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United States  SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549

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(Mark One)

|  |                                                                                                           
|- | ----------------------------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                   
|  |                                                                                                           
|  | For the quarterly period ended June 30, 2003                                                              
|  |                                                                                                           
|  | OR                                                                                                        
|  |                                                                                                           
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
|  |                                                                                                           
|  | For the transition period from _____________ to _____________                                             

Commission file number 000-29642

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FILM ROMAN, INC.(Exact name of registrant as specified in charter)

|                                                               |                                        
|-------------------------------------------------------------- | ---------------------------------------
|Delaware                                                       | 95-4585357                             
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number)

12020 Chandler Boulevard, Suite 200 North Hollywood, California
     91607(Address of principal executive offices)      (Zip Code)

(818)
761-2544(Registrants telephone number, including area code)

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Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.

YesxNoo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YesoNox

APPLICABLE ONLY TO CORPORATE
ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable
date:

As of July 30, 2003, 19,031,847 shares of common stock, par value $.01 per share, were issued and outstanding.

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##### Table of Contents

TABLE OF CONTENTS

|                  |                                                                                                                      |   
|----------------- | -------------------------------------------------------------------------------------------------------------------- | --
|                  | PART I.  FINANCIAL INFORMATION                                                                                       |   
|                  |                                                                                                                      |   
|Item 1.           | Financial Statements                                                                                                 | 3 
|                  |                                                                                                                      |   
|                  | Consolidated Balance Sheets as of December 31, 2002 and June 30, 2003 (unaudited)                                    | 3 
|                  |                                                                                                                      |   
|                  | Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2002 and June 30, 2003 (unaudited) | 4 
|                  |                                                                                                                      |   
|                  | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2002 and June 30, 2003 (unaudited)           | 5 
|                  |                                                                                                                      |   
|                  | Notes to Consolidated Financial Statements                                                                           | 6 
|                  |                                                                                                                      |   
|Item 2.           | Managements Discussion and Analysis of Financial Condition and Results of Operations                                | 9 
|                  |                                                                                                                      |   
|Item 3.           | Quantitative and Qualitative Disclosures about Market Risk                                                           | 16
|                  |                                                                                                                      |   
|Item 4.           | Controls and Procedures                                                                                              | 16
|                  |                                                                                                                      |   
|                  | PART II.  OTHER INFORMATION                                                                                          |   
|                  |                                                                                                                      |   
|Item 2.           | Changes in Securities and Use of Proceeds                                                                            | 17
|                  |                                                                                                                      |   
|Item 4.           | Submission of Matters to a Vote of Security Holders                                                                  | 17
|                  |                                                                                                                      |   
|Item 6.           | Exhibits and Reports on Form 8-K                                                                                     | 17
|                  |                                                                                                                      |   
|Signatures        | 19                                                                                                                  
|                  |                                                                                                                      |   
|Index to Exhibits | 20                                                                                                                  

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##### Table of Contents

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

FILM ROMAN, INC.

CONSOLIDATED BALANCE SHEETS  (Unaudited)

|                                                                                                                                                                                           |                   |  |                       |             |   |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------- |  | --------------------- | ----------- | - | - | ----------- | -
|                                                                                                                                                                                           | December 31, 2002 |  | June 30, 2003 (Note1) |            
|                                                                                                                                                                                           |                   |  | (unaudited)           |            
|ASSETS                                                                                                                                                                                     |                   |  |                       |             |   |   |             |  
|Cash and cash equivalents                                                                                                                                                                  |                   |  | $                     | 1,277,958   |   | $ | 1,240,189   |  
|Accounts receivable                                                                                                                                                                        |                   |  |                       | 114,772     |   |   | 249,132     |  
|Film costs, net of accumulated amortization of $39,927,593 (2002) and $18,045,512 (2003)                                                                                                   |                   |  |                       | 18,141,712  |   |   | 14,561,987  |  
|Property and equipment, net of accumulated depreciation and amortization of $3,097,691 (2002) and $3,217,691 (2003)                                                                        |                   |  |                       | 246,579     |   |   | 176,266     |  
|Deposits and other assets                                                                                                                                                                  |                   |  |                       | 293,119     |   |   | 401,108     |  
|                                                                                                                                                                                           |                   |  |                       |            
|Total Assets                                                                                                                                                                               |                   |  | $                     | 20,074,140  |   | $ | 16,628,682  |  
|                                                                                                                                                                                           |                   |  |                       |            
|LIABILITIES AND STOCKHOLDERS DEFICIENCY                                                                                                                                                   |                   |  |                       |             |   |   |             |  
|Accounts payable                                                                                                                                                                           |                   |  | $                     | 1,842,904   |   | $ | 955,574     |  
|Accrued expenses                                                                                                                                                                           |                   |  |                       | 2,098,354   |   |   | 1,958,060   |  
|Deferred revenue                                                                                                                                                                           |                   |  |                       | 22,026,710  |   |   | 18,108,157  |  
|Convertible debt                                                                                                                                                                           |                   |  |                       |            |   |   | 59,126      |  
|                                                                                                                                                                                           |                   |  |                       |            
|Total liabilities                                                                                                                                                                          |                   |  |                       | 25,967,968  |   |   | 21,080,917  |  
|Commitments and contingencies                                                                                                                                                              |                   |  |                       |            |   |   |            |  
|Stockholders deficiency:                                                                                                                                                                  |                   |  |                       |             |   |   |             |  
|Preferred Stock, $.01 par value, 10,000,000 shares authorized, none issued                                                                                                                 |                   |  |                       |            |   |   |            |  
|Common Stock, $.01 par value, 40,000,000 shares authorized, 8,577,690 shares issued and outstanding in 2002 and 19,031,847 shares
issued and outstanding in 2003 8 and outstanding in 2001 |                   |  |                       | 85,777      |   |   | 190,318     |  
|Additional paid-in capital                                                                                                                                                                 |                   |  |                       | 36,379,615  |   |   | 37,182,548  |  
|Accumulated deficit                                                                                                                                                                        |                   |  |                       | (42,359,220 | ) |   | (41,825,101 | )
|                                                                                                                                                                                           |                   |  |                       |            
|Total stockholders deficiency                                                                                                                                                             |                   |  |                       | (5,893,828  | ) |   | (4,452,235  | )
|                                                                                                                                                                                           |                   |  |                       |            
|Total liabilities and stockholders deficiency                                                                                                                                             |                   |  | $                     | 20,074,140  |   | $ | 16,628,682  |  
|                                                                                                                                                                                           |                   |  |                       |            

