****SECURITIES AND EXCHANGE COMMISSION       Washington, D.C. 20549       FORM 10-QSB       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF       THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended July 31, 2002****
| **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) |

| **MAGICINC.COM**                           |
|--------------------------------------------|
|                                            |
| (Former name if changed since last report) |

| **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 September 14, 2002 (the most recent practicable date), there were      9,612,948 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 |
|                                                                             |   |   |
| **PART II**                                                                      |   | **OTHER INFORMATION** |
| Item 1                                                                           |  | Legal Proceedings |
| Item 2                                                                           |  | Changes in Securities and Use of Proceeds |
| Item 3                                                                           |  | Defaults upon Senior Securities |
| Item 4                                                                           |  | Submission of Matters to a Vote of Security Holders |
| Item 5                                                                           |  | Other Information |
| Item 6                                                                           |  | Exhibits and Reports on Form 8-K |
|                                                                             |   |   |
| **SIGNATURES**                                                                   |

----

**PART I       FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

| **MAGIC MEDIA NETWORKS,      INC.      Consolidated Balance Sheets      July 31, 2002 (unaudited) and October 31, 2001**      See Summary of Accounting Policies and Notes to Financial Statements. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                |   |   |   |   |
|                                                                                                                                                                                                |   | **July 31,        2002** |   | **October 31,        2001** |
|                                                                                                                                                                                                |   |  |   |  |
| ASSETS                                                                                                                                                                                              |   |  |  |  |   |  |  |  |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Current Assets:                                                                                                                                                                                     |   |  |  |  |   |  |  |  |
|    Cash and Cash Equivalents                                                                                                                                                         |   | $ | 21,268 |  |   | $ | 58,858 |  |
|    Loans Receivable - Related Parties                                                                                                                                                |   |  | 0 |  |   |  | 50,000 |  |
|                                                                                                                                                                                                |   |  |  |  |   |  |  |  |
|       Total Current Assets                                                                                                                                            |   |  | 21,268 |  |   |  | 108,858 |  |
|                                                                                                                                                                                                |   |  |  |  |   |  |  |  |
| Property and Equipment - Net                                                                                                                                                                        |   |   | 18,482 |   |   |   | 15,926 |   |
| Other Assets                                                                                                                                                                                        |   |   | 1,475 |   |   |   |   |   |
|                                                                                                                                                                                                |   |   |  |   |   |   |  |   |
|       Total Assets                                                                                                                                                    |   |   | 41,225 |   |   |   | 124,784 |   |
|                                                                                                                                                                                                |   |   |  |   |   |   |  |   |
|                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| LIABILITIES & STOCKHOLDERS' DEFICIT                                                                                                                                                             |   |  |  |  |   |  |  |  |
|                                                                                                                                                                                                |   |  |  |  |   |  |  |  |
| Current Liabilities:                                                                                                                                                                                |   |  |  |  |   |  |  |  |
|    Accounts, Payroll and Accrued Expenses Payable                                                                                                                                    |   |  | 35,734 |  |   |  | 20,873 |  |
|    Accrued Officer's Salary under Employment      Agreement                                                                                                                          |   |  | 21,319 |  |   |  | 24,569 |  |
|    Note Payable - Related Parties                                                                                                                                                    |   |   | 0 |   |   |   | 0 |   |
|    Convertible Debentures Payable                                                                                                                                                    |   |  | 0 |  |   |  | 28,000 |  |
|    Deferred Income                                                                                                                                                                   |   |  | 710 |  |   |  | 0 |  |
|                                                                                                                                                                                                |   |  |  |  |   |  |  |  |
|       Total Liabilities                                                                                                                                               |   |  | 57,763 |  |   |  | 73,442 |  |
|                                                                                                                                                                                                |   |  |  |  |   |  |  |  |
| Stockholders' Equity (Deficit):                                                                                                                                                                     |   |  |  |  |   |  |  |  |
|    Preferred Stock, Series A Convertible ($0.0001 par value)                                                                                                                         |   |   |  |   |   |   |  |   |
|       5,576,923 Shares Authorized                                                                                                                                     |   |   |  |   |   |   |  |   |
|       5,576,923 Shares Issued at July 31,      2002       and at October 31, 2001                                                       |   |   | 250,000 |   |   |   | 250,000 |   |
|    Preferred Stock, Series B Convertible ($0.0001 par value)                                                                                                                         |   |   |  |   |   |   |  |   |
|       1,250,000 Shares Authorized                                                                                                                                     |   |   |  |   |   |   |  |   |
|       1,250,000 Issued at July 31, 2002            and -0- at October 31, 2001                                                          |   |   | 75,000 |   |   |   | 0 |   |
|    Common Stock                                                                                                                                                                      |   |   |  |   |   |   |  |   |
|       43,173,077 Shares Authorized ($0.0001      par value)                                                                                                           |   |   |  |   |   |   |  |   |
|       9,437,948 Shares Issued at July 31,      2002       and 4,286,519      Shares Issued at October 31, 2001                          |   |   | 1,360,267 |   |   |   | 1,102,200 |   |
|                                                                                                                                                                                                |   |   |  |   |   |   |  |   |
|    Deficit Accumulated during Development Stage       since      Quasi-reorganization October 31, 1999                                                 |   |   | (1,701,805 | ) |   |   | (1,300,858 | ) |
|                                                                                                                                                                                                |   |   |  |   |   |   |  |   |
|                                                                                                                                                                                                |   |   |  |   |   |   |  |   |
|       Total Stockholders'      Equity (Deficit)                                                                                                                       |   |   | (16,538 | ) |   |   | 51,342 |   |
|                                                                                                                                                                                                |   |   |  |   |   |   |  |   |
|       Total Liabilities & Stockholders'      Equity (Deficit)                                                                                                     |   | $ | 41,225 |   |   | $ | 124,784 |   |
|                                                                                                                                                                                                |   |   |  |   |   |   |  |   |

