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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-K/ A

Amendment No. 1


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934    
|  
|   |  | For the fiscal year ended June 30,
    2003                                                 
|  
|or
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from                to                .                       

Commission file number: 000-32989

BAM! Entertainment, Inc.

(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 77-0553117                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

333 West Santa Clara Street, Suite
716

San Jose, California 95113


(Address of principal executive offices,
including zip code)


(408) 298-7500

(Registrants telephone number, including
area code)


Securities registered pursuant to Section
12(b) of the Exchange Act:

None


Securities registered pursuant to
Section 12(g) of the Exchange Act:

Common Stock


$0.001 par value


Indicate by check
mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days.     Yes þ          No o

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of
Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment of this
Form 10-K.     o

Indicate by check mark whether the registrant
(1) is an accelerated filer (as defined in Rule 12b-2
of the Exchange
Act.     Yes o          No þ

The aggregate market value of the voting stock
held by non-affiliates of the Registrant was approximately
$11,659,573 as of September 17, 2003 based upon the closing
price on the Nasdaq SmallCap Market reported for such date.
Stock held by each officer and director and by each person who
owns 5% or more of Common Stock have been excluded in that such
persons may be deemed to be affiliates. This determination of
affiliate status is not necessarily conclusive determination for
other purposes.

The number of shares of common stock outstanding
as of September 17, 2003: 14,764,040



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TABLE OF CONTENTS



|             |                                                                             |  |  |  |  |  |  | 
|------------ | --------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART III    
|             | Item 10 -- DIRECTORS AND EXECUTIVE OFFICERS                                
|             | Item 11 -- EXECUTIVE COMPENSATION                                          
|             | Item 12 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  
|             | Item 13 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                  
|PART IV     
|             | Item 15 -- EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K
|SIGNATURES  
|EXHIBIT 31.1
|EXHIBIT 31.2
|EXHIBIT 32  



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TABLE OF CONTENTS

Explanatory Note:

We are amending the following items of our annual
report on Form 10-K


for the fiscal year ended June 30, 2003 on
the pages attached hereto.


|           |  |                                                                     |    |      |    | 
|---------- |  | ------------------------------------------------------------------- | -- | ---- | -- | 
|           |  |                                                                     |    | Page
|           |  |                                                                     |    |     
|PART III  
|Item 10.   |  | Directors and executive officers                                    |    |      | 3  | 
|Item 11.   |  | Executive compensation                                              |    |      | 5  | 
|Item 12.   |  | Security ownership of certain beneficial owners
    and management  |    |      | 10 | 
|Item 13.   |  | Certain relationships and related transactions                      |    |      | 12 | 
|PART IV   
|Item 15.   |  | Exhibits, financial statement schedules and
    reports on Form 8-K |    |      | 13 | 
|Signatures |  |                                                                     | 14 |     

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PART III




Item 10  DIRECTORS AND EXECUTIVE
OFFICERS

The following table provides certain information
with respect to our executive officers and directors.

|                          |  |     |    |          |  |                                                                
|------------------------- |  | --- | -- | -------- |  | ---------------------------------------------------------------
|Name                      |  | Age |    | Position
|                          |  |     |    |         
|Raymond C. Musci          |  |     | 42 |          |  | Chief Executive Officer and Director
    (Class I expires 2004)
|Anthony R. Williams       |  |     | 45 |          |  | Vice Chairman of the Board (Class I expires
    2004)          
|Stephen M. Ambler         |  |     | 44 |          |  | Chief Financial Officer and Vice President of
    Finance      
|Yves Legris               |  |     | 35 |          |  | Executive Vice President and General Manager                   
|George M. Sundheim, III   |  |     | 50 |          |  | Secretary                                                      
|Robert T. Slezak(1)       |  |     | 46 |          |  | Director (Class III expires 2003)                              
|Anthony G. Williams(1)(2) |  |     | 44 |          |  | Director (Class III expires 2003)                              
|Mark Dyne                 |  |     | 42 |          |  | Director (Class II expires 2005)                               
|David E. Tobin(1)(2)      |  |     | 32 |          |  | Director (Class II expires 2005)                               
|Robert E. Lloyd           |  |     | 57 |          |  | Director (Class II expires 2005)                               



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|    |                                      
|--- | -------------------------------------
|(1) | Member of our Audit Committee.       
|   
|(2) | Member of our Compensation Committee.

Raymond C. Musciis our companys founder and has
served as our Chief Executive Officer since May 2001 and a
member of our Board of Directors since October 1999.
Mr. Musci also served as our Chief Operating Officer and
Co-Chairman of the Board from July 2000 to April 2001, as our
President from October 1999 to January 2002 and as our Chief
Financial Officer and Secretary from October 1999 to July 2000.
From May 1996 through July 1999, Mr. Musci was President,
Chief Executive Officer and a member of the board of directors
of the US division of Infogrames Entertainment, S.A., a
developer, publisher and distributor of interactive
entertainment software. From September 1994 to July 1996,
Mr. Musci served as a director of Ocean International,
Ltd., the holding company of Ocean of America. From 1990 until
its merger with Infogrames Entertainment (Paris Bourse:5257) in
May 1996, Mr. Musci was co-founder, President, and Chief
Operating Officer of Ocean of America, a private developer,
publisher and distributor of interactive entertainment software.
From October 1996 to the present, Mr. Musci has been a
member of the board of directors of Brilliant Digital
Entertainment, Inc., a developer, publisher and distributor of
interactive entertainment software (AMEX:BDE), where he is a
member of the audit and compensation committees. Mr. Musci
earned a B.A. in Criminal Justice from Western New Mexico
University.