See accompanying notes

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FILM ROMAN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

|                                                |                             |  |                           |            |      |   |            |  |   |            |   |   |           
|----------------------------------------------- | --------------------------- |  | ------------------------- | ---------- | ---- | - | ---------- |  | - | ---------- | - | - | ----------
|                                                | Three Months ended June 30, |  | Six Months ended June 30,
|                                                | 2002                        |  | 2003                      |            | 2002 |   | 2003      
|Revenue                                         |                             |  | $                         | 11,080,891 |      | $ | 8,542,086  |  | $ | 26,890,682 |   | $ | 20,226,917
|Cost of revenue                                 |                             |  |                           | 10,498,670 |      |   | 7,692,640  |  |   | 26,293,064 |   |   | 18,299,484
|Selling, general and administrative expenses    |                             |  |                           | 757,920    |      |   | 478,804    |  |   | 1,599,868  |   |   | 1,221,005 
|                                                |                             |  |                           |            |      |   |           
|Operating income (loss)                         |                             |  |                           | (175,699   | )    |   | 370,642    |  |   | (1,002,250 | ) |   | 706,428   
|Interest income                                 |                             |  |                           | 5,943      |      |   | 27         |  |   | 16,227     |   |   | 2,691     
|                                                |                             |  |                           |            |      |   |           
|Income (loss) before provision for income taxes |                             |  |                           | (169,756   | )    |   | 370,669    |  |   | (986,023   | ) |   | 709,119   
|Provision for income taxes                      |                             |  |                           |           |      |   | 175,000    |  |   |           |   |   | 175,000   
|                                                |                             |  |                           |            |      |   |           
|Net income (loss)                               |                             |  | $                         | (169,756   | )    | $ | 195,669    |  | $ | (986,023   | ) | $ | 534,119   
|                                                |                             |  |                           |            |      |   |           
|Net Income (loss) per common share:             |                             |  |                           |            |      |   |            |  |   |            |   |   |           
|Basic and Diluted                               |                             |  | $                         | (0.02      | )    | $ | 0.01       |  | $ | (0.11      | ) | $ | 0.05      
|                                                |                             |  |                           |            |      |   |           
|Weighted average number of shares outstanding:  |                             |  |                           |            |      |   |            |  |   |            |   |   |           
|Basic                                           |                             |  |                           | 8,577,690  |      |   | 13,172,924 |  |   | 8,577,690  |   |   | 10,888,001
|                                                |                             |  |                           |            |      |   |           
|Diluted                                         |                             |  |                           | 8,577,690  |      |   | 13,461,695 |  |   | 8,577,690  |   |   | 11,033,184
|                                                |                             |  |                           |            |      |   |           

See accompanying notes

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FILM ROMAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

|                                                                                     |                          |  |      |             |   |   |             |  
|------------------------------------------------------------------------------------ | ------------------------ |  | ---- | ----------- | - | - | ----------- | -
|                                                                                     | Six Months endedJune 30, | 
|                                                                                     | 2002                     |  | 2003 |            
|Operating activities:                                                                |                          |  |      |             |   |   |             |  
|Net income (loss)                                                                    |                          |  | $    | (986,023    | ) | $ | 534,119     |  
|Adjustments to reconcile net income (loss) to net cash used in operating activities: |                          |  |      |             |   |   |             |  
|Depreciation and amortization                                                        |                          |  |      | 190,000     |   |   | 120,000     |  
|Amortization of film costs                                                           |                          |  |      | 26,293,064  |   |   | 18,299,484  |  
|Changes in operating assets and liabilities:                                         |                          |  |      |             |   |   |             |  
|Accounts receivable                                                                  |                          |  |      | 70,705      |   |   | (134,360    | )
|Film costs                                                                           |                          |  |      | (17,388,689 | ) |   | (14,719,759 | )
|Deposits and other assets                                                            |                          |  |      | 1,360       |   |   | (107,989    | )
|Accounts payable                                                                     |                          |  |      | (694,572    | ) |   | (887,330    | )
|Accrued expenses                                                                     |                          |  |      | (132,438    | ) |   | (140,294    | )
|Deferred revenue                                                                     |                          |  |      | (8,882,778  | ) |   | (3,918,553  | )
|                                                                                     |                          |  |      |            
|Net cash used in operating activities                                                |                          |  |      | (1,529,371  | ) |   | (954,682    | )
|Investing activities:                                                                |                          |  |      |             |   |   |             |  
|Additions to property and equipment                                                  |                          |  |      | (21,629     | ) |   | (49,687     | )
|                                                                                     |                          |  |      |            
|Net cash used in investing activities                                                |                          |  |      | (21,629     | ) |   | (49,687     | )
|Financing activities:                                                                |                          |  |      |             |   |   |             |  
|Net proceeds from issuance of common stock                                           |                          |  |      |            |   |   | 907,474     |  
|Net proceeds from borrowings on convertible debt                                     |                          |  |      |            |   |   | 59,126      |  
|                                                                                     |                          |  |      |            
|Net cash provided by financing activities                                            |                          |  |      |            |   |   | 966,600     |  
|Net decrease in cash                                                                 |                          |  |      | (1,551,000  | ) |   | (37,769     | )
|                                                                                     |                          |  |      |            
|Cash and cash equivalents at beginning of period                                     |                          |  |      | 2,776,757   |   |   | 1,277,958   |  
|                                                                                     |                          |  |      |            
|Cash and cash equivalents at end of period                                           |                          |  | $    | 1,225,757   |   | $ | 1,240,189   |  
|                                                                                     |                          |  |      |            
|Supplemental disclosure of cash flow information:                                    |                          |  |      |             |   |   |             |  
|Cash paid during the period for:                                                     |                          |  |      |             |   |   |             |  
|Income taxes                                                                         |                          |  | $    | 5,600       |   | $ | 5,600       |  
|                                                                                     |                          |  |      |            