----

| **MAGIC MEDIA NETWORKS, INC.         Consolidated Statements of Operations      July 31, 2002 and July 31, 2001         (unaudited)**         See Summary of Accounting Policies and Notes to Financial Statements. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                |  | **Three Months             Ended** |   | **Nine Months             Ended** |
|                                                                                                                                                                                                                |   | **July 31,             2002** |   | **July 31,        2001** |   | ****July 31**,        2002** |   | ****July 31**,        2001** |
|                                                                                                                                                                                                                |   |  |   |  |   |  |   |  |
| Net Sales                                                                                                                                                                                                           |   | $ | 800 |   |   | $ | 0 |   |   | $ | 11,076 |  |   | $ | 0 |  |
|                                                                                                                                                                                                                |   |  |  |   |   |  |  |   |   |  |  |   |   |  |  |   |
| Selling, General and Administrative Expenses                                                                                                                                                                        |   |  | 125,987 |   |   |  | 160,493 |   |   |  | 402,490 |   |   |  | 506,568 |   |
| Interest Expense                                                                                                                                                                                                    |   |  | 0 |   |   |  | 70,892 |   |   |  | 9,533 |   |   |  | 143,821 |   |
|                                                                                                                                                                                                                |   |  |  |   |   |  |  |   |   |  |  |   |   |  |  |   |
| Total Expenses                                                                                                                                                                                                      |   |  | 125,987 |   |   |  | 231,385 |   |   |  | 412,023 |   |   |  | 650,389 |   |
|                                                                                                                                                                                                                |   |  |  |   |   |  |  |   |   |  |  |   |   |  |  |   |
| Net Loss before Income Taxes                                                                                                                                                                                        |   |  | (125,187 | ) |   |  | (231,385 | ) |   |  | (400,947 | ) |   |  | (650,389 | ) |
|                                                                                                                                                                                                                |   |  |  |   |   |  |  |   |   |  |  |   |   |  |  |   |
| Income Tax Expense                                                                                                                                                                                                  |   |  | 0 |   |   |  | 0 |   |   |  | 0 |   |   |  | 0 |   |
|                                                                                                                                                                                                                |   |  |  |   |   |  |  |   |   |  |  |   |   |  |  |   |
| Net Loss                                                                                                                                                                                                            |   | $ | (125,187 | ) |   | $ | (231,385 | ) |   | $ | (400,947 | ) |   | $ | (650,389 | ) |
|                                                                                                                                                                                                                |   |  |  |   |   |  |  |   |   |  |  |   |   |  |  |   |
| Basic Net Income (Loss) Per Share                                                                                                                                                                                   |   | $ | (0.02 | ) |   | $ | (0.09 | ) |   | $ | (0.06 | ) |   | $ | (0.49 | ) |
|                                                                                                                                                                                                                |   |  |  |   |   |  |  |   |   |  |  |   |   |  |  |   |
| Weighted Average Common Share Equivalent         Outstanding as Adjusted for 1-for-10 Reverse-Split                                                                                                                 |   |  | 8,049,445 |   |   |  | 2,537,197 |   |   |  | 6,256,989 |   |   |  | 1,315,705 |   |
|                                                                                                                                                                                                                |   |   |  |   |   |   |  |   |   |  |  |   |   |  |  |   |