Anthony R. Williamshas served as our Vice Chairman of the
Board since May 2001 and our Co-Chairman of the Board from July
2000 to April 2001. Mr. Williams served as our Chief
Executive Officer from July 2000 to May 2001 and our Chief
Financial Officer from July 2000 to March 2001. From February
1998 to July 2000, Mr. Williams served as the Co-Chairman
and Chief Operating Officer of Take-Two Interactive Software,
Inc. (NASDAQ:TTWO), a developer, publisher and distributor of
interactive entertainment software. From April 1988 to February
1998, Mr. Williams was employed in various executive
positions at Acclaim Entertainment, Inc. Mr. Williams
currently serves as a director of the Near East Foundation, a
private, nonprofit development agency dedicated to assisting
people in the Middle East and Africa. Mr. Williams earned a
B.A. in Economics from Cambridge University. In 2000,
Mr. Williams and the staff of the Securities and Exchange
Commission, or SEC, agreed to settle a proposed administrative
proceeding relating to a press release issued by Acclaim in
October 1995. Under the settlement, Acclaim and
Mr. Williams, without admitting or denying the findings and
conclusions of the SEC, have agreed to cease and desist from
future violations of Sections 10(b) and 13(b) of the
Securities and Exchange Act of 1934, as amended.

Stephen M. Amblerhas served as our Chief Financial
Officer and Vice President of Finance since April 2001. From
April 1994 to March 2001, Mr. Ambler served in various
executive capacities, including

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Chief Financial Officer, Secretary and
Senior Vice President Finance, at Insignia Solutions PLC
(NASDAQ:INSG), a software developer. Mr. Ambler received
his diploma in Accounting Studies, with distinction, from Oxford
Polytechnic, and he is a member of the Institute of Chartered
Accountants in England and Wales.


Yves Legrishas
served as our Executive Vice President and General Manager since
April 2002. From November 1994 through February 2002,
Mr. Legris served in various capacities at Infogrames
Entertainment, S.A., (Paris Bourse: 5257) a developer, publisher
and distributor of interactive entertainment software, including
Chief Operating Officer and Managing Director of Infogrames
North America, its US division. Mr. Legris earned a B.A. in
Business and Economics from the University of Toulouse and an
M.B.A. from the Lyon Graduate School of Business.

George M. Sundheim, IIIhas served as our Secretary since July
2000, and from October 1999 to November 2002, he served as a
member of our Board of Directors. From April 1986 until December
2001, Mr. Sundheim was a partner of the law firm of Doty
Sundheim & Gilmore, a professional corporation, and since
January 2002, he has served the same law firm as of counsel.
Mr. Sundheim earned a B.A. in Economics from Stanford
University and a J.D. from Northwestern University.

Robert T. Slezakhas served on our Board of Directors
since June 2001. From November 1999 to the present,
Mr. Slezak has worked as an independent management
consultant, and from October 1989 through November 1999,
Mr. Slezak served as the Chief Financial Officer of
Ameritrade Holding Corporation, an online brokerage firm
(NASDAQ:AMTD). Mr. Slezak earned a B.S. in Business
Administration from the University of Nebraska at Omaha and an
M.B.A. from Creighton University.

Anthony G. Williamshas served on our Board of Directors
since April 2001. From July 2000 to the present,
Dr. Williams has been pursuing independent investment
opportunities and non-commercial activities. From November 1994
to July 2000, Dr. Williams served in various Director
positions as a partner at Goldman Sachs & Co., London,
including Global Co-Head Swaps, Global Head of FICC Risk, and
Global Head of Fixed Income Arbitrage. Dr. Williams earned
a B.A., M.A., and Ph.D. in Physics from Cambridge University.

Mark Dynehas served
on our Board of Directors since July 2000. From October 1996 to
the present, Mr. Dyne has served as Chairman of the Board
at Brilliant Digital Entertainment, Inc. From September 1997 to
the present, Mr. Dyne has also served as the Chairman of
the Board of Tag-It Pacific, Inc. (AMEX:TAG), a specialty
printing and packaging company for the garment, accessories and
related market areas. Additionally, from October 1998 though
January 2000, Mr. Dyne was Chairman and Chief Executive
Officer of Virgin Interactive Entertainment Ltd., a distributor
of software programs and video games in London, England. From
June 1993 to October 1996, Mr. Dyne served as Co-Chief
Executive Officer of Sega Enterprises, a theme park developer.
Mr. Dyne is a founder and a director of Ozisoft Pty Ltd., a
leading distributor of entertainment software in Australia and
New Zealand. Mr. Dyne attended the University of
California, Los Angeles.

David E. Tobinhas served on our Board of Directors
since December 2000. From April 1996 to the present,
Mr. Tobin has served as a Vice President at PAR Capital
Management, Inc., an investment management firm in Boston, MA.
Pursuant to the Series B Preferred Stock Purchase Agreement
dated December 28, 2000, Mr. Tobin is the designee of
PAR Capital Management, Inc. elected to the Companys Board
of Directors and appointed to its Compensation Committee.
Mr. Tobin earned a B.A. in Finance from Saint Anselm
College.

Robert E. Lloydhas served on our Board of Directors
since November 2002 and previously served as a member of our
Board of Directors from July 2000 to April 2001. From July 1998
to the present, Mr. Lloyd has served as a consultant and
advisor to the Board of Directors of Nintendo of America, and he
currently serves as Chairman of the V Foundation for Cancer
Research. From 1995 to 1997, Mr. Lloyd served as
non-executive Chairman of the Board of Mindscape, a developer
and publisher of entertainment, educational and reference
consumer software for personal computers, and from 1990 to 1994,
he served as the Chairman and Chief Executive Officer of
Mindscape. Mr. Lloyd earned a B.A. in Economics from
Rutgers University and an M.B.A. from Pepperdine University.

No family relationships exist between any of our
directors or executive officers.

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Section 16(a) Beneficial Ownership
Reporting Compliance

Section 16(a) of the Securities Act of 1934,
as amended requires our officers, directors and persons who own
more than 10% of a registered class of our securities, to file
with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of our securities.
Officers, directors and greater than 10% stockholders are
required by the Securities and Exchange Commissions
regulations to furnish us with copies of all filed
Section 16(a) forms.

Based solely on our review of the copies of such
reports furnished to us, we believe that all officers, directors
and greater than 10% stockholders complied with the filing
requirements of Section 16(a) for the fiscal year ended
June 30, 2003.




Item 11  EXECUTIVE
COMPENSATION

The following table sets forth information
concerning the annual and long-term compensation earned by our
Chief Executive Officer and each of our other executive officers
and former executive who served during the fiscal year ended
June 30, 2003, and whose annual salary and bonus during the
fiscal years ended June 30, 2001, 2002 and 2003 exceeded
$100,000 (the Named Executive Officers).

