<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 March 31, 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            (IRS Employer Identification No.)
 incorporation or organization)


             475 Park Avenue South, 10th Floor, New York, NY 10016
-------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (212) 545-1785
                           ---------------------------
                           (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 May 18, 2001: 17,092,683

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 Consolidated Balance Sheet (Unaudited)--As of March 31, 2001               3-4
  Condensed Consolidated Statements of Operations (Unaudited)--For the three
    months ended March 31, 2001 and March 31, 2000                                       5
  Condensed Consolidated Statements of Cash Flows (Unaudited) - For the three
    months ended March 31, 2001 and March 31, 2000                                     6-7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                  8-14


Item 2.  Management's Discussion and Analysis                                        15-19


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                              20
Item 2.  Changes in Securities and Use of Proceeds                                      20
Item 3.  Defaults Upon Senior Securities                                                20
Item 4.  Submission of Matters to a Vote of Security Holders                            20
Item 5.  Other Information                                                              20
Item 6.  Exhibits and Reports on Form 8-K                                               20

Signatures                                                                              21
</TABLE>

<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements.


                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

                                           CONDENSED CONSOLIDATED BALANCE SHEET
                                                                    (UNAUDITED)

                                                                 March 31, 2001
-------------------------------------------------------------------------------

                                     ASSETS
                                     ------
<TABLE>
<S>                                                                  <C>            <C>
CURRENT ASSETS
--------------
  Cash                                                               $      902
  Accounts receivable, less allowance for doubtful accounts of
    $14,009                                                             152,772
  Prepaid expenses and other current assets                             120,300
  Inventories                                                            38,073
                                                                      ---------


       Total Current Assets                                                           $  312,047
                                                                                      ----------


PROPERTY AND EQUIPMENT, Net                                                              872,408
----------------------                                                                ----------


OTHER ASSETS
------------
  Reorganization value, net of accumulated amortization of
    $875,824                                                          1,568,334
  Goodwill, net of accumulated amortization of $401,877                 562,627
  Deposit on pending acquisition                                        323,102
  Intangibles, net of accumulated amortization of $45,139                79,861
                                                                      ---------


         Total Other Assets                                                            2,533,924
                                                                                      ----------


         TOTAL ASSETS                                                                 $3,718,379
                                                                                      ==========
</TABLE>

                      See notes to condensed consolidated financial statements.

                                                                              3
<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

                                           CONDENSED CONSOLIDATED BALANCE SHEET
                                                                    (UNAUDITED)

                                                                 March 31, 2001
-------------------------------------------------------------------------------

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                    ----------------------------------------

<TABLE>
<S>                                                                  <C>                <C>
CURRENT LIABILITIES
-------------------
  Accounts payable and accrued expenses                              $  4,977,749
  Notes payable                                                           368,137
  Notes payable - stockholders                                          1,586,291
  Due to stockholder                                                      539,236
  Due to officer                                                          333,904
  Current portion of capital lease obligation                             114,102
  Reorganization liabilities, current portion                             333,985
                                                                     ------------

       Total Current Liabilities                                                        $ 8,253,404
                                                                                        -----------

OTHER LIABILITIES
-----------------
  Capital lease obligation, net of current portion                        455,590
  Reorganization liabilities, net of current portion                    1,169,611
                                                                     ------------

       Total Other Liabilities                                                            1,625,201
                                                                                        -----------

       TOTAL LIABILITIES                                                                  9,878,605
                                                                                        -----------

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

STOCKHOLDERS' DEFICIENCY
------------------------
  Common stock - $.001 par value; 35,000,000 shares
    authorized, 15,250,409 shares issued and outstanding                   15,250
  Additional paid-in capital                                           10,848,129
  Accumulated deficit                                                 (17,023,605)
                                                                     ------------

       TOTAL STOCKHOLDERS' DEFICIENCY                                                   (6,160,226)
                                                                                        -----------

       TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                   $ 3,718,379
                                                                                        ===========
</TABLE>

                      See notes to condensed consolidated financial statements.

