<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

              For the quarterly period ended September 30, 2001 or
                                             ------------------

[] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

             For the transition period from __________ to _________

                        Commission file Number 000-24706

                       SELECT MEDIA COMMUNICATIONS, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                  New York                              13-3415331
---------------------------------------------  ---------------------------------
(State or other jurisdiction of incorporation  (IRS Employer Identification No.)
                             or organization)

                     575 Madison Avenue, New York, NY 10022
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (212) 605-0548
                                 --------------
                           (Issuer's telephone number)

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No[X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of November 7, 2001: 17,487,683 shares

Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]


<PAGE>



PART I - FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements.
<TABLE>
<CAPTION>
                                                                                                             Page
                                                                                                             ----
<S>                                                                                                          <C>
  Condensed Balance Sheet (Unaudited)--As of September 30, 2001                                                3-4
  Condensed Statements of Operations (Unaudited)--For the nine
    months and three months ended September 30, 2001 and September 30, 2000                                      5
  Condensed Statements of Cash Flows (Unaudited) - For the nine
    months ended September 30, 2001 and September 30, 2000                                                     6-7

NOTES TO CONDENSED FINANCIAL STATEMENTS                                                                       8-16


Item 2.  Management's Discussion and Analysis                                                                17-22


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                                                      22
Item 2.  Changes in Securities and Use of Proceeds                                                              22
Item 3.  Defaults Upon Senior Securities                                                                        22
Item 4.  Submission of Matters to a Vote of Security Holders                                                    22
Item 5.  Other Information                                                                                      22
Item 6.  Exhibits and Reports on Form 8-K                                                                       22

Signatures                                                                                                      23
</TABLE>




<PAGE>




PART I - FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements.
<TABLE>
<CAPTION>


                                                                                                    SELECT MEDIA COMMUNICATIONS INC.
                                                                                                                      AND SUBSIDIARY

                                                                                                CONDENSED CONSOLIDATED BALANCE SHEET
                                                                                                                         (UNAUDITED)

                                                                                                                  September 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                    <C>
                                     ASSETS
                                     ------

CURRENT ASSETS
--------------
  Cash                                                                              $      2,579
  Accounts receivable, net                                                                 5,298
  Prepaid expenses and other current assets                                               52,093
  Inventories                                                                             38,073
                                                                                    ------------

       Total Current Assets                                                                            $   98,043

PROPERTY AND EQUIPMENT, Net                                                                               157,824
----------------------

OTHER ASSETS
  Reorganization value, net of accumulated amortization of
   $998,032                                                                            1,446,126
  Deposit on pending acquisitions                                                        545,000
  Intangibles, net of accumulated amortization of $65,973                                 59,027
                                                                                    ------------

   Total Other Assets                                                                                   2,050,153
                                                                                                       ----------

   TOTAL ASSETS                                                                                        $2,306,020
                                                                                                       ==========
</TABLE>


                                    See notes to condensed financial statements.


                                                                               3
<PAGE>

<TABLE>
<CAPTION>
                                                                                                    SELECT MEDIA COMMUNICATIONS INC.
                                                                                                                      AND SUBSIDIARY

                                                                                                CONDENSED CONSOLIDATED BALANCE SHEET
                                                                                                                         (UNAUDITED)

                                                                                                                  September 30, 2001
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                <C>
                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------

CURRENT LIABILITIES
-------------------
  Accounts payable and accrued expenses                                         $   5,128,229
  Notes payable - stockholders                                                        475,767
  Accrued settlement                                                                  350,000
  Reorganization liabilities, current portion                                         338,070
  Due to stockholder                                                                  170,700
  Notes payable                                                                        22,500
                                                                              ---------------

       Total Current Liabilities                                                                    $   6,485,266

OTHER LIABILITIES
-----------------
  Reorganization liabilities, net of current portion                                                    1,169,611
                                                                                                     ------------

       TOTAL LIABILITIES                                                                                7,654,877
                                                                                                     ------------

COMMITMENTS AND CONTINGENCIES
-----------------------------

STOCKHOLDERS' DEFICIT
---------------------
  Common stock - $.001 par value; 35,000,000 shares
    authorized, 17,487,683shares issued and outstanding                                17,487
  Additional paid-in capital                                                       13,306,480
  Accumulated deficit                                                             (18,672,824)
                                                                                 -------------

       TOTAL STOCKHOLDERS' DEFICIT                                                                     (5,348,857)
                                                                                                     ------------

       TOTAL LIABILITIES AND
        STOCKHOLDERS' DEFICIT                                                                        $  2,306,020
                                                                                                     ============
</TABLE>



                                    See notes to condensed financial statements.



                                                                               4
<PAGE>
<TABLE>
<CAPTION>
                                                                                                    SELECT MEDIA COMMUNICATIONS INC.
                                                                                                                      AND SUBSIDIARY

                                                                                                  CONDENSED STATEMENTS OF OPERATIONS
                                                                                                                         (UNAUDITED)

                                                                     For the Nine and Three Months Ended September 30, 2001 and 2000
------------------------------------------------------------------------------------------------------------------------------------
                                               Nine Months   Nine Months    Three Months     Three Months
                                               Ended Sept.   Ended Sept.      Ended Sept.     Ended Sept.
                                                30, 2001      30, 2000         30, 2001       30, 2000
                                              -----------------------------------------------------------
<S>                                           <C>            <C>            <C>              <C>
SALES                                         $    114,178   $   530,636    $          --    $    166,579
-----

COST OF SALES                                       75,007       318,313               --          62,671
-------------                                 ------------   -----------    -------------    ------------
       GROSS PROFIT                                 39,171       212,323               --         103,908

SELLING, GENERAL, AND
----------------------
 ADMINISTRATIVE EXPENSE                          2,365,823     4,379,037          443,101       1,041,411
 ----------------------                       ------------   -----------    -------------    ------------

OPERATING LOSS                                  (2,326,652)   (4,166,714)        (443,101)       (937,503)
                                               -----------   -----------      -----------    ------------

OTHER INCOME (EXPENSE)
---------------------
  Other income                                      26,074       (66,740)           3,008         (92,052)
  Loss on disposal of investment                  (407,883)           --          (60,750)             --
  Interest expense                                (163,654)     (114,200)         (50,961)        (34,396)
                                              ------------   -----------    -------------    ------------

TOTAL OTHER INCOME
 (EXPENSE)                                        (545,373)     (180,940)        (108,703)       (126,448)
                                              ------------   -----------    -------------    ------------

NET LOSS                                      $ (2,872,025)  $(4,347,654)   $    (551,804)   $ (1,063,951)
                                              ============   ===========    =============    ============

PER SHARE DATA
--------------
  Basic and diluted net loss per
   common share                                     $(0.18)       $(0.37)          $(0.03)         $(0.08)
                                                    ======        ======           ======          ======

  Weighted Average Common Shares
   Outstanding                                  16,109,343    11,653,979       17,408,879      13,676,918
                                              ============   ===========    =============    ============
</TABLE>

                                    See notes to condensed financial statements.