----

| **MAGIC MEDIA NETWORKS,      INC.      Consolidated Statements of Cash Flows      July 31, 2002 and July 31, 2001****(unaudited)**      See Summary of Accounting Policies and Notes to Financial Statements. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                          |   | **Nine Months Ended        July 31, 2002** |   | **Nine Months Ended        July 31, 2001** |
|                                                                                                                                                                                                          |   |  |   |  |
| Operating Activities:                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Net Loss                                                                                                                                                                                                      |   | $ | (400,947 | ) |   | $ | (650,389 | ) |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Adjustments to Reconcile Net Loss to Cash                                                                                                                                                                     |   |  |  |   |   |  |  |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Non-Cash Expenses Included in Net Loss                                                                                                                                                                        |   |  |  |   |   |  |  |   |
|                                                                                                                                                                                                          | Depreciation and Amortization |   |  | 4,500 |   |   |  | 112,271 |   |
|                                                                                                                                                                                                          | Stock Issued for Services |   |  | 62,400 |   |   |  | 184,381 |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Consumed by Operating Activities:                                                                                                                                                                             |   |  |  |   |   |  |  |   |
|                                                                                                                                                                                                          | Increase (Decrease) in Accounts, Payroll and    Accrued      Expenses Payable |   |  | 12,321 |   |   |  | (175,766 | ) |
|                                                                                                                                                                                                          | Increase in Other Operating Assets |   |   | 0 |   |   |   | 31,361 |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Cash Consumed by Operating Activities                                                                                                                                                                         |   |  | (321,726 | ) |   |  | (498,142 | ) |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Financing Activities:                                                                                                                                                                                         |   |  |  |   |   |  |  |   |
|                                                                                                                                                                                                          | Proceeds from the Issuance of Preferred Stock |   |   | 75,000 |   |   |   | 200,000 |   |
|                                                                                                                                                                                                          | Proceeds from the Issuance of Common Stock |   |  | 195,667 |   |   |  | 64,044 |   |
|                                                                                                                                                                                                          | Proceeds (Net) from the Issuance of Convertible Debentures |   |  | 50,000 |   |   |  | 261,000 |   |
|                                                                                                                                                                                                          | Proceeds from Subscription Receivable |   |  | 0 |   |   |  | 20,000 |   |
|                                                                                                                                                                                                          | Advances to Related Parties |   |   | 0 |   |   |   | (34,000 | ) |
|                                                                                                                                                                                                          | Repayment of Advances to Related Parties |   |  | 50,000 |   |   |  | 0 |   |
|                                                                                                                                                                                                          | Payment of Convertible Debentures |   |   | (78,000 | ) |   |   | 0 |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Cash Generated by Financing Activities                                                                                                                                                                        |   |  | 292,667 |   |   |  | 511,044 |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Investing Activities:                                                                                                                                                                                         |   |  |  |   |   |  |  |   |
|                                                                                                                                                                                                          | Acquisition of Fixed Assets |   |  | (7,056 | ) |   |  | (22,565 | ) |
|                                                                                                                                                                                                          | Return of Deposit Receivable |   |   | 0 |   |   |   | 10,000 |   |
|                                                                                                                                                                                                          | Security Deposit on Lease |   |   | 0 |   |   |   | (2,920 | ) |
|                                                                                                                                                                                                          | Acquisition of Intellectual Property |   |   | (1,475 | ) |   |   | 0 |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Cash Consumed by Investing Activities                                                                                                                                                                         |   |  | (8,531 | ) |   |  | (15,485 | ) |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Change in Cash                                                                                                                                                                                                |   |  | (37,590 | ) |   |  | (2,583 | ) |
| Cash and Cash Equivalents-Beginning                                                                                                                                                                           |   |  | 58,858 |   |   |  | 17,129 |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |
| Cash and Cash Equivalents-Ending                                                                                                                                                                              |   | $ | 21,268 |   |   | $ | 14,546 |   |
|                                                                                                                                                                                                          |   |  |  |   |   |  |  |   |

