**SECURITIES AND EXCHANGE COMMISSION****Washington****, D.C. 20549       FORM 10-QSB/A       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF       THE SECURITIES EXCHANGE ACT OF 1934       For the quarterly period ended****April 30, 2004**

| **000-29921**          |
|------------------------|
|                        |
| Commission file number |
|                                                                   |
|-------------------------------------------------------------------|
| **MAGIC MEDIA NETWORKS, INC.**                                    |
|                                                                   |
| (Exact name of small business issuer as specified in its charter) |
| **Delaware**             |   | **65-0494581**                       |
|--------------------------|--------|--------------------------------------|
|                          |   |                                      |
| (State of incorporation) |   | (IRS Employer Identification Number) |
| **530 North Federal Highway****Fort Lauderdale****,****Florida****33301** |
|---------------------------------------------------------------------------|
|                                                                           |
| (Address of principal executive office)                                   |
| **(954) 764-0579**          |
|-----------------------------|
|                             |
| (Issuer's telephone number) |

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

|                                                                                                                                                         |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Applicable only to corporate issuers**                                                                                                                     |
| As of June 15, 2004 (the most recent practicable date), there were 22,878,058 shares of the issuer's Common Stock, $0.0001 par value per share, outstanding. |
|                                                                                                                                                         |
| Transitional Small Business Disclosure Format (check one)**Yes [ ] No [X]**                                                                                  |

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| **MAGIC MEDIA NETWORKS, INC.               FORM 10-QSB               TABLE OF CONTENTS** |
|------------------------------------------------------------------------------------------|
|                                                                                     |   |   |
| **PART I**                                                                               |   | **FINANCIAL INFORMATION** |
| Item 1                                                                                   |   | Financial Statements |
|                                                                                     |   |      Consolidated Balance Sheets |
|                                                                                     |   |      Consolidated Statements of Operations |
|                                                                                     |   |      Consolidated Statements of Cash Flows |
|                                                                                     |   |      Notes to Financial Statements |
| Item 2                                                                                   |   | Management's Discussion and Analysis of Financial Condition and Results of Operations |
| Item 3                                                                                   |   | Controls and Procedures |
|                                                                                     |   |   |
| **PART II**                                                                              |   | **OTHER INFORMATION** |
| Item 2                                                                                   |   | Changes in Securities and Use of Proceeds |
| Item 6                                                                                   |   | Exhibits and Reports on Form 8-K |
|                                                                                     |   |   |
| **SIGNATURES**                                                                           |

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**PART I       FINANCIAL INFORMATION**

**ITEM 1 - FINANCIAL STATEMENTS**

| **MAGIC MEDIA NETWORKS, INC.               Consolidated Balance Sheets**                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                           |   | **April 30,               2004               (unaudited)** |   | **October 31,               2003** |
|                                                                                                                                                           |   |  |   |  |
| ASSETS                                                                                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                                                                           |   |   |   |   |   |   |   |   |
| Current Assets:                                                                                                                                                |   |   |   |   |   |   |   |   |
|    Cash and Cash Equivalents                                                                                                                    |   | $ | 457,709 |   |   | $ | 25,658 |   |
|    Prepaid Expenses                                                                                                                                  |   |   | 0 |   |   |   | 0 |   |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
|       Total Current Assets                                                                                                       |   |   | 457,709 |   |   |   | 25,658 |   |
|                                                                                                                                                           |   |   |   |   |   |   |   |   |
| Property and Equipment - Net                                                                                                                                   |   |   | 86,971 |   |   |   | 27,525 |   |
| Acquired Amortizable Intangible Assets - Net                                                                                                                   |   |   | 3,130 |   |   |   | 3,280 |   |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
|       Total Assets                                                                                                               |   | $ | 547,810 |   |   | $ | 56,463 |   |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                                                           |   |   |   |   |   |   |   |   |
| Current Liabilities:                                                                                                                                           |   |   |   |   |   |   |   |   |
|    Accounts and Accrued Expenses Payable                                                                                                             |   |   | 139,329 |   |   |   | 106,917 |   |
|    Payroll Taxes Payable                                                                                                                        |   |   | 64,992 |   |   |   | 41,608 |   |
|    Accrued Officer's Salary under Employment Agreement                                                                                          |   |   | 0 |   |   |   | 40,165 |   |
|    Convertible Notes Payable – Related Party                                                                                              |   |   | 200,000 |   |   |   | 160,000 |   |
|    Note Payable- La Jolla Cove Investors  (New)                                                                                  |   |   | 300,000 |   |   |   | 0 |   |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
|       Total Current Liabilities                                                                                                  |   |   | 704,321 |   |   |   | 348,690 |   |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
| Note Payable- La Jolla Cove Investors  (New)                                                                                               |   |   | 0 |   |   |   | 300,000 |   |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
|        Total Liabilities                                                                                                         |   |   | 704,321 |   |   |   |  648,690 |   |
|                                                                                                                                                           |   |   |   |   |   |   |   |   |
| Stockholders' Deficit                                                                                                                                          |   |   |   |   |   |   |   |   |
|    Preferred Stock, Series A Convertible ($0.0001 par value)                                                                                    |   |   |   |   |   |   |   |   |
|        5,576,923 Shares Authorized                     5,076,923 Shares Issued (5,576,923 in 2003) |   |   | 227,586 |   |   |   | 250,000 |   |
|    Preferred Stock, Series B Convertible ($0.0001 par value)                                                                                    |   |   |   |   |   |   |   |   |
|        3,750,000 Shares Authorized and Issued                                                                               |   |   | 150,000 |   |   |   | 150,000 |   |
|    Common Stock                                                                                                                                 |   |   |   |   |   |   |   |   |
|       40,673,077 ($0.0001 par value) Shares Authorized                                                                           |   |   |   |   |   |   |   |   |
|       22,370,365 Shares Issued (14,684,698 in 2003)                                                                              |   |   | 2,927,591 |   |   |   | 1,535,577 |   |
|    Deficit Accumulated since Quasi-reorganization October 31, 1999                                                                         |   |   | (3,461,689 | ) |   |   | (2,527,804 | ) |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
|       Total Stockholders' Deficit                                                                                                |   |   | (156,511 | ) |   |   | (592,227 | ) |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
|       Total Liabilities and Stockholders' Deficit                                                                                |   | $ | 547,810 |   |   | $ | 56,463 |   |
|                                                                                                                                                           |   |   |  |   |   |   |  |   |
|                                                                                                                                                           |

