168,534. This represented a decrease of $1,251,657, or 36.6% over net sales
of $3,420,191 for the year ended March 31, 1999. The net decrease was due to
shrinkage in orders from the Company's principal customer.
<PAGE>
         Consolidated cost of sales was $1,527,970 for the year ended March 31,
2000 as compared to $2,211,048 for the year ended March 31, 1999. This
represented a decrease of $683,078 or 30.9%. The decrease can be attributed to
decreased sales volume.

         Consolidated operating expenses (total operating expenses less
depreciation and amortization) were $650,311 for the year ended March 31, 2000
as compared to $1,062,015 for the year ended March 31, 1999. This represented a
decrease of $411,704 or 38.8%. The decrease can be attributed to management's
efforts to better control administrative expenses.

         Depreciation and amortization expense in the year ended March 31, 2000
was $645 as compared to $705 in the year ended March 31, 1999. This represented
a decrease of $60 or 8.5%. The reason for this decrease was that the majority of
the fixed assets were fully depreciated by March 31,1999.

         For the year ended March 31, 2000, subsequent to the adjustment for the
minority interest in the net loss of United Textiles, the Company reported
consolidated net income of $73,934 or $0.02 per common share. For the year ended
March 31, 1999, subsequent to the minority interest adjustment, the Company
reported a restated consolidated net loss of $25,314 or $.01 per common share.

Liquidity and Capital Resources

         At March 31, 2001, consolidated working capital was $1,806,222 as
compared to a working capital of $1,370,681 as of March 31, 2000. This change in
consolidated working capital was primarily due to a reduction in reportable
accounts payable, as well as amounts due to affiliates.

         For the year ended March 31, 2001, consolidated operating activities
used $775,821 as compared to the year ended March 31, 2000 in which $64,818 was
used by operating activities. The increase in the use of funds from operating
activities was due mainly to a reduction in accounts payable.

         The Company provided $42,552 in investing activities for the year ended
March 31, 2001 as compared to a usage of $45,015 for the year ended March 31,
2000. The increase is due primarily to a correction to the investment in
subsidiary account.

         Consolidated financing activities used funds of $368,381 during the
year ended March 31, 2001 as compared to a generation of $234,000 in funds
during the year ended March 31, 2000. The primary elements in the use of
financing funds was the repayment to affiliates.
<PAGE>
         Liquidity and Capital Resources (continued)

         As a result, consolidated net cash decreased $1,101,650 from $1,109,166
at March 31, 2000 to $7,516 at March 31, 2001.

Trends affecting Liquidity, Capital Resources and Operations

         The Company's subsidiary, U.S. Apparel, is dependent on sales generated
from one principal customer (a national retailer).
<PAGE>
         ITEM 7.  FINANCIAL STATEMENTS

                  See attached Financial Statements.


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

                  Not applicable.


<PAGE>
                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS

Officers and Directors

         The following table sets forth the names, ages, and titles of all
directors and officers of the Company:
<TABLE>
<CAPTION>

       Name                       Age                        Position

<S>                               <C>                        <C>
       Ilan Arbel                 49                         Chief Executive Officer, President, and Director

       Rivka Arbel                48                         Vice President and Director

       Allean Goode               69                         Secretary and Treasurer

       Yair Arbel                 53                         Director

</TABLE>
     All directors are elected at an annual meeting of the Company's
shareholders and hold office for a period of one year or until the next annual
meeting of stockholders or until their successors are duly elected and
qualified. Vacancies on the board of directors may be filled by the remaining
directors. Officers are appointed annually by, and serve at the discretion of,
the board of directors. There are no family relationships between or among any
officers or directors of the Company except that Rivka Arbel is the
sister-in-law of Ilan Arbel and Yair Arbel Mika is the brother of Ilan Arbel.
Rivka and Yair are married.

     As permitted under the Delaware General Corporation Law, the Company's
Certificate of Incorporation eliminates the personal liability of the directors
to the Company or any of its shareholders for damages caused by breaches of said
directors' fiduciary duties. As a result of such provision, stockholders may be
unable to recover damages against directors for actions which constitute
negligence or gross negligence or are in violation of their fiduciary duties.
This provision in the Company's Certificate of Incorporation may reduce the
likelihood of derivative, and other types of shareholder, litigation against
directors.

     Ilan Arbel was the president, secretary, and a director of the Company from
inception until June 12, 1995. He was reelected a director in August 1995 and
chief executive officer and president in May 1996. Mr. Arbel has been the
president, chief executive officer, and a director of United Textiles since
1991. Mr. Arbel was the president, chief executive officer, and a director of
America Toys, Inc. (now known as U.S. Wireless Corp.) ("Atoys") from February
1993 until July 1993 at which time he resigned as president thereof. In March
1995, Mr. Arbel was reelected president of Atoys, a position he held, with his
directorship, until July 1996. Since its inception, in February 1997, Mr. Arbel
has been the president, chief executive officer and a director of USAC. From May
<PAGE>
1993 to April 1997, Mr. Arbel was a director of Play Co. Toys & Entertainment
Corp. ("Play Co."), a Delaware Corporation (from June 1994 until his April 1997
resignation, he was chairman). Since 1989, he has been the sole officer and
director of Europe America Capital Corp., a company involved in investment and
finance in the United States and Europe. Since 1996, Mr. Arbel has been the
president and a director of USSC.  Since 1993, he has been the president
of European Ventures Corp., a company involved in investments and finance in the
United States and Europe. Mr. Arbel is a graduate of the University Bar Ilan in
Israel and has a degree in Economics and Business Administration.

     Each of Mr. Arbel and several defendants were named in a complaint filed in
May 1998 by the Securities and Exchange Commission ("Commission") alleging fraud
and other violations of the securities laws during 1993 regarding three public
companies: Viral Testing Systems, Inc., LS Capital Corporation and RMS Titanic,
Inc. Simultaneously with the filing of the complaint, the Commission filed a
judgment on consent against Mr. Arbel. Without admitting or denying the
allegations of the complaint, Mr. Arbel and one other named defendant consented
to (1) permanent injunctions against violating Sections 5(a) and 5(c) of the
Securities Act of 1933, as amended ("Securities Act"), and Sections 13(d) and
16(a) of the Securities Exchange Act ("Exchange Act") and Rules 13d-1, 16a-2,
and 16a-3 thereunder, and (2) a joint and several disgorgement obligation of
$218,118, plus prejudgment interest. Mr. Arbel also consented to pay a penalty
of $100,000 pursuant to Sections 20(d) of the Securities Act and 21(d)(3) of the
Exchange Act.