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****MAGIC MEDIA NETWORKS, INC.**       Notes to Interim Consolidated Financial Statements  July 31, 2002       (Unaudited)    **

**Note 1.**  The interim consolidated financial statements 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 for complete financial statements.  The consolidated financial statements include the results of Cybars, Inc., a  wholly-owned subsidiary incorporated in Florida on January 2, 2002.**Note 2.****Stockholders' Equity**  Reverse Split  Effective October 12, 2001, each share of the Company's common stock was exchanged  for one-tenth of a share of the Company's new common stock pursuant to a 1-for-10  reverse-split. The Company's financial statements, including the Statements  of Operations as pertains to Net Loss per Share and the weighted average of  outstanding common shares and equivalents, have been retroactively revised to  account for the reverse-split.  Stock Issued for Cash

During the three months ended July 31, 2002, the Company issued 200,000 shares  of restricted common stock at $0.10 per share for $20,000.

Stock Issued for Services

During the three months ended July 31, 2002, the Company issued 250,000 shares  of restricted common stock for services. The shares were valued at the approximate  market value at the time of issuance ($0.04 per share) for a total of $10,000.  Of these shares, 50,000 were issued for investor relations services and 100,000  for directors’ fees and 100,000 shares for consulting services.

Stock Issued in Payment of Note Payable-Related Party

In June 2002, the Company issued 700,000 shares of restricted common stock in  payment of $45,000 note payable. The stock was valued at approximately $0.06  per share. 

 Series B Preferred Stock

On July 15, 2002, the Company issued 1,250,000 shares of Series B Preferred  Stock to its president and chief executive officer, Gordon Scott Venters, in  exchange for the elimination of $75,000 of debt owed to him for accrued salaries.  The shares were valued at $0.06 per share which was the average price of the  common stock at the time of issuance. Each share of this series of preferred  stock is convertible into one share of common stock

**Note 3.****Convertible Debentures**  In July 2002, the Company received $50,000 from the issuance of $50,000 Convertible  Debentures. In July 2002, the debentures were converted into 1,071,429 shares  of common stock based on a contractual formula of 60% of the average closing  bid-price of the three trading days prior to the election to convert. The Company  also issued 750,000 shares of common as security for the performance of conversion  by the Company which has not been returned to the Company.**Note 4.****Commitments**  Facilities  The Company is leasing an 8,500 square foot building in Fort Lauderdale, Florida,  which serves as its administrative offices and computer operations center.  The lease is for a term of two-years beginning June 1, 2000 and ending May 31,  2002. The rent for the property was initially scheduled as follows:

|   | June 1, 2000 through July 31, 2000       |   | Rent waived by Lessor |
|--------|------------------------------------------|--------|-----------------------|
|   | August 1, 2000 through November 30, 2000 |   | $4,000/month          |
|   | December 1, 2000 through May 31, 2001    |   | $4,500/month          |
|   | June 1, 2001 through November 30, 2001   |   | $5,000/month          |
|   | December 1, 2001 through May 31, 2002    |   | $5,300/month          |

