<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-K/A
                                Amendment No. 1

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

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

                 For the fiscal year ended: December 31, 1999

                         Commission File Number: 0-17462

                       FILMAGIC ENTERTAINMENT CORPORATION
         IMMEDIATE PREDECESSOR NAME: "ROEDEINGER MEDICAL SYSTEMS, INC."
                      PREDECESSOR NAME: "COTTON TREE, INC."

             (Exact name of registrant as specified in its charter)

          UTAH                                                   87-0404991
(State or other jurisdiction of                                (IRS Employer
Incorporation or organization)                               Identification No.)

545 N. Mountain Suite 208, Upland, CA                              91786
(Address of principal executive offices)                         (Zip Code)

        Registrant's telephone number including area code: (909) 946-1708

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

                                      None

           Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.0001 par value
                                (Title of Class)

         Indicate by check mark whether the registrant (a) has filed all reports
required to be filed by Section 13 pr 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.   YES X   NO
                                               ---    ---

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not 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-K or any
amendment to this Form 10-K. [ ]

         The  aggregate  market value (the average bid and asked  prices) of the
voting stock held by  non-affiliates  of the registrant on December 31, 1998 was
unavailable as the stock has inactive for the prior couple of years.  The number
of shares of Common Stock, $0.0001 par value,  outstanding on December 31, 1999,
was 7,323,006 shares, held by 222 shareholders.
<PAGE>

                                Item 1. BUSINESS

         Filmagic was  incorporated  in the State of Utah on December 7, 1983 as
Cotton Tree, Inc. In August of 1985 it acquired, in stock-for-stock acquisition,
MEDX, Inc. and changed its name to Roedeinger  Medical  Systems,  Inc. In May of
1988,  Roedeinger  Medical  System sold its line of medical  products to a third
party company, and in September of 1988 it acquired, on a stock-for-stock basis,
Filmagic, Inc. and changed its name to Filmagic Entertainment Corporation.

           It will be the business of the Company to do the following:

  Filmagic owns a library of television programming consisting of 943 one half
hour Programs in a variety of formats. This "library" is being used as follows:

         1.   Develop a dot-com type of business  involving the present  library
              for use in the new emerging internet marketing to fill the growing
              demand for viewing films on-line.

         2.   Distribute this programming to existing television stations in the
              United  States  and Canada  through  direct  solicitation  in both
              conventional and digital means.

         3.   License this programming for use by Low Power Television stations,
              Cable, and or Pay-For-Viewing  television  services through direct
              solicitation and on-line.

         4.   Acquire additional  programming,  both serial and theatrical,  for
              distribution as provided for in paragraphs 1,2& 3 above.

                  In addition,  Filmagic has been  discussing the possibility of
              acquiring  other  libraries  that can be converted to both digital
              and on-line  formats in an attempt to get the  company  back to an
              active income stream.  In its capacity as  "distributor,"  it owns
              all of the "rights," worldwide, to the movies in perpetuity.  Most
              of  its  distribution  efforts  in  the  past  were  done  through
              "sub-distributors"  on a commission basis and for the past several
              years,  with prior  management  had not move the company  past the
              development   stages.   The  new  management  has  begun  actively
              accessing  the  changing  market  and will  focus  developing  the
              company's  existing  library  for  use in  both  internet  and the
              increased demand for friendly films.

                  It is  the  company's  intention  to  continue  this  type  of
              distribution  business,  and  already has  several  other  similar
              transactions  in various  stages of  completion.  The company will
              additionally seek other opportunities for acquisitions and mergers
              that can benefit the shareholders.

                  The Company  additionally  has  completed  bringing all of its
              audits  current as of the filing of this 10K report and intends on
              preparing all necessary  documents required to re-activate trading
              of this  Company  under  its  current  operations.  The  Company's
              management has been actively seeking  opportunities and additional
              management  that  will  bring new  opportunities  to the table for
              consideration.  The  Company  has also  been able to  attract  the
              interest  of a small  number of  investors  willing to put capital
              towards addressing these opportunities.  Most of these the Company
              intends on  bringing to some form of  completion  during the later
              part of the 2nd  quarter,2000  or early  part of the 3rd  quarter,
              2000.