See Notes to Financial Statements.       The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-1

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| **MAGIC MEDIA NETWORKS, INC.               Consolidated Statements of Operations****April 30, 2003****and****April 30, 2002****(unaudited)** |
|----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                         |   | **Three Months               Ended** |   | **Six Months               Ended** |
|                                                                                                                                         |   | **April 30,               2004** |   | **April 30,               2003** |   | **April 30,               2004** |   | **April 30,               2003** |
|                                                                                                                                         |   |  |   |  |   |  |   |  |
| Net Sales                                                                                                                                    |   | $ | 19,801 |   |   | $ | 11,049 |   |   | $ | 38,632 |   |   | $ | 15,099 |   |
|                                                                                                                                         |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Selling, General and Administrative Expenses                                                                                                 |   |   | 215,071 |   |   |   | 155,039 |   |   |   | 462,140 |   |   |   | 287,286 |   |
| Consulting Expenses                                                                                                                          |   |   | 416,000 |   |   |   | 0 |   |   |   | 491,000 |   |   |   | 4,500 |   |
| Interest Expense                                                                                                                             |   |   | 9,963 |   |   |   | 4,391 |   |   |   | 19,377 |   |   |   | 11,906 |   |
|                                                                                                                                         |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Total Expenses                                                                                                                               |   |   | 641,034 |   |   |   | 159,430 |   |   |   | 972,517 |   |   |   | 303,692 |   |
|                                                                                                                                         |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Net Loss before Income Taxes                                                                                                                 |   |   | (621,233 | ) |   |   | (148,381 | ) |   |   | (933,885 | ) |   |   | (288,593 | ) |
|                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income Tax Expense                                                                                                                           |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|                                                                                                                                         |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Net Loss                                                                                                                                     |   | $ | (621,233 | ) |   | $ | (148,381 | ) |   | $ | (933,885 | ) |   | $ | (288,593 | ) |
|                                                                                                                                         |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Basic and Diluted Loss per Share                                                                                                             |   | $ | (0.02 | ) |   | $ | (0.01 | ) |   | $ | (0.04 | ) |   | $ | (0.02 | ) |
|                                                                                                                                         |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Weighted Average Common Share Equivalent                    Outstanding                                             |   |   | 25,738,299 |   |   |   | 13,845,641 |   |   |   | 23,210,068 |   |   |   | 12,929,201 |   |
|                                                                                                                                         |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |

See Notes to Financial Statements.       The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-2

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| **MAGIC MEDIA NETWORKS, INC.               Consolidated Statements of Cash Flows** |
|------------------------------------------------------------------------------------|
|                                                                               |   |   |
|                                                                               |   | **Six Months Ended** |
|                                                                               |   | **April 30,               2004****(unaudited)** |   | **April 30,               2003****(unaudited)** |
|                                                                               |   |  |   |  |
| Operating Activities:                                                              |   |   |   |   |   |   |   |   |
| Net Loss                                                                           |   | $ | (933,885 | ) |   | $ | (288,593 | ) |
| Adjustments to Reconcile Net Loss to Cash:                                         |   |   |   |   |   |   |   |   |
| Non-Cash Expenses Included in Net Loss                                             |   |   |   |   |   |   |   |   |
|                                                                               | Depreciation and Amortization |   |   | 7,183 |   |   |   | 5,250 |   |
|                                                                               | Stock Issued for Services |   |   | 223,600 |   |   |   | 1,750 |   |
|                                                                               | Extension of Stock Options for Consulting Services |   |   | 391,000 |   |   |   | 0 |   |
|                                                                               | Write-off of Prepaid Legal Fees |   |   | 0 |   |   |   | 10,000 |   |
|                                                                               | Increase in Payables and Accrued Expenses |   |   | 15,631 |   |   |   | 78,153 |   |
|                                                                               |   |   |  |   |   |   |  |   |
| Cash Used by Operating Activities                                                  |   |   | (296,471 | ) |   |   | (193,440 | ) |
|                                                                               |   |   |   |   |   |   |   |   |
| Financing Activities:                                                              |   |   |   |   |   |   |   |   |
|                                                                               | Proceeds from the Issuance of Common Stock |   |   | 750,000 |   |   |   | 31,500 |   |
|                                                                               | Proceeds Note Payable - Related Parties |   |   | 40,000 |   |   |   | 100,000 |   |
|                                                                               | Segregation of Cash to Cash-Restricted |   |   | 0 |   |   |   | (5,610 | ) |
|                                                                               |   |   |  |   |   |   |  |   |
| Cash Generated by Financing Activities                                             |   |   | 790,000 |   |   |   | 125,890 |   |
|                                                                               |   |   |   |   |   |   |   |   |
| Investing Activities:                                                              |   |   |   |   |   |   |   |   |
|                                                                               | Acquisition of Fixed Assets |   |   | (61,478 | ) |   |   | (9,063 | ) |
|                                                                               | Acquisition of Intellectual Property |   |   | 0 |   |   |   | (300 | )  |
|                                                                               |   |   |  |   |   |   |  |   |
| Cash Used by Investing Activities                                                  |   |   | (61,478 | ) |   |   | (9,363 | ) |
|                                                                               |   |   |   |   |   |   |   |   |
| Increase (Decrease) in Cash                                                        |   |   | 432,051 |   |   |   | (76,913 | ) |
| Cash and Cash Equivalents-Beginning                                                |   |   | 25,658 |   |   |   | 195,085 |   |
|                                                                               |   |   |  |   |   |   |  |   |
| Cash and Cash Equivalents-Ending                                                   |   | $ | 457,709 |   |   | $ | 118,172 |   |
|                                                                               |   |   |  |   |   |   |  |   |

See Notes to Financial Statements.       The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-3

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**MAGIC MEDIA NETWORKS, INC.**       Notes to Interim Consolidated Financial Statements       April 30, 2004       (Unaudited)

**Note 1 -** **Basis of Presentation**

           The interim consolidated financial statements of Magic Media Networks, Inc. include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading. The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and footnotes required by Generally Accepted Accounting Principles in the United States for complete financial statements. The consolidated financial statements include the results of the Company's wholly-owned subsidiaries; Bar TV, Inc. and Destination Television, Inc., which were incorporated in Florida in November 2002 and August 2003, respectively. 