     Rivka Arbel has been a director of the Company since June 12, 1995 and was
elected as vice president of the Company in May 1996. In October 1996, Mrs.
Arbel resigned as an officer of the Company. Mrs. Arbel was re-elected as vice
president in May 1997. From 1992 to present, Mrs. Arbel has been a director of
United Textiles and from 1995 to present, Mrs. Arbel has been vice president.
Since 1986, Mrs. Arbel has been president and a director of Amigal, Ltd., a
producer of men's and women's wear in Israel. Mrs. Arbel is the wife of Yair
Arbel.

     Allean Goode has been Secretary and Treasurer of the Company since March
1998. Ms. Goode has been secretary, treasurer, and a director of United Textiles
since September 1992. Ms Goode was assistant secretary of United Textiles from
May 1993 until approximately May 1995. From 1991 until September 1992, Ms. Goode
acted as an independent contractor performing bookkeeping services for United
Textiles. Ms. Goode was secretary, treasurer, and a director of Atoys from
February 1993 until July 1996. From 1981 until 1991, Ms. Goode was employed as
office manager and bookkeeper of Via West Sportswear, a New York based
manufacturer of sportswear.

     Yair Arbel has been a director of the Company since June 12, 1995. Mr.
Arbel is currently employed by Israeli Aircraft Industries, where he has been
employed since 1980. Yair Arbel is the husband of Rivka Arbel and the brother of
Ilan Arbel.

     The Company has agreed to indemnify its officers and directors with respect
to certain liabilities including liabilities which may arise under the
Securities Act of 1933. Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and controlling
persons of the Company pursuant to any charter, provision, by-law, contract,
arrangement, statute, or otherwise, the Company has been advised that in the
<PAGE>
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer, or controlling person of the Company in the successful
defense of any such action, suit, or proceeding) is asserted by such director,
officer, or controlling person of the Company in connection with the Securities
being registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
Compliance with Section 16(a) of the Exchange Act

     Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors, and persons who beneficially own more than
ten percent of a registered class of the Company's equity securities to file
reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission ("SEC"). Officers, directors, and greater
than ten percent beneficial owners also are required by rules promulgated by the
SEC to furnish the Company with copies of all Section 16(a) forms they file.

     No person (a "Reporting Person") who during the fiscal year ended March 31,
2001 was a director, officer, or beneficial owner of more than ten percent of
the Company's Common Stock (which is the only class of equity securities of the
Company registered under ss.12 of the Securities Exchange Act of 1934), failed
to file on a timely basis reports required by ss.16 of the Act during the most
recent fiscal year, except USSC and Mr. Ilan Arbel who may be deemed to be the
beneficial owner of shares owned by USSC and other entities. See "Security
Ownership of Certain Beneficial Owners and Management." The foregoing is based
solely upon a review by the Company of (i) Forms 3 and 4 during the most recent
fiscal year as furnished to the Company under Rule 16a-3(e) under the Act, (ii)
Forms 5 and amendments thereto furnished to the Company with respect to its most
recent fiscal year, and (iii) any representation received by the Company from
any reporting person that no Form 5 is required, except as described herein.


<PAGE>
ITEM 10.          EXECUTIVE COMPENSATION

Executive Compensation

Summary of Cash and Certain Other Compensation

         The following provides certain information concerning all Plan and
Non-Plan (as defined in Item 402 (a)(ii) of Regulation S-B) compensation awarded
or paid by the Company during the years ended March 31, 2001, 2000, and 1999 to
the named executive officer of the Company.


<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                          Annual Compensation                             Long-Term Compensation

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

Ilan Arbel (3)
  President,  CEO,
 And Director             2001           --         --              --             --             --            --            --
                          2000           --         --              --             --             --            --            --
                          1999           --         --              --             --             --            --            --
</TABLE>

    ----------------------
     (1) Mr. Arbel does not receive any cash compensation as an officer of the
Company. Mr. Arbel entered into an employment agreement with the Company in May
1996. See "Employment Agreements."

     (2) No bonuses were paid during the periods herein stated.

Employment and Consulting Agreements

         On April 4, 1996, the board of directors authorized the Company to
enter into a compensation agreement with Ilan Arbel. Pursuant thereto, the
Company granted to Mr. Arbel an option to purchase 1,900,000 warrants at $0.04
per warrant, identical to the warrants sold by the Company in its initial public
offering. The option was exercisable at $7.00 per share. The warrants and shares
underlying the warrants were registered for resale pursuant to a Form S-8
registration statement. Mr. Arbel exercised this option in full and sold the
warrants in April 1996. In addition, the board of directors authorized the
Company to issue an additional option to Mr. Arbel to purchase 200,000 shares of
Common Stock at $3.70 per share. On April 19, 1996, the board of directors and
Mr. Arbel amended the compensation agreement and terminated the option to
purchase 200,000 shares of Common Stock and in lieu thereof issued an option to
purchase 1,000,000 warrants for a purchase price of $0.04 per warrant, the
warrants bearing an exercise price of $7.00 per share. The warrants were
registered for resale pursuant to an amendment to the Form S-8 registration
statement. Mr. Arbel exercised this option in full and sold the warrants.
<PAGE>
         In May 1996, the Company entered into an employment agreement with Ilan
Arbel, for a period of five years. Pursuant thereto, Mr. Arbel became the
president and chief executive officer of the Company. At such time, the Company
and Mr. Arbel agreed to increase the option price to purchase the warrants
described above to $1.90 per warrant, payable either in cash or other
securities, whereupon Mr. Arbel owed the difference between the price he paid
for warrants he had purchased previously ($0.04) and this new purchase price
($1.90). In October 1997, the Company and Mr. Arbel agreed to increase the
option price to purchase the warrants to $2.50 per warrant, payable either in
cash or other securities. The term "securities" was defined as any debt or
equity security or convertible security, the underlying security of which is
traded on either a national securities exchange or on the Nasdaq Stock Market.
The price for which the securities could be exchanged to reduce the debt was 50%
of the average bid price of the securities or the underlying securities of a
convertible security, for a period of ninety days ending five days prior to the
exchange. The employment agreement provides that no other compensation or
remuneration be paid to Mr. Arbel during its term. As payment of the debt, Mr.
Arbel, through certain affiliates, transferred to the Company an aggregate of
803,070 shares of Play Co. Series E preferred stock, each share of which is
convertible into six shares of Play Co. common stock at the option of the
holder, subject to holding periods. In April 2000, the Company converted these
preferred shares into Play Co. Common Stock at the conversion rate of one share
of preferred for six shares of Play Co. Common Stock. In March 2001, Play Co.
filed for protection under Chapter 11 of the U.S.
Bankruptcy Code.  See "Notes to Financial Statements, Note 9."