                                                                               5
<PAGE>

<TABLE>
<CAPTION>
                                                                                                    SELECT MEDIA COMMUNICATIONS INC.
                                                                                                                      AND SUBSIDIARY

                                                                                                  CONDENSED STATEMENTS OF CASH FLOWS
                                                                                                                         (UNAUDITED)

                                                                               For the Nine Months Ended September 30, 2001 and 2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                    2001                2000
                                                                                  ------------------------------
<S>                                                                               <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
 Net loss                                                                         $(2,872,025)       $(4,347,654)
                                                                                  -----------        -----------
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Loss on disposal of Subsidiary, net of cash surrendered                           408,193                 --
    Stock-based compensation                                                          525,808            273,000
    Depreciation and amortization                                                     378,615            576,001
    Accrued interest                                                                   39,521                 --
    Increase in allowance for doubtful accounts                                            --            262,545
  Changes in assets and liabilities:
    Accounts receivable                                                              (108,941)            (5,182)
    Reorganization liabilities                                                             --            (95,079)
    Prepaid expenses and other current assets                                         (22,406)           (95,087)
    Accounts payable and accrued expenses                                           1,148,677          1,123,448
                                                                                  -----------        -----------

       TOTAL ADJUSTMENTS                                                            2,369,467          2,039,646
                                                                                  -----------        -----------

       NET CASH USED IN OPERATING ACTIVITIES                                         (502,558)        (2,308,008)
                                                                                  -----------        -----------

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
  Purchases of property and equipment                                                 (20,377)          (163,133)
  Purchase of Sigma Sound Services Inc., net of cash acquired                              --           (198,600)
  Deposit on acquisition                                                             (320,000)                --
  Purchase of intangible assets                                                           --            (125,000)
                                                                                  -----------        -----------

       NET CASH USED IN INVESTING ACTIVITIES                                      $  (340,377)       $  (486,733)
                                                                                  -----------        -----------
</TABLE>


                                    See notes to condensed financial statements.


                                                                               6

<PAGE>

<TABLE>
<CAPTION>
                                                                                                    SELECT MEDIA COMMUNICATIONS INC.
                                                                                                                      AND SUBSIDIARY

                                                                                       CONDENSED STATEMENTS OF CASH FLOWS, Continued
                                                                                                                         (UNAUDITED)

                                                                               For the Nine Months Ended September 30, 2001 and 2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                               2001             2000
                                                                           -----------------------------
<S>                                                                        <C>                     <C>
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
  Advances from stockholder                                                $  748,738        $ 2,733,900
  Advance from officer                                                         94,441                 --
  Repayments from shareholders                                                     --            166,000
  Payments of capital lease obligations                                            --            (73,230)
  Repayments of notes payable                                                      --            (22,025)
                                                                           ----------        -----------
NET CASH PROVIDED BY FINANCING
  ACTIVITIES                                                                  843,179          2,804,645
                                                                           ----------        -----------
NET (DECREASE) INCREASE IN CASH                                                   244              9,904

CASH AT BEGINNING OF PERIOD                                                     2,335                344
---------------------------                                                ----------        -----------

CASH AT END OF PERIOD                                                      $    2,579        $    10,248
---------------------                                                      ==========        ===========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
-------------------------------------------------

 Cash paid during the periods for:
    Interest                                                               $       --        $    31,184

 Noncash investing and financing activities:

    Common stock issued to settle due to stockholder                       $  837,332        $ 1,407,000
    Acquisition of equipment thru capital leases                           $   40,767
    Conversion of note payable common stock                                $1,522,200
    Conversion of note payable stockholder to common stock                 $1,125,000
    Common stock issued in settlement of accounts payable                  $  250,000
    Sigma Sound Services, Inc. acquisition:
      Issuance of note payable                                                               $   400,000
      Deposit applied to the purchase price                                                  $   400,000
</TABLE>


                                    See notes to condensed financial statements.

                                                                               7
<PAGE>


                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1 - Organization, Basis of Presentation and Management Plans
         --------------------------------------------------------

       The Company and Nature of Business
       ----------------------------------
       Select Media Communications Inc. ("Select Media" or the "Company"), a New
       York integrated media company, was organized in September 1981. On
       October 13, 1995, the Company filed for voluntary petition for
       reorganization pursuant to Chapter 11 of Title 11 of the United States
       Bankruptcy Code. The petition was filed in the United States Bankruptcy
       Court for Southern District of New York and its plan of reorganization
       was confirmed on August 28, 1997. In the period from the Company's
       bankruptcy filing in October 1995 until September 1998, the Company was
       essentially dormant. In September 1998, the Company reactivated its
       marketing efforts and began marketing its vignette products to
       advertisers.

       On January 18, 2000, the Company purchased all of the issued and
       outstanding common stock of Sigma Sound Services, Inc. ("Sigma") pursuant
       to the terms of a stock purchase agreement. As described in Note 6, the
       Company determined that effective April 1, 2001 control of Sigma became
       temporary when the Company defaulted on various payments due to the
       former owner of Sigma. The Company negotiated a settlement of this matter
       in which the ownership of Sigma reverted back to the former owner.
       Pursuant to "Statement of Financial Accounting Standard" No. 94
       "Consolidation of All Majority Owned Subsidiaries", the Company has
       de-consolidated Sigma effective April 1, 2001.

       Select Media is actively pursuing the acquisition of content providers,
       production and post-production houses to become a vertically integrated
       provider and distributor of video/television programming and recorded
       music.