Item 2.                      Financial Information

         The  activities  of the  Company in 1985,  1986,  and 1987  (Roedeinger
Medical Systems,
<PAGE>

Inc.) were devoted primarily to the refinement of the VIDA Heart Monitor and the
development of a viable marketing  program.  There were no products sold as such
and Company could be deemed to be a development Stage Company.

         The  acquisition of Filmagic  Incorporated in August of 1988 placed the
Company in the  entertainment  business.  The  continuation  of the Company as a
viable entity is dependent on the successful  marketing of the acquired  library
of television  programming,  and it entered into a tentative licensing agreement
with a  distributor  in  Australia.  Shortly  after this period the company went
through various changes in both management,  board and other controlling factors
which thrust the company into a continued development stage.  Additionally,  the
company went delinquent on its required filings, thus putting the company into a
non-trading status until the current management came on board this year to bring
all  filings  into a  current  status.  As  stated  in the 1998 10K  filing  the
Company's  management  had to issue stock (144  restricted) in order to have had
the funds  necessary to complete all of the legal and  accounting  work that was
required this past year. As a result,  however, the Company is now in a position
to file the necessary  paperwork with all of the regulatory  agencies  necessary
for us to  reactivate  our trading  status.  This will also allow the Company to
begin to  negotiate  with the  pending  capital  investors  that will  allow the
Company  to  take  advantage  of  the  opportunities   presently  under  review.
Management  feels  that most of these will be brought  into a  completion  stage
during the 2000 year of operation.

Item 3.                            Properties

         The Company owns, in fee, 943 one half-hour television programs.  These
programs  are in the form of "Tape  Masters"  used for  duplication.  All of the
programs are registered with the Library of Congress.

         The  principal   industry  using  the  Company's   properties  are  the
Television, Low Power Television,  Pay-for-View television, and Cable television
industry  in the United  States and  Canada.  A more  limited  market  exists in
certain foreign television markets.

Item 4.  Security Ownership of Certain Beneficial Owners and Management

The following "Table" represents the Ownership of Certain Beneficial Owners and
Management as of December 31, 1999:
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------
<S>                     <C>                      <C>                         <C>
(1) Title of Class      (2) Name and Address      (3) Amount and Nature      (4) Percent of
                         of beneficial owner       of beneficial ownership      Class**

-------------------------------------------------------------------------------------------
Common Stock
Par value $.0001

                           Drones Financial Ltd.               500,000           0.068%
                           Union Bank Plaza Suite 2600
                           445 South Figueroa Street
                           Los Angeles, CA 90071-1630

         *Denotes Offices or Directors
         ** Based on 7,323,006 shares issued and outstanding, one class
</TABLE>

<PAGE>

Item 5.                      Directors and Executive Officers

         Mr. R. Bruce  Harris:  Age 49, CEO, and  Director.  Mr. Harris has been
         involved  in  International  Business  for many years.  Mr.  Harris has
         experience in international mergers and acquisitions,  management,  and
         development

         Mr. Frank DeSantis:  Age 43, Director,  Corporate Counsel, Mr. DeSantis
         has been involved in all phases of corporate law,  investment  banking,
         trial litigation, contracts, and franchise agreements.

         Ms. Aubrye Harris:  Age 25,  Director.  Ms. Harris was an International
         Management BS and has many years experience in finance.  She has worked
         with corporate accounts, financial planning and account analysis.


Item 6.           Executive Compensation- See Note 7 Financials

Item 7.                         Legal Proceedings

         The Company is not involved in any legal  proceedings as of the date of
this filing.