Summary Compensation Table

|                            |                          |      |      |                     |  |              |         |                 |  |              |        |                 |     |  |        |        |     |  |         |         |  |  |        |        |     
|--------------------------- | ------------------------ | ---- | ---- | ------------------- |  | ------------ | ------- | --------------- |  | ------------ | ------ | --------------- | --- |  | ------ | ------ | --- |  | ------- | ------- |  |  | ------ | ------ | ----
|                            |                          |      |      |                     |  |              |         |                 |  | Long-Term    |        |                
|                            |                          |      |      |                     |  |              |         |                 |  | Compensation |        |                
|                            |                          |      |      |                     |  |              |         |                
|                            |                          |      |      | Annual Compensation |  | Awards       |         |                
|                            |                          |      |      |                     |  |              |         |                
|                            |                          |      |      |                     |  | Securities   |         |                
|                            |                          |      |      |                     |  | Other Annual |         | Underlying      |  | All Other   
|Name and Principal Position |                          | Year |      | Salary($)           |  | Bonus($)     |         | Compensation($) |  | Options(#)   |        | Compensation($)
|                            |                          |      |      |                     |  |              |         |                 |  |              |        |                
|Raymond C. Musci(1)         |                          |      | 2003 |                     |  |              | 159,375 |                 |  |              |       |                 |     |  |       |        |     |  | 116,978 |         |  |  | 25,630 | (7)   
|                            | Chief Executive Officer  |      |      | 2002                |  |              |         | 225,000         |  |              |        |                |     |  |        |       |     |  |         |        |  |  |        | 24,952 | (7) 
|                            |                          |      | 2001 |                     |  |              | 225,000 |                 |  |              |       |                 |     |  |       |        |     |  |        |         |  |  | 17,959 | (7)   
|Stephen M. Ambler(2)        |                          |      | 2003 |                     |  |              | 176,000 |                 |  |              | 35,012 |                 |     |  |       |        |     |  | 58,000  |         |  |  | 28,374 | (8)   
|                            | Chief Financial Officer  |      |      | 2002                |  |              |         | 176,000         |  |              |        |                |     |  |        |       |     |  |         | 14,981  |  |  |        | 31,464 | (8) 
|                            |                          |      | 2001 |                     |  |              | 40,000  |                 |  |              |       |                 |     |  |       |        |     |  | 59,925  |         |  |  | 1,587  | (8)   
|Yves Legris(3)              |                          |      | 2003 |                     |  |              | 215,000 |                 |  |              | 37,895 |                 |     |  | 29,026 | (6)    |     |  | 56,667  |         |  |  | 26,893 | (9)   
|                            | Executive Vice President |      |      | 2002                |  |              |         | 71,123          |  |              |        | 66,667          | (5) |  |        | 10,000 | (6) |  |         | 150,000 |  |  |        | 5,045  | (9) 
|                            | and General Manager      |      |      |                     |  |              |         |                 |  |              |        |                 |     |  |        |        |     |  |         |         |  |  |        |        |     
|Bernard Stolar(4)           |                          |      | 2003 |                     |  |              | 159,375 |                 |  |              |       |                 |     |  |       |        |     |  | 120,000 |         |  |  | 31,289 | (10)  
|                            | Chief Operating Officer  |      |      | 2002                |  |              |         | 101,538         |  |              |        |                |     |  |        |       |     |  |         | 250,000 |  |  |        | 4,856  | (10)
|                            | and President            |      |      |                     |  |              |         |                 |  |              |        |                 |     |  |        |        |     |  |         |         |  |  |        |        |     



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|    |                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Mr. Musci previously served as our
    President, Chief Operating Officer, Chief Financial Officer and
    Secretary.                                                                                                                                          
|   
|(2) | Mr. Ambler joined our company in April 2001.                                                                                                                                                                                                                   
|   
|(3) | Mr. Legris joined our company in April 2002.                                                                                                                                                                                                                   
|   
|(4) | Mr. Stolar joined our company in January
    2002 and left us in March 2003.                                                                                                                                                                                   
|   
|(5) | Represents a signing bonus upon commencement of
    employment with our company.                                                                                                                                                                               
|   
|(6) | Represents a car allowance of $11,638 and $4,000
    for 2003 and 2002, respectively, and an education allowance of
    $17,388 and $6,000 for 2003 and 2002, respectively.                                                                                    
|   
|(7) | Represents health and life insurance payments of
    $18,849, $14,452 and $9,521 for 2003, 2002 and 2001,
    respectively, and contributions of $6,781, $10,500 and $8,438 by
    our company under our 401(k) Plan for 2003, 2002 and 2001,
    respectively.
|   
|(8) | Represents health and life insurance payments of
    $14,374, $11,964 and $1,587 for 2003, 2002 and 2001,
    respectively, and contributions of $14,000 and $19,500 by our
    company under our 401(k) Plan for 2003 and 2002 respectively.                  

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|    |                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(9) | Represents health and life insurance payments of
    $12,546 and $1,839 for 2003 and 2002, respectively,
    contributions of $11,496 and $3,206 by our company under our
    401(k) Plan for 2003 and 2002, respectively, and personal
    airfares paid of $2,851 for 2003.



|     |                                                                                                                                                                                                                               
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Represents health and life insurance payments of
    $10,289 and $4,856 for 2003 and 2002, respectively, and
    contributions of $21,000 and $3,206 by our company under our
    401(k) Plan for 2003 and 2002, respectively.

Employment Agreements

In October 1999, we entered into a two-year
employment agreement with Raymond C. Musci, our Chief
Executive Officer, which was automatically renewed in October
2001 for an additional one-year term as set forth below and was
amended to reflect his current position within our company
effective June 2001. Mr. Musci is entitled to an annual
base salary of $225,000 and is eligible for any bonus program or
plan established for our employees. The employment agreement
entitles Mr. Musci to receive stock options or other equity
rights to be determined at the sole discretion of our
Compensation Committee and to receive certain insurance and
other employee plans and benefits established for our employees.
If the employment agreement is terminated for any reason, except
for disability or cause, or if Mr. Musci resigns for good
cause, he shall receive severance in an amount equal to
24 months of his then-current base salary, with 50% payable
within 60 days of the termination date and 50% payable as
salary continuing for 12 months following the termination
date. In addition, he will receive 12 months of insurance
coverage following the termination date. The employment
agreement of Mr. Musci automatically renews for additional
one-year terms if notice is not provided 60 days before the
termination of the original term or each successive term of
renewal.