       On April 27, 2001, the Board of Directors elected James F. Mongiardo
       (formerly Vice Chairman) as Chairman, Chief Executive Officer and interim
       Chief Financial Officer. Mitch Gutkowski, formerly Chairman and Chief
       Executive Officer, was elected Chief Creative Officer and Secretary.

       Reclassifications
       -----------------
       Certain accounts in the prior period financial statements have been
       reclassified for comparative purposes to conform to the presentation in
       the current period financial statements. These reclassifications have no
       effect on previously reported operations.

       Going Concern Uncertainty
       -------------------------
       As shown in the accompanying financial statements, the Company incurred a
       net loss of $2,872,025 during the nine months ended September 30, 2001,
       and, as of that date, the Company's current liabilities exceeded its
       current assets by $6,387,223 and its total liabilities exceeded its total
       tangible assets by $6,854,010. Management of the Company is developing a



                                                                               8
<PAGE>



                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1 - Organization, Basis of Presentation and Management Plans, continued
         --------------------------------------------------------

       Going Concern Uncertainty, continued
       -------------------------
       plan to reduce its liabilities and raise equity capital for acquisitions
       through the issuance of additional common stock through private or public
       offerings conforming to the requirements of Securities Acts. The Company
       has received a best efforts letter of intent from Lloyds Bahamas
       Securities Ltd. ("Lloyds") for an additional $3 million in financing once
       the Company's common stock is eligible for quotation on the OTC Bulletin
       Board, which occurred on April 20, 2001. There can be no assurance that
       such a financing will be completed or, if completed, be on favorable
       terms. Under this plan the Company intends to use any funds raised to
       fund operations and to make strategic acquisitions through cash and stock
       transactions. Management hopes that these acquisitions will enable the
       Company to generate positive cash flows from operations. If the Company
       is unable to raise the appropriate funds it will not be able to make any
       acquisitions nor will the Company be able to fund operations through
       December 31, 2001.

       There can be no assurances that the Company will be successful in its
       attempts to raise sufficient capital essential to its survival. To the
       extent that the Company is unable to generate or raise the necessary
       operating capital it will become necessary to further curtail or cease
       operations. These matters raise substantial doubt about the Company's
       ability to continue as a going concern. However, the accompanying
       financial statements have been prepared on a going concern basis, which
       contemplates the realization of assets and satisfactions of liabilities
       in the normal course of business. The financial statements do not include
       any adjustments relating to the recovery of the recorded assets or the
       classification of the liabilities that might be necessary should the
       Company be unable to continue as a going concern.

       Basis of Presentation
       ---------------------
       Our accompanying unaudited financial statements reflect all adjustments,
       which are, in the opinion of management, necessary to a fair statement of
       the results of the interim periods presented. All such adjustments are of
       a normal recurring nature. The results of operations for the three and
       nine months ended September 30, 2001 are not necessarily indicative of
       the results that may be expected for any other interim period or the full
       year. The financial statements should be read in conjunction with the
       notes to the financial statement and in conjunction with the Company's
       audited financial statements contained in its Annual Report on Form
       10-KSB for the year ended December 31, 2000. The accounting policies used
       to prepare the condensed financial statements are consistent with those
       described in the December 31, 2000 financial statements.




                                                                               9
<PAGE>



                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1 - Organization, Basis of Presentation and Management Plans, continued
         --------------------------------------------------------

       New Accounting Standards
       ------------------------
       During the period ended March 31, 2001, the Company adopted SFAS No. 133.
       SFAS No. 133 establishes accounting and reporting standards for
       derivative instruments, including certain derivative instruments embedded
       in other contracts (collectively referred to as derivatives), and for
       hedging activities. This Statement requires that an entity recognize all
       derivatives as either assets or liabilities in the condensed consolidated
       balance sheets and measure those instruments at fair value. The
       accounting for changes in the fair value of a derivative instrument
       depends on its intended use and the resulting designation. Implementation
       of SFAS No. 133 did not have any material impact on the financial
       statements of the Company.

       In July 2001, the Financial Accounting Standards Board issued SFAS No.
       141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
       Intangible Assets." SFAS No. 141 provides guidance on the accounting for
       a business combination at the date a business combination is completed.
       The statement requires the use of the purchase method of accounting for
       all business combinations initiated after June 30, 2001, thereby
       eliminating use of the pooling-of-interests method. SFAS No. 142 provides
       guidance on how to account for goodwill and intangible assets after an
       acquisition is completed. The Company does not expect the implementation
       of SFAS No. 141 and 142 to have a material impact on the financial
       statements of the Company.


NOTE 2 - Liquidity and Funding Agreements
         --------------------------------

       On December 5, 2000, the Company received a best efforts letter of intent
       from Lloyds for an additional $3 million in financing once the Company's
       common stock is eligible for quotation on the OTC Bulletin Board, which
       occurred on April 20, 2001.

       The Company has received total cash advances in the amount of $539,236
       from Lloyds prior to the eligibility for quotation of its common stock on
       the OTC Bulletin Board. On May 7, 2001 the Company issued 819,172 shares
       of common stock in settlement of these advances. From May 2, 2001 through
       November 6, 2001, the Company received an additional $ 223,842 from
       Lloyds. On July 30, 2001, 100,000 shares of common stock were issued with
       a balance of 65,203 common shares due for the settlement of these May 2,
       2001 through November 6, 2001 advances.






                                                                              10
<PAGE>




                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 2 - Liquidity and Funding Agreements, continued
         --------------------------------

       On October 24, 1999, the Company received a non-binding letter of intent
       from Valley Forge Securities ("Valley Forge", formerly Bryn Mawr
       Investment Group, Inc.) to provide up to $10 million in financing to the
       Company through private or public offerings of securities, to be used for
       working capital and acquisitions. On May 29, 2001, the Company engaged
       Meridian Capital Markets ("Meridian") to identify sources of debt or
       equity financing of $ 12 million for the purpose of acquiring Betelgeuse
       Productions, LLC. There can be no assurances that either Valley Forge or
       Meridian will be successful.