Item 8.          Market Price of and Dividends on the Registrant's Common Equity
                 and Related Stockholder Matters

         The  free-trading  shares of the Company's stock had been traded in the
Over the Counter  Market  (OTC),  "pink sheets" and had been subject to sporadic
trading  and  pricing  during a period  over four years  ago.  The stock has not
actively  traded on neither of the above two markets in the past several  years.
During  this past year there has been zero  trading on either  market.  The last
time the stock traded actively,  it was traded for as low as $.03-$.08 (bid) and
$.05-  $.12  (ask).  The  shares of  common  stock  have not been  traded on any
"exchange."  The company  does  however,  once all filing are  brought  current,
intend  on  filing  the  necessary  documentation  to get this  company  trading
actively.

                 The Company has not paid any dividends to date.

Item 9           Recent Sales of Unregistered Securities

         The Company  issued  940,000  shares of 144  restricted  stock to Triad
Investments  International  of Hong Kong in  exchanges  for them  supplying  the
services and investment background for the past 12months. These shares shall be
issued during first quarter 2001, which will bring the company's outstanding to
8,263,000. As the Company was not in a capital position to cover any capital
required for accounting, legal or merger and acquisition advise Traid provide
the capital in exchange for stock.

<PAGE>

Item 10          Description of Registrants Securities to be registered

         The Company is authorized to issue  20,000,000  shares of Common Stock,
all one class,  with a par value of $.001.  As of the date of this filing  there
were 8,263,006 shares issued and outstanding.

Item 11          Indemnification of Directors and Officers

                 Not Applicable

Item 12          Financial Statements and Supplementary Data

                 Not Applicable.  See item 15.

Item 13          Changes In and Disagreements with Accountants on Accounting and
                 Financial Disclosure

                 None

Item 14          Financial Statements and Exhibits

                 Registrants,  Filmagic  Entertainment Corporation, includes the
                 following  information with this  filing:
                 a. Balance Sheets:        1998, 1999
                 b. Income Statements:     1997, 1998, and 1999
                 c. Statement of Stockholders Equity: Inception to Present

                                    SIGNATURE

         Pursuant to the  requirements  of Section 12 of the  Securities  Act of
1934, the registrant has duly caused this  regulation  statement to be signed on
its behalf by the undersigned, hereunto duly authorized.

                                              FILMAGIC ENTERTAINMENT CORPORATION
                                              ----------------------------------
                                                          REGISTRANT

                                              By: /s/ R. Bruce Harris
                                                 -------------------------------
                                                 President and Chief Operations
                                                 Officer

                                              Date: 4-06-2001
                                                   -----------------------------
<PAGE>

                       Filmagic Entertainment Corporation

                               Balance Sheet 1998

ASSETS:
<TABLE>
<CAPTION>
                                                DEC. 31, 1998      DEC. 31,1999
                                               ---------------------------------
<S>                                             <C>                <C>
CASH                                                    $0.00             $0.00
INTEREST RECEIVABLE  (NOTE 3)                           $0.00             $0.00
NOTES RECEIVABLE                                        $0.00             $0.00
                                               ---------------------------------

TOTAL CURRENT ASSETS                                    $0.00             $0.00

PATENT RIGHTS- NET                                      $0.00             $0.00
FILM LIBRARY     (NOTE 4)                          $10,000.00        $10,000.00
OTHER ASSETS- PROMOTIONAL MATERIAL                      $0.00             $0.00
ORGANIZATION EXPENSES                                   $0.00             $0.00
                                               ---------------------------------

TOTAL ASSETS                                       $10,000.00        $10,000.00
                                               =================================

LIABILITIES & EQUITY
ACCOUNTS PAYABLE                                        $0.00             $0.00
INTEREST PAYABLE                                        $0.00             $0.00
                                               ---------------------------------

TOTAL CURRENT LIABILITIES                               $0.00             $0.00

NOTES PAYABLE- INVESTMENT ADVISOR (NOTE 5)              $0.00             $0.00
NOTE PAYABLE- SHAREHOLDER  (NOTE 3)                     $0.00             $0.00
                                               ---------------------------------