                                                                              4
<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

                                                       STATEMENTS OF OPERATIONS
                                                                    (UNAUDITED)

                             For the Three Months Ended March 31, 2001 and 2000
-------------------------------------------------------------------------------

                                                       2001            2000
                                                   ----------------------------

SALES                                              $   104,178     $    164,217
-----

COST OF SALES                                           75,007          119,372
-------------                                      -----------     ------------

       GROSS PROFIT                                     29,171           44,845

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES         1,190,336        1,818,416
--------------------------------------------       -----------     ------------

         OPERATING LOSS                             (1,161,165)      (1,773,571)

OTHER INCOME (EXPENSE)
----------------------
  Other income                                            --             12,007
  Interest expense                                     (61,642)         (43,302)
                                                   -----------     ------------

         TOTAL OTHER INCOME (EXPENSE)                  (61,642)         (31,295)
                                                   -----------     ------------

         NET LOSS                                  $(1,222,807)    $ (1,804,866)
                                                   ===========     ============

PER SHARE DATA
--------------
  Basic and diluted net loss per common share            $(.08)          $(0.18)
                                                   ===========     ============
  Weighted Average Common Shares Outstanding        14,497,801        9,757,592
                                                   ===========     ============

                      See notes to condensed consolidated financial statements.

                                                                              5
<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

                                                       STATEMENTS OF CASH FLOWS
                                                                    (UNAUDITED)

                             For the Three Months Ended March 31, 2001 and 2000
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                          2001              2000
                                                                      ------------------------------
<S>                                                                   <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
 Net loss                                                             $(1,222,807)       $(1,804,866)
                                                                      -----------        -----------
  Adjustments to reconcile net loss to net cash
   used in operating activities:
   Stock-based compensation                                               338,309             33,000
   Depreciation and amortization                                          201,782            186,727
   Accrued interest                                                        20,959               --
   Increase in allowance for doubtful accounts                               --              262,545
 Changes in assets and liabilities:
  Accounts receivable                                                     (36,642)            29,302
  Prepaid expenses and other current assets                               (30,349)              (549)
  Accounts payable and accrued expenses                                   471,415            220,960
  Reorganization liabilities                                                 --              (95,079)
                                                                      -----------        -----------

       TOTAL ADJUSTMENTS                                                  965,474            636,906
                                                                      -----------        -----------

       NET CASH USED IN OPERATING ACTIVITIES                             (257,333)        (1,167,960)
                                                                      -----------        -----------

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
  Purchases of property and equipment                                     (20,375)              --
  Purchase of Sigma Sound Services Inc., net of cash acquired                --             (198,600)
  Deposit on acquisition                                                  (98,102)              --
  Purchase of intangible assets                                              --             (125,000)
                                                                      -----------        -----------

       NET CASH USED IN INVESTING ACTIVITIES                          $  (118,477)       $  (323,600)
                                                                      -----------        -----------
</TABLE>

                       See notes to condensed consolidate financial statements.

                                                                              6


<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

                                            STATEMENTS OF CASH FLOWS, Continued
                                                                    (UNAUDITED)

                             For the Three Months Ended March 31, 2001 and 2000
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                              2001                2000
                                                          --------------------------------
<S>                                                       <C>                  <C>
CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
  Advances from stockholder                               $   279,936          $ 1,595,000
  Advances from officer                                        94,441                 --
  Payments of capital lease obligations                          --                (55,469)
  Repayments of notes payable                                    --                (45,000)
                                                          -----------          -----------

         NET CASH PROVIDED BY FINANCING
          ACTIVITIES                                          374,377            1,494,531
                                                          -----------          -----------

         NET  (DECREASE) INCREASE IN CASH                      (1,433)               2,971

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

CASH AT END OF PERIOD                                     $       902          $     3,315
---------------------                                     ===========          ===========


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

 Cash paid during the periods for:
    Interest                                              $      --            $    24,290

 Noncash investing and financing activities:

    Acquisition of equipment thru capital leases          $    40,767
    Conversion of note payable common stock               $ 1,522,200
    Sigma Sound Services, Inc. acquisition:
      Issuance of note payable                                                 $   400,000
      Deposit applied to the purchase price                                    $   400,000
</TABLE>

                      See notes to condensed consolidated 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 a 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.

       Select Media is engaged in 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. The Company through its wholly owned subsidiary Sigma, provides
       studio space and technology for the recording of audio media for the
       music recording, motion picture, and commercial advertising industries.

       Basis of Consolidation
       ----------------------
       The consolidated financial statements include the accounts of Select
       Media, and it wholly-owned subsidiary Sigma (collectively referred to as
       the "Company"). All significant inter-company transactions and balances
       have been eliminated in consolidation.