NOTE 3 - Stockholders' Deficiency
         ------------------------

       In October 1999 the Company issued 1,000,000 shares of its common stock
       to Lloyds and or its designees for financial advisory services provided
       to the Company, as part of the Funding agreement with Lloyds dated
       October 22, 1999 ("Funding Agreement"). Accordingly, the Company recorded
       an expense of $220,000 ($0.22 per share based upon the fair value of the
       common stock at the time of issuance) during the year ended December 31,
       1999. As a result of the delay in the Company's common stock being
       eligible for quotation on the OTC Bulletin Board, Lloyds provided
       additional services and assumed greater responsibilities, and
       accordingly, during March 2001, the Company agreed to issue Lloyds
       676,617 additional shares of common stock for the services provided. The
       Company recorded an expense of $338,309 ($0.50 per share based upon the
       fair value of the common stock at the time of issuance) during the nine
       months ended September 30, 2001.

       The Company has also received a separate commitment from Lloyds for the
       $500,000 down payment for the Betelgeuse Productions, LLC acquisition of
       which $498,102 has been received. During the period ended September 30,
       2001, the Company issued 298,102 shares of its Common Stock as settlement
       of $298,102 of advances.

       During 2000, the Company borrowed from International Electronic
       Securities Trading, Ltd. a total of $1,522,200 pursuant to a Loan
       Agreement and Securities Pledge Agreement dated October 29, 2000.
       International Electronic Securities Trading, Ltd. elected to convert this
       debt into 1,522,200 shares of common stock on January 15, 2001.

       The Company issued 819,172 shares of common stock to Lloyds in settlement
       of Due to Stockholder in the amount of $539,236 during the period ended
       September 30, 2001.

       The Company issued 250,000 shares of common stock in settlement of
       accounts payable of $250,000 during the period ended September 30, 2001.





                                                                              11
<PAGE>



                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 3 - Stockholders' Deficiency
         ------------------------

       The Company issued 350,000 shares of common stock in settlement of notes
       payable stockholder of $1,125,000 (including $1,000,000 with respect to a
       Letter of Credit, Note 4) during the period ended September 30, 2001.

       During the period ended September 30, 2001, the Company issued 225,000
       shares of common stock to three consultants for investor relations
       services performed valued at $112,000. The Company has also agreed to
       issue an additional 150,000 shares of unrestricted common stock to one of
       consultants for future services.

       In November 2000 when the Company vacated its offices at 666 Third
       Avenue, certain equipment under three capital leases was returned to the
       lessor and the Company was released from any future obligations under the
       capital leases. In May 2001, the Company issued the lessor 150,000 shares
       of common stock as consideration for releasing the Company of its
       obligation. These shares were issued on May 7, 2001 and, accordingly, the
       Company recorded a $75,000 charge to operations in the second quarter of
       2001.

       On July 30, 2001, the Company issued 100,000 shares of common stock to
       Lloyds in settlement of advances previously made.

       On September 28, 2001 the Company issued 45,000 shares of common stock in
       settlement of disposal of Sigma as fully described in Note 6.


NOTE 4 - Litigation
         ----------

       In addition to the following, the Company is involved in litigation
       through the normal course of business. The Company believes that the
       resolution of these matters will not have a material adverse effect on
       the financial position of the Company.

       Former Landlord
       ---------------
       In November, 1999, 405 Lexington, L.L.C. (the " Former Landlord") began
       an action in New York City Landlord-Tenant Court alleging that Select
       Media had breached its lease and seeking the payment of use and occupancy
       of offices located at 666 Third Avenue, New York, NY ("Offices"). In May
       2000, the Company began an action in New York Supreme Court against the
       Landlord seeking an injunction to permit completion of the build-out of
       the office space and damages for loss of its SITN business. On October
       30, 2000, Select Media vacated the offices.

       In February 2001, the Company entered into a mutual release with the
       Former Landlord and both actions were dismissed with prejudice. The
       Former Landlord, after drawing down on a $1,000,000 Letter of Credit
       (which was converted to a note payable to stockholder and was converted
       into 311,111 shares of common stock on May 7, 2001), paid $700,000 of the
       amount due to the contractors involved in the build-out of the Company's
       space. The Company is responsible for any additional amounts claimed by
       the contractors as described in the following paragraph.





                                                                              12
<PAGE>



                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

       Former Contractors
       ------------------
       In September 2000, a contractor began an action in New York Supreme Court
       for services rendered in the build-out of the Company's leased space at
       666 Third Avenue. Another contractor filed a subsequent action, also in
       New York Supreme Court, relating to its services with respect to this
       build-out. Upon motion by the Company, the two actions were consolidated.
       Approximately $1,200,000 is claimed in the consolidated actions. As
       discussed above, the landlord has paid $700,000 of this amount with the
       Company responsible for any additional amounts determined to be owed to
       the contractors. The Company is defending this action. The judgment is
       measurable and some payment is probable, therefore, the Company recorded
       $500,000 expense during the years ended December 31, 1999 and 2000 and is
       included in accrued expenses at June 30, 2001.

       Former Consultant
       -----------------
       In November 2000, Commonwealth Partners LP instituted an action in the
       Supreme Court of New York seeking damages in excess of $600,000 for
       alleged financial advisory services rendered to the Company. The Company
       believes this action is without merit and has filed its answer in
       opposition. However, the Company is unable to predict the outcome of this
       claim and, accordingly, no adjustment has been recorded in the
       consolidated financial statements in response to this claim.


NOTE 5 - Commitments and Contingencies
         -----------------------------

       Pending Acquisition - ANTRA Holdings Group
       -------------------   --------------------

       On November 9, 2001 the Company reached an agreement in principle with
       90% of the shareholders of ANTRA Holdings Group (Pink Sheets:RECD) to
       exchange their stock for shares in the Company. ANTRA is a full service
       record and publishing company focusing on the resourcing of talent and
       marketing of new music together with the production, acquisition,
       licensing, publishing and distribution of high quality recorded music in
       the music genres of Urban Music - which includes Urban/Rap/Hip-Hop and
       Rhythm and Blues, with some interest in Rock and Pop. ANTRA Holdings
       Group will become a new division of the Company called ANTRA
       Entertainment. Two million seven hundred fifty thousand (2,750,000)
       shares of restricted Company stock will be used for the exchange of all
       of the outstanding shares of ANTRA Holdings Group.