See accompanying notes

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FILM ROMAN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) - Basis of
Presentation

Film Roman, Inc., a Delaware corporation (the Company), currently conducts all of its operations
through its wholly owned subsidiaries, Film Roman, Inc., a California corporation; Namor Productions, Inc., a California corporation; Chalk Line Productions, Inc., a California corporation; Diversion Entertainment, Inc., a Delaware corporation and
Level 13 Entertainment, Inc., a Delaware corporation, and Special Project Films, Inc., a Delaware corporation. The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments consisting only of normal recurring accruals considered necessary to present fairly the financial position of the
Company as of June 30, 2003 and the results of its operations for the three and six months ended June 30, 2002 and 2003 and the cash flows for the six months ended June 30, 2002 and 2003 have been included. The results of operations for interim
periods are not necessarily indicative of the results, which may be realized for the full year. For further information, refer to the financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the year
ended December 31, 2002 (the Form 10-K) filed with the Securities and Exchange Commission.

(2) - Earnings Per Share

Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of
common shares outstanding during the period. Diluted net income (loss) per share includes the dilutive effect of potential stock options exercises and convertible debt, calculated using the treasury stock method. The following table sets forth the
computation of basic and diluted earnings per share:

|                                                                                                      |                                  |            |                                |   |           
|----------------------------------------------------------------------------------------------------- | -------------------------------- | ---------- | ------------------------------ | - | ----------
|                                                                                                      | Three months ended June 30, 2003 |            | Six months ended June 30, 2003
|Numerator:                                                                                            |                                  |            |                                |   |           
|Net Income                                                                                            | $                                | 195,669    |                                | $ | 534,119   
|                                                                                                      |                                  |            |                               
|Numerator for basic and diluted earnings per share                                                    | $                                | 195,669    |                                | $ | 534,119   
|Denominator:                                                                                          |                                  |            |                                |   |           
|Denominator for basic earnings per share  weighted-average shares                                    |                                  | 13,172,924 |                                |   | 10,888,001
|Effect of dilutive securities:                                                                        |                                  |            |                                |   |           
|Convertible debt                                                                                      |                                  | 288,771    |                                |   | 145,183   
|                                                                                                      |                                  |            |                               
|Dilutive potential common shares                                                                      |                                  | 288,771    |                                |   | 145,183   
|                                                                                                      |                                  |            |                               
|Denominator for diluted earnings per share  adjusted weighted-average shares and assumed conversions |                                  | 13,461,695 |                                |   | 11,033,184
|                                                                                                      |                                  |            |                               

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(2) - Earnings Per Share (continued)

Options
to purchase 1,466,500 shares of common stock at exercise prices ranging from $0.20 - $2.94 per share were outstanding at June 30, 2003 but were not included in the computation of diluted earnings per share because the options exercise price
was greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For additional disclosure regarding the convertible debt, see Note 4.

(3) -
Film Costs

The components of unamortized film costs consist of the following:

|                                |                  |            |              |   |           
|------------------------------- | ---------------- | ---------- | ------------ | - | ----------
|                                | December 31 2002 |            | June 30 2003
|                                |                  |            | (unaudited) 
|Film productions in process     | $                | 18,003,446 |              | $ | 14,425,073
|Film productions in development |                  | 138,266    |              |   | 136,913   
|                                |                  |            |             
|                                | $                | 18,141,712 |              | $ | 14,561,986
|                                |                  |            |             

(4)  Common Stock and Convertible Debt

On May 30, 2003, the Company filed a report on Form 8-K announcing that it had completed a stock purchase transaction with Digital Production
Solutions, Inc. (DPS), whereby DPS acquired a controlling interest in the Company through the issuance of 10,454,157 shares of the Common Stock of the Company pursuant to a stock purchase agreement dated May 22, 2003 (the Stock
Purchase Agreement) as set forth in Exhibit 2.1 hereto. In addition, DPS agreed to lend the Company up to $2,059,125.87 pursuant to a certain loan agreement (the Loan Agreement) and convertible note (the Convertible
Note) of even date therewith as set forth in Exhibits 10.1 and 10.2, respectively. DPS is the animation production unit of IDT Media, Inc. IDT Media is a subsidiary of IDT Corporation.

Under the terms of the loan agreement and convertible note, any outstanding principal amount will accrue interest at the prime rate plus 2.0%. The
prime rate as of June 30, 2003 was 4.0%. Any unpaid principal and interest are due and payable no later than May 22, 2008. The lender, in its sole discretion, may convert any unpaid principal and interest under the note agreement into fully paid and
nonassessable shares of the Companys common stock. The number of common shares the note can be converted into is determined by the amount of the unpaid principal and interest at the time of conversion divided by the Conversion
Price. The Conversion Price, per the terms of the note agreement, is $0.09. The Conversion Price may be adjusted based upon future events. The Company borrowed $59,126 in connection with the execution of the loan agreement and convertible
note.

(5)  Stock Option Employee Compensation

As allowed
under the provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, the Company applies the provisions of Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees, and related interpretations to account for our employee stock-based compensation plans and, accordingly, does not recognize

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compensation expense. Furthermore, no stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the
market value of the underlying common stock on the date of grant.

SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure, an amendment of SFAS No. 123, requires that companies provide disclosure regarding the pro forma impact of the provisions of SFAS No. 123 in interim financial statements. The following table illustrates
the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS Statement No. 123 to stock-based employee compensation.