In November 2002, the agreement was amended
whereby Mr. Muscis annual base salary was reduced by
50% for the period between December 1, 2002 and
June 30, 2003. In consideration for this reduction,
Mr. Musci was granted an option to purchase
116,978 shares of our Common Stock at an exercise price of
$0.561. The options fully vested on July 1, 2003.

In March 2002, we entered into a three-year
employment agreement with Yves Legris, our Executive Vice
President and General Manager, which will automatically renew
for additional one-year terms if notice is not provided 60 days
before the termination of the original term or each successive
term of renewal. Under the agreement, Mr. Legris is
entitled to an annual base salary of $215,000 until
June 30, 2003 and $265,000 thereafter. The salary may be
increased each year at the sole discretion of our Compensation
Committee subject to a minimum increase of six percent per
annum. Mr. Legris is also entitled under the agreement to a
one time signing bonus of $66,667 upon joining our company, a
car and education allowance of $2,500 per month, and may
participate in any bonus program or plan established for our
employees. In addition, under the agreement, Mr. Legris was
granted an option to purchase 150,000 shares of our Common
Stock at an exercise price of $2.01, vesting over three years.
The employment agreement entitles Mr. Legris to receive
more stock options or other equity rights to be determined at
the sole discretion of our Compensation Committee and to receive
certain insurance and other employee plans and benefits
established for our employees. If the employment agreement of
Mr. Legris is terminated for any reason, except for
disability or cause, or if Mr. Legris resigns for good
cause, he shall receive severance in an amount equal to
12 months of his then-current base salary, with 50% payable
within 60 days of the termination date and 50% payable as salary
continuing for 12 months following the termination date. In
addition, Mr. Legris will receive 12 months of
insurance coverage following the termination date.

In January 2003, we sent Stephen M. Ambler, our
Chief Financial Officer and Vice President of Finance, a letter
advising him that we will extend a separation payment of
12 months salary to him if his employment with us is
terminated due to the sale of our company.

In January 2002, we entered into a two-year
employment agreement with Bernard Stolar, our former Chief
Operating Officer and President. Under the agreement,
Mr. Stolar was entitled to an annual base salary of
$225,000, was eligible for any bonus program or plan established
for our employees, and was granted an option to purchase
250,000 shares of our Common Stock at an exercise price of
$3.25, vesting over three years. The employment agreement
entitled Mr. Stolar to receive more stock options or other
equity rights as

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determined by the sole discretion of our
Compensation Committee and to receive certain insurance and
other employee plans and benefits established for our employees.
Mr Stolar resigned in March 2003. Under a separation agreement
between Mr. Stolar and our company, we agreed to accelerate
the vesting of all options to purchase our Common Stock
previously granted to Mr. Stolar, and to extend the period
in which he could exercise these options to December 14,
2003.


Compensation for Robert W. Holmes, Jr., our
former Chairman of the Board, and Anthony R. Williams, our
Vice Chairman of the Board is set forth under Executive
Compensation  Compensation of Directors 
Employee Directors.

The employment agreements and directors
agreements that we have entered into with our officers and
directors, respectively, contain provisions specifying that we
will indemnify and defend our officers and directors against any
liability incurred in performance of services in their capacity
as officers and directors to the fullest extent authorized by
our certificate of incorporation, bylaws and applicable law.

Options Granted in the Fiscal Year Ended
June 30, 2003

The following table sets forth information
regarding options granted to the Named Executive Officers during
the fiscal year ended June 30, 2003. The total number of
options granted to our employees (not including
18,800 shares underlying options granted to non-employee
directors) during the fiscal year ended June 30, 2002 was
1,041,760. The exercise price per share of options granted
represents the fair market value of the underlying shares of our
Common Stock on the date the options were granted. The stock
options expire ten years from the date of grant or earlier upon
termination of employment. In accordance with the rules of the
Securities and Exchange Commission, the table sets forth the
hypothetical gains or option spreads that would
exist for the options at the end of their respective ten-year
terms. These gains are based on assumed rates of compounded
share price appreciation of 5% and 10% from the dates the
options were granted to the end of the respective option terms.
These gains do not represent our estimate or projection of the
future price of our Common Stock. Actual gains, if any, on
option exercises depend upon the future performance of our
Common Stock.

|                  |  |                   |         |                      |  |             |     |                  |  |             |       |        |  |  |          |  |  |  |        |  |  |  |         | 
|----------------- |  | ----------------- | ------- | -------------------- |  | ----------- | --- | ---------------- |  | ----------- | ----- | ------ |  |  | -------- |  |  |  | ------ |  |  |  | ------- | 
|                  |  |                   |         |                      |  |             |     |                  |  |            
|                  |  |                   |         | Potential Realizable
|                  |  | Individual Grants |         | Value at Assumed    
|                  |  |                   |         | Annual Rates of     
|                  |  | Number of         |         |                      |  | Stock Price
|                  |  | Securities        |         | Percent of           |  |             |     | Appreciation for
|                  |  | Underlying        |         | Total Options        |  | Exercise or |     |                  |  | Option Term
|                  |  | Options           |         | Granted to           |  | Base Price  |     | Expiration       |  |            
|Name              |  | Granted(#)        |         | Employees(%)         |  | ($/Share)   |     | Date             |  | 5%($)       |       | 10%($)
|                  |  |                   |         |                      |  |             |     |                  |  |             |       |       
|Raymond C. Musci  |  |                   | 116,978 | (1)                  |  |             | 8.0 |                  |  |             | 0.561 |        |  |  | 12/2/12  |  |  |  | 41,271 |  |  |  | 104,589 | 
|Stephen M. Ambler |  |                   | 8,000   | (2)                  |  |             | 0.5 |                  |  |             | 1.40  |        |  |  | 9/12/12  |  |  |  | 7,044  |  |  |  | 17,850  | 
|Stephen M. Ambler |  |                   | 50,000  | (2)                  |  |             | 3.4 |                  |  |             | 0.51  |        |  |  | 12/2/12  |  |  |  | 16,037 |  |  |  | 40,640  | 
|Yves Legris       |  |                   | 6,667   | (2)                  |  |             | 0.5 |                  |  |             | 1.40  |        |  |  | 9/12/12  |  |  |  | 5,870  |  |  |  | 14,876  | 
|Yves Legris       |  |                   | 50,000  | (2)                  |  |             | 3.4 |                  |  |             | 0.50  |        |  |  | 12/13/12 |  |  |  | 15,722 |  |  |  | 39,844  | 
|Bernard Stolar    |  |                   | 50,000  | (3)                  |  |             | 3.4 |                  |  |             | 1.40  |        |  |  | 9/12/12  |  |  |  | 44,023 |  |  |  | 111,562 | 
|Bernard Stolar    |  |                   | 70,000  | (3)                  |  |             | 4.8 |                  |  |             | 0.50  |        |  |  | 12/13/12 |  |  |  | 22,011 |  |  |  | 55,781  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Options vested and became exercisable on
    July 1, 2003.                                                                                                                                                                                                                                                                                                      
|   
|(2) | Options vest and become exercisable at the rate
    of 25% on the first anniversary of the date of the grant, and
    2.083% per month upon each complete month of service over the
    following three years thereafter, and are subject to accelerated
    vesting upon a change in control of our company or termination
    of services by us without cause.
|   
|(3) | Under the terms of the grant, options vested and
    became exercisable at the rate of 25% on the first anniversary
    of the date of the grant, and 2.083% per month upon each
    complete month of service over the                                                                                                                                         