TOTAL LIABILITIES                                       $0.00             $0.00

COMMON STOCK                                        $7,323.00         $8,323.00
PAID IN CAPITAL                                 $1,900,708.00     $1,900,708.00
RETAINED EARNINGS                              ($1,898,031.00)   ($1,898,031.00)
                                               ---------------------------------

TOTAL EQUITY                                       $10,000.00        $10,000.00
                                               ---------------------------------

TOTAL LIABILITIES & EQUITY                         $10,000.00        $10,000.00
                                               =================================



</TABLE>
<PAGE>

    The Accompanying Notes Are an Integral Part of These Financial Statements
                       Filmagic Entertainment Corporation

                                INCOME STATEMENT

INCOME                              YEAR ENDING  YEAR ENDING   YEAR ENDING
                                      12/31/97    12/31/98      12/31/99
DEBT REDUCTION                     $            $             $
CANCELLATION OF DEBT-SHAREHOLDER   $            $             $
INTEREST INCOME                    $            $             $
                                   -------------------------------------------

TOTAL INCOME                       $            $             $
                                   -------------------------------------------

EXPENSE

WRITE DOWN OF VIDA INVENTORY       $            $  130,000    $


INVESTMENT ADVISOR FEES            $            $             $
PATENT AMORTIZATION                $            $             $
PROFESSIONAL FEES                  $            $             $
FILM STORAGE CHARGES               $            $             $
TRAVEL                             $            $             $           -

DEPRECIATION                       $            $             $
OFFICE EXPENSE                     $            $        -    $           -
PUBLIC RELATIONS                   $            $             $
INTEREST-AMORTIZATION              $  70,000    $  130,000    $
INVESTMENT WRITE-OFF-PATENT        $            $             $
TAXES                              $            $             $
CONTRACTED FEES                    $            $             $
ORGANIZATION EXPENSE-AMORTIZATION  $            $             $
                                   -------------------------------------------
TOTAL EXPENSE                      $  70,000    $  130,000    $           -
                                   -------------------------------------------

NET LOSS                           $ (70,000)   $ (130,000)   $           -
                                   ===========================================


    The Accompanying Notes Are an Integral Part of These Financial Statements
<PAGE>

                       Filmagic Entertainment Corporation

                          Notes To Financial Statements

Note 1-Summary of Significant Accounting Policies

Organization

Filmagic Entertainment  Corporation ( the "Company") was incorporated in Utah on
December 7, 1982 as Cotton Tree, Inc. On July 29, 1985, the Company acquired all
of the issued and  outstanding  shares of MEDX,  Inc.  (an Arizona  Corporation)
through a tax free  exchange  of stock  with all of the MEDX  shareholders,  and
changed its name to Roedinger Medical Systems, Inc. The premary business of MEDX
was the development and marketing of patented  medical  products under the names
of VIDA and PREVENT.

On September  11,1988,  the company  acquired all of the  outstanding  shares of
Filmagic  Incorporated (a Delaware  Corporation)  through  tax-free  exchange of
stock,  and changed its name to Filmagic  Entertainment  Corporation  (FEC). All
shares required for this acquisition (10,000,000 restricted shares) were donated
back to the Company by the principal shareholder.

Filmagic  Incorporated  was organized  October 5, 1987. Its principal asset is a
library  of 947  tape  masters  of one  half-hour  television  programming.  The
company's  intent  was to  license  these  tapes for  television  and home video
viewing in the U.S. and overseas, where such programming is applicable.  No such
transactions have been made to date.

The  Company  has  conducted  minimal  operations  since  inception,  and is now
inactive.

Cash and cash equivalents

Cash and cash equivalents  include cash on hand and on deposit and highly liquid
debt instruments with original maturities of three months or less.

Inventory

Inventories  are  stated at the lower of cost  (first-in,  first-out  method) or
market.