|                                                                                                                                            |                                               |       |   |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | ----- | - | - | ---- | -
|                                                                                                                                            | (In thousands, except income/(loss)per share) |      
|                                                                                                                                            | Three Months ended June 30                    |      
|                                                                                                                                            |                                               |      
|                                                                                                                                            | 2002                                          | 2003  |  
|                                                                                                                                            |                                               |      
|Net Income/(loss), as reported                                                                                                              | $                                             | (170  | ) | $ | 196  |  
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |                                               | (105  | ) |   | (15  | )
|                                                                                                                                            |                                               |       |   |  
|Pro forma net income/(loss)                                                                                                                 | $                                             | 275   | ) | $ | 180  |  
|                                                                                                                                            |                                               |       |   |  
|Income/(loss), per share as reported:                                                                                                       |                                               |       |   |   |      |  
|Basic and diluted                                                                                                                           | $                                             | (0.02 | ) | $ | 0.01 |  
|Income/(loss), per share pro forma:                                                                                                         |                                               |       |   |   |      |  
|Basic and diluted                                                                                                                           | $                                             | (0.03 | ) | $ | 0.01 |  



|                                                                                                                                            |                                                |        |      |   |      |  
|------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------ | ---- | - | ---- | -
|                                                                                                                                            | (In thousands, except income/(loss) per share) |       
|                                                                                                                                            | Six Months ended June 30                       |       
|                                                                                                                                            |                                                |       
|                                                                                                                                            | 2002                                           |        | 2003 |  
|                                                                                                                                            |                                                |       
|Net Income/(loss), as reported                                                                                                              | $                                              | (986   | )    | $ | 534  |  
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |                                                | (210   | )    |   | (36  | )
|                                                                                                                                            |                                                |        |      |  
|Pro forma net income/(loss)                                                                                                                 | $                                              | (1,196 | )    | $ | 498  |  
|                                                                                                                                            |                                                |        |      |  
|Income/(loss), per share as reported:                                                                                                       |                                                |        |      |   |      |  
|Basic and diluted                                                                                                                           | $                                              | (0.11  | )    | $ | 0.05 |  
|Income/(loss), per share pro forma:                                                                                                         |                                                |        |      |   |      |  
|Basic and diluted                                                                                                                           | $                                              | (0.14  | )    | $ | 0.05 |  

(6)  Provision for Income Taxes

The Company recorded a provision for income taxes in the amount of $175,000 for the three months ended June 30, 2003. The provision was recorded
based on the fact that the Company expects to have taxable income for the twelve months ended December 31, 2003. Although the Company has significant net operating loss carryforwards, the Company has substantial limitations imposed on the
utilization of these NOLs as a result of the stock purchase transaction with DPS (see footnote 4). This transaction caused the Company to have a change in ownership as defined in IRC Sec. 382. This section serves to limit the utilization of net
operating loss carryforwards when an ownership change has occurred. Accordingly, a tax provision has been recorded on the expected taxable income of the Company after the appropriate limitations have been placed on its net operating loss
carryforwards.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation

This Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. The words expect, estimate, anticipate, predict, believe, plan, should, may and
projects and similar expressions and variations thereof are intended to identify forward-looking statements. Such forward-looking statements relate to, among other things, trends affecting the financial condition or results of operations
of the Company; the Companys future production and delivery schedule (including the number of episodes of programming to be produced and delivered during the 2003-2004 television season); plans to enter into new business areas beyond the
Companys core business of animation television production; the Companys objectives, planned or expected activities and anticipated financial performance and liquidity. These forward-looking statements are based largely on the
Companys current expectations and are subject to a number of risks and uncertainties, including without limitation, those described under the caption Managements Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors in the Companys Form 10-K for the year ended December 31, 2002. Actual results could differ from these forward-looking statements. The Company does not make projections of its future operating results and
undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

General

Film Roman, Inc. (Film Roman or the Company) develops, produces and distributes a broad range of television
programming for the television network, cable television, first-run domestic syndication and international markets. The Company was founded in 1984 and has grown into one of the leading independent animation studios in the world. Film Roman has
produced and is producing some of the worlds best known animated series, including The Simpsons, King of the Hill, X-Men, The Mask, Bobbys World, The Twisted Tales of Felix the Cat and Garfield & Friends. Over the years, the
Company has primarily produced animation for television, both on a fee-for-services and a proprietary basis. While the Company is currently aggressively pursuing both of theses areas, the Company is also continuing to explore ways to expand its
production capabilities in animation beyond television, direct-to-video, commercials, and the Internet. As the Company moves into these other areas, it is also responding to the changes that are taking place in the media and entertainment
areas.

Production work on a fee-for-services basis has historically accounted for the largest and most reliable portion
of the Companys revenues. Fees paid to the Company for these production services generally range from $300,000 to $650,000 per episode and typically cover all direct production costs plus a profit margin. The Company also produces programming
for which it controls some of the proprietary rights (including, for example, international distribution and licensing and merchandising rights). The Company currently produces only proprietary programming that has sufficient distribution licensing
income to cover the projected production costs. Currently, the Company seeks to cover all of its production costs prior to production of its proprietary programs by licensing the rights to those productions. As a result, the Company may recognize
revenue associated with its proprietary programming over a period of years. Revenue from proprietary programming has not been material over the last several years.

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The Company produces a limited number of animated television series in any year and is substantially
dependent on revenues from licensing these programs to broadcasters and from fees from producing programs for third parties. The Companys future performance will be affected by issues facing all producers of animated programming, including
risks related to the limited number of time slots allocated to childrens and/or animated television programming, the intense competition for those time slots, the limited access to distribution channels (particularly for programs produced by
independent studios), the declining license fees paid to producers of programming by broadcasters and the regulations implemented by the Federal Communications Commission (FCC) governing program content. The Company seeks to limit its
financial risk associated with its proprietary programming by obtaining commitments from third parties prior to production to cover all of its direct production costs.

The Company is also continuing expansion of its production capabilities beyond free television, cable, direct-to-video,
commercials, computer graphics and the Internet. The Companys future performance will be affected by unpredictable and changing factors that influence the success of an individual television program or direct-to-video release such as personal
taste of the public and critics as well as public awareness of a production and the successful distribution of a production. Although the Company intends to attempt to limit the risks involved with television film and direct-to-video production, the
Company will likely be unable to limit all financial risk, and the level of marketing, promotional and distribution activities and expenses necessary for such production cannot be predicted with certainty.