7



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##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | following three years thereafter, and were
    subject to accelerated vesting upon a change in control of our
    company, or termination of services by us without cause. Under a
    separation agreement between Mr. Stolar and our company
    entered into in March 2003, we agreed to the immediate vesting
    of the options and extended the exercise period to
    December 14, 2003.

Aggregated Option Exercises in the Fiscal Year
Ended June 30, 2003 and 2003 Fiscal Year-End 
 Option Values

The following table sets forth the outstanding
stock options of the Named Executive Officers as of
June 30, 2003. None of the Named Executive Officers
exercised stock options in the fiscal year ended June 30,
2003. The value of the unexercised in-the-money
options is based on the fair market value of $0.466 as of
June 30, 2003, minus the exercise price, multiplied by the
numbers of shares underlying the option.

|                  |  |                                      |         |                                   |  |                |         |                  |  |  |   |  |  |  |   | 
|----------------- |  | ------------------------------------ | ------- | --------------------------------- |  | -------------- | ------- | ---------------- |  |  | - |  |  |  | - | 
|                  |  |                                     
|                  |  | 2003 Fiscal Year-End Option Values  
|                  |  |                                     
|                  |  |                                      |         |                                  
|                  |  | Number of Securities Underlying      |         | Value of Unexercised In-The-Money
|                  |  | Unexercised Options at June 30, 2003 |         | Options at June 30, 2003         
|                  |  |                                      |         |                                  
|Name              |  | Exercisable(#)                       |         | Unexercisable(#)                  |  | Exercisable($) |         | Unexercisable($)
|                  |  |                                      |         |                                   |  |                |         |                 
|Raymond C. Musci  |  |                                      |        |                                   |  |                | 116,978 |                  |  |  |  |  |  |  |  | 
|Stephen M. Ambler |  |                                      | 39,325  |                                   |  |                | 93,581  |                  |  |  |  |  |  |  |  | 
|Yves Legris       |  |                                      | 50,000  |                                   |  |                | 156,667 |                  |  |  |  |  |  |  |  | 
|Bernard Stolar    |  |                                      | 370,000 |                                   |  |                |        |                  |  |  |  |  |  |  |  | 

Compensation Of Directors

Non-Employee Directors.We pay our non-employee directors
annual compensation of $10,000 for serving on our Board of
Directors and for attendance at meetings of our Board of
Directors and our committees of the Board of Directors on which
they serve. Our non-employee directors are reimbursed for
reasonable travel and other out-of-pocket expenses incurred in
connection with attending any Board of Director or committee
meetings. Our non-employee directors are eligible to receive,
from time to time, grants of options to purchase shares of our
Common Stock and direct stock issuances of our Common Stock
under our 2000 Stock Incentive Plan as determined by our Board
of Directors. During the fiscal year ended June 30, 2003,
options to purchase a total of 135,000 shares of our Common
Stock were granted to our non-employee directors as follows:

|                       |  |           |        |          |  |               |      |  |  |  |                    | 
|---------------------- |  | --------- | ------ | -------- |  | ------------- | ---- |  |  |  | ------------------ | 
|                       |  | Number    |        | Exercise |  |              
|Name                   |  | of Shares |        | Price    |  | Date of Grant
|                       |  |           |        |          |  |              
|Robert T. Slezak       |  |           | 15,000 |          |  | $             | 1.40 |  |  |  | September 12, 2002 | 
|Robert T. Slezak       |  |           | 15,000 |          |  | $             | 0.51 |  |  |  | December 2, 2002   | 
|Anthony G. Williams    |  |           | 10,000 |          |  | $             | 1.40 |  |  |  | September 12, 2002 | 
|Anthony G. Williams    |  |           | 10,000 |          |  | $             | 0.51 |  |  |  | December 2, 2002   | 
|Mark Dyne              |  |           | 15,000 |          |  | $             | 1.40 |  |  |  | September 12, 2002 | 
|Mark Dyne              |  |           | 10,000 |          |  | $             | 0.51 |  |  |  | December 2, 2002   | 
|David E. Tobin         |  |           | 10,000 |          |  | $             | 1.40 |  |  |  | September 12, 2002 | 
|David E. Tobin         |  |           | 10,000 |          |  | $             | 0.51 |  |  |  | December 2, 2002   | 
|Robert E. Lloyd        |  |           | 10,000 |          |  | $             | 0.51 |  |  |  | December 2, 2002   | 
|Steven J. Massarsky(1) |  |           | 15,000 |          |  | $             | 1.40 |  |  |  | September 12, 2002 | 
|Steven J. Massarsky(1) |  |           | 15,000 |          |  | $             | 0.51 |  |  |  | December 2, 2002   | 



---



|    |                                                                            
|--- | ---------------------------------------------------------------------------
|(1) | Mr. Massarsky resigned as a director of the
    Company on August 14, 2003.