       Reclassifications
       -----------------
       Certain accounts in the prior period financial statements have been
       reclassified for comparative purposes to conform with 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 $1,222,807 during the three months ended March 31, 2001, and,
       as of that date, the Company's current liabilities exceeded its current
       assets by $7,941,357 and its total liabilities exceeded its total assets
       by $6,160,226. Management of the Company is developing a 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.

                                                                              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
       -------------------------
       ("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 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
       ---------------------
       The 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 months
       ended March 31, 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 2 - Liquidity and Funding Agreements
         --------------------------------

       On December 5, 2000, 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 received total cash advances in the amount of $539,236
       ($279,976 during the quarter ended March 31, 2001) from Lloyds prior to
       the eligibility for quotation of its common stock on the OTC Bulletin
       Board. At March 31, 2001, these advances are included in "Due to
       Stockholder"; on May 7, 2001 the Company issued 819,172 shares of common
       stock in settlement of these advances.

       On October 24, 1999, the Company received a non-binding letter of intent
       from Valley Forge Securities (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.


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 three months ended March
       31, 2001.


                                                                             10
<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

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

NOTE 3 - Stockholders Deficiency, continued
         ----------------------------------

       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.

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 into notes payable-stockholder and was converted
       into 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.

       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
       a $500,000 expense during the years ended December 31, 1999 and 2000,
       which was included in accrued expenses at March 31, 2001.

                                                                             11
<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

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

NOTE 4 - Litigation, continued
         ---------------------

       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
       -------------------
       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. Pursuant to the
       Definitive Agreement, the Company made a down payment of $200,000 to
       Betelgeuse, with three additional $100,000 payments due monthly for a
       total non-refundable down payment of $500,000. Through May 7, 2001, the
       Company has paid $323,102 of the down payment. The balance of the
       purchase price will be due at a closing to be held within six (6) months
       of the signing of the Definitive Agreement and the completion of certain
       due diligence. The Company has received a firm commitment from Lloyds for
       the $500,000 down payment ($323,102 has been received from Lloyds as of
       March 31, 2001). 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.

       Payroll Taxes
       -------------
       Select Media has not filed payroll tax returns from October 1, 1998
       through March 31, 2000. As of March 31, 2001, the past due amounts have
       been included in accrued expenses totaling approximately $1,250,000 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.

                                                                             12
<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

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

NOTE 6 - Major Customers and related party transactions
         ----------------------------------------------

       The Company through its subsidiary Sigma sells a substantial portion of
       its product to one customer and to one related party. During the three
       months ended March 31, 2001, sales to the customer totaled $33,887
       (32.5%) and sales to the related party totaled $27,324 (26.2%). As of
       March 31, 2001, the amounts due from the customer included in accounts
       receivable was $52,372 and the amounts due from related party included in
       accounts receivable was $62,262.

       In addition, non trade receivables due from the related party in the
       amount of $79,626 is included in prepaid expenses and other current
       assets.


NOTE 7 - Subsequent Events
         -----------------

       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.

       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; and
       (ii) $333,904 due to officer to May 31, 2001.

       On May 7, 2001 the Company issued 819,172 shares of common stock to
       Lloyds in settlement of Due to Stockholder in the amount of $539,296.

       On May 7, 2001, the Company issued 250,000 shares of common stock in
       settlement of accounts payable of $250,000.

       On May 7, 2001, the Company issued 350,000 shares of common stock in
       settlement of notes payable stockholder of $1,125,000.

       On May 7, 2001, the Company issued 175,000 shares of common stock to two
       consultants for future investor relations services to be performed. The
       Company estimates the value of the services to be performed is
       approximately $87,500. The Company has also agreed to issue an additional
       150,000 shares of free-trading common stock to one of consultants.

                                                                             13
<PAGE>

                                               SELECT MEDIA COMMUNICATIONS INC.
                                                                 AND SUBSIDIARY

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

NOTE 7 - Subsequent Events, continued
         -----------------

       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 agreed to issue 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 will record a charge to operations in the second
       quarter of 2001.
































                                                                             14
<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 three months ended March 31, 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. In general, in the period covered by
this report, the Company's sources of revenues consisted of revenues from the
Company's Sigma Sound Services subsidiary ("Sigma").

                                                                             15
<PAGE>

In 2000, the Company had minimal revenues as it focused on restructuring its
business and completing two acquisitions. In the quarter ended March 31, 2001,
the Company's subsidiary had sales to two customers totaling approximately 58.7%
of the Company's total sales. If management is successful implementing the
Company's Business Plan, sales will increase and management does not reasonably
foresee any such dependence in the future.