                                                                              13
<PAGE>




                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

       NOTE 5 -Commitments and Contingencies, continued
               -----------------------------

       In connection with the pending acquisition of ANTRA Holdings Group, the
       Company subsequently reached agreement in principle to convert the ANTRA
       Holdings Group convertible debt into $ 7 million of Select Media
       convertible debt. This debt is redeemable at any time at 115% of the
       outstanding principle. Conversion is subject to a volume restriction
       agreement as are the shares being exchanged with the shareholders of
       ANTRA Holdings Group. Select Media, as part of this agreement reached in
       principle, will also issue to the debt holders one million warrants to
       purchase stock at $ 2.50 callable by the Company at $ 7.50. A convertible
       loan of $ 250,000 as bridge financing to operate ANTRA is also being
       provided as part of this transaction agreed to in principle. This loan is
       convertible into Select Media common stock. The Company has also agreed,
       as part of this transaction, to file a registration statement covering
       the common stock underlying the above convertible debt, convertible loan
       and warrants.

       Pending Acquisition - Betelgeuse Productions, LLC
       -------------------   ---------------------------

       On December 6, 2000, the Company and Betelgeuse Productions, LLC
       ("Betelgeuse"), a full service television and video production and
       post-production business in New York signed a definitive Asset Purchase
       Agreement (the "Definitive Agreement"), whereby the Company will purchase
       all of the assets of Betelgeuse for $10,000,000 in cash. As per the
       Definitive Agreement, the Company made a non-refundable down payment of
       $525,000 to Betelgeuse. Lloyds provided $498,102 of the down payment in
       exchange for 498,102 shares of restricted Common Stock of the Company.
       The balance of the purchase price will be due at a closing to be held
       within six (6) months of completion of certain due diligence (the "Due
       Diligence Completion Date"). Pursuant to the Definitive Agreement, the
       Due Diligence Completion Date is defined as the date that the Company
       completes its due diligence; provided, however, that such date shall not
       be more than forty-five (45) days from the date that the financial
       records were made available to the Company. The Company does not yet have
       a commitment from a funding source for the balance of the purchase price.
       There is no assurance that the acquisition will be completed by the
       Company and Betelgeuse. If the Company cannot raise the additional
       $9,500,000 to close on this acquisition within the specified time frame,
       it is reasonably possible that the Company would be unable to complete
       the acquisition. As a result, the carrying amount of the deposit on
       pending acquisition in the amount of $525,000 may be reduced materially
       in the near term.




                                                                              14
<PAGE>




                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 5 - Commitments and Contingencies, continued
         -----------------------------

       Bankruptcy proceedings
       ----------------------
       On August 28, 1997 the United States Bankruptcy Court of the Southern
       District of New York confirmed the Company's Plan of Reorganization. The
       plan stipulated payments totaling $2,444,158 to be paid to certain
       secured, administrative and unsecured creditors. It was determined that
       the Company's reorganization value computed immediately before August 28,
       1997, the date of plan confirmation, was $2,444,158. The Company adopted
       fresh start reporting because holders of existing voting shares
       immediately before filing and confirmation of the plan received less than
       50% of the voting shares of the emerging entity and its reorganization
       value is less than its post petition liabilities and allowed claims.

       The Company's policy is to amortize the reorganization value using the
       straight-line method over the remaining estimated economic life, which is
       ten (10) years. It is reasonably possible that the estimates of
       anticipated future discounted cash flows from operations, the remaining
       estimated economic life of the reorganization value, or both will be
       reduced significantly in the near term due to the loss of Sigma, the
       possibility of not closing on the Betelgeuse or other acquisitions and
       the inability to raise capital. As a result, the carrying amount of the
       reorganization value of $1,446,126, net of accumulated amortization of
       $998,032 may be reduced materially in the near term.

       Payroll Taxes
       -------------
       Select Media has not filed payroll tax returns from October 1, 1998
       through March 31, 2000. As of September 30, 2001, the past due amounts
       have been included in accrued expenses totaling approximately $ 1,358,260
       and consist of payroll taxes owed and estimated penalties and interest.
       Beginning April 2000, Select Media began using a payroll service to
       process their current payroll and file and pay all payroll tax returns
       and applicable taxes. At any time the Internal Revenue Service could
       declare Select Media in default of their fiduciary responsibility and
       could file a tax lien on the Company's assets or take other action
       against the Company and its responsible officers, which would have a
       material adverse effect on the Company's business.





                                                                              15
<PAGE>


                                                SELECT MEDIA COMMUNICATIONS INC.
                                                                  AND SUBSIDIARY

                                         NOTES TO CONDENSED FINANCIAL STATEMENTS
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 6 - Disposal of Subsidiary
         ----------------------

       On April 11, 2001, the Company entered into an agreement with the former
       owner of Sigma whereby, extending the due dates of: (i) the $345,637
       included in note payable in connection with the acquisition of Sigma,
       (ii) and $333,904 due to officer, to May 31, 2001.

       On June 26, 2001, the Company received a Notice of Default pursuant to
       the April 11, 2001 agreement. On September 28, 2001 the matter was
       resolved. The Company agreed with the former owner that control and
       ownership of Sigma will revert to the former owner. The Company further
       agreed to pay the former owner $ 350,000 pursuant to a note with interest
       at 8% payable in four equal installments in 2002 and 2003. The Company
       further agreed to issue 45,000 restricted common shares in settlement of
       two Company employment contracts with employees of Sigma. Since control
       of Sigma was lost in advance of the September 28, 2001 settlement, the
       Company has de-consolidated Sigma effective April 1, 2001.

       Since the Company's investment in Sigma was negative as of April 1, 2001,
       the Company did not record its equity in the losses of Sigma for the
       period April 1, 2001 to September 30, 2001. The Company has accrued the
       additional costs relating to the disposal of Sigma of approximately
       $350,000 at September 30, 2001. The net book value of Sigma's assets and
       liabilities as reflected in the Company's consolidated balance sheet as
       of April 1, 2001 was $(2,867). Accordingly, the Company recorded a loss
       on disposal of its investment in Sigma of $407,833, consisting of the
       negative book value plus the estimated additional costs of the settlement
       provisions and disposal. Pro forma financial information as if Sigma were
       not consolidated for all periods presented is as follows:
<TABLE>
<CAPTION>
                              Nine Months Ended Sept. 30, 2001                Nine Months Ended Sept. 30, 2000
                       -----------------------------------------------------------------------------------------------
                                      Pro Forma                                      Pro Forma
                          Actual     Adjustments     Pro Forma      Actual          Adjustments       Pro Forma
                       ------------------------------------------------------------------------------------------------
<S>                    <C>           <C>           <C>          <C>                 <C>              <C>
Sales                  $   114,178    $(100,983)   $    13,195  $     530,636       $  (359,929)     $   170,707
Cost of sales               75,007      (75,007)            --        318,313          (214,158)         104,155
                       -----------    ---------    -----------  -------------       -----------       ----------
Gross profit                39,171      (25,976)        13,195        212,323          (145,771)          66,552
Operating expenses       2,365,823     (312,598)     2,053,225      4,379,037          (512,990)       3,866,047
                       -----------    ---------    -----------  -------------       -----------       ----------