Employee Directors.As of June 30, 2003,
Raymond C. Musci was the only executive officer serving on
our Board of Directors, and Robert W. Holmes, Jr. and
Anthony R. Williams were the only non-executive employee
directors serving on our Board of Directors. Mr. Holmes
resigned as our Chairman of the Board and as a director on
August 14, 2003. George M. Sundheim, III served
as an executive officer on our Board of

8



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##### Table of Contents



Directors until November 13, 2002, when he
did not seek re-election as a Class II director.
Mr. Sundheim serves as our Secretary. For the fiscal year
ended June 30, 2003, Mr. Sundheim was paid director
fees totaling $3,750. Mr. Musci was not paid any
directors fees. Compensation for Messrs. Holmes and
Williams is set forth below. Compensation for Raymond C.
Musci, our Chief Executive Officer, is set forth under
Executive Compensation  Employment
Agreements.


Our employee directors are eligible to receive,
from time to time, grants of options to purchase shares of our
Common Stock and direct stock issuances under our 2000 Stock
Incentive Plan as determined by our Board of Directors. During
the fiscal year ended June 30, 2003, options to purchase
416,145 shares of our Common Stock were granted to our
employee directors as follows:

|                         |  |           |         |          |  |               |       |  |  |  |                    | 
|------------------------ |  | --------- | ------- | -------- |  | ------------- | ----- |  |  |  | ------------------ | 
|                         |  | Number    |         | Exercise |  |              
|Name                     |  | of Shares |         | Price    |  | Date of Grant
|                         |  |           |         |          |  |              
|Raymond C. Musci         |  |           | 116,978 |          |  | $             | 0.561 |  |  |  | December 2, 2002   | 
|Anthony R. Williams      |  |           | 116,978 |          |  | $             | 0.561 |  |  |  | December 2, 2002   | 
|Robert W. Holmes, Jr.(1) |  |           | 115,000 |          |  | $             | 1.40  |  |  |  | September 12, 2002 | 
|Robert W. Holmes, Jr.(1) |  |           | 57,189  |          |  | $             | 0.51  |  |  |  | December 2, 2002   | 
|George M. Sundheim, III  |  |           | 10,000  |          |  | $             | 1.40  |  |  |  | September 12, 2002 | 



---



|    |                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------
|(1) | Mr. Holmes resigned as our Chairman of the
    Board and as a director of our company on August 14, 2003.

In July 2000, we entered into a two-year
employment agreement with Anthony R. Williams to serve as
our Chief Executive Officer, which was amended to reflect his
change in position within our company to the non-executive
employee director position of Vice Chairman of the Board
effective June 2001. Mr. Williams is entitled to an annual
base salary of $225,000 and is eligible for any bonus program or
plan established for our employees. The employment agreement
entitles Mr. Williams to receive stock options or other
equity rights to be determined at the sole discretion of our
Compensation Committee and to receive certain insurance and
other employee benefits established for our employees. If the
employment agreement is terminated for any reason, except for
disability or cause, or if Mr. Williams resigns for good
cause, he shall receive severance in an amount equal to
24 months of his then-current base salary, with 50% payable
within 60 days of the termination date and 50% payable as
salary continuing for 12 months following the termination
date. In addition, he will receive 12 months of insurance
coverage following the termination date. The employment
agreement of Mr. Williams automatically renews for
additional one-year terms if notice is not provided 60 days
before the termination of the original term or each successive
term of renewal.

In November 2002, the agreement was amended
whereby Mr. Williams annual base salary was reduced
by 50% for the period between December 1, 2002 and
June 30, 2003. In consideration for this reduction,
Mr. Williams was granted an option to purchase 116,978
shares of our Common Stock at an exercise price of $0.561. The
options fully vested on July 1, 2003.

In June 2001, we entered into an agreement with
Robert W. Holmes, Jr., to act as our Chairman of the Board,
which is a non-executive employee director position within our
company. Pursuant to the terms of the agreement, Mr. Holmes
received compensation of $100,000 per year, and was issued stock
options to purchase 47,000 shares of our Common Stock at an
exercise price of $4.79 per share and 47,000 shares of our
Common Stock at an exercise price of $8.00 per share, all
of which were fully vested.

Mr. Holmes was granted an option to purchase
115,000 shares of our Common Stock at an exercise price of $1.40
in September 2002. The vesting terms of this option grant was
25% on the anniversary of the grant, and 2.083% for each
complete month of service thereafter over the next three years.

In November 2002, the agreement was amended
whereby Mr. Holmes annual compensation was reduced by
50% for the period between December 1, 2002 and
June 30, 2003. In consideration for this reduction,
Mr. Holmes was granted an option to purchase
57,189 shares of our Common Stock at an exercise price of
$0.51. The options fully vested on July 1, 2003.

9



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##### Table of Contents



Mr. Holmes resigned as our Chairman of the
Board and as a director of our company on August 14, 2003.
Our Board of Directors agreed to accelerate vesting on all
options to purchase our Common Stock previously granted to
Mr. Holmes, and to extend the period in which he could
exercise these options to February 14, 2004.

Compensation Committee Interlocks and Insider
Participation

Our Compensation Committee consists of
David E. Tobin and Anthony G. Williams. Steven J.
Massarsky served on the Committee until his resignation as a
director on August 14, 2003. None of our executive officers
serves on the board of directors or on the compensation
committee of any other entity that has officers who serve on our
Board of Directors or on our Compensation Committee, except for
Raymond C. Musci who serves on the board of directors and
compensation committee of Brilliant Digital Entertainment, Inc.,
a company of which Mark Dyne is the Chairman of the Board.






|          |                                                                   
|--------- | ------------------------------------------------------------------
|Item 12  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
    OWNERS AND MANAGEMENT

The following table sets forth certain
information regarding the beneficial ownership of our Common
Stock as of October 6, 2003 by (i) each of our
directors, (ii) each of our Named Executive Officers,
(iii) each person known to us to be a beneficial owner of
more than 5% of our Common Stock and (iv) all of our
directors and executive officers as a group.

Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission. In
computing the number of shares beneficially owned by a person
and the percentage of ownership of that person, shares of our
Common Stock subject to options or warrants held by that person
that are currently exercisable or become exercisable within
60 days of October 6, 2003 are included. Those shares,
however, are not deemed outstanding for the purpose of computing
the percentage ownership of any other person. Each
stockholders percentage of ownership in the following
table is based upon 16,672,928 shares of our Common Stock
outstanding as of October 6, 2003. Unless otherwise
indicated in the table, the persons and entities named in the
table have sole voting and sole investment power with respect to
the shares set forth opposite the stockholders name.
Unless otherwise indicated, the address of each beneficial owner
listed below is c/o: BAM! Entertainment, Inc.,
333 West Santa Clara Street, Suite 716, San Jose,
California 95113.

|                                                                            |                                     |                    |           |                      |  |  |      |   | 
|--------------------------------------------------------------------------- | ----------------------------------- | ------------------ | --------- | -------------------- |  |  | ---- | - | 
|                                                                            |                                     | Number of Shares   |           | Percentage of Shares
|Name of Beneficial Owner(11)(12)(13)                                        |                                     | Beneficially Owned |           | Beneficially Owned  
|                                                                            |                                     |                    |           |                     
|Raymond C. Musci(1)                                                         |                                     |                    | 3,226,942 |                      |  |  | 19.2 | %
|Anthony R. Williams(2)                                                      |                                     |                    | 2,431,859 |                      |  |  | 14.5 |  
|PAR Investment Partners, L.P.(3)                                            |                                     |                    | 1,505,802 |                      |  |  | 9.0  |  
|David E. Tobin                                                              |                                     |                    |           |                      |  |  |      |  
|                                                                            | One International Place, Suite 2401 |                    |           |                      |  |  |      |   | 
|                                                                            | Boston, MA 02110                    |                    |           |                      |  |  |      |   | 
|Bernard Stolar(4)                                                           |                                     |                    | 250,000   |                      |  |  | 1.5  |  
|Mark Dyne(5)                                                                |                                     |                    | 153,243   |                      |  |  | *    |  
|Stephen M. Ambler(6)                                                        |                                     |                    | 68,422    |                      |  |  | *    |  
|Anthony G. Williams(7)                                                      |                                     |                    | 52,167    |                      |  |  | *    |  
|Yves Legris(8)                                                              |                                     |                    | 51,945    |                      |  |  | *    |  
|George M. Sundheim, III(8)                                                  |                                     |                    | 50,100    |                      |  |  | *    |  
|Robert E. Lloyd(9)                                                          |                                     |                    | 48,325    |                      |  |  | *    |  
|Robert T. Slezak(10)                                                        |                                     |                    | 22,875    |                      |  |  | *    |  
|All directors and executive officers as a group
    (10 persons)(1-3, 5-10) |                                     |                    | 7,611,680 |                      |  |  | 44.3 | %



---



| |   |              
| | - | -------------
| | * | Less than 1%.



| |     |                                                                                  
| | --- | ---------------------------------------------------------------------------------
| | (1) | Includes 116,978 options currently
    exercisable or exercisable within 60 days.

10



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##### Table of Contents





| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes 116,978 options currently
    exercisable or exercisable within 60 days. Also includes
    2,205,362 shares of Common Stock held in an irrevocable
    trust administered by Breams Trustees Limited. Although Breams
    Trustees Limited has the power to dispose of trust property,
    Mr. Williams has the right to appoint new or additional
    trustees and to require any trustee to resign. Mr. Williams
    disclaims beneficial ownership of these shares except to the
    extent of his pecuniary interest in these shares.                                                                                                                                                                                                                                                                                          
|
| | (3) | PAR Group, L.P. is a Delaware limited partnership
    and the sole general partner of PAR Investment Partners, L.P.
    PAR Capital Management, Inc. is a Delaware
    S corporation and the sole general partner of
    PAR Group, L.P. Messrs. Paul A. Reeder, III,
    Frederick S. Downs, Jr., Arthur G.
    Epker, III and Edward L. Shapiro are deemed to be
    controlling shareholders of PAR Capital Management, Inc.
    and exercise voting and/or dispositive power over
    PAR Investment Partners, L.P. Mr. Tobin is a Vice
    President of PAR Capital Management, Inc. and disclaims
    beneficial ownership of the shares held by this entity except to
    the extent of his pecuniary interest in the shares. Also,
    includes 15,992 options to Mr. Tobin currently
    exercisable or exercisable within 60 days.
|
| | (4) | Represents options currently exercisable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (5) | Includes 63,667 options currently
    exercisable or exercisable within 60 days. Excludes
    206,211 shares of Common Stock held by Selected Ventures,
    LLC which is 25% owned by Mr. Dyne, and as to which he
    disclaims beneficial ownership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (6) | Includes 63,210 options currently
    exercisable or exercisable within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (7) | Includes 17,167 options currently
    exercisable or exercisable within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (8) | Represents options currently exercisable or
    exercisable within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (9) | Includes 2,500 options currently exercisable or
    exercisable within 60 days. Also includes 45,825 shares of
    Common Stock that Mr. Lloyd is deemed to beneficially own
    as a trustee of the Lloyd Living Trust. Kay Lloyd,
    Robert E. Lloyds wife, is also a trustee of the Lloyd
    Living Trust and is also deemed to beneficially own all shares
    held by the Lloyd Living Trust.                                                                                                                                                                                                                                                                                                                                                                                                                                       