         In April 1999, USAC entered into a verbal consulting agreement with Yu
Jin International, Inc. ("Yu Jin") pursuant to which Yu Jin oversees the day to
day production of garments and operating activities of USAC's subcontractor. In
accordance with the terms of the aforesaid agreement, USAC remitted $171,120 to
Yu Jin during the fiscal year ended March 31, 2001.


<PAGE>
1995 Senior Management Incentive Plan

         In June 1995, the board of directors adopted the Senior Management
Incentive Plan (the "Management Plan"), which was adopted by stockholder
consent. The Management Plan provides for the issuance of up to 150,000 shares
of the Company's Common Stock in connection with the issuance of stock options
and other stock purchase rights to executive officers and other key employees.

         The Management Plan was adopted to provide the board of directors with
sufficient flexibility regarding the forms of incentive compensation which the
Company will have at its disposal in rewarding executive officers and directors
who are also employees of either the Company or its subsidiary(ies) or who
render significant services to the Company or its subsidiary(ies). To enable the
Company to attract and retain qualified personnel without unnecessarily
depleting the Company's cash reserves, the board of directors intends to offer
key personnel equity ownership in the Company through the grant of stock options
and other rights pursuant to the Management Plan. The Management Plan is
designed to augment the Company's existing compensation programs and is intended
to enable the Company to offer executive officers and directors who are also
employees of the Company a personal interest in the Company's growth and success
through awards of either shares of Common Stock or rights to acquire shares of
Common Stock.

         The Management Plan is intended to help the Company attract and retain
key executive management personnel whose performance is expected to have a
substantial impact on the Company's long-term profit and growth potential by
encouraging and assisting those persons to acquire equity in the Company. It is
contemplated that only those executive management employees who perform services
of special importance to the Company will be eligible to participate under the
Management Plan. The Company does not presently have any intention to hire any
additional management employees and has not engaged in any solicitations or
negotiations with respect to the hiring of any management employees. It is
anticipated that awards made under the Management Plan will be subject to
vesting periods, although the vesting periods are subject to the discretion of
the board of directors.



<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding beneficial
ownership of the Company's outstanding Common Stock as of July 1, 2001, by (i)
each beneficial owner of 5% or more of the Company's Common Stock, (ii) each of
the Company's executive officers, directors, and key employees, and (iii) all
executive officers, directors, and key employees as a group:

<TABLE>
<CAPTION>

                    Name and Address                       Number of Shares             Percent of Common Stock
                 of Beneficial Owner(1)                  Beneficially Owned(1)           Beneficially Owned(2)
<S>                      <C>                                   <C>                                <C>
     U.S. Stores Corp.
     1385 Broadway, Suite 814
     New York, New York  10018                                 1,175,000                          39%

     American Telecom, PLC (2)
     8-13 Chiswell Street                                                                         39%
     London EC 1Y 4UP                                          1,175,000

     Europe American Capital Foundation (3)
     Pradafont Street #7
     Vaduz, Liechtenstein                                      1,175,000                          39%

     Ilan Arbel (4)(5)                                         1,232,000                          41%

     Yair Arbel                                                    -                              --

     Rivka Arbel                                                  --                              --

     Officers and Directors as a Group
     3 persons)                                                1,232,000                          41%
</TABLE>

(1)  Unless otherwise indicated, the address for each listed director or officer
     is c/o Multimedia Concepts International, Inc. 1385 Broadway, Suite 814,
     New York, New York 10018. As used in this table, "beneficial ownership"
     means the sole or shared power to vote or direct the voting or to dispose
     or direct the disposition of any security. For the purposes of this table,
     a person is deemed to be the beneficial owner of securities that can be
     acquired within 60 days from July 1, 2001 through the exercise of any
     option or warrant. Shares of Common Stock subject to options or warrants
     that are currently exercisable or exercisable within 60 days are deemed
     outstanding for computing the ownership percentage of the person holding
     such options or warrants, but are not deemed outstanding for computing the
     ownership percentage of any other person. The amounts and percentages are
     based upon 3,005,000 shares of common stock outstanding as of July 1, 2001.
(2)  ATPLC owns 100% of the issued and outstanding shares of USSC. By virtue of
     ATPLC's ownership in USSC, ATPLC may have voting and dispositive control of
     the shares of the Company beneficially owned by USSC and therefore may be
     deemed to beneficially own such shares of the Company.
(3)  EACF owns 80% of the issued and outstanding shares of ordinary shares of
     ATPLC. By virtue of EACF's ownership in ATPLC, EACF may have voting and
     dispositive control of the shares of the Company beneficially owned by
     ATPLC and therefore may be deemed to beneficially own such shares of the
     Company beneficially owned by ATPLC (see footnote (2) above).
(4)  Mr. Arbel, chief executive officer, president and director of the Company,
     is the president and a director of USSC. By virtue of such positions, Mr.
     Arbel has voting and dispositive control of the shares of the Company
     beneficially owned by USSC and therefore may be deemed to beneficially own
     such shares of the Company.
(5)  Includes  57,000 shares of the Company's  Common Stock owned by Gal Capital
     Corp., a Delaware  corporation.  Mr. Arbel is the President and a Director
     of Gal Capital Corp. By virtue of such  positions,  Mr. Arbel has voting
     and  dispositive  control of the shares of the Company  beneficially owned
     by Gal Capital Corp. and therefore may be deemed to beneficially own such
     shares of the Company.
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          On January 20, 1998, USSC, a company which was incorporated on
November 10, 1997, acquired 1,465,000 shares of the Company's Common Stock of
which 1,339,000 shares were acquired from European Ventures Corp., a company in
which Ilan Arbel is an officer and director, in a private sale. After this
transaction, taking into account Common Stock owned by USSC prior to such
transactions, USSC held an aggregate of 1,868,000 shares of the Company's Common
Stock, or 62.2% of the outstanding shares, effectively making the Company a
subsidiary of USSC. As of July 1, 2001, USSC owns 1,175,000 (or 39%) of the
Company's Common Stock.