**Note 2 -****Notes Payable****            Convertible Notes Payable – Dr. Terry**

            On April 15, 2003, the Company issued to Dr. H. K. Terry a $100,000 unsecured promissory note due April 15, 2004. On October 12, 2003, the Company issued an additional one-year promissory note for up to $100,000 of which $60,000 had been advanced as of October 31, 2003 and an additional $40,000 was advanced on November 24, 2003. The notes are unsecured and bear interest at 6%. The notes, including any accrued interest, are convertible, at the holder's option, into common stock at the average closing price of the Company's common stock for the five trading days prior to the date of receipt of election to convert but not less than $0.05 per share. The notes were issued to document Dr. Terry's loans to the Company. The proceeds of the loans were used for working capital.

            **Note Payable (New) – La Jolla Cove Investors, Inc.**

            On October 23, 2003, as part of a legal settlement, a new promissory note for $300,000 was issued with a maturity date of April 24, 2005. The promissory note is non-convertible and bears interest at 6-3/4% with all interest, including amounts previously accrued, to be paid at maturity. The new promissory note is secured by a $300,000 real estate mortgage on the land and building which is owned by Dr. Harold Terry and which houses the Company's offices.

F-4

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**Note 3** - **Stockholders' Deficit**                  **Stock Issued for Cash**

            During the three months ended January 31, 2004, the Company issued 2,500,000 shares of restricted common stock to Dr. Terry for $250,000 or $0.10 per share. During the three months ended June 30, 2004, stock options pursuant to the Company's consultants' stock option plan of September 2003, were exercised as follows: 2,500,000 shares at $0.10 per share; and 1,666,667 shares at $0.15 per share; for total proceeds to the Company for working capital of $500,000. The shares issued to Dr. Terry have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.   

**            Stock Issued for Services**

            During the three months ended January 31, 2004, the Company issued a total of 954,000 shares of restricted common stock for services. The shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.    Of the total, the Company issued 545,000 shares to UTEK Corporation, pursuant to a six-month technology advisory agreement entered into in November 2003. The shares to UTEK Corporation were valued at the approximate market value at the time of the initial agreement, $60,000, of which $25,000 was charged to consulting expense in the quarter ended January 31, 2004 and the balance of $35,000 in the quarter ended June 30, 2004. The Company also issued 409,000 shares to ten individuals for services, including 100,000 shares for business consulting, valued at $40,000; and 309,000 shares, valued at $123,600, for computer and web design and sales and office services. The 409,000 shares were valued at $0.40 per share, which approximated market value at the date of issuance.

            **Stock Issued for Equipment**

**           ** In March 2004, the Company issued 15,000 shares of its common stock to Stephen Hammer as partial payment for equipment. The shares were valued at $0.33 per share, for a total of $5,000, which was the approximate market value at the date of issuance.** ** The shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.    **        **

**            Common****Stock Options and Warrants**

            In September 2003, the Company granted options to two individuals, pursuant to consulting agreements to purchase 3,208,334 and 3,208,333 shares of common stock, for a total of 6,416,667 shares. The options, with an original expiration date of March 5, 2004 gave the right to purchase shares of common stock at exercise prices of $0.10 to $0.25, or an average of $0.1558 per share. The number of shares of common stock to be received by each of the grantees of the options, upon exercise, was limited so that each would not beneficially own more than 10% of the then outstanding shares of common stock. During the three months ended April 30, 2004, the expiration date of the remaining 2,250,000 unexercised options was extended to April 2, 2004 and re-extended to June 30, 2004. At the time of the extension, the extended options had intrinsic value of $332,500. Pursuant to the Black-Scholes valuation method, the options at the time of the extension had fair value of $391,000 which has been reflected as an addition to *Common Stock* in the Company's Consolidated Balance Sheet as at April 30, 2004 and as an offsetting additional *Consulting Expense* of $391,000, as reported in the Consolidated Statement of Operations for the three months and six months ended April 30, 2004.

            In October 2003, La Jolla Cove Investors, Inc. entered into a two-year warrant agreement for the purchase of 10,000,000 shares of the Company's common stock, exercisable before October 22, 2005 at a price equal to the greater of (a) 85% of the average of the 5 lowest volume weighted average prices in the prior 20 trading days before the date of exercise, or (b) $0.25 per share.  Although the settling parties referred to this document as a "warrant", La Jolla agreed that (subject to the terms and conditions of such "warrant") La Jolla will exercise such "warrant" if and when (a) the market price of our common stock pursuant to the above formula equals $0.29 or more per share, (b) La Jolla's "piggy-back" rights have been declared "effective" by the S.E.C., and (c) in an amount at least equal to 10% of the volume of the common shares that trade at a price of $0.29 or more per share, excluding block trades of 50,000 shares or more. La Jolla was granted "piggy-back" rights for the above 10,000,000 shares on any Registration Statement that the Company files with the S.E.C. during a period of two years from the execution date of the Definitive Agreement. The number of shares of common stock to be received by La Jolla upon exercise of the warrants is limited so that La Jolla will not beneficially own more than 9.9% of the then outstanding shares of common stock.

F-5

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**Note 4 -****Commitments**

**            Facilities**

            The Company leases from a stockholder, Dr. H. K. Terry, pursuant to an oral agreement on a month-to-month basis, an 8,500 square foot building in Fort Lauderdale, Florida, which serves as its administrative offices and computer operations center. The rent is $4,500 per month and the Company is responsible for utilities.

            **Employment Agreements**

            Mr. Gordon Scott Venters is employed as the Company's President and Chief Executive Officer, pursuant to an original three-year employment agreement which began October 1, 1997. The agreement provided for a base salary of $75,000, $100,000 and $133,000 for years one, two and three, respectively. Since the end of the term of the employment agreement, September 30, 2000, Mr. Venters has, with the approval of the Board of Directors, continued in his positions with the Company and his salary has continued to accrue at the same level as in the last year of the agreement. The employment agreement has been renewed to October 31, 2004. The accrued but unpaid portion of Mr. Venters' cash compensation is carried as a current payable and reflects any payments made through April 30, 2004 and October 31, 2003. The amounts owing on those dates were $-0- and $40,165, respectively.