In January 2000, Select Media repositioned itself as the owner of entertainment
content providers whose product can be marketed through traditional media and
over the Internet. In January 2000, Select Media purchased all the outstanding
stock of Sigma for $1,000,000 payable in cash in several payments, with the
final payment due May 31, 2001. Sigma is a full service recording studio that
provides services to record companies, independent artists and record producers.
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.

These acquisitions were accounted for as purchases. The principals of Sigma and
AHP were not affiliated with Select Media before to their acquisition by Select
Media. Lloyds' financing was not contingent upon these particular acquisitions.

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.

                                                                             16
<PAGE>

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.

In line with this strategy, in 2000 Select Media acquired Sigma and AHP. Select
Media has also 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, of which $323,102 was paid through March
31, 2001. The balance of $9.5 million is due six months from the due diligence
completion date.

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.

Sigma markets its services directly through its principals. Sigma and AHP have
also produced collections and compilation albums sold through home shopping
channels, direct response television and direct mail.

Select Media has 20 full time employees as March 31,2001. 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. As a result of the Sigma acquisition, Select Media also leases a
sound recording studio facility at North 12th Street in Philadelphia,
Pennsylvania.

                                                                             17
<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 December         For the Three Months
                                                             31,                  Ended March 31,
                                                             2000             2000              2001
                                                        -----------------------------------------------
<S>                                                           <C>               <C>              <C>
       Net revenues                                           100.0%            100.0%           100.0%
       Cost of revenues                                        95.5%             72.7%            71.9%
       Gross profit                                             4.5%             27.3%            28.1%

       Selling, general and administrative                  1,251.9%          1,142.6%         1,107.3%

       Operating loss                                     (1,247.4)%        (1,114.6)%       (1,080.0)%
       Other income and expense, net                         (18.9)%           (59.2)%          (19.1)%

       Loss before income taxes                           (1,266.3)%        (1,173.8)%       (1,099.1)%
       Provision for (benefit from) income taxes                0.3%                0%               0%
       Net loss                                           (1,266.6)%        (1,173.8)%       (1,099.1)%
</TABLE>

Before the Sigma acquisition, the Registrant's net revenues were derived mainly
from the sales of vignettes, video press releases and SITN. Sigma's revenues
consist of sales of sound recording studio services, editing and post-production
work on recorded musical works. In the three months ended March 31, 2001, net
revenues decreased by $60,039 or 36.6 %, to $104,178 from $164,217 in the three
months ended March 31, 2000. The decrease in net revenues during the first three
months of 2001 was due to a loss of SITN revenues due to the inability to use
studio space at Select Media's facility caused by a dispute with its landlord
and the subsequent decision to cease SITN operations on October 30, 2000.

Gross Profit

Gross margins during the three months ended March 31, 2001 remained essentially
the same at 28% compared to 27.3 % for the three months ended March 31, 2000.

Cost of revenues consists 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 will
result in higher gross margins.

Expenses

Total operating expenses were $1,190,336 in the three months ended March 31,
2001 compared with $1,818,416 in the three months ended March 31, 2000, for a
decrease of $628,080, or 34.5%. This decrease was attributable to the move by
the Company to much smaller facilities and a decrease in staff as the Company
restructured itself.

                                                                             18
<PAGE>

Losses

The Registrant incurred losses from operations of $(1,222,807) in the three
months ended March 31, 2001 compared to $(1,804,866) in the three months ended
March 31, 2000, for a decrease of $582,059 or 32.2%. This decrease was
attributable to the move by the Company to much smaller facilities and 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 is convertible 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 eligible for quotation on the OTC Bulletin Board, which
occurred on April 20, 2001. In 2000 and 2001, the Company received $539,236 from
Lloyds (of which $279,976 was received in the first quarter of 2001) 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 on May 7, 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 $323,102 has
been received as of March 31, 2001. There can be no assurance that such a
financing will be completed or, if completed, be on favorable terms.

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.

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 curtail or cease operations.
These matters raise substantial doubt about the Company's ability to continue as
a going concern.

                                                                             19
<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

                                                                             20
<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: May 21, 2001                      /S/ JAMES F. MONGIARDO
      ------------                    --------------------------
                                          JAMES F. MONGIARDO
                                        Chief Executive Officer






















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