         In April 1998, American Telecom Corp., a corporation organized under
the laws of the British Virgin Islands and whose president is Mr. Arbel,
exchanged all its outstanding common shares and all of the outstanding shares of
its wholly owned subsidiary USSC with ATPLC, a publicly traded company in Great
Britain. After this transaction, both American Telecom Corp. and USSC became
wholly owned subsidiaries of ATPLC.

          The Company currently occupies office space at 1385 Broadway, Suite
814, New York, New York 10018. Such facilities are provided to the Company on a
rent-free basis by USAC, a wholly-owned subsidiary of the Company. The lease
agreement, dated June 29, 1999, entered into by USAC calls for a base monthly
rent of $2,813.25 monthly or $33,759 per annum through June 2001 and $2,904.00
monthly or $34,848.00 per annum through the conclusion of the lease on June 29,
2002.


<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

(a)      The following financial statements of the Company are included as Part II, Item 8:

<S>                                                                                              <C>
         Report of Independent Certified Public Accountant                                       F-1
         Consolidated Balance Sheets as of  March 31, 2001 and March 31, 2000                    F-2
         Consolidated Statements of Operations for the years ended March 31, 2001
         and March 31, 2000                                                                      F-4
         Consolidated Statement of Changes in Stockholders' Equity for the years
         ended March 31, 2001 and March 31, 2000                                                 F-5
         Consolidated Statements of Cash Flows for the years ended March 31, 2001
         and March 31, 2000                                                                      F-6
         Notes to Financial Statements                                                           F-8
</TABLE>

(b)      During its last fiscal 2001 quarter, the Company filed no Forms 8-K.

(c)      All exhibits, except those designated with an asterisk (*) which are
filed herewith have previously been filed with the Commission either in
connection with the Company's Registration Statement on Form SB-2 or, as
indicated by the reference herein and pursuant to 17 C.F.R. ss.230.411, are
incorporated by reference herein. Exhibits previously filed but not as part of
the SB-2 Registration Statement are incorporated herein by reference to the
appropriate document.

<TABLE>
<CAPTION>
<S>                  <C>
3.1                  Certificate of Incorporation of the Company
3.2                  Amendment to Certificate of Incorporation of the Company, filed in May 1995
3.3                  Second Amendment to Certificate of Incorporation of the Company, filed in June 1995
3.5                  By-Laws of the Company
3.8(a)               Second Amendment to Certificate of Incorporation of the Company, filed in June 1996
3.9                  Certificate of Incorporation of U.S. Apparel  Corp.
4.1                  Specimen Common Stock Certificate.
10.1                 The Company Senior Management Incentive Plan.
</TABLE>



<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES



                                TABLE OF CONTENTS

                        March 31, 2001 and March 31, 2000

<TABLE>
<CAPTION>


                                                                                                          Page

<S>                                                                                                          <C>
Report of Independent Certified Public Accountant                                                          F-1

Consolidated Financial Statements:

         Consolidated Balance Sheets as of March 31, 2001 and March 31, 2000 (restated)                    F-2

         Consolidated Statements of Operations for the year ended March 31, 2001 and the
         year ended March 31, 2000 (restated)                                                              F-4

         Consolidated Statement of Changes in Stockholder's Equity for the year
         ended March 31, 2001 and the year ended March 31, 2000 (restated) F-5

         Consolidated Statements of Cash Flows for the year ended March 31, 2001 and the
         year ended March 31, 2000 (restated)                                                              F-6

Notes to Financial Statements                                                                              F-8

</TABLE>
<PAGE>

                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


         Board of Directors
         Multimedia Concepts International, Inc.

         We have audited the accompanying consolidated balance sheets of
         Multimedia Concepts International, Inc. as of March 31, 2001 and March
         31, 2000, and the related statements of operations, stockholders'
         equity, and cash flows for the year ended March 31, 2001 and the year
         ended March 31, 2000.

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

         In our opinion, the financial statements referred to above present
         fairly, in all material aspects, the financial position of Multimedia
         Concepts International, Inc at March 31, 2001 and March 31, 2000, and
         the result of its operations and its cash flows for the year ended
         March 31, 2001 and the year ended March 31, 2000 in conformity with
         generally accepted accounting principles.


         /s/ Jerome Rosenberg, CPA, P.C.


         Melville, New York

         June 11, 2001


                                      F-1
<PAGE>
                  MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                     As of March 31, 2001 and March 31, 2000


<TABLE>
<CAPTION>


                                                                     March 31,     March 31,
                                                                       2001          2000
                                                                 ------------    -----------
                                                                                  (Restated)
                                                                                   (Note 9)
                                                                            ASSETS

   CURRENT ASSETS:
<S>                               <C>                             <C>            <C>
  Cash and cash equivalents (Note 3c) .........................   $     7,516    $ 1,109,166
  Accounts receivable .........................................       559,420        556,591
  Advances to supplier ........................................       890,661        737,145
  Inventories (Note 3d)
                                                                  -----------    -----------
  Prepaid expenses and other current assets
                                                                        5,689          5,689
  Investment in affiliates (Note 9) ...........................       528,000        570,552
                                                                  -----------    -----------

          Total current assets ................................     1,991,286      2,979,143
                                                                  -----------    -----------

FURNITURE, FIXTURES AND EQUIPMENT
  Furniture, fixtures and equipment ...........................        72,789         72,789
  Accumulated depreciation on furniture, fixtures and equipment       (69,802)       (68,861)
                                                                  -----------    -----------
  Furniture, fixtures and equipment - Net
                                                                        2,987          3,928
                                                                  -----------    -----------

OTHER ASSETS:
Due from affiliates ...........................................       901,960      1,014,818
Advances to equity affiliate ..................................       140,000        140,000
Deposits and other assets .....................................        28,961         28,961
                                                                  -----------    -----------
          Total other assets ..................................     1,070,921      1,183,779
                                                                  -----------    -----------

          Total assets ........................................   $ 3,065,194    $ 4,166,850
                                                                  ===========    ===========

</TABLE>

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


                                      F-2
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                     As of March 31, 2001 and March 31, 2000

<TABLE>
<CAPTION>


                                                                                   March 31,      March 31,
                                                                                    2001           2000
                                                                                -----------    -----------
                                                                                                (Restated)
                                                                                                 (Note 9)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
<S>                                                                             <C>            <C>
Accounts payable ............................................................   $    45,989    $   998,469
Accrued expenses and other current liabilities ..............................       139,075        128,754
Due to affiliates ...........................................................          --          481,239
                                                                                -----------    -----------