       Operating loss   (2,326,652)     286,622     (2,040,030)    (4,166,714)          367,219       (3,799,495)

Loss on abandonment
 of Sigma                 (407,883)          --       (407,883)            --                --               --
Other income                26,074           --         26,074        (66,740)          (26,442)         (93,182)

Interest expense          (163,564)       3,181       (160,383)      (114,200)               --         (114,200)
                       -----------    ---------    -----------  -------------       -----------

       Net loss        $(2,872,025)     289,803    $(2,582,222) $  (4,347,654)      $   340,777      $(4,006,877)
                       ===========    =========    ===========  =============       ===========      ===========

Basic and diluted net
loss per share              $(0.18)                     $(0.16)        $(0.37)                            $(0.34)
                            ======                      ======         ======                         ==========
</TABLE>








                                                                              16
<PAGE>



Item 2.  Management's Discussion and Analysis or Plan of Operation.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of
Operations may be deemed to include 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, that involve risk and
uncertainty, including financial, regulatory environment and trend projections,
estimated costs to complete or possible future revenues from the Company's
expansion plans, the likelihood of successful completion of such plans, as well
as any statements preceded by, followed by, or that include the words "intends,"
"estimates," "believes," "expects," "anticipates," "should," "could," or similar
expressions; and other statements contained herein regarding matters that are
not historical facts. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that its expectations
will be achieved. The important factors that could cause actual results to
differ materially from those in the forward-looking statements below (the
"Cautionary Statements") include, without limitation: (1) the ability of the
Company to raise additional equity capital; (2) the ability of the Company to
implement its new business plan as a holding Company whose purpose is to acquire
content providers, production and post-production houses to enable the Company
to be a vertically integrated provider and distributor of video programming and
recorded music; (3) the ability of the Company to expand its product offerings;
(4) the ability of the Company to assimilate personnel and operations of the
companies it acquires; and (5) other risks referenced from time to time in the
Company's filings with the SEC, including the Form 10-KSB for the year ended
December 31, 2000. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the Cautionary Statements. The Company does not
undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.

The following discussion and analysis relates to the financial condition and
results of operations of the Company for the nine months ended September 30,
2001, and 2000. The information should be read in conjunction with the
"Management's Discussion and Analysis" and consolidated financial statements and
notes thereto contained herein and in the Form 10-KSB for the year ended
December 31, 2000.

Overview

Select Media is a New York corporation whose common stock is currently traded on
the OTC Bulletin Board under the symbol "SMTV.OB." Select Media began in the
business of producing and distributing "vignettes," which are short-form
(thirty-second) informational programs distributed by particular sponsors for
viewing during regular programming. In 1998, Select Media hired personnel to
provide services to worldwide news broadcasters and act as a television news
agency under the name "Select International Television Network" ("SITN") to
produce and distribute news segments for sale to local and foreign news
broadcasters. Because of an inability to use studio space in their facility and
the subsequent move to new premises on October 30, 2000, the Company has ceased
operations of SITN as of October 30, 2000.




                                                                              17
<PAGE>



On January 18, 2000, the Company purchased all of the issued and outstanding
common stock of Sigma Sound Services, Inc. ("Sigma") pursuant to the terms of a
stock purchase agreement. As described in Note 6, the Company has determined
that effective April 1, 2001 control of Sigma became temporary when the Company
defaulted on various payments due to the former owner of Sigma. On September 28,
2001 the matter was resolved. The Company agreed with the former owner that
control and ownership of Sigma will revert to the former owner. The Company
further agreed to pay the former owner $ 350,000 pursuant to a note with
interest at 8% payable in four equal installments in 2002 and 2003. The Company
further agreed to issue 45,000 restricted common shares in settlement of two
Company employment contracts with employees of Sigma. Pursuant to "Statement of
Financial Accounting Standard" No. 94 "Consolidation of All Majority Owned
Subsidiaries", the Company has de-consolidated Sigma effective April 1, 2001.

In March 2000, Select Media purchased contracts and other assets of After Hours
Productions, Inc. ("AHP"), for $125,000 in cash. AHP creates custom music and
video products AHP has produced one new album of musical works for sale by
Select Media through shopping channels and direct response television ads since
the acquisition. This acquisition was accounted for as a purchase.

The Company believes that, given the changes in the structure of television
broadcasting, including, but not limited to, the creation of a number of
alternative television networks and the resulting scarcity of advertising
airtime available to local television stations, the Company can better serve its
stockholders by becoming the owner of entertainment content providers. By owning
content providers, the Company can take advantage of the changing distribution
systems offered by broadcast, cable and Internet distribution of its product.

Competition

Select Media faces competition from some of the largest entertainment companies
in the United States. It is difficult to estimate the size of the vignette
market. The Company is not aware of any other reporting companies involved in
the vignette business. The Company believes that competition in its business
comes not from other producers of vignettes, but from other users of scarce
airtime. One of the most significant developments in the broadcast television
industry in the 1990's has been the growth of alternative broadcast networks,
such as Fox, WB and UPN. Before this development, television stations that were
not affiliates of the three major television networks (CBS, NBC and ABC) were
independent local stations, each of which had substantial amounts of airtime to
sell to the Company and its customers. Today, most formerly independent stations
are affiliated with one of the new networks. As a result, the network, in
exchange for providing programming, gets to sell a significant portion of the
affiliate's broadcast airtime. Therefore, the affiliate has less airtime to sell
itself. Scarcity of a commodity tends to increase the price. As a result, the
cost of airtime has dramatically increased.