**Note 5 - Related Party Transactions**

            In March and October 2001, Mr. Gordon Scott Venters received a total of 5,576,923 shares of Series A Preferred Stock in exchange for a total of $250,000 of salary owed to him. In July 2002 and October 2003, he received a total of 3,750,000 shares of Series B Preferred Stock, in exchange for a total of $150,000 of salary owed to him. In February and March 2004, Mr. Venters converted 500,000 shares of Series A Preferred Stock into 50,000 shares of Common Stock. As of April 30, 2004, the remaining outstanding 5,076,923 shares of Series A Preferred Stock were convertible into 507,693 shares of common stock and had the equivalent voting rights of 2,030,772 shares of common stock and the shares of Series B Preferred Stock were convertible into 3,750,000 shares of common stock and had the equivalent voting rights of 15,000,000 shares of common stock. As of April 30, 2004 and October 31, 2003, Mr. Gordon Scott Venters was owed $-0- and $40,165 for accrued, but unpaid, salary under his employment agreement, at those dates, respectively.

            Dr. Harold Terry, the owner of more than 25% of the Company's common stock acquired 2,500,000 additional shares of common stock from the Company during the three months ended January 31, 2004 for cash consideration of $250,000. Dr. Terry, who assumed the Company's contractual obligation to acquire the building housing its office facilities for $480,000, has continued to lease the building to the Company, on a month-to-month basis, at $4,500 per month, which has been accrued by the Company but not paid. Dr. Terry has also consented to the use of the property as collateral for the $300,000 La Jolla promissory note. On November 24, 2003, Dr. Terry advanced the Company $40,000. This was in addition to $160,000 previously advanced and described in *Note 2-**Notes Payable,**Convertible Notes Payable – Dr. Terry.* As of April 30, 2004 and October 31, 2003, the Company was indebted to Dr. Terry for accrued rent in the amounts of $72,000 and $45,000, respectively and accrued interest in the amounts of $9,157 and 3,304, respectively.

F-6

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**Note 6 -****Ability to Continue as a Going Concern and Management Plan**

            The financial statements have been prepared assuming that the Company will continue as a going concern. The Company has had only nominal revenue in the ordinary course of its business. The lack of sales and recurring losses from operations raises substantial doubt about the Company's ability to continue as a going concern. Management's plan in regards to these matters is to seek further equity or debt funding to allow it to pursue its business plan which involves the sale of advertising on the Company's Bar TV and Gym TV networks and the possible acquisition of companies in related or unrelated businesses. The Company intends to increase its revenues by increasing its concentration of locations within the Southeast and Central Florida markets where it presently broadcasts and to aggressively enter new markets throughout North and West Florida in order to reach a critical size that would be attractive to national advertisers; to substantially expand its Gym TV network to make it attractive as an advertising medium; and to reduce its fixed cash operating expenses so that sales exceed the Company's fixed expenses.

**Note 7 - Subsequent Events**

            In May 2004, the remaining outstanding 5,076,923 shares of Series A Preferred Stock, all of which were owned by the Company's president, Gordon Scott Venters, were converted into 507,693 shares of common stock

F-7

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**ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS****GENERAL**

            Our revenue is derived from the production and sale of custom advertising and the subsequent airing of the ads on our Bar TV and Destination Television networks. We offer retail locations, primarily bars, taverns and nightclubs, a system consisting of hardware and if necessary, television monitors to distribute our programming, as described below.

            We currently have a total of approximately 121 locations installed and broadcasting Bar TV on a daily basis. We have 86 locations in Fort Lauderdale, West Palm Beach and the South Beach entertainment district in Miami Beach. We believe that this base of anchor locations has established our regional footprint in the Southeast Florida corridor which covers the highly populated and affluent counties of Palm Beach, Broward and Miami-Dade. We also have 25 locations in Central Florida (metropolitan Orlando) and 10 locations in the Florida Keys.

            We plan to now concentrate on extending our location base throughout Florida. We are targeting well-known, high-traffic and highly visible bars, taverns and nightclubs to broadcast our ads and content. We anticipate entering into agreements to install our Bar TV broadcast in a minimum of 20 premium destinations in each of the following areas; the Florida Keys (Key West), Daytona Beach, Tampa, the Panhandle (Panama City), Tallahassee and Jacksonville.

            We believe that our business model can only be successful if we are able to attract national and major regional advertisers. In order to accomplish this goal, we must continue to place our broadcast in high traffic locations in the entertainment districts throughout Florida. There is no assurance that we will able to enter into agreements with a sufficient number of business locations within the state to interest the advertisers we are seeking.

            In order to interest viewers to watch our monitors and see and pay attention to our advertisements, we must provide entertaining content. We use the same approach as network television which provides content, which may be situation comedies, quiz, reality, talent or late-night talk shows to draw viewers and keep them entertained and focused on their television sets so that during the commercial breaks they watch the ads and eventually buy the products. Just as an "ads-only" channel has not proven to be popular, we believe that to be successful in presenting advertisements, we must provide some form of entertainment and we have chosen first-run motion picture trailers and music videos as our entertainment. We have not taken any surveys as to whether our locations' patrons like being exposed to ads or movie trailers.

           We utilize as "backbone" or "core" content, movie trailers of first-run motion pictures from the major motion picture studios, including Twentieth Century Fox, Columbia Pictures, MGM, Warner Bros., Paramount Pictures and Universal highlighting upcoming releases, and music videos. The movie trailers, which are rated as suitable for general audiences, are supplied to us, without charge, by Fahlgren Entertainment, Inc., an Atlanta based entertainment oriented advertising and public relations agency.  Fahlgren Entertainment, Inc. has agreements with the studios to receive print and ad ("P & A") marketing materials which they provide to third-party entertainment companies such as our company to expand the "P & A" promotion of upcoming theatrical releases. The music videos, which are promotions for upcoming album releases, are provided to us by Elektra Music, which include videos by Warner, Atlantic Records and Elektra, and by Epitaph Records.