Due to delays in obtaining a certificate of occupancy on the entire building,  the lessor waived the payment of rent until May 1, 2000 and has agreed to accept  rent payments of $3,000 per month. The Company has entered into an agreement  to purchase the building no later than May 31, 2002 for $480,000, subject to  standard conditions. The Company does not have the financial ability to purchase  the building and has assigned its rights to an investment group which includes  a shareholder of the Company, Dr. Harold Terry. The Company has not determined  if it will continue as a tenant in the building.     Equipment Leases  The Company leases computer and television and camera equipment for its operations.  The leases are operating leases and generally are for a term of 24-months.  Future lease commitments are as follows:

|   | Year ending October 31, 2002 |   | $22,000 |
|--------|------------------------------|--------|---------|
|   | Year ending October 31, 2003 |   | 31,000  |

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 accrued but unpaid portion of Mr. Venters' cash compensation  is carried as a current payable and reflects any payments made through July  31, 2002 and October 31, 2001. The amounts owing on those dates were $21,319  and $24,569, respectively.**Note 5.****Subsequent Events**     Stock Issued     During the period May 1, 2002 through June 14, 2002, the Company issued a total of 250,000 shares of restricted common stock in payment for services. Of theses shares 200,000 were issued to officers, directors and employees and 50,000 shares were issued to an outside consultant.**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 not had significant 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 funding to allow it to pursue its revised business plan which involves the sale of advertising on the Company's point-of-sale advertising network and the possible acquisition of companies in related or unrelated businesses. To support its ongoing operations, additional financing must be obtained either through the sale of equity or debt.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS****GENERAL**        We are a development stage media production  company focused primarily on the television advertising industry, offering production  capability and the services of a point-of-sales advertising display network.  Our primary business is now the production and distribution of television advertising  commercials designed to affect consumers' purchasing decisions at the point  of purchase.        We plan to provide proprietary advertising  content which we produce as well as advertising content provided by commercial  sponsors.        We have patterned our business on the operations  of Next Generation Networks and RMS Networks which provide in-store advertising  at locations such as Sports Authority retail stores and 7-Eleven convenience  stores. We plan to provide similar advertising in bars, taverns and nightclubs  which are open primarily in the evening hours.        Our plan of operation consists of using  trained commissioned sales people to solicit for advertisers for the Cybars  network. We provide advertisers, as part of an advertising package, a professionally  produced commercial which will air a specific number of times per day at locations  that agree to run the commercials on televisions at their place of business.  The locations are primarily bars, taverns and nightclubs which cater to a particular  age and income group which is attractive to specific advertisers.        Generally, we offer an advertising package  to sponsors for $250 per month. Bars, taverns, nightclubs and other businesses  which permit our ads to be viewed at their locations are compensated with free  advertising spots. We have completed the establishment of a base of anchor locations  in Fort Lauderdale, Florida. Now that we have reached our goal for that particular  area, we plan to aggressively enter the West Palm Beach, Florida entertainment  market and the South Beach entertainment district in Miami Beach with select  anchor locations. We are targeting well-known, high-traffic and highly visible  bars, taverns and nightclubs and similar venues where our ads can be seen. We  also plan to promote our advertisers on our website and assist them in providing  special offers to viewers and to guests of our website.      If we are successful in these well-known tourist locations, we expect to hire  sales personnel to sell ads in other cities in South Florida and other parts  of the State. During the first nine months of fiscal 2002, we began to implement  our new business model and have received only nominal revenue from advertisers.        We own the cybars.com domain name and had  planned to develop a live Internet nightclub syndication utilizing “CyBarCam”  Internet cameras and club monitors. We have discontinued this aspect of our  business but expect to continue to solicit bars, taverns and nightclubs to advertise  on our network and to provide their customers with email and other advertising  opportunities on our website. On January 2, 2002, we incorporated, as a wholly  owned subsidiary, Cybars Inc., to assume the operations of our Cybars division.**Competition**        Competition for advertisers is intense.  We will be competing with similar networks and also with radio, television and  cable companies. We believe that our new strategy of offering advertising in  bars, taverns and nightclubs has the potential to provide particular advertisers  with access to a select clientele at attractive rates. There can be no assurances  that we will be able to obtain the desired results from our business strategy  or to be profitable.**Other Opportunities**        In addition to pursuing our new adverting  business model, we are seeking to acquire companies or enter into joint ventures  with companies that are involved in the entertainment and advertising businesses.  We may also consider the acquisition of companies that are in completely unrelated  industries if our board of directors considers the opportunity worthwhile. In  light of our limited cash position and the price of our common stock, 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.*Three months ended**July 31, 2002**and three months ended**July 31, 2001***Sales**