The Companys 2003 Production Schedule

The Company is currently scheduled to
produce the following programming for the 2003-2004 broadcast season:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Simpsons.   The Company is producing 22 new episodes of The Simpsons for exhibition over the Fox Broadcasting Network. Entering its fifteenth season and still the
longest-running prime time animated series in television history, The Simpsons has been honored with a number of awards, including a Peabody Award, Emmy Awards, Annie Awards, Genesis Awards, International Monitor Awards and Environmental
Media Awards, among numerous other honors. The Simpsons has transformed the way the television industry and audiences perceive animation and comedy series in general.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | King of the Hill.   The Company is currently producing 22 new episodes of King of the Hill to be exhibited on the Fox Broadcasting Network. King of the Hill is the hit
half-hour, animated comedy, voted the Best Television Show of 1997 by TV Guide and Entertainment Weekly, that tells the hilarious stories about Hank Hill, his family and their neighbors in the fictional suburb of Arlen, Texas, the heartland of
America.

| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | X-Men.   The Company is currently producing 9 episodes of X-Men, which airs Saturday mornings on the WB Network.

| |                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Tripping the Rift.   The Company has begun to fulfill an order from the Sci-Fi Channel for 13 episodes of Tripping the Rift, which will be produced through a Canadian Company,
CineGroupe.

| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Free for All.   The Company is currently producing 7 episodes of Free for All for Showtime.

| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | Projects in Development.   The Company is currently developing McShegney, Princesa and Jr. High Tech along with updating C-Bear and Jamal.

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Results of Operations

Three Months Ended June 30, 2003 Compared to Three Months Ended June 30,
2002

Total revenue decreased by 23%, or $2.6 million, to $8.5 million for the quarter ended June 30,
2003, from $11.1 million for the quarter ended June 30, 2002. Starting in 2003, the Company had a new arrangement whereas Fox Broadcasting Network paid certain overseas production expenses directly. This new arrangement caused revenue to decrease
along with fewer episodes being delivered in 2003.

The Company
delivered 12 fee-for-services episodes during the quarter ended June 30, 2003 compared to 14 episodes in the comparable period in 2002. Fee-for-services revenue decreased 23%, or $2.4 million, to $8.1 million for the quarter ended June 30, 2003,
from $10.5 million in the comparable period in 2002 due to a decrease in episodes delivered.

Other revenue decreased to $0.5 million for the quarter ended June 30, 2003 compared to
$0.6 million for the quarter ended June 30, 2002. The increase is primarily due to the higher revenue recognition in commercials department.

Total cost of revenue decreased by 27%, or $2.8 million, to $7.7 million for the quarter ended
June 30, 2003, from $10.5 million for the quarter ended June 30, 2002. Total cost of revenue as a percentage of sales decreased 5% to 90% for the quarter ended June 30, 2003, from 95% in the comparable period in 2002 due to higher fee-for-services
margins. The Company has implemented economies and efficiencies in operations, overhead and production that have substantially increased gross margins.

Total selling, general and administrative expenses for the quarter ended June 30, 2003 decreased
by $0.3 million to $0.5 million from $0.8 million for the comparable period in 2002, due primarily to lower general and development costs.

Operating income was $0.3 million for the quarter ended June 30, 2003, as compared to a loss of
$0.2 million for the quarter ended June 30, 2002.

Six Months Ended June 30, 2003 Compared to Six Months Ended June 30, 2002

Total revenue decreased by 25%, or $6.7 million, to $20.2 million for the six months ended June
30, 2003, from $26.9 million for the six months ended June 30, 2002. Total revenue decreased because fewer fee-for services episodes were delivered in 2003.

The Company delivered 30 fee-for-services episodes during the six months ended June 30, 2003
compared to 38 episodes in the comparable period in 2002. Fee-for-services revenue decreased 26%, or $6.7 million, to $19.5 million for the six months ended June 30, 2003, from $26.2 million in the comparable period in 2002 due to a decrease in
episodes delivered.

Other revenue remained constant at $0.7
million for the six months ended June 30, 2003 and June 30, 2002.

Total cost of revenue decreased by 30%, or $8.0 million, to $18.3 million for the six months ended June 30, 2003, from $26.3 million for the six months ended June 30, 2002. Total cost of revenue as a percentage of sales
decreased 7% to 91% for the six months ended June 30, 2003, from 98% in the comparable period in 2002 due to higher fee-for-services margins. The Company has implemented

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economies and efficiencies in operations, overhead and production that have substantially increased gross margins.

Total selling, general and administrative expenses for the six months ended June 30, 2003
decreased by $0.3 million to $1.3 million from $1.6 million for the comparable period in 2002, due primarily to lower general and development costs.

Operating income was $0.7 million for the six months ended June 30, 2003, as compared to a loss of
$1.0 million for the six months ended June 30, 2002.

Critical Accounting Policies

Revenue and Cost Recognition. The Company recognizes revenue based on
Statement of Position 00-2 Accounting by Producers and Distributors of Films (SOP 00-2).

Revenue earned from fee-for-service productions is the principal source of revenue earned by the
Company. During 2002 and 2003, such revenues accounted for more than 90% of the Companys total revenues. License fees received by the Company for its work on fee-for-hire productions are recognized on an episode-by-episode basis as each
episode is completed and delivered to the customer in accordance with the terms of the existing arrangement.

Revenue earned from proprietary programs is recognized as such programs are exploited in the
markets in which the Company has retained ownership rights, typically upon the receipt of statements from the Companys licensees. In the event that a licensee pays the Company a nonrefundable minimum guarantee at the beginning of a license
term, the Company will record this amount as revenue if all of the criteria for recognition pursuant to SOP 00-2 is met.

Costs incurred in connection with the acquisition of story rights, the development of stories,
production and allocable overhead are capitalized as film costs or expensed in accordance with SOP 00-2. Film costs are stated at the lower of unamortized cost or fair value. The costs of fee-for-service produced episodes are capitalized and
subsequently amortized to cost of revenues at the time revenue is recognized. If the costs of an episode are expected to exceed the corresponding license fee, all costs incurred in excess of this license fee will be expensed to cost of revenues as
incurred. The cost of each proprietary program is capitalized and is amortized in the proportion that revenue realized relates to managements estimate of the total revenue expected to be realized from such programs.

The Companys cash flow is not necessarily related to revenue recognition
and amortization of production costs. Cash is received and costs are incurred (and paid) throughout the year. Historically, in the fourth quarter, and to a lesser extent the third quarter, cash used in operations typically exceeded cash generated by
operations as completed shows were delivered to broadcasters. The Company expects that cash used in or provided by operations will fluctuate greatly from quarter to quarter.