            We then schedule local, regional and national advertisements, before and after the filmed movie trailers.  Because music is generally played in our locations by disk jockeys or juke boxes, it is necessary that our broadcasts of movie trailers and music videos and ads be graphically intensive and without sound.

            We currently do not receive any direct revenues from these trailers and videos, but we are free to use them as content in our broadcasts to the locations that comprise our network. In exchange for allowing us to broadcast our ads and content to their location to be viewed by their patrons, we provide free advertisements, which includes producing a five-second static advertisement for the retail location utilizing its logo, address, website address and phone number. We also provide an "event calendar" with digital photographs of patrons and employees and allocate up to two minutes of air time per hour of broadcast to their location.

            We maintain a similar relationship with our Gym TV locations, except that in addition to providing the businesses with free advertisements, we pay the locations, on a pro-rata basis, 33% of the gross ad revenue. 

            **Industry Background**

            The point-of-purchase market with the out-of-home advertising business is currently estimated at $6 billion annually. The advertising industry is diverse and includes television, newspapers, magazines, radio, specialty media, the Internet, billboards, direct mail and telephone directories. Approximately $460 billion was spent on worldwide advertising in 2000, including over $240 billion in the United States alone.

            In recent years, non-traditional media, particularly digital technology, has brought in an era of change, providing advertisers new forms and formats by which they can connect with and impact their target audience.  Many industry analysts believe that the relative importance of traditional advertising media will decrease as advertisers look for more creative solutions to reach consumers.

            Through our networks, we have created advertising distribution channels that permit advertisers to effectively reach their audience in an out-of-home environment. We intend to capture an increasing share of the total advertising market. We believe that point-of-purchase advertising networks appeal to both traditional in-home and out-of-home advertisers who today employ a broad range of advertising mediums.

**            Network Program**

            Our networks, the term we use to describe our groups of locations that permit their patrons to view our broadcasts, offer advertisers the ability to target specific demographics on a site-by-site basis. Placing monitors in high traffic venues such as sports bars, taverns and nightclubs increases exposure and ad impressions. The monitors are profiled based on specific characteristics of their audience, including age, gender, race and income. This is not accomplished scientifically, but by word-of-mouth and anecdotal observation, which we believe to be reliable. Some examples of the type of information which may be helpful for advertisers are the price of drinks in a bar, which gives information as to patrons' income; the breakdown by sexes, which might indicate the type of drink, which would appeal to a particular gender; the types of cars and trucks in the parking lot, are all items of information that may be useful to advertisers in determining demographics make-up of the viewing population.  This information availability allows us to appeal to both local advertisers targeting a small geographic area within a major city, as well as national advertisers targeting a wide range of demographic groups.

            Our advertising monitor plays a repeating or looping sequence of advertising and programming.  As currently configured, a broadcast consists of 120 thirty-second advertising spots per hour.  The broadcast in each specific area can support 240 thirty-second airing slots, including entertainment spots, on the DVD installed at each location. New technology has been announced that may make available to us double-layered DVDs which can provide increased storage and broadcast availability. We intend to make use of this technology when it becomes available.

            Installation costs for a new site include the cost of acquiring hardware and the cost of installing equipment.  The fully installed average per site cost for a typical location with a single video monitor is approximately $600.  Some sites may contain multiple monitors. We secure three-year placement contracts for locations to install monitors.  There is no monthly recurring fee for the retail establishment that wants the monitors installed and we do not permit ads of competing bars and restaurants to be broadcast to the retail locations that form our network.  The retail establishment is responsible for supplying electricity to the equipment and keeping the monitor on, during normal business hours. As compensation for allowing us to place our monitors in their business location, which at present is generally a busy bar, tavern or nightclub, the retail establishment receives free advertising spots. We usually provide the business location with at least one-minute of advertisements that air, without charge, at least twice per hour. The location may display, without charge, its monthly event calendar, five-second static ad and photo gallery which are all updated monthly at minimal cost to us.  

**            Advertising Sales**

            Our strategy is to derive a significant portion of our revenue from advertisements placed on our network.  We are attempting to procure national advertisers with substantial discretionary advertising budgets with favorable brand recall such as automobile and fashion companies. We are also seeking advertisers that are looking for alternate media to display their products that are limited by law or tradition as to their advertising options. We also look for opportunities for advertisers whose products can be sold immediately on an impulse basis such as beverages in a Bar TV location.

           We believe that advertising and product demonstrations at the point-of-purchase could significantly influence which products consumers purchase. Generally, we are currently offering an advertising package to advertisers, after the initial period, for $3,500 per year. Advertising rates are based upon the availability of space for the desired location, the size and demographic make-up of the market served by the screens and the availability of alternative advertising media in the area.  Advertising sales are generally made pursuant to contracts with local, regional or national advertisers.

            As we grow, we intend to license territories to individuals or corporations to sell the local, regional and national advertisements for their territory. We intend to operate the new locations and network broadcast remotely utilizing a "media box" consisting of a digital and still camera shipped to the location to capture the necessary location content and shipped back for editing. We then intend to mail back the edited broadcast with the new ads on a monthly basis. We plan to compensate any necessary sales force with a base salary and an incentive plan if we are unable to license the territories. If we are unable to operate the new territories remotely, it could have a substantial and adverse impact on the Company's expansion and capital plan.

            We anticipate a regional marketing plan that will include print and direct mail and attendance at trade shows and a website which will feature all of the information necessary for media professionals to make an educated decision on media placement. In March 2004, we licensed exclusive advertising rights to the Orlando Sentinel newspaper, a subsidiary of the Tribune Company, to sell the advertising on our Bar TV broadcast in the Orlando market.  The terms of the agreement are a 50-50 split of gross revenues from advertising. To date, no advertisements have been sold under this agreement. 