      We are presently in the development stage  of our new business plan which is the providing of advertising on our point-of-sale  television network. In the three months ended July 31, 2002, our revenues were  only $800. This nominal amount was for the production of a commercial. We did  not have any revenue in the three months ended July 31, 2001.**Expenses**        Selling, general and administrative expenses  for the quarter ended July 31, 2002 decreased $34,506 or 21.5%, to $125,987  from $160,493 in the comparable 2001 quarter. In the July 2002 quarter, we had  expenses for investor relations of $2,000; directors’ fees of $4,000 and  consulting expense of $4,000 totaling $10,000 which were paid with our common  stock in lieu of cash. In the July 2001 quarter, stock valued at $10,250 was  issued for consulting services. Included in selling, general and administrative  expenses, for the current period, is the salary of our president and chief executive  officer, Mr. Gordon Scott Venters, in the amount of $33,250, all of which of  which was accrued but not paid other than by issuance of Series B preferred  stock.        Interest expense for the quarter ended July  31, 2002, decreased $70,892, or 100%, to $-0- from $70,892 in the comparable  2001 quarter. The decrease in interest expense results primarily from the payment  of the principal balance of our convertible debentures. The interest expense  in the quarter ended July 31, 2001 consisted primarily of interest on our convertible  debentures and the amortization of the discount on the debentures.

**Losses**        Our net loss, before taxes, decreased $106,198  or 45.9% from $231,385 in the July 31, 2001 quarter, to $125,187 in the quarter  ended July 31, 2002. Although we have substantial tax carryforwards, we have  not reduced our net loss for the quarter by any tax benefit and, therefore,  net loss before taxes and net loss after taxes are the same. Our loss per share  for the quarter ended July 31, 2002 was $0.02, based on 8,049,445 weighted average  common and equivalent shares compared to $0.09, based on 2,537,197 weighted  average common and equivalent shares in the previous year's comparable quarter.  The number of weighted average common and equivalent shares has been, retroactively,  adjusted for a 1-for-10 reverse-split of our common stock which became effective  on October 12, 2001.

*Nine months ended**July 31, 2002**and nine months ended**July 31 , 2001*

**Sales**

       In the nine months ended July 31, 2002,  our sales were $11,076. We did not have any sales in the nine months ended July  31, 2001.**Expenses**        Selling, general and administrative expenses  for the nine months ended July 31, 2002 decreased $104,078 or 20.5%, to $402,490  from $506,568 in the comparable 2001 nine-month period. In the July 2002 nine-month  period, we had professional consulting expenses, primarily for investor relations,  of $62,400 paid for with our common stock in lieu of cash. In the July 2001  nine-month period, stock valued at $184,381 was issued for consulting services.  Included in selling, general and administrative expenses, for the current period,  is the salary of our president and chief executive officer, Mr. Gordon Scott  Venters, in the amount of $99,750 of which $22,000 was paid in cash and the  balance was accrued or exchanged for Series B Preferred Stock.        Interest expense for the nine months ended  July 31, 2002, decreased $134,288, or 93.4%, to $9,533 from $143,821 in the  comparable 2001 nine-month period. The decrease in interest expense results  primarily from the payment of the principal balance of our convertible debentures.