Overhead Allocation.Overhead
is allocated to particular productions on the basis of the total allocable overhead times the ratio of direct production costs incurred on a program to total production costs incurred during the period. Total allocable overhead is determined on the
basis of managements estimates of the percentage of overhead costs that can be attributed to the productions in progress during the period.

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Liquidity and Capital Resources

At June 30, 2003, the Company had cash
and short-term investments of approximately $1.2 million compared to $1.3 million at December 31, 2002. The Companys cash and short-term investment balances had continued to decline until the Company secured equity financing on May 22, 2003
with Digital Production Solutions, Inc. (DPS). Additionally, along with the $59,126 that the Company has already borrowed, DPS has made available to the Company an additional $2,000,000 pursuant to a Loan Agreement and Convertible Note.
The Company expects that with the completion of the Stock Purchase Agreement with DPS, the Companys cash balances and anticipated cash flow from operations will be sufficient to fund the Companys operating requirements for at least the
next year.

For the six months ended June 30, 2003, net cash used in operating activities was approximately $1.0 million, principally due to cash used in connection with film production activities. Cash used in investing activities for
the six months ended June 30, 2003 was $49,687 due to additions to property and equipment. Cash generated by financing activities for the six months ended June 30, 2003 was $1.0 million due primarily to net proceeds received in connection with the
issuance of common stock to DPS.

Cash collected in advance of revenue recognition is recorded as deferred revenue. As of June 30, 2003, the Company had a balance in its deferred revenue account of $18.1
million.

The following table summarizes the contractual obligations and commitments the Company has over the next 5 years:

|                           |      |  |      |         |      |   |         |  |      |         |  |   |         |  |   |        
|-------------------------- | ---- |  | ---- | ------- | ---- | - | ------- |  | ---- | ------- |  | - | ------- |  | - | -------
|                           | 2003 |  | 2004 |         | 2005 |   | 2006    |  | 2007
|Operating Lease Agreements |      |  | $    | 491,190 |      | $ | 952,319 |  | $    | 973,702 |  | $ | 979,734 |  | $ | 995,962
|Employment Agreements      |      |  | $    | 212,500 |      | $ | 187,979 |  | $    |        |  |   |        |  |   |       

Risk Factors

The
Companys business is subject to numerous risk factors, not all of which can be known or anticipated and any one of which could adversely impact the Company or its financial condition. Some of those risk factors are as follows:

Company Has a History of Losses and Declining Cash Balances and
There Can Be No Assurance that It Will Be Able to Execute on Its Business Strategy.The Company has accumulated losses of approximately $41.8 million through June 30, 2003. Because substantial
portions of the Companys expenses are fixed and its gross margin is relatively low, achieving profitability and positive cash flows depends upon Companys ability to generate and sustain substantially higher revenues. Although the
Companys revenues are relatively predicable and its strategy is to increase revenues and gross margin, it cannot be assured that the Company will be able to do so and consequently the Company is very likely to experience additional losses and
a further decline in its cash balances in 2003.

Dependence on a Limited Number of Television Programs.The Companys revenue has historically come from the production of a relatively small number of animated
television programs. King of the Hill, The Simpsons and X-Men accounted for approximately 40%, 41% and 15% respectively, of the Companys total revenue for the year ended December 31, 2002. King of the Hill, The
Simpsons and X-Men accounted for approximately 42%, 51% and 3% respectively, of the Companys total revenue for the six months ended June 30, 2003. Film Roman cannot assure that broadcasters will continue to

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broadcast the Companys proprietary or fee-for-services programs or that Film Roman will continue to be engaged to produce such programs.

Failure to Renew Licenses or Production
Agreements.There can be no assurance that any of the programs being produced by the Company will be relicensed for additional broadcast seasons or renewed for production or, if so relicensed
or renewed, that the terms of the license agreements or production agreements will be as favorable to the Company as those of existing licenses or production agreements.

Declining Value of License Fee Agreements and Increasing Control of Proprietary
Rights by Broadcasters. Competition created by the emergence of new broadcasters (such as UPN, WB, Nickelodeon and the USA Network) has provided television audiences with more choices, thereby, generally reducing the number of
viewers watching any one program. As a result, the market share of, and license fees paid by, FOX, CBS, NBC and ABC may continue to decrease and make it difficult for Film Roman to finance certain proprietary programs.

Risks of Vertical Integration.Over the last decade, broadcasters, distributors and producers of television and motion picture programming have become increasingly integrated vertically through mergers, acquisitions, partnerships, joint
ventures or other affiliations. Film Roman has not entered into any of these relationships. As a result, the number of time slots available for childrens and/or animated programming and, specifically, for animated programming supplied by
independent animation studios, may decrease, making it more difficult to compete successfully for available time slots.

Current Programs May Not Sustain Their Popularity and New Programs May Not Become
Popular.   Film Roman derives substantially all of its revenue from the production and distribution of animated television programs. Each program is an individual artistic work, and consumer reaction will determine its commercial
success. Film Roman cannot assure that the Company will be able to continue to create entertaining episodes for its existing programs or that the Company will be able to create new programs that are appealing to broadcasters.

Risks Related to Expansion of Production of Proprietary
Programming. Film Roman intends to expand its production of programming for which the Company owns or controls certain licensing and/or distribution rights (proprietary programming). These rights may include domestic
and international broadcast distribution, home video distribution, licensing and merchandising and interactive/game development (proprietary rights). While Film Roman seeks to limit the financial risk associated with the development of
proprietary programming by obtaining commitments prior to production to cover a portion of its direct production costs, the Company cannot be sure that it will be able to recover the balance of the production and overhead costs through the
exploitation of its remaining rights.

Risk of
Budget and Cost Overruns.Although Film Roman reviews cost reports and updates the Companys cost projections regularly and has generally completed each of the Companys productions
within its budget, the Company cannot assure that the actual production costs for its programming will remain within budget. Significant cost or budget overruns could negatively impact the Companys gross margin since the majority of the
Companys revenues result from fixed fee arrangements.