     Total current liabilities ..............................................       185,064      1,608,462
                                                                                -----------    -----------

          Total liabilities .................................................       185,064      1,608,462
                                                                                -----------    -----------

MINORITY INTERST IN SUBSIDIARIES ............................................      (188,390)      (151,266)
                                                                                -----------    -----------

STOCKHOLDERS' EQUITY:
Common stock, $.001 par value; 10,000,000 shares authorized; 3,005,000 shares
   issued and outstanding at March 31, 2001 and
   March 31, 2000 respectively ..............................................         3,005          3,005
  Additional paid-in capital ................................................     5,852,005      5,852,005
  Retained earnings (Deficit) ...............................................    (2,786,490)    (3,145,356)
                                                                                -----------    -----------

          Total stockholders' equity ........................................     3,068,520      2,709,654
                                                                                -----------    -----------

          Total liabilities and stockholders' equity ........................   $ 3,065,194    $ 4,166,850
                                                                                ===========    ===========




</TABLE>
     The accompanying notes are an integral part of these consolidated financial
statements

                                      F-3

<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                Year Ended
                                                                           March 31,      March 31,
                                                                             2001           2000
                                                                                         (Restated)
                                                                                          (Note 9)

<S>                                                                      <C>            <C>
Net sales ............................................................   $ 3,179,771    $ 2,168,534
                                                                         -----------    -----------

Cost of sales ........................................................     2,080,866      1,527,970
                                                                         -----------    -----------

Gross profit .........................................................     1,098,905        640,564
                                                                         -----------    -----------
Operating expenses:
     Operating expenses ..............................................       750,122        638,879
     Depreciation and amortization ...................................           940            645
                                                                         -----------    -----------

               Total operating expenses ..............................       751,062        639,524
                                                                         -----------    -----------

               Operating  income (loss) ..............................       347,843         (1,040)
                                                                         -----------    -----------

               Other income:
                          Interest and other income ..................         2,984         55,066

               Other expenses:
                          Interest expense ...........................       (19,326)          --
                                                                         -----------    -----------

Income before Minority interests .....................................       331,501         56,106

   Minority interest in net (loss) of consolidated subsidiary (Note 5)
                                                                              37,124         29,260
                                                                         -----------    -----------

Income before taxes ..................................................       368,625         85,366

Provision for income taxes ...........................................         9,759         11,432
                                                                         -----------    -----------

Net income ...........................................................   $   358,866    $    73,934
                                                                         ===========    ===========

Calculation of basic and diluted common share and share equivalents:

Basic and diluted loss per common share and share equivalents ........   $       .12    $       .02
                                                                         ===========    ===========

Weighted average number of common shares outstanding .................     3,005,000      3,005,000
                                                                         ===========    ===========

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

                                       F-4
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                        STATEMENT OF STOCKHOLDERS' EQUITY
              For the Years Ended March 31, 2001 and March 31, 2000

<TABLE>
<CAPTION>





                                                   Shares               Common Stock               Paid-in              Accumulated
                                                 Outstanding               Amount                  Capital                Deficit
                                              ------------------    ---------------------     ------------------     ---------------

<S>                                                   <C>              <C>                        <C>                 <C>
  Balance, March 31, 1998                             3,005,000        $    3,005                 $5,852,005          $ (3,193,976)

  Net loss for the year ended
     March 31, 2000                                                                                                        (25,314)
                                              ------------------    ---------------------     ------------------     ---------------

  Balance, March 31, 2000                             3,005,000            3,005                   5,852,005            (3,219,290)

  Net income for the year ended
     March 31, 2000                                                                                                         73,934
                                              ------------------    ---------------------     ------------------     ---------------

  Balance, March 31, 2000                             3,005,000            3,005                   5,852,005           $(3,145,356)

  Net income for the year ended
     March 31, 2001                                                                                                        358,866
                                              ------------------    ---------------------     ------------------     ---------------
                                                      3,005,000        $    3,005                 $5,852,005           $(2,786,490)

</TABLE>


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

                                      F-5
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
<TABLE>
<CAPTION>

                                                                                  Year Ended
                                                                          --------------------------
                                                                             March 30,     March 31,
                                                                               2001          2000
                                                                          -----------    -----------
                                                                                          (Restated)
                                                                                           (Note 9)

   CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                       <C>            <C>
Net income (loss) .....................................................   $   358,866    $    73,934
                                                                          -----------    -----------

Adjustments to reconcile net loss to cash (used) provided for operating
   activities:
   Depreciation and amortization                                                  940            645
   Loss on investment of subsidiary ...................................          --              --
                                                                          -----------    -----------
   Minority interests in net losses of subsidiaries ...................       (37,124)       (29,260)
Changes in assets and liabilities:
   (Increase) decrease in accounts receivable .........................        (2,829)        37,399
   (Increase) decrease in advances to supplier ........................      (156,345)      (262,573)
   (Increase) decrease in Merchandise inventories .....................          --           89,000
   (Increase) decrease in prepaid expenses and other current assets ...          --             (101)
   (Increase) decrease in deposits and other assets ...................          --           (6,958)
   Increase (Decrease) in accounts payable ............................      (949,650)       (10,325)
   Increase (Decrease) in accrued expenses and liabilities ............        10,321         43,421
                                                                          -----------    -----------

          Total adjustments ...........................................    (1,134,687)      (138,752)
                                                                          -----------    -----------

          Net cash provided by operating activities ...................      (775,821)       (64,818)
                                                                          -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in property and equipment ....................................          --           (2,463)
Investment in subsidiary ..............................................        42,552        (42,552)
                                                                          -----------    -----------

          Net cash provided by (used for) investing activities ........   $    42,552    $   (45,015)
                                                                          -----------    -----------
</TABLE>

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

                                      F-6
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash

<TABLE>
<CAPTION>
                                                              Year Ended
                                                      -----------   ------------
                                                        March 30,     March 31,
                                                          2001          2000
                                                      -----------   ------------
                                                                      (Restated)
                                                                        (Note 9)


CASH FLOWS FROM FINANCING ACTIVITIES:
<S>                                                   <C>            <C>
  Loans and advances-affiliates ...................   $  (368,381)   $   234,000
                                                      -----------    -----------

          Net cash provided by financing activities      (368,381)       234,000
                                                      -----------    -----------