The entertainment market is rapidly evolving and intensely competitive.
Increased competition is likely to result in price reductions, reduced gross
margins and loss of market share, any of which could seriously harm Select
Media's net sales and results of operations. Select Media expects competition to
intensify in the future as additional distribution channels for entertainment
product are opened. In particular, Select Media believes that the use of the
Internet for distribution of entertainment product is both an opportunity and a
challenge. With so many entertainment choices, Select Media faces the challenge
of adapting its core business to Internet entertainment. Select Media expects
that its acquisition of content providers will enable it to adapt to the
Internet entertainment challenge, because Select Media believes that Internet
technology is developing faster than content can be produced. Although the
technology exists to provide a rich entertainment experience via the Internet,
Select Media believes that there is not sufficient high quality content
available for users. Select media intends to provide that content.




                                                                              18
<PAGE>

In line with this strategy, in 2000 Select Media signed a letter of intent to
purchase all the assets and liabilities of Betelgeuse Productions, LLC.
Betelgeuse has the ability to create entertainment content for broadcast, cable
and Internet and to adapt existing product for use as Internet content. On
December 6, 2000 Select Media signed a definitive Asset Purchase Agreement (the
"Definitive Agreement") to acquire all the assets and liabilities of Betelgeuse
Productions, LLC for $10 million. There is an initial $500,000 down payment,
which has been paid. The balance of $9.5 million is due six months from the due
diligence completion date (see Note 5 to the condensed financial statements).

As a further part of its strategy to acquire content providers and production
and post-production houses as a vertically integrated provider and distributor
of programming and high-quality recorded music through traditional media and the
new medium of the Internet, the Company on November 9 reached an agreement in
principle with 90% of the shareholders of ANTRA Holdings Group (Pink
Sheets:RECD) to exchange their stock for shares in the Company. Subsequently,
the Company reached agreement in principle to convert the ANTRA convertible debt
into $7 million of Select Media convertible debt. The music record business
consists of several functions including publishing, production, manufacturing,
licensing, distribution and promotion. ANTRA competes with many larger full
service corporations in the music record business but focuses on the smaller
sub-segment music genre of Urban Music- primarily Urban/Rap/Hip-Hop. ANTRA has
formed joint ventures in the past to distribute and promote its records. ANTRA
has a distribution agreement and services agreement with Artemis Records.
Artemis distributes records including distribution through RED Distribution,
Inc., which is partially owned by Edel and Sony Corporation (NYSE:SNE).

Market Strategy

Select Media markets its remaining vignette products to large advertisers
directly to the marketing departments of these companies. Select Media uses its
own internal staff for such marketing. The cost of advertising airtime has the
greatest impact on whether the Company can sell its vignette product. For each
airing of a vignette, the customer has to purchase sufficient airtime to
broadcast both the vignette and the customer's own advertisement. The greater
the cost of airtime, the higher the cost to the customer. The Company only
resells airtime to its vignette customers to air vignettes. The Company is not
in the business of reselling airtime to third parties.

Select Media has 4 full time employees as September 30, 2001. On October 30,
2000, Select Media moved from a facility at 666 Third Avenue, New York, New
York, which was used as the principal corporate office and the site of its
studio facilities, to 44 E. 32nd Street in New York, and in February, 2001 to
475 Park Avenue South, 10th Floor in New York, subletting these latter two
spaces from Betelgeuse. In November, 2001 the Company moved to 575 Madison
Avenue, Suite 1006 in New York.





                                                                              19
<PAGE>

RESULTS OF OPERATIONS

Revenues

The following table sets forth certain items from the Registrant's consolidated
statements of operations as a percentage of net revenues for the periods
indicated:
<TABLE>
<CAPTION>
                                                                 For the Year
                                                                     Ended             For the Nine Months
                                                                 December 31,          Ended September 30,
                                                                      2000              2001             2000
                                                                ----------------- ---------------- -----------------
      <S>                                                       <C>               <C>              <C>
       Net revenues                                                   100.0%            100.0%           100.0%
       Cost of revenues                                                95.5%             65.7%            60.0%
       Gross profit                                                     4.5%             34.3%            40.0%

       Selling, general and administrative                           1251.9%          2,072.0%           825.2%

       Operating loss                                               (1247.4)%         (2037.7)%         (785.2)%
       Other income and expense, net                                  (18.9)%          (477.7)%          (34.1)%

       Loss before income taxes                                     (1266.3)%        (2,515.4)%         (819.3)%
       Provision for (benefit from) income taxes                        0.3%              0%               0%
       Net loss                                                     (1266.6)%        (2,515.4)%         (819.3)%
</TABLE>




                                                                              20
<PAGE>



The Company's net revenues were derived mainly from the sales of vignettes,
video press releases and SITN prior to 2001. With the decision to cease SITN
operations on October 30, 2000, revenues have been minimal. In the nine months
ended September 30, 2001, net revenues decreased by $415,858 or 78.4% to
$114,178 from $ 530,636 in the nine months ended September 30, 2000. The
decrease in net revenues during the first nine months of 2001 was due to a loss
of SITN revenues and the de-consolidation of Sigma, which is more fully
described in Note 6 to the notes to condensed financial statements.

In the three months ended September 30, 2001, net revenues decreased by $166,579
or 100% to zero dollars from $166,579 the three months ended September 30, 2000.
The decrease in net revenues during the first three months of 2001 was due to a
loss of SITN revenues and the de-consolidation of Sigma (see Note 6).

Gross Profit

Gross margins during the nine months ended September 30, 2001 were 34.3%
compared to 40.0% for the nine months ended September 30, 2000 primarily related
to the disposition of Sigma.

Cost of revenues for the nine months ended September 30, 2001 and 2000 consisted
primarily of costs associated with audio studio personnel. The resulting gross
profit fluctuates based on factors such as salary expense, editing and
marketing. Greater use of the audio studio space resulted in higher gross
margins.

Gross margins during the three months ended September 30, 2001 was zero compared
to 62.4% for the three months ended September 30, 2000 primarily related to the
deconsolidation of Sigma.

Cost of revenues for the three months ended September 30, 2001 was zero and the
cost of revenues for September 30, 2000 consisted primarily of costs associated
with audio studio personnel. The resulting gross profit fluctuates based on
factors such as salary expense, editing and marketing. Greater use of the audio
studio space resulted in higher gross margins.

Expenses

Total operating expenses were $2,365,823 in the nine months ended September 30,
2001 compared with $4,166,714 in the nine months ended September 30, 2000, for a
decrease of $1,800,891 or 43.2%. This decrease was attributable to the move by
the Company to much smaller facilities, a decrease in staff as the Company
restructured itself as well as the de-consolidation of Sigma.