Property and equipment

Property  and  equipment  are  recorded  at  cost at the  time  of  acquisition.
Depreciation is computed using the straight-line method over a five year period.

Other assets

The film library consist of story rights,  production,  print,  distribution and
advertising costs (which benefit future periods),  and is stated at the lower of
Un-amortized cost or net realizable value.

<PAGE>

Income taxes

The company  accounts for income taxes in accordance  with Financial  Accounting
Standards Board  Statement 109,  "Accounting for Income Taxes." Income taxes are
provided  for  the  tax  effects  of  transactions  reported  in  the  financial
statements  and consist of taxes  currently  due plus deferred  tasex.  Deferred
taxes are recognized for temporary  differences  between the basis of assets and
liabilities  for financial  statement and income tax purposes.  The deferred tax
liabilities  represent the future tax return  consequences of those differences,
which will either be taxable or decutible  when the assets and  liabilities  are
recovered or settled.

Use of estimates

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

Earnings per share

Basic earnings per share is calculated based upon the weighted average number of
common shares  outstanding  for the year. The Company had no options or warrants
at December 31, 1998 which would have diluted the earnings per share.

Note  2-Basis of Presentation

The  Company has no current  assets and no revenue  generating  activities  that
raises substantial doubt about its ability to continue as a going concern.

Management  is presently  engaged in activities  related to a proposed  business
combination and other options which would bring about an infusion of capital.

The ability of the Company to continue as a going concern is dependent  upon its
securing sufficient additional financing and commencing significant operations.

The  financial  statements  do not  reflect  the  effect of the  uncertainty  of
discontinuing operations.

Note 3-Related Party Transactions

Officers of the Company have provided  certain  services and incurred some costs
on behalf  of the  Company  in the years  ended  1998 and  1997.  However,  such
services and costs were nominal in amount and such were not valued.

Note 4-Commitments and Contingencies

Charisma,  the  company  storing  the film  library,  is  holding  the  tapes as
collateral  against storage charges.  Management  believes the storage agreement
was terminated,  but due to the lack of capital to pursue the matter, the matter
has not been  resolved.  The  asset  value of the tapes  has been  reduced  to a
nominal amount.

Michael Redinger, a former principal  shareholder,  has asseted that the Company
owes him  approximately  $75,000 for funds advanced the Company between 1984 and
1987.  Management  contends  that  the  liability  was  resolved  by  exchanging
property, equipment and cash.

<PAGE>

Management and counsel believer neither claim will adversely affect the Company.

Note 5-Income Taxes

The Company has a net operating  loss  carry-forward  that may be offset against
future  taxable  income.  However,  a tax benefit  has not been  reported in the
accompanying  financial statements because of the uncertainty of the utilization
of the  carry-forward.  Accordingly,  the  approximate  tax  benefit of the loss
carry-forward has been offset by a valuation allowance.

The Company has not filed income tax returns since 1996.
<TABLE>
<CAPTION>
                                      1999             1998            1997
                                   --------------------------------------------
<S>                                <C>              <C>              <C>
Net operating loss Carry-Forward   $750,000          $750,000         $750,000

Valuation allowance                (750,000)         (750,000)        (750,000)
                                   --------------------------------------------

Income tax benefit                 $     ---         $   ----         $  ----
                                   --------------------------------------------
</TABLE>

<PAGE>








                       FILMAGIC ENTERTAINMENT CORPORATION
                       CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998













                               HURLEY & COMPANY
<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                          DECEMBER 31, 1999 AND 1998


                                   CONTENTS

<TABLE>
<CAPTION>
                                                                    Page
<S>                                                                 <C>
INDEPENDENT AUDITOR'S REPORT                                          1