**Losses**        Our net loss, before taxes, decreased $249,442  or 38.4% from $650,389, in the July 31, 2002 nine months, to $400,947 in the  nine months ended July 31, 2002. We have not reduced our net loss for the nine  months by any tax benefit and, therefore, net loss before taxes and net loss  after taxes are the same. Our loss per share for the nine months ended July  31, 2002 was $0.06, based on 6,256,989 weighted average common and equivalent  shares compared to $0.49, based on 1,315,705 weighted average common and equivalent  shares in the previous year's comparable nine-month period. The number of weighted  average common and equivalent shares has been, retroactively, adjusted for a  1-for-10 reverse-split of our common stock which became effective on October  12, 2001.

      Our current plan of operations provides  for continuing losses until such time as we are able to sign a significant number  of bars, taverns and nightclubs to our network, which we believe will then attract  national and regional advertisers willing to pay for the ability to reach a  select demographic group. There can be no assurance that we will be able to  attract a significant number of bars, taverns and nightclubs to our network.  There can also be no assurance that we will be able to attract paying advertisers.  If we are unable to generate sufficient advertising revenues, we may be required  to sell or discontinue our operations. There is no assurance we will be able  to achieve or maintain profitability, or be able to reduce our losses, or that  revenues will be generated or that growth can be sustained in the future.**LIQUIDITY AND CAPITAL RESOURCES**        As of July 31, 2002, we had cash and cash  equivalents of $21,628 compared to $58,858 on October 31, 2001 and $13,251 on  July 31, 2001.        We have not been able to generate cash flow  from operations. In fact, our operating activities consumed $321,726 cash in  the nine months ended July 31, 2002 and consumed $498,142 in the nine months  ended July 31, 2001.        We have been able to continue in business  primarily from the sale or exchange of our stock. In the quarter ended July  31, 2002, we issued 200,000 shares of our common stock for $20,000 cash. We  also issued 250,000 shares for services valued at $10,000 and 700,000 shares  to pay a short-term note payable of $45,000. We were also able to issue 1,250,000  shares of a new series of convertible preferred stock to pay accrued salaries  due our president in the amount of $75,000. We also received $50,000 from the  sale of a convertible debenture which was converted into common stock.

      At July 31, 2002 our total of accounts payable,  payroll taxes payable and accrued expenses payable was $35,734. This compares  to $20,873 on October 31, 2001. Included in the 2002 total are payroll taxes  payable of approximately $25,000, all of which is more than 90 days past due.        We intend to meet our cash needs over the  next twelve months through the sale of additional shares of our common stock  and/or convertible debentures.

      In order to support existing and proposed  operations, bank, private and/or equity financing will be necessary. However,  there is no guarantee that we will be able to raise additional funds from borrowing  or from the sale of our securities.**Capital Expenditures**        During the nine months ended July 31, 2002,  we purchased equipment for $11,556. In order for us to sign additional bars,  taverns and nightclubs, we must provide them with viewing monitors. If we are  unable to obtain financing to acquire or lease the monitors, we will not be  able to successfully execute our business plan. 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.**Ability to Continue as a Going Concern**           Our financial statements in this Form 10-QSB have been prepared assuming that we will continue as a going concern. We have not had significant revenue in the ordinary course of business. The lack of sales and recurring losses from operations raises substantial doubt about our ability to continue as a going concern. We estimate that we will need approximately $300,000 to fund our operations for the next twelve months. Our plan regarding these matters is to seek further equity funding to allow us to meet our cash needs as we pursue plans to expand our advertising television network. In order to support ongoing operations for the next 12-month period, additional financing must be obtained either through borrowings or the sale of equity securities.