NET INCREASE (DECREASE) IN CASH ...................    (1,101,650)       124,167
                                                      -----------    -----------
Cash, beginning of period .........................     1,109,166        984,999
                                                      -----------    -----------

Cash, end of period ...............................   $     7,516    $ 1,109,166
                                                      ===========    ===========

Supplemental disclosure of cash flow information:
Interest paid .....................................   $      --      $      --
                                                      ===========    ===========
Taxes paid ........................................   $    30,483    $    11,432
                                                      ===========    ===========
</TABLE>




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

                                      F-7
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1.  DESCRIPTION OF COMPANY:

                  Multimedia Concepts International, Inc. (the "Company") is a
                  Delaware corporation which was organized in June 1994 under
                  the name U.S. Food Corporation. The Company changed its name
                  to American Eagle Holding Corporation in April 1995 and then
                  to its present name in June 1995. The Company was initially
                  formed as a holding company for the purpose of forming an
                  integrated clothing design, manufacturing, and distribution
                  operation. In June 1994, the Company acquired 55% of the
                  outstanding shares of the common stock of American Eagle
                  Industries Corp., which had acquired 100% of the outstanding
                  shares of Match II, Inc.

                  In January 1997, the Company terminated its financing and
                  business relationships with these subsidiaries. Both companies
                  had ceased operating activities in September 1996.

                  In February 1997, the Company formed a new wholly owned
                  subsidiary,  U.S. Apparel Corp. ("U.S.  Apparel"),  which is
                  engaged in the design and  manufacture  of a line of T-shirts
                  and other tops,  predominately  for men.  U.S.  Apparel
                  began operations in January 1997.

                  In January 2, 1998, the Company acquired 3,571,429 shares of
                  the outstanding common stock of United Textiles and Toys Corp.
                  ("United Textiles"), a company of which the Company's
                  President is also President, Chief Executive Officer, and a
                  Director. The issuance of these shares was at a price of $.28
                  per share ($.01 above the closing price on December 31, 1997)
                  representing payment for $1,000,000 loaned to United Textiles
                  by the Company. As a result of this transaction, the Company
                  owns 78.5% of the outstanding shares of common stock of United
                  Textiles, effectively making United Textiles a subsidiary of
                  the Company.

                  United Textiles is a company that was engaged in the design,
                  manufacturing, and marketing of a variety of lower priced
                  women's dresses, gowns, and separates for special occasions
                  and formal events.

                  In March 1998, United Textiles, having sustained continuous
                  losses, discontinued operating activities.


                                      F-8
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS



NOTE 1.  DESCRIPTION OF COMPANY (continued):

                  Nature of Relationship with Affiliates:

                  As described in the following footnotes, the Company engages
                  in transactions with affiliated entities, many of which are
                  under common control. These entities and the nature of the
                  affiliates are as follows:

                         Affiliates Under Common Control
                    Name of Entity and Nature of Affiliation

                  U.S.  Stores Corp.  ("U.S.  Stores"):  A private  company
                  whose  president and a director is Ilan Arbel.  U.S. Stores
                  owns 39% of the issued and outstanding common stock of
                  Multimedia.













                                      F-9
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1.  DESCRIPTION OF COMPANY (continued):

                  Nature of Relationship with Affiliates (continued):


                  The following chart graphically depicts the Company's
                  ownership structure at March 31, 2000 for those entities under
                  common control:



                    Multimedia Concepts International, Inc.
                                       ||                 \\
                                       \/                  \\
                                     (78.5%)                    (100%)
                          United Textiles & Toys Corp.       U.S. Apparel Corp.

NOTE 2.  BASIS OF PRESENTATION:

                  In May 1998, the Company's Board of Directors voted to change
                  the end of the Company's fiscal year from September 30th to
                  March 31st.


NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

a.       Principles of Consolidation:

                      The consolidated financial statements include the accounts
                      of the Company, its subsidiaries (U.S. Apparel and United
                      Textiles). All material intercompany balances and
                      transactions have been eliminated in consolidation.

b.       Uses of Estimates:

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

                                      F-10
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued )

c.       Concentration of Credit Risk:

                      Financial instruments that potentially subject the Company
                      to concentration of credit risk consist primarily of cash
                      and accounts receivable.

                      The Company maintains, at times, deposits in federally
                      insured financial institutions in excess of federally
                      insured limits. Management attempts to monitor the
                      soundness of the financial institutions and believes the
                      Company's risk is negligible. Concentration with regard to
                      accounts receivable are limited due to the Company's large
                      customer base.

d.       Merchandise Inventories:

                      Merchandise inventories are stated at the lower of cost
                      (first-in, first-out method - "FIFO") or market.

e.       Fair Value of Financial Instruments:

                      The carrying amount of the Company's financial
                      instruments, consisting of cash, accounts receivable,
                      accounts payable, and borrowings approximate their fair
                      value due to the relatively short maturity (90 days) of
                      these instruments.

f.       Fixed Assets and Depreciation:

                      Property and equipment is recorded at cost. Depreciation
                      and amortization are provided using the straight-line
                      method over the estimated useful lives (3-15 years) of the
                      related assets. Leasehold improvements are amortized over
                      the lesser of the related lease terms or the estimated
                      useful lives of the improvements. Maintenance and repairs
                      are charged to operations as incurred.

g.       Statements of Cash Flows:

                      For the purpose of the statements of cash flows, the
                      Company considers all highly liquid investments purchased
                      with an original maturity of three months or less to be
                      cash equivalents.

                                      F-11
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

h.       Revenue Recognition:

                      The Company and its subsidiaries recognize revenue upon
                      shipment of finished goods to customers. All sales are
                      pursuant to firm contracts, with no title to merchandise
                      passing at shipping. Sales returns and discounts are
                      reflected in net sales and historically have not been
                      significant.

i.       Income Taxes:

                      The Company accounts for income taxes in accordance with
                      Statement of Financial Standards (SFAS) No. 109,
                      Accounting for Income Taxes. Deferred income taxes are
                      recognized based upon the differences between financial
                      statement and income tax bases of assets and liabilities
                      using enacted rates in effect for the year in which the
                      differences are expected to reverse. Valuation allowances
                      are established, when necessary, to reduce the deferred
                      tax assets to the amount expected to be realized. The
                      provision for income taxes represents the tax payable for
                      the period and the change during the period in deferred
                      tax assets and liabilities, including the effect of change
                      in the valuation allowance, if any.

j.       Net Loss Per Share

                      During the three-month period ended December 31, 1997, the
                      Company adopted the provisions of SFAS No. 128, Earnings
                      Per Share, which requires the disclosure of "basic" and
                      "diluted" earnings (loss) per share. Basic earnings (loss)
                      per share is computed by dividing net income (loss), by
                      the weighted average number of common shares outstanding.
                      Diluted earnings (loss) per share is similar in
                      calculation except that the weighted average number of
                      common shares is increased to reflect the effects of
                      potential additional shares that would result from the
                      exercise of stock options or other convertible
                      instruments. For the years ended March 31, 2001 and March
                      31, 2000, there were no items of potential dilution that
                      would impact on the computation of diluted earnings per
                      share.