Total operating expenses were $443,101 in the three months ended September 30,
2001 compared with $1,041,411 in the three months ended September 30, 2000, for
a decrease of $598,310 or 57.5%. This decrease was attributable to the move by
the Company to much smaller facilities, a decrease in staff as the Company
restructured itself as well as the de-consolidation of Sigma.

Losses

The Company incurred losses from operations of $(2,872,025) in the nine months
ended September 30, 2001 compared to $(4,347,654) in the nine months ended
September 30, 2000, for a decrease of $1,475,629 or 33.9%. This decrease was
attributable to the move by the Company to much smaller facilities, a decrease
in staff as the Company restructured itself.




                                                                              21
<PAGE>

The Company incurred losses from operations of $(551,804) in the three months
ended September 30, 2001 compared to $(1,063,951) in the three months ended
September 30, 2000, for a decrease of $512,147 or 48.1%. This decrease was
attributable to the move by the Company to much smaller facilities, a decrease
in staff as the Company restructured itself.

LIQUIDITY AND CAPITAL RESOURCES

Select Media has significant capital needs, which to date Select Media has met
through private sales of its equity and loans. Sales of common stock by the
Company at less than the current trading price could tend to depress prices.
Select Media will continue to need substantial infusions of capital, which it
expects to continue to fund primarily from private sales of its equity, loans,
or by a public offering of its equity or debt securities. On October 22, 1999,
Select Media received a best efforts letter of intent from Lloyds for $1 million
in additional financing in exchange for 4,500,000 shares of Common Stock at
$0.22 per share. During 2000 the Company raised an additional $259,300 from
Lloyds, which was converted into 259,300 shares of common stock and $1,522,200
in convertible debt from International Electronic Trading Securities, Ltd.,
which was converted into 1,522,200 shares of common stock on January 15, 2001.
Lloyds is an investment banking and securities brokerage business located in
Nassau, the Bahamas. During 2000, Lloyds raised additional equity capital for
the Company, in which Lloyds has assigned its interest to International
Electronic Trading Securities, Ltd. The Company has received a best efforts
letter of intent from Lloyds for an additional $3 million in financing once the
Company's common stock is eligible for quotation on the OTC Bulletin Board,
which occurred on April 20, 2001. The Company has received $539,236 from Lloyds
in advance of its eligibility for quotation of its common stock on the OTC
Bulletin Board, for which 819,172 shares of common stock were issued. From May
2, 2001 through November 6, 2001, the Company received an additional $ 223,842
from Lloyds. On July 30, 2001, 100,000 shares of common stock were issued with a
balance of 65,203 common shares due for the settlement of these May 2, 2001
through November 6, 2001 advances. The Company has also received a separate
commitment from Lloyds for the $500,000 down payment for the Betelgeuse
Productions, LLC acquisition of which $498,102 has been received for which
498,102 common shares were issued.

The Company has also received a non-binding letter of intent from Valley Forge
Securities, Inc. (formerly Bryn Mawr Investment Group, Inc.) to provide up to
$10 million in financing to the Company through private or public offerings of
securities, to be used for working capital and acquisitions. There can be no
assurances that such a financing will be completed or, if completed, be on
favorable terms.

On May 29, 2001, the Company engaged Meridian Capital Markets to identify
sources of debt or equity financing of $ 12 million for the purpose of acquiring
Betelgeuse Productions, LLC. There can be no assurances that such a financing
will be completed or, if completed, be on favorable terms.

The Company intends to use any funds raised to fund operations and to make
strategic acquisitions through cash and stock transactions. Management hopes
that these acquisitions will enable the Company to generate positive cash flows
from operations. If the Company is unable to raise the appropriate funds, it
will not be able to make any acquisitions nor will the Company be able to fund
operations through December 31, 2001. There can be no assurances that the
Company will be successful in its attempts to raise sufficient capital essential
to its survival. If the Company is unable to generate or raise the necessary
operating capital, it will become necessary to further curtail or cease
operations. These matters raise substantial doubt about the Company's ability to
continue as a going concern.



                                                                              22
<PAGE>



                            PART II-OTHER INFORMATION

Item 1. Legal Proceedings.

On October 30, 2000, the Company vacated its office space located at 666 Third
Avenue, New York, New York. Litigation with the former Landlord was resolved in
February 2001. The Landlord, after exercising on a $1 million security deposit
made by the Company, agreed to pay $700,000 to the contractors involved in the
build-out of the Company's space. The Company is responsible for any additional
amounts claimed by the contractors as described in the following paragraph. All
other claims by both the Company and the Landlord were dismissed with prejudice.

In September 2000, Micron General Contractors began an action in New York
Supreme Court for services rendered in the build-out of the Company's leased
space at 666 Third Avenue. A subsequent action was filed by Robert B. Samuels,
Inc., also in New York Supreme Court, relating to its services with respect to
this build-out. Upon motion by the Company, the Samuels action was consolidated
with the Micron action. Approximately $1,200,000 is claimed in the consolidated
actions. The Landlord has paid $700,000 of this amount with the Company
responsible for any additional amounts. The Company is defending this action.

In November 2000, Commonwealth Partners LP instituted an action in the Supreme
Court of New York seeking damages in excess of $600,000 for alleged financial
advisory services rendered to the Company. The Company believes this action is
without merit and has filed its answer in opposition. However, the Company is
unable to predict the outcome of this claim and, accordingly, no adjustment has
been recorded in the consolidated financial statements in response to this
claim.

Item 2. Changes in Securities.

         Not Applicable.

Item 3. Defaults Upon Senior Securities.

         Not Applicable.

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

        Not Applicable.

Item 5. Other Information.

       Not Applicable.

Item 6. Exhibits and Reports on Form 8-K.

       Not Applicable



                                                                              23
<PAGE>





                                   SIGNATURES



       In accordance with the requirements of the Exchange Act, the registrant
       caused this report to be signed on its behalf of the undersigned,
       thereunto duly authorized.


                                               SELECT MEDIA COMMUNICATIONS, INC.
                                               ---------------------------------
                                                         (Registrant)


       Date:  November 19, 2001                         /S/ JAMES F. MONGIARDO
              -----------------                         ------------------------
                                                        JAMES F. MONGIARDO
                                                        Chief Executive Officer















                                                                              24