**            Competition**

            Competition for advertisers is intense. We will be competing with similar networks and also with radio, television and cable companies and other forms of advertising including newspapers, magazines, the Internet, direct mail and billboards. We believe that our strategy of offering advertising in bars, taverns and nightclubs provides particular advertisers with access to a select clientele at attractive rates with favorable brand recall and significant point-of-purchase potential. We expect to compete with these forms of advertising on the basis of price and our ability to reach potential customers at the point of purchase. A large number of companies that provide advertising in the point of purchase segment of the advertising industry and other sectors have significantly greater financial, marketing, technical and other resources than we have. Potential competitors may be able to devote greater resources to marketing promotional campaigns, adopt more aggressive pricing policies and devote more resources to technology than we can. Increased competition may reduce our market share and may require us to reduce advertising rates and therefore lower our operating margins. We may not be able to compete successfully against current and future competitors. There can be no assurances that we will be able to obtain the desired results from our business strategy or to be profitable.

**Gym TV and Hotel TV**

**           ** We plan to expand the Bar TV concept, which is directed at a specific demographic population focused on patrons of bars, taverns and nightclubs, to a concept focused on health club members, which will be part of our business unit, Destination Television. We believe that manufacturers and retailers that market health related products such as vitamins, health foods, bicycles, athletic equipment and sporting events will be anxious to direct part of their advertising budget to a specific sector of the population. We are beta testing our Gym TV network of locations with Gold's Gym franchisees at 13 locations in South Florida. Although early indications appear favorable that the Gym TV network is a viable concept and would be very attractive to select advertisers, there is no assurance that, after we complete our testing, we will proceed with further development.

            Other than through Gym TV, our Destination Television subsidiary has not expanded, and at the present time doesn't intend to expand its broadcast brand into any other types of locations. 

            As part of our longer-range planning, we are in the very early stages of developing a business plan for establishing a network geared to travelers, both business and vacation. Only after further testing and a determination as to the adequacy of our resources will we decide whether to go forward with this concept. This network of locations is to be known as Hotel TV.

            In addition to having made application to register the trademark for Bar TVTM, we have made application to register the trademark of the Gym TVTM and Hotel TVTM brand with the United States Patent and Trademark Office under Section 038 of narrowcast media/audio in out-of- home (OOH) locations.

**            Government Regulation**

            Because we operate private networks at retail locations, we are not currently restricted by licensing program content and related regulations of the Federal Communications Commission.  In addition, the advertising industry is subject to regulation by the Federal Trade Commission, the Food and Drug Administration and other federal and state agencies and is reviewed by various civic groups and trade organizations.  The introduction of new laws, regulations or interpretation of existing regulations governing advertising could have a material adverse effect on our business.

**            Employees**                  We currently have five full-time employees and also employ four independent commission sales representatives. We typically enter into independent contractor agreements or work-for-hire agreements with individuals to provide services on an as-needed basis.

**Reports to Shareholders        **

           We file annual, quarterly and special reports and other information with the Securities and Exchange Commission. Upon request, we will provide without charge a copy of our Annual, Quarterly and Current Reports that we have filed electronically with the Commission as well as a copy of any and all of the information that has been or may be incorporated by reference in our filings. Requests for such copies should be directed to Magic Media Networks, Inc., 530 North Federal Highway, Fort Lauderdale, Florida 33301.

            We also maintain our reports and other information on our corporate website at: www.magicmedia.com

**Strategic****Alliance****with UTEK Corporation**

            In November 2003, we entered into a six-month strategic alliance agreement with UTEK Corporation.  Pursuant to the agreement, which has now expired, we issued 545,000 shares of our common stock to UTEK Corporation. The shares were valued at the approximate market value at the time of the initial agreement, $60,000, of which $25,000 was charged to consulting expense in the quarter ended January 31, 2004; and $35,000, in the quarter ended April 30, 2004. UTEK Corporation had agreed to identify for us new technologies from university and government laboratories and also agreed to review technology opportunities and present to us technology acquisition opportunities and assist us in obtaining equity financing for these acquisitions.  During the term of the agreement, UTEK Corporation did not provide us with technology opportunities that we felt were suitable for our operations, nor did they provide us with acceptable acquisition opportunities or equity financing.  

            **Other Opportunities**

            In addition to pursuing our advertising business model, we are seeking to acquire companies or enter into joint ventures with companies that are involved in the entertainment and advertising businesses. There is no assurance that we will be able to complete the acquisition of any company.

**RESULTS OF OPERATIONS**                  The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and footnotes that appear elsewhere in this report.

**Critical Accounting Policies**

            The following critical accounting policies are important to the portrayal of our company's financial condition and results.

***Revenue Recognition:***

            All of our revenue is derived from the production and sale of custom advertising and its subsequent airing throughout our Bar TV network. Our primary obligations are to produce a completed video clip ("Production revenue") and to air that clip on our Bar TV network for an initial 90-day period ("Air Time revenue"). Production revenue is recognized upon the delivery and acceptance of the produced piece while Air Time revenue is recognized ratably over the 90-day period. Our advertising agreements provide one sum for both services. Management estimates the portion of the contract sum to be allocated to Production revenue based upon the projected production costs to be incurred. The remaining balance is allocated to Air Time revenue. The Bar TV network advertising medium is fairly unique and no statistics are currently available to support the nature and extent of its success in reaching a target market. We run produced spots at our own expense in order to generate the quantitative support necessary to eventually market this aspect of our business.

***Valuation of Long-Lived Assets:***

            We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

            We amortize the costs of other intangibles over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are also tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required.

*Three months ended**April 30, 2004**and three months ended**April 30, 2003***Sales**

            In the three months ended April 30, 2004, we had incidental sales in the nominal amount of $19,801. This compares to nominal sales of $11,049 in the three months ended April 30, 2003. Our sales were primarily of an experimental nature in which we tested and refined different concepts and approaches for potential advertisers. We do not expect any sum of revenues other than nominal amounts until we have in place a sufficient number of broadcast locations within Florida to attract national and regional advertisers.

**Expenses**                  Selling, general and administrative expenses, for the quarter ended April 30, 2004, excluding consulting expenses, increased $50,032 or 32%, to $205,071 from $155,039 in the comparable 2003 quarter. In the April 2004 quarter, our major expenses included $59,437 for independent sales and production personnel; $13,500 for rent; $20,450 for professional expenses and $33,250 for officer's salary. In the comparable April 2003 quarter, our major expenses included $26,452 for independent sales and production personnel; 13,500 for rent; 36,730 for professional expenses and $33,250 for officer's salary.