Revenues and Costs Recognized in Certain Periods May Be Overstated or Understated Due to the Application of Entertainment Accounting Policies. In 2001, Film Roman adopted SOP 00-2 regarding revenue
recognition and amortization of production costs. All costs incurred in connection with an individual program or film, including acquisition, development, production and allocable production overhead costs and interest, are capitalized as television
and film costs. These costs are stated at the lower of unamortized cost or fair value. For proprietary programs, Film Roman amortizes its estimated

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total production costs for an individual program or film in the proportion that revenue realized relates to managements estimate of the total revenue expected to be
received from such program or film. As a result, if revenue or cost estimates change with respect to a program or film, the Company may be required to write-down all or a portion of its unamortized costs for the program or film. The Company cannot
make assurances that these write-downs will not have a significant impact on its results of operations and financial condition.

Competition.   The creation, development, production and
distribution of television programming, together with the exploitation of the proprietary rights related to such programming, is a highly competitive business. Film Roman competes with producers, distributors, licensors and merchandisers, many of
who are larger and have greater financial resources than does the Company. Although the number of outlets available to producers of animated programming has increased with the emergence of new broadcasters, the number of time slots available to
independent producers of childrens and animated programming remains limited. Moreover, because license fees in the United States have dropped substantially recently, companies that do not rely on U.S. broadcast license fees to finance the
production of animation programming, particularly international animation companies that receive governmental subsidies, have achieved a competitive advantage. These companies now serve as an additional source of competition for the limited slots
available to independent animation companies. As a result of these factors, the Company cannot make assurances that it will be able to remain competitive.

Overseas Subcontractors. Like other producers of animated
programming, Film Roman subcontracts some of the less creative and more labor-intensive components of its production process to animation studios located in low-cost labor countries, primarily in the Far East. As the number of animated feature films
and animated television programs increases, the demand for the services of overseas studios has increased substantially. This increased demand may lead overseas studios to raise their fees, which may result in increased production costs, or an
inability to contract with the Companys preferred overseas studios. Further, political considerations, such as acts of war or terrorism, may affect the Companys ability to obtain services from Far East countries.

Technological Changes; Possible Changes in Production of
Products.   The proliferation of new production technologies may change the manner in which the animation industry creates and distributes programming. Recently, certain animators have begun to use computer-generated animation,
including three-dimensional digital animation, instead of two-dimensional cell animation, to create their animated programming. Film Roman cannot be sure that the introduction and proliferation of three-dimensional digital animation or other
technological changes will not cause the Companys historical methods of producing animation to become less cost competitive or less appealing to its audiences. In addition, the Company cannot be sure that it will be able to adapt to such
changes in a cost-effective manner.

Dependence upon
Key Personnel.Film Romans success depends to a significant extent upon the expertise and services of John Hyde, President and Chief Executive Officer. Although the Company has employment
agreements with Mr. Hyde, the loss of services of Mr. Hyde could have an adverse effect on the Companys business, results of operations and financial condition. Film Roman does not currently carry key man life insurance policies on
any of the Companys executives.

Casualty
Risks. Substantially all of the Companys operations and personnel are located in its North Hollywood headquarters, resulting in vulnerability to fire, flood, power loss, telecommunications failure or other local conditions,
including the risk of seismic activity. If a disaster were to occur, the Companys disaster recovery plans may not be adequate to protect the Company and its business interruption insurance may not fully compensate the Company for its
losses.

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Volatility of Stock
Price.  The Market price of the Companys Common Stock, which trades on the NASD OTCBB, could fluctuate significantly in response to operating results and other factors.

Impact of FCC Regulations.  The policies of the current FCC indicate a
potential lessening of government restrictions that may facilitate more vertical integration of companies than in the past. This could have an adverse effect on the availability of buyers for the Companys product.

Potential Union Activity.   There have been and
may be efforts by the International Alliance of Theatrical Stage Employees (I.A.T.S.E.) Local Union 839 (Animation Guild) to collect enough signatures from employees to have an election for representation of the Companys production
employees. Union representation of the production employees could have an adverse effect on the Company.

Film Roman Does Not Intend to Pay Dividends.Film Roman has never paid dividends and currently does not intend to declare or pay dividends. The Company plans to follow a policy of retaining earnings to finance the growth of its business. Whether or not the
Company declares or pays dividends is up to the Board of Directors and will depend on results of operations, financial condition, contractual and legal restrictions and other factors the Board of Directors deems relevant at that time.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The
Company does not utilize market risk sensitive instruments (such as derivative financial instruments) for trading or other purposes.

The
Company has low exposure to interest rate risk. The Company currently borrowed $59,126 in connection with the execution of the loan agreement and convertible note. Thus, a decrease (or increase) in future interest rates will directly and
proportionately decrease (or increase, respectively) the Companys future interest income. For the six months ended June 30, 2003, the Company earned interest income of $2,691.

The
Company is not exposed to significant foreign exchange rate risk. All of the Companys contracts with foreign subcontractors are dollar-denominated. The Company makes limited international sales in foreign currencies, the aggregate of which the
Company estimates to be less than one percent of the Companys yearly revenue.

Item 4. Controls and Procedures

As of June 30, 2003, an evaluation was performed under the supervision and with the participation of the Companys management, including the
CEO/CFO, of the effectiveness of the design and operation of the Companys disclosure controls and procedures. Based on that evaluation, the Companys management, including the CEO/CFO, concluded that the Companys disclosure controls
and procedures were effective as of June 30, 2003. There have been no significant changes in the Companys internal controls or in other factors that could significantly affect internal controls subsequent to June 30, 2003.

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PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

On May 22, 2003, the Company issued
10,454,157 shares of Common Stock of the Company to Digital Production Solutions, Inc. (DPS) for an aggregate purchase price of $940,874.13 pursuant to that certain Stock Purchase Agreement between the Company and DPS dated May 22, 2003
(the Stock Purchase Agreement). On the same date, DPS agreed to lend the Company up to $2,059,125.87 pursuant to a certain loan agreement (the Loan Agreement) between the Company and DPS and a convertible note (the Convertible Note) made
by the Company in favor of DPS. DPS is the animation production unit of IDT Media, Inc. IDT Media, Inc. is a subsidiary of IDT Corporation.