**PART II****OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**            We have been named in  two civil lawsuits for a total of approximately $25,000 for payment for services  rendered. We have answered in one case that payment was made in stock and in  the other we believe that the services were not provided in accordance with  the agreement. We plan to defend both cases.**ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS**             In May 2002,  we issued 50,000 shares of restricted common stock for investor relations services  to Jonathan Shatz. The shares were valued at the approximate market value at  the time of issuance ($0.04 per share) for a total of $2,000.              Also in May  2002, we issued 50,000 shares of restricted common stock to Gordon Scott Venters  and 50,000 shares of restricted common stock to Todd Nugent for a total of 100,000  shares for directors’ fees. The shares were valued at the approximate  market value at the time of issuance ($0.04 per share) for a total of $4,000.             Also in May  2002, we issued 100,000 shares of restricted common stock to Robert Venters  for consulting fees. The shares were valued at the approximate market value  at the time of issuance ($0.04 per share) for a total of $4,000.             The above  issuances were made in reliance on Section 4(2) of the Securities Act of 1933  and were made without general solicitation or advertising. The recipients had  access to all relevant information necessary to evaluate the investment and  they represented to us that the securities were being acquired for investment  purposes.             In June 2002,  we issued 200,000 shares of restricted common stock to Dr. Harold K. Terry at  $0.10 per share for $20,000. We used the proceeds of the sale for general working  capital requirements.  In June 2002, we also issued to Dr. Harold K. Terry 700,000 shares of restricted  common stock. The shares were issued as payment of a note payable to Dr. Terry  in the amount of $45,000 which was made to us as a bridge loan. The stock was  valued at approximately $0.06 per share.             The issuances  to Dr. Terry were made in reliance on Section 4(2) of the Securities Act of  1933 and were made without general solicitation or advertising. The purchaser  is an “accredited” sophisticated investor with access to all relevant  information necessary to evaluate the investments and he represented to us that  the securities were being acquired for investment purposes.             On July 15,  2002, we issued 1,250,000 shares of Series B Preferred Stock to our president  and chief executive officer, Gordon Scott Venters, in exchange for the elimination  of $75,000 of debt owed to him for accrued salaries. The shares were valued  at $0.06 per share which was the average price of the common stock at the time  of issuance. Each share of this series of preferred stock is convertible into  one share of common stock. The issuance to Gordon Scott Venters was made in  reliance on Section 4(2) of the Securities Act of 1933 and was made without  general solicitation or advertising. The purchaser is an “accredited”  investor by virtue of his position with the Company and he has access to all  relevant information necessary to evaluate the investments and he represented  to us that the securities were being acquired for investment purposes.             Also in July  2002, the Company received $50,000 from the issuance of $50,000 Convertible  Debentures and in July 2002, the debentures were converted into 1,071,429 shares  of common stock based on a contractual formula of 60% of the average closing  bid-price of the three trading days prior to the election to convert. The debenture  and the common shares into which they were converted were issued to Advantage  Fund I, LLC.              We also issued  750,000 shares of our common stock as security to debenture holder to assure  the performance of conversion of the debenture into the Company’s common  stock. Upon conversion of the debenture, the security shares were to be returned  to the Company. The shares have not been returned and as of July 31, 2002, we  chose to treat the shares as if they were additional shares issued in conversion  of the debenture. We may in the future pursue our remedies for return of the  shares.             As of July 31, 2002, we had 9,437,948 shares of common stock outstanding. As  of the same date we had 5,576,923 outstanding shares of Series A Preferred Stock  and 1,250,000 shares of Series B Preferred Stock.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**              None** ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

            None

**ITEM 5. OTHER INFORMATION**              Subsequent events             During the period  August 1, 2002 through September 14, 2002, the Company issued a total of 175,000  shares of restricted common stock in payment for services.           As of September 14, 2002, we had 9,612,948 shares of common stock outstanding.  As of the same date we had 5,576,923 outstanding shares of Series A Preferred  Stock convertible into 557,693 shares of our common stock and 1,250,000 shares  of Series B Preferred Stock convertible into 1,250,000 shares of common stock

**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.**                                       |
|--------|--------------------|--------|-----------|----------------------------------------------------------------------|
|   |               |   |      |                                                                 |
|   | September 19, 2002 |   | By:  | /s/ Gordon Scott Venters                                             |
|   |               |   |      |                                                                      |
|   |               |   |      | Gordon Scott Venters           President and Chief Executive Officer |