                                      F-12
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS

NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

k.       Impairment of Long-Lived Assets:

                      SFAS No. 121, Accounting for the Impairment of long-lived
                      Assets and long-lived Assets to be Disposed Of, requires
                      that long-lived assets and certain identifiable
                      intangibles to be held and used by an entity by reviewed
                      for impairment whenever events or changes in circumstances
                      indicate that the carrying amount of an assets may not be
                      recoverable. The Company adopted SFAS No. 121. There were
                      no long lived assets impairments recognized by the company
                      for the years ended March 31, 2001 and March 31, 2000.

l.       Effect of New Accounting Pronouncements:

                      In June 1997, the FSAB issued SFAS No. 130, Reporting
                      Comprehensive Income. This statement establishes standards
                      for reporting and display of comprehensive income and its
                      components (revenues, expenses, gains and losses) in an
                      entity's financial statements. This statement requires an
                      entity to classify items of other comprehensive income by
                      their nature in a financial statement and display the
                      accumulated balance of other comprehensive income
                      separately from retained earnings and additional
                      paid-in-capital in the equity section of a statement of
                      financial position. This pronouncement, which is effective
                      for fiscal years beginning after December 15, 1997, was
                      adopted by the Company during the fiscal year ending March
                      31, 1999. There were no other items of comprehensive
                      income to report during the years ended March 31, 2001 and
                      March 31, 2000.

                      In December 1999, the Securities and Exchange Commission
                      issued Staff Accounting Bulletin No. 101 ("SAB No. 101"),
                      Revenue Recognition in Financial Statements, which
                      summarizes certain of the staff's views on revenue
                      recognition. The Company's revenue recognition policies
                      are in accordance with SAB No 101.


NOTE 4.  INVESTMENT BY U.S. STORES CORP.:

                  On January  20,  1998,  U.S.  Stores  acquired  1,465,000
                  shares of the  Company's  common  stock.  U.S.  Stores was
                  incorporated  on November 10, 1997.  The Company's  President
                  is also  President and Director of U.S.  Stores.  As of June
                  10, 2001, U.S. Stores Corp. owns 1,175,000 (or 39%) of the
                  Company's Common Stock.

                                      F-13
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS

NOTE 4.           INVESTMENT BY U.S. STORES CORP. (continued)

                  On February 28, 1998, American Telecom Corporation ("American
                  Telecom") acquired 100% of the outstanding common shares of
                  U.S. Stores. American Telecom was incorporated on July 18,
                  1997. The Company's President is also President and a Director
                  of American Telecom. After this transaction, American Telecom
                  effectively obtained beneficial voting control of the Company
                  and its subsidiaries.

                  In April 1998, American Telecom exchanged all of its
                  outstanding common shares with American Telecom, PLC, a
                  publicly traded company in Great Britain. After this
                  transaction, American Telecom effectively became a subsidiary
                  of American Telecom, PLC. Additionally, as part of this
                  transaction, American Telecom, PLC acquired 100% of the
                  outstanding common shares of U.S. Stores, thereby effectively
                  making U.S. Stores a direct subsidiary of American Telecom,
                  PLC.


NOTE 5.  MINORITY INTEREST IN SUBSIDIARIES:

                  The Company owns a majority interest (78.5%) in United
                  Textiles. The minority interest liability represents the
                  minority shareholders' portion (21.5%) of United Textiles'
                  equity at March 31, 2001.


NOTE 6.  FIXED ASSETS:

                  Fixed assets consisted of the following:
<TABLE>
<CAPTION>

                                                                                            March 31,           March 31,
                                                                                              2001                 2000
                                                                                         ----------------    -----------------

<S>                                                                                            <C>                  <C>
                  Furniture, fixtures and equipment                                            $  72,789            $  72,789

                  Less: Accumulated depreciation                                                  69,802               68,861
                                                                                         ----------------    -----------------
                  Furniture, fixtures and equipment - Net                                       $  2,987            $   3,928
                                                                                         ================    =================
</TABLE>




                                      F-14
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


NOTE 7.           INCOME TAXES

                  The components of the deferred tax assets and liabilities are
                  as follows:
<TABLE>
<CAPTION>

                                                                                  March 31,            March 31,
                                                                                    2001                  2000
                                                                              ------------------    -----------------
         Deferred tax assets:
<S>                                                                              <C>                  <C>
         Net operating loss carryforwards                                        $ 5,345,395          $ 5,293,446
                                                                              ------------------    -----------------

         Gross deferred tax assets                                                 5,345,395            5,293,446

         Deferred tax liabilities:

         State income taxes                                                         (495,631)            (114,770)
                                                                              ------------------    -----------------

         Net deferred tax assets before valuation allowances                        4,849,764           5,178,676

         Valuation allowance                                                       (4,849,764)         (5,178,626)
                                                                              ------------------    -----------------

         Net deferred tax assets                                              $             0       $           0
                                                                              ==================    =================

</TABLE>

         At March 31, 2001 and March 31, 2000, the Company established a 100%
         valuation allowance for the net deferred tax assets, as management
         could not determine that it was more likely than not that the deferred
         tax assets could be realized. The change in valuation allowance
         amounted to $328,862 for the year ended March 31, 2001.

         As of March 31, 2001, the Company has available Federal net operating
         loss carryforwards (NOL's) totaling approximately $5,345,395 which
         expire at various times through September 30, 2011. For State and local
         purposes, the Company has available NOL's for Federal and State tax
         purposes, the Company's tax year ends on September 30th approximating
         $5,259,742 which expire at various times through September 30, 2011.




                                      F-15
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


NOTE 7.  INCOME TAXES (continued)

                  Utilization of the NOL's may be limited pursuant to Internal
                  Revenue Code Section 382 should significant changes to the
                  existing ownership of the Company occur.