Under the terms of the Loan Agreement and Convertible Note, any outstanding principle amount will accrue interest at the prime rate plus 2.0%. The
prime rate as of June 30, 2003 was 4.0%. Any unpaid principle and interest are due and payable no later than May 22, 2008. DPS, in its sole discretion, may convert any unpaid principle and interest under the Convertible Note into fully paid and
nonassessable shares of the Companys common stock. The number of shares of common stock into which the note can be converted is determined by dividing the amount of the unpaid principle and interest at the time of conversion by the Conversion
Price. The Conversion Price, per the terms of the Convertible Note, is $0.09. The Conversion Price may be adjusted based upon future events. The Company borrowed $59,126 in connection with the execution of the Loan Agreement and Convertible
Note.

DPS, a subsidiary of IDT Media, Inc., Is principally engaged in the production of film and broadcast quality
3-D animation. In connection with the transaction, the bylaws of the Company, which provided that directors could be removed with cause, were amended to provide for the removal of directors with or without cause. The Second Amended and Restated
Bylaws of the Company are set forth in Exhibit 3 hereto.

The Company issued the securities to DPS in
reliance upon private placement exemptions, including, but not limited to, Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder, which reliance was based in part upon the following: (i) the securities
were acquired for the account of DPS and not for sale in connection with any distribution thereof in violation of applicable securities laws; (ii) DPS, sole purchaser of the securities, was an accredited investor and/or had the knowledge and
experience in financial and business matters such that it was capable of evaluating the merits and risks of the investment at that time the investment was made; (iii) all applicable information access and delivery requirements were met; and (iv) the
offer and the sale of the securities were not made using any general solicitation or general advertising.

Item 4. Submission of Matters to a Vote of Security Holders

On
May 21, 2003, the Board of Directors of the Company approved and declared advisable, subject to stockholder approval, the amendment of the Companys Amended and Restated Certificate of Incorporation (the Certificate of
Incorporation) to increase the number of shares of Common Stock the Company is authorized to issue from 40,000,000 to 60,000,000 and the total number of shares the Company is authorized to issue from 50,000,000 to 70,000,000.

On July 10, 2003, DPS, the Companys majority stockholder, provided the Company with its written consent to approve the amendment to the Certificate of Incorporation. Pursuant to Section 14(c) of the Securities Exchange
Act of 1934, as amended, and Rule 14c-2 promulgated thereunder, the amendment cannot take effect until at least 20 calendar days after the date on which a definitive information statement regarding such action has been sent to every stockholder
entitled to consent to the amendment and from whom consent was not solicited. In an effort to effect this action, the Company filed its required preliminary information statement on Schedule 14C with the Securities and Exchange Commission
(SEC) on July 23, 2003. Subsequently, the Company determined to delay indefinitely filing with the SEC and mailing to stockholders the definitive information statement. Therefore, the Companys Certificate of Incorporation has not
been amended as proposed above, and the number of shares of Common Stock the Company is authorized to issue will remain 40,000,000 and the total number of shares the Company is authorized to issue will remain 50,000,000 until twenty calendar days
following the date on which the definitive information statement is filed with the SEC and mailed to stockholders of the Company.

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits


| | The Exhibits, and the Index thereto, required to be filed by Item 601 of Regulation S-K are attached hereto.
| | ------------------------------------------------------------------------------------------------------------

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(b)  Reports on Form 8-K


| | (1)   On May 15, 2003, the Company filed a current report on Form 8-K announcing that it had entered into a letter of agreement with IDT Corporation (IDT) pursuant to which an equity investment
would be made in the Company, subject to execution of the definitive agreement.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2)   On May 30, 2003, the Company filed a current report on Form 8-K announcing that it had completed a change of control stock purchase transaction with Digital Production Solutions, Inc.
(DPS), whereby DPS acquired a controlling interest in the Company through the issuance of 10,454,157 shares of the Common Stock of the Company pursuant to a stock purchase agreement dated May 22, 2003 (the Stock Purchase
Agreement). In addition, DPS agreed to lend the Company up to $2,059,125.87 pursuant to a certain loan agreement (the Loan Agreement) and convertible note (the Convertible Note) of even date therewith. DPS is the
animation production unit of IDT Media, Inc. IDT Media, Inc. is a subsidiary of IDT Corporation.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: August 14, 2003

| |                  |                                      
| | ---------------- | -------------------------------------
| | FILM ROMAN, INC. |                                      
| |                  |                                      
| |                  |                                      
| | By:              | /s/ JOHN W. HYDE                     
| |                  |                                      
| |                  | John W. Hyde                         
| |                  | President and Chief Executive Officer
| |                  |                                      
| | By:              | /s/ JOAN THOMPSON                    
| |                  |                                      
| |                  | Joan Thompson                        
| |                  | Chief Accounting Officer             
| |                  |                                      

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INDEX TO EXHIBITS

|                                                                                                                                                                              |  |                                                                                                                                                                             
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number                                                                                                                                                                |  | Description                                                                                                                                                                 
|                                                                                                                                                                              |  |                                                                                                                                                                             
|2.1#                                                                                                                                                                          |  | Stock Purchase Agreement dated as of May 22, 2003 by and between Digital Production Solutions, Inc. and Film Roman, Inc.                                                    
|                                                                                                                                                                              |  |                                                                                                                                                                             
|3                                                                                                                                                                             |  | Second Amended and Restated Bylaws of the Company                                                                                                                           
|                                                                                                                                                                              |  |                                                                                                                                                                             
|10.1#                                                                                                                                                                         |  | Loan Agreement dated as of May 22, 2003 by and between Digital Production Solutions, Inc. and Film Roman, Inc.                                                              
|                                                                                                                                                                              |  |                                                                                                                                                                             
|10.2#                                                                                                                                                                         |  | Convertible Note dated as of May 22, 2003 by and between Digital Production Solutions, Inc. and Film Roman, Inc.                                                            
|                                                                                                                                                                              |  |                                                                                                                                                                             
|31                                                                                                                                                                            |  | Certifications                                                                                                                                                              
|                                                                                                                                                                              |  |                                                                                                                                                                             
|32                                                                                                                                                                            |  | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|                                                                                                                                                                              |  |                                                                                                                                                                             
|                                                                                                                                                                              |  |                                                                                                                                                                             
|# Incorporated by reference to a similarly numbered exhibit to the Companys Current Report on Form 8-K as filed with the Securities and
Exchange Commission on May 30, 2003.
|                                                                                                                                                                              |  |                                                                                                                                                                             

20