FINANCIAL STATEMENTS

     Consolidated Balance Sheets                                      2

     Consolidated Statement of Operation                              3

     Consolidated Statement of Stockholders Equity                    4

     Consolidated Statement of Cash Flows                             5

     Notes to Consolidated Financial Statements                       6
</TABLE>

<PAGE>

                         INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Filmagic Corporation

We have audited the accompanying consolidated balance sheets of Filmagic
Entertainment Corporation as of December 31, 1999 and 1998 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the years then ended. The financial statements are the responsibility of the
management of Filmagic Entertainment Corporation. Our responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, an all material respects, the financial position of Filmagic
Entertainment Corporation as of December 31, 1999 and 1998, and the results of
their operations and their cash flows for each of the two years in the period
ended December 31, 1999, in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared assuring
that the Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has no significant assets and has not
generated any revenue for several years which raises substantial doubt about its
ability to continue as a going concern unless additional capital is obtained.
Management's plan to raise capital is also discussed in Note 2. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



Granada Hills, CA
June 20, 2000
<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
                          CONSOLIDATED BALANCE SHEET
                           DECEMBER 31, 1999 AND 998


                                                  1999         1998
                                                 -------      -------
<TABLE>
<CAPTION>
<S>                                              <C>          <C>
                ASSETS

Current assets..............................     $     0       $     0
Other assets................................      10,000        10,000
                                                 -------       -------
Total assets................................     $10,000       $10,000
                                                 =======       =======


   LIABILITIES AND STOCKHOLDER'S Equity

Current liabilities.........................    $      0       $     0

STOCKHOLDERS EQUITY

Common stock $.0001 par value, 10,000
 shares authorized 7,323,006 issued and
outstanding.................................       7,323          7,323
Paid-in-capital.............................   1,900,708      1,900,708
Accumulated deficit.........................  (1,898,031)    (1,898,031)
                                               ---------      ---------


Total liabilities and
 stockholder's equity....................... $    10,000      $  10,000
                                              ==========       ========


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

<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<S>                                     <C>                 <C>
Revenues                                $       0           $       0

Expenses                                        0                   0
                                        ---------           ---------

Net loss                                $       0           $       0
                                        =========           =========

Net loss per share                      $     .00           $     .00
                                        =========           =========

Weighted average number of
 shares outstanding                     7,323,006           7,323,006
                                        =========           =========
</TABLE>

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

                                       3
<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                    YEARS ENDED DECEMBER 31, 1999 AND 1998


<TABLE>
<CAPITAL>
                                                 Additional
                               Common Stock       Paid in     Accumulated
                            Shares     Amount     Capital       Deficit       Total
                          ---------   -------    ----------   ------------   -------
<S>                      <C>         <C>        <C>          <C>            <C>
Balance
Jan. 1, 1998              7,323,006   $ 7,323    $1,900,708   $(1,898,031)   $10,000

Net loss                                                                0          0
                          ---------   -------    ----------   -----------    -------

Balance
Dec. 31, 1998             7,323,006     7,323     1,900,708    (1,898,031)    10,000

Net loss                                                                0          0
                          ---------    ------    ----------   -----------    -------

Balance
Dec. 31, 1999             7,323,006    $7,323    $1,900,708   $(1,898,031)   $10,000
                          =========    ======    ==========   ===========    =======
</TABLE>

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

                                       4
<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>

                                                              1999         1998
<S>                                                         <C>           <C>
Cash flows from operating activities                        $    0        $    0

Cash flows from investing activities                             0             0

Cash flows from financing activities                             0             0

Net increase in cash and cash equivalents                        0             0

Cash and cash equivalents, beginning of year                     0             0
                                                            ------        ------
Cash and cash equivalents, end of year                      $    0        $    0
                                                            ======        ======
</TABLE>

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

                                       5

<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1999

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization

     Filmagic Entertainment Corporation ("the Company") was incorporated in
     Utah in December 1982 as Cotton Tree, Inc. In July 1985, the Company
     acquired all the shares of MEDX, Inc. (an Arizona Corporation) through a
     tax free exchange of stock with all the MEDX shareholders, and changed its
     name to Roedinger Medical Systems, Inc. The primary business of MEDX was
     the development and marketing of patented medical products under the names
     Vida and Prevent.