            Consulting expenses were $426,000 for the quarter ended April 30, 2004, which included a non-cash expense of $391,000 representing the fair value of the extension of consultants' options to June 30, 2004; and $35,000, which was paid in stock, in lieu of cash. We did not have any consulting expenses in the comparable 2003 quarter.

            Interest expense for the quarter ended April 30, 2004, increased $5,572 or 127% to $9,963 from $4,391 in the comparable 2003 quarter. Interest expense for the 2004 quarter consists of the accrual of interest on the La Jolla and Terry notes and payroll taxes payable.

**Losses**                  Our net loss, before taxes, increased $472,853 from $148,381, in the April 30, 2003 quarter, to $621,233 in the quarter ended April 30, 2004. Included in our loss was the $391,000 non-charge for the fair value of the extension of consultants' options. Although we have substantial tax carry-forwards, we have not reduced our net loss for the quarter by any tax benefit because we determined that it was more likely than not that our net operating loss carry-forwards would not be utilized; therefore, we have provided a valuation allowance against the related deferred tax asset and, consequently, our net loss before taxes and after taxes is the same.

            There can be no assurance that we will achieve or maintain profitability or that revenues will be generated or that growth can be sustained in the future. The viability of our business plan necessitates that we contract with a sufficient number of locations within the state of Florida to attract national and regional advertisers. To reach this critical threshold will require adequate funding to familiarize our network to prospective bar and nightclub owners and potential national, regional and substantial local advertisers. We also must have adequate funding to engage sales and production personnel to reach that level, or critical mass of locations, needed to attract advertisers. Without the required funding, we will not be able to increase the number of locations and, consequently, we will be unable to secure the necessary advertisers.   **Loss per Share**

            The basic and diluted loss per share of common stock, in the fiscal quarter ended April 30, 2004, was $(0.02), compared to $(0.01) in the comparable quarter of fiscal 2003. The loss per share was computed by dividing the net loss, by the weighted average common and equivalent shares outstanding. In the fiscal 2004 quarter, the weighted average, which includes the weighted average number of common shares into which the preferred stock is convertible, was 25,738,299 compared to 13,845,641 in the fiscal 2003 quarter. For the purpose of computing loss per share of common stock, the Series A and Series B Preferred Stock are treated as if they were separate classes of common stock as the rights and attributes of the common shares and preferred shares are identical in all respects except for voting rights.

*Six months ended**April 30, 2004**and six months ended**April 30, 2003*

**Sales**

            In the six months ended April 30, 2004, our sales were $38,632 compared to $15,099 in the six months ended April 30, 2003.**Expenses**

            Selling, general and administrative expenses, for the six months ended April 30, 2004, excluding consulting expenses, increased $164,854 or 41%, to $452,140 from $287,286 in the comparable 2003 six-month period. In the six months ended April 30, 2004, our major expenses included $223,409, of which $123,600 was paid in stock in lieu of cash, for independent sales and production personnel; $27,000 for rent; $25,950 for professional expenses; and $66,500 for officer's salary. In the comparable April 2003 six months, our major expenses included $54,553 for independent sales and production personnel; 27,000 for rent; and $66,500 for officer's salary.

            Consulting expenses were $491,000 for the six months ended April 30, 2004, which included a non-cash expense of $391,000, representing the fair value of the extension of consultants' options to June 30, 2004; and $100,000, paid in stock in lieu of cash. Our consulting expense for the six months ending April 30, 2003 was $4,500.

            Interest expense for the six months ended April 30, 2004, increased $7,471, or 63%, to $19,377 from $11,906 in the comparable 2003 six-month period. Interest expense for the 2004 quarter consists of the accrued interest on the La Jolla and Terry notes and payroll taxes payable.

**Losses**

            Our net loss, before taxes, increased $645,292 from $288,593, in the April 30, 2003 six months, to $933,885 in the April 30, 2004 six-month period. Included in our loss was the $391,000 non-cash charge for the fair value of the extension of consultants' options. Although we have substantial tax carryforwards, we have not reduced our net loss for the quarter by any tax benefit because we determined that it was more likely than not that our net operating loss carry-forwards would not be utilized; therefore, we have provided a valuation allowance against the related deferred tax asset and, consequently, our net loss before taxes and after taxes is the same.

**Loss per Share**

            The basic and diluted loss per share of common stock, in the six months ended April 30, 2004, was $0.04, compared to $0.02 in the comparable six-month period of fiscal 2003. The loss per share was computed by dividing the net loss, by the weighted average common and equivalent shares outstanding. In the fiscal 2004 six months, the weighted average, which includes the weighted average number of common shares into which the preferred stock is convertible, was 23,210,068 compared to 12,929,201 in the fiscal 2003 six months. For the purpose of computing loss per share of common stock, the Series A and Series B Preferred Stock are treated as if they were separate classes of common stock as the rights and attributes of the common shares and preferred shares are identical in all respects except for voting rights.

**Liquidity and Capital Resources**

            As of April 30, 2004, we had a net working capital deficit of $246,612, which compared to a net working capital deficit of $321,165 at October 31, 2003. This excess of current liabilities over current assets has caused us to defer the timely payment of outstanding liabilities including accounts payable, officer's salaries, rent payments and payroll taxes. Dr. Terry's agreement to defer rent payments together with his advancing funds to us has allowed us to continue to operate while having a working capital deficit.           

            As of April 30, 2004, we had cash of $457,709 as compared to $25,658, on October 31, 2003, and $198,616, on January 31, 2004.

            At April 30, 2004, the total of our accounts payable, payroll taxes payable and accrued expenses payable was $204,321, or an increase of $15,631 from $188,690 at. October 31, 2003. Our current liabilities were $704,321 at April 30, 2004 for an increase of approximately $356,000 from October 31, 2003, which primarily was the result of the re-categorizing the La Jolla promissory note of $300,000, from long-term liability to current liability as its maturity date, at April 30, 2004, was less than one year from the statement date.