                  A reconciliation of Income taxes computed at the federal
                  statutory rate as compared to income tax expense at the
                  effective income tax rate is as follows:
<TABLE>
<CAPTION>

                                                                                   March 31,            March 31,
                                                                                      2001                2000
                                                                                -----------------    ----------------

<S>                                                                                      <C>                <C>
                  Federal statutory income tax (benefit) rate                            (34.0)%            (34.0) %

                  State tax benefit, net of federal liability                            (12.2)%             (12.2)%

                  Net change in  valuation allowance                                       46.2%               46.2%

                  Effective income tax (benefit) rate                                     ( - )%             ( - ) %

</TABLE>

NOTE 8.           COMMITMENTS AND CONTINGENCIES

                  Operating Leases:

                  The Company, until June 1999, occupied space at 1410 Broadway,
                  New York, NY where it shared office space with United Textiles
                  and U.S. Apparel. It vacated these premises and relocated
                  along with United Textiles and U.S. Apparel to 1385 Broadway,
                  New York, NY. U.S. Apparel is the prime tenant on the lease
                  and has allowed the Company and United Textiles to occupy
                  space on a rent-free basis.

                  The lease agreement, dated June 29, 1999, entered into by US
                  Apparel called for a base monthly rent of $2,913.25 or
                  $33,759.00 per annum through June 2001 and $2,904.00 monthly
                  or $34,848.00 per annum through the conclusion of the lease,
                  which ends June 29, 2002.

                  US Apparel is obligated under this lease through June 29,
                  2002, at minimum annual rentals as follows:

                  Fiscal year ending March:

                                                     2002              $ 34,575
                                                     2003                 8,712
                                                                       ---------
                                                                       $ 43,287


                  The rental expense for the year ended March 31, 2001 for this
                  lease was $38,469.

NOTE 9.  RESTATEMENT OF AMOUNTS PREVIOUSLY REPORTED

                  The Financial statements for the year ended March 31, 2000
                  contain certain restatements of amounts previously reported.


                                      F-16
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS


NOTE 9.  RESTATEMENT OF AMOUNTS PREVIOUSLY REPORTED (continued)

                  These  restatements  were the result of a decision by the
                  Company's  subsidiary,  United Textile to deconsolidate the
                  accounts of Play Co. as of March 31, 2000. At March 31, 1999,
                  United  Textile's  percentage of ownership in Play Co. was
                  45.2%.  Although  United  Textiles  at that date owned less
                  than 51% of Play  Co.'s  outstanding  common  stock, United
                  Textiles still exercised  prerogative of control over Play
                  Co. and  consolidated the accounts of Play Co. into United
                  Textiles.

                  At March 31, 2000, United Textile's percentage of ownership in
                  Play Co. was reduced to 21.69%. Accordingly, United Textiles
                  elected to deconsolidate the accounts of Play Co., and account
                  for its investment in Play Co. on the equity method of
                  accounting. Under the equity method, the original investment
                  is recorded at cost, and is adjusted periodically to recognize
                  the investor's share of the earnings or losses of the investee
                  subsequent to the date of acquisition. Under this method of
                  accounting, the investment generally cannot be reduced below
                  zero, when the investee has operating losses that exceed the
                  investment, at which point the use of the equity method is
                  suspended. United Textiles percentage of ownership in Play Co.
                  was below 5% by March 31, 2001.

                  On March 28, 2001, Play Co. filed for protection under Chapter
                  11 of the US Bankruptcy Code.

                  United Textiles did modify the accounting for its investment
                  in Play Co. as a result of its diminished percentage of
                  ownership (less than 5%), as well as reducing its investment
                  under the equity method to zero to reflect Play Co.'s losses.

                  United Textile's investment in Play Co. at cost was $383,986.
                  United Textile's allocable share of Play Co.'s losses as of
                  March 31, 1999 was $1,127,301. Accordingly, the investment in
                  Play Co. was reduced to zero on the restated financial
                  statements as of March 31, 2000. For the year ended March 30,
                  2000, United Textile's allocable share of Play Co.'s net loss
                  was $ 3,404,337.

                  For the nine months ended December 31, 2000 United Textiles
                  allocable share of Play Co.'s net cost was $299,257 on March
                  28, 2001 Play Co. filed for protection under Chapter 11 of the
                  US Bankruptcy Code and has not filed updated financial
                  statements for the fiscal year ended March 31, 2001.

                  In 1997, the Company acquired 803,070 shares of Play Co.'s
                  Series E convertible preferred stock. These shares were
                  acquired from an affiliated company as repayment for
                  outstanding loans made to that company by Multimedia. In April
                  2000, the Company converted these preferred shares into Play
                  Co. common stock at the conversion rate of one share of
                  preferred for six shares of common stock. As a result of this
                  conversion, the Company at April 2000 owned 4,818,420 shares
                  of Play Co.'s common stock. At March 31, 2001, the Company
                  held a minority interest in Play Co. As this investment in
                  Play Co. amounts to less than 20%, the Company has accounted
                  for this investment on the "cost basis" method.

                                      F-17
<PAGE>
            MULTIMEDIA CONCEPTS INTERNATIONAL, INC. AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS

NOTE 9.  RESTATEMENT OF AMOUNTS PREVIOUSLY REPORTED (continued)

                  The Company did not exercise any prerogative of control over
                  Play Co. as Play Co. has filed for Chapter 11 protection of
                  the US Bankruptcy Code. The amount of the Company's loss on
                  its investment in Play Co. is indeterminate at this time.


                                      F-18
<PAGE>
                                   SIGNATURES



         In accordance with Section 13 or 15(d) of the Exchange Act of 1934, as
amended the Registrant has caused this report to be signed on its behalf,
thereunto duly authorized as of the 12th day of July 2001.


                                         MULTIMEDIA CONCEPTS INTERNATIONAL, INC.


                                  By:      /s/ Ilan Arbel
                                               Ilan Arbel, Chief Executive
                                               Officer and President

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>


<S>                                                  <C>                                <C>
/s/ Ilan Arbel                                       Chief Executive Officer            7/12/01
Ilan Arbel                                           President and Director              Date


/s/ Rivka Arbel                                      Director                           7/12/01
Rivka Arbel                                                                              Date

/s/ Yair Arbel                                       Director                           7/12/01
Yair Arbel                                                                               Date
</TABLE>