     In September 1988, the Company acquired all the shares of Filmagic
     Incorporated (a Delaware Corporation) through a tax free exchange of stock,
     and changed its name to Filmagic Entertainment Corporation. All shares of
     Roedinger Medical Systems, Inc. required for the acquisition were donated
     back to the Company by the then principal shareholder.

     Filmagic Incorporated was organized in October 1987. Its principal business
     was to acquire tape masters of half-hour television programming and
     license these tapes for television and home video in the United States and
     foreign markets where such programming is applicable. Its principle asset
     was a library of 947 tape masters. No licensing transactions have been made
     since inception.

     The company has conducted minimal operations since inception and is
     currently inactive.

     Other Assets

     The other assets consist of a film library, story rights and various
     production costs. The cost of these assets have been amortized to a de
     minimis value.

     Use of Estimates

     The preparation of financial statements in accordance with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets ad liabilities and
     the reported amounts of income and expense during the reported period.
     Actual results may differ from these estimates.

                                       6



<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               DECEMBER 31, 1999


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

        Income Taxes

        The Company accounts for income taxes in accordance with Financial
        Accounting Standards Board Statement 109, which provides for the tax
        effect of transactions reported in the financial statements and consist
        of taxes currently due plus any deferred taxes. Deferred taxes are
        recognized for temporary differences between the basis of assets and
        liabilities for financial statements and income tax purposes. The
        deferred tax assets and liabilities represent future tax return
        consequences of those differences.


        Loss Per Share

        Loss per share is calculated based on the weighted average number of
        shares outstanding for the year. The Company has no options or warrants
        which may have affected the loss per share.

NOTE 2. BASIS OF PRESENTATION


        The Company has no ongoing operations or any significant assets that
        could generate revenue. As such there is substantial doubt about the
        Company's ability to continue as a going concern.

        Management is presently engaged in activities related to possible
        business combinations and other options which would bring about an
        infusion of capital or significant business operations.

        The ability of the Company to continue as a going concern is dependent
        upon its securing additional financing and commencing significant
        operations. The financial statements do not include any adjustments to
        reflect the uncertainty of discontinuing operations.


                                       7
<PAGE>

                      FILMAGIC ENTERTAINMENT CORPORATION
                         NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 1999

Note 3.     RELATED PARTY TRANSACTIONS

       The officers of the Company have provided certain services and incurred
       some costs on behalf of the Company for the last few years ended December
       31, 1999. However, such services and costs were nominal in amount and
       as such are not valued in the financial statements.


Note 4.     COMMITMENTS AND CONTINGENCIES

       The tape library is held by an independent company. Since Filmagic has
       not paid storage charges for several years, the storage company has filed
       a lien against those charges. Management has not pursued recovery of the
       tapes due to a lack of capital, and the library is carried on the balance
       sheet at a nominal value due to this impairment.

       Michael Roedinger, a former principal shareholder, has asserted that the
       Company owes him approximately $75,000 for funds advanced to the Company
       prior to 1988. Management contends that this issue was resolved by an
       exchange of property, equipment and cash. Management and counsel believe
       neither claim will adversely affect the Company.


Note 5.     INCOME TAXES

       The Company has a net operating loss carryforward that may be used to
offset future taxable income. However, the tax benefit has not been recorded due
to the uncertainty of the utilization of these carryforwards. The carryfowards
all expire by 2010. The Company has not filed tax returns since 1993.

<TABLE>
<CAPTION>
                                             1999            1998
                                            ------          ------
<S>                                      <C>            <C>
Net operating loss carryfoward            $ 750,000       $ 750,000

Valuation allowance                        (750,000)       (750,000)
                                          ---------       ---------
Income tax benefit                        $       0       $       0
                                          =========       =========
</TABLE>

                                       8