            We did not generate cash from operations at any time in the period beginning November 1, 1999 through April 30, 2004. In fact, our operating activities consumed cash of $343,874 in the fiscal year ended October 31, 2003 and $368,614 in the fiscal year ended October 31, 2002 and $296,471 in the six months ended April 30, 2004.                  We have been able to continue in business primarily from the receipt of cash from financing activities. During fiscal year 2003, our financing activities provided total funds of $191,500. Similarly, our financing activities provided total funds of $517,667 for fiscal year 2002. During the first six months of fiscal year 2004, we issued $1,013,600 of our securities, which included $973,600 of common stock, and a $40,000 convertible note, in exchange for $790,000 cash and $223,600 in services. Similarly, our financing activities provided cash and services of $131,500 and $1,750 for the first six months of fiscal year 2003.                        We have funded our cash needs during the past several years by issuing our common stock and convertible debentures and notes, for cash. We also used our common stock, in lieu of cash, to obtain professional and employment services. We intend to cover our cash needs over the next 12 months through the sale of additional shares of our common stock and/or convertible securities and the possible exercise of outstanding options and warrants including the La Jolla warrants. In order to support our existing and proposed operations, financing will be necessary. However, there is no guarantee that we will be able to raise additional funds from borrowing, the sale of our securities or the exercise of warrants.

**Capital Expenditures**       

            In fiscal year 2003, we acquired equipment in the amount of $15,248, which compared to $11,351 in fiscal year 2002. During the six months ended April 30, 2004, we purchased equipment for $73,511 of which $5,000 was paid for with our stock in lieu of cash. This compares to $9,063, all in cash, in the comparable 2003 six-month period.

            We are unable to quantify our anticipated capital expenditure requirements for the coming year because the amount spent will be dependent on the level of our expansion which in turn depends on our cash and credit availability. In any event, we do not anticipate total capital expenditures of more than $40,000. Our only significant capital expenditure that we expect to make in the upcoming year is for video monitors to be placed in the clubs, bars and taverns that receive our programming.

            In order for us to "sign up" additional bars, taverns, nightclubs and fitness centers for our networks, we must provide them with viewing monitors if they do not already have them. If we are unable to obtain financing to acquire or lease the monitors, we will not be able to successfully execute our business plan by obtaining additional revenues. There is no assurance that we will obtain the necessary financing.

**Quasi-Reorganization**                  As of October 1999, we reached settlement agreements with all of our significant creditors and, by that date, we changed our business focus. Our board of directors elected to state our October 31, 1999 balance sheet as a "quasi-reorganization." In a quasi-reorganization, the deficit in retained earnings is eliminated by charging paid-in-capital. In effect, this gives our balance sheet a "fresh start." Beginning November 1, 1999 and continuing forward, we are crediting net income and charging net losses to retained earnings.

**Impact of Inflation**                  It is our opinion that inflation has had only a negligible effect on our operations in the past several years.

**Ability to Continue as a Going Concern and Management Plan**

            The financial statements have been prepared assuming that the Company will continue as a going concern. The Company has had only nominal revenue in the ordinary course of its business. The lack of sales and recurring losses from operations raises substantial doubt about the Company's ability to continue as a going concern. Management's plan in regards to these matters is to seek further equity or debt funding to allow it to pursue its business plan which involves the sale of advertising on the Company's Bar TV and Gym TV networks and the possible acquisition of companies in related or unrelated businesses. The Company intends to increase its revenues by increasing its concentration of locations within the Southeast and Central Florida markets where it presently broadcasts and to aggressively enter new markets throughout North and West Florida in order to reach a critical size that would be attractive to national advertisers; to substantially expand its Gym TV network to make it attractive as an advertising medium; and to reduce its fixed cash operating expenses so that sales exceed the Company's fixed expenses.

**ITEM 3 - CONTROLS AND PROCEDURES**

            Within the 90 days prior to the filing date of this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our principal executive officer who concluded that our disclosure controls and procedures are effective. There have been no significant changes in our internal controls or in other factors, which could significantly affect internal controls subsequent to the date we carried out our evaluation.

            Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer, to allow timely decisions regarding required disclosure.

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**PART II       OTHER INFORMATION**

**ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS**                  In February and March 2004, we issued a total of 4,166,667 shares of our common stock, for $500,000 cash, pursuant to the exercise of 4,166,667 consultants' stock options. The options and the underlying shares had been registered under Form S-8 in September 2003. The expiration date of the remaining 2,250,000 unexercised options was extended to April 2, 2004 and then re-extended to June 30, 2004.  For financial reporting purposes, we computed the intrinsic value, $332,500 and the fair value, $391,000 of the extended options and reflected as additional consulting expense of $391,900 for the quarter ended April 30, 2004.

            In March 2004, we issued 15,000 shares of our restricted common stock to Stephen Hammer as partial payment for equipment. The shares were valued at $0.33 per share, for a total of $5,000, which was the approximate market value at the date of issuance. The issuance was made in reliance on Section 4(2) of the Securities Act of 1933 and was made without general solicitation or advertising. The purchaser represented to us that the securities were being acquired for investment purposes.

            In February and March, 2004, Gordon Scott Venters converted 500,000 shares of our Series A Preferred Stock into 50,000 shares of our common stock.

            As of April 30, 2004, we had 22,378,058 shares of common stock outstanding. As of the same date, we had 5,076,923 outstanding shares of Series A Preferred Stock and 3,750,000 shares of Series B Preferred Stock.

**ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K**       
|   | (a)    |   | Exhibit 31.1 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer

Exhibit 32.1 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer |
|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | (b)    |   | No reports on Form 8-K were filed during the three months ended April 30, 2004                                                                                                                                                                                                                                                                                                                                                                                                       |

**SIGNATURES**

            In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|   |          |   |      | **MAGIC MEDIA NETWORKS, INC.**                                                                                                                                                                                                                                                     |
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|   |          |   |      |                                                                                                                                                                                                                                                                               |
|   | July 19, 2004 |   | By:  | /s/ Gordon Scott Venters                                                                                                                                                                                                                                                           |
|   |          |   |      |                                                                                                                                                                                                                                                                                    |
|   |          |   |      | Gordon Scott Venters             President and Chief Executive Officer             (Principal Executive Officer)             and              Acting Chief Financial Officer              (Principal Financial Officer and              Principal Accounting Officer) and Director |