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Includes 19,875 options currently
    exercisable or exercisable within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(11) | Vertical Ventures LLC holds (a) 789,584
    shares of our Common Stock, (b) warrants to purchase up to
    710,625 shares of our Common Stock and (c) additional
    investment rights to purchase up to 474,443 additional shares of
    our Common Stock and warrants to purchase up to
    426,999 additional shares of our Common Stock. Further to
    the terms of the warrants, the additional investment rights and
    the warrants comprising a portion of the additional investment
    rights held by Vertical Ventures LLC, the warrants and the
    additional investment rights are not exercisable to the extent
    that (a) the number of shares of our Common Stock held by
    Vertical Ventures LLC and (b) the number of shares of our
    Common Stock issuable upon exercise of the warrants, the
    additional investment rights and the warrants comprising a
    portion of the additional investment rights would result in
    beneficial ownership by Vertical Ventures LLC of more than 4.99%
    of our outstanding shares of Common Stock (Verticals
    Maximum Percentage). By written notice to us, Vertical
    Ventures LLC may waive these provisions, or increase or decrease
    Verticals Maximum Percentage, but any such waiver or
    increase will not be effective until the 61st day after
    such notice is delivered to us (any such waiver of increase or
    decrease will apply only to Vertical Ventures LLC and not to any
    other holder of warrants, additional investment rights or
    warrants comprising a portion of the additional investment
    rights). Vertical Ventures LLC beneficially owns
    834,205 shares of our Common Stock, including
    44,621 shares underlying warrants that are currently
    exercisable or exercisable within 60 days.
|    
|(12) | Crescent International LTD holds
    (a) 328,125 shares of our Common Stock,
    (b) warrants to purchase up to 295,313 shares of our
    Common Stock and (c) additional investment rights to
    purchase up to 197,163 additional shares of our Common Stock and
    warrants to purchase up to 177,447 additional shares of our
    Common Stock. Further to the terms of the warrants, the
    additional investment rights and the warrants comprising a
    portion of the additional investment rights held by Crescent
    International LTD, the warrants and the additional investment
    rights are not exercisable to the extent that (a) the
    number of shares of our Common Stock held by Crescent
    International LTD and (b) the number of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

11



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##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | shares of our Common Stock issuable upon exercise
    of the warrants, the additional investment rights and the
    warrants comprising a portion of the additional investment
    rights would result in beneficial ownership by Crescent
    International LTD of more than 4.99% of our outstanding shares
    of Common Stock (Crescents Maximum
    Percentage). By written notice to us, Crescent
    International LTD may waive these provisions, or increase or
    decrease Crescents Maximum Percentage, but any such waiver
    or increase will not be effective until the 61st day after
    such notice is delivered to us (any such waiver of increase or
    decrease will apply only to Crescent International LTD and
    not to any other holder of warrants, additional investment
    rights or warrants comprising a portion of the additional
    investment rights). Crescent International LTD beneficially
    owns 858,441 shares of our Common Stock, including
    530,316 shares underlying warrants that are currently
    exercisable or exercisable within 60 days.



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(13) | OTAPE Investments LLC holds
    (a) 296,662 shares of our Common Stock,
    (b) warrants to purchase up to 266,995 shares of our Common
    Stock and (c) additional investment rights to purchase up
    to 178,259 additional shares of our Common Stock and
    warrants to purchase up to 160,433 additional shares of our
    Common Stock. Further to the terms of the warrants, the
    additional investment rights and the warrants comprising a
    portion of the additional investment rights held by OTAPE
    Investments LLC, the warrants and the additional investment
    rights are not exercisable to the extent that (a) the
    number of shares of our Common Stock held by OTAPE
    Investments LLC and (b) the number of shares of our
    Common Stock issuable upon exercise of the warrants, the
    additional investment rights and the warrants comprising a
    portion of the additional investment rights would result in
    beneficial ownership by OTAPE Investments LLC of more than
    4.99% of our outstanding shares of Common Stock
    (OTAPEs Maximum Percentage). By written notice
    to us, OTAPE Investments LLC may waive these provisions, or
    increase or decrease OTAPEs Maximum Percentage, but any
    such waiver or increase will not be effective until the 61st day
    after such notice is delivered to us (any such waiver of
    increase or decrease will apply only to OTAPE
    Investments LLC and not to any other holder of warrants,
    additional investment rights or warrants comprising a portion of
    the additional investment rights). OTAPE Investments LLC
    beneficially owns 860,094 shares of our Common Stock, including
    563,432 shares underlying warrants that are currently
    exercisable or exercisable within 60 days.




Item 13  CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS

Pursuant to a license agreement with Franchise
Films, we are obligated to issue 68,738 shares of our
Common Stock after the release of any film for which we elect to
produce interactive entertainment software products. This
agreement covers up to 10 films, or 687,375 shares of
our Common Stock. To date, we have elected to produce titles for
three films and have issued 137,475 shares of our Common
Stock under this agreement to Franchise Films. In May 2001,
Franchise Films and its president assigned 68,738 shares of
our Common Stock, 21,937 shares of our Series A
Preferred Stock (which subsequently were converted into
103,104 shares of our Common Stock) and the right to be
issued up to 618,637 shares of our Common Stock to Selected
Ventures, LLC, a Delaware limited liability company. In
August 2002, the assignment of such right to Selected
Ventures, LLC was revoked. Mark Dyne, who is a member of
our Board of Directors, owns 25% of Selected Ventures, LLC.

In August 2003, we entered into a promissory note
with Anthony R. Williams pursuant to which
Mr. Williams loaned us $250,000. The note, which bears
interest at 6% per annum is due on or prior to October 31,
2003.

Since January 2002, George M.
Sundheim, III, who is our Secretary and was a member of our
Board of Directors until November 13, 2002, has served as
of counsel at the law firm of Doty, Sundheim & Gilmore,
a professional corporation, which provides legal services to us,
and from April 1986 to December 2001, he was a partner of the
same law firm. We incurred legal fees payable to Doty,
Sundheim & Gilmore of $56,000 for the year ended
June 30, 2003, $290,000 for the year ended June 30,
2002, $195,000 for the year ended June 30, 2001 and $9,000
for the period from our inception through June 30, 2000.

12



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##### Table of Contents



We have entered into employment agreements with
certain of our executive officers and certain non-executive
employee directors. See Executive Compensation 
Employments Agreements and Executive
Compensation  Compensation of Directors 
Employee Directors, respectively.

We believe that all of the foregoing transactions
were on terms no less favorable than those that could have been
received from unrelated third parties.




PART IV




Item 15  EXHIBITS, FINANCIAL
STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

(c) Exhibits



| |                                                                                 
| | --------------------------------------------------------------------------------
| | The following exhibits are filed as part of this
    annual report on Form 10-K:

|        |    |                        |  |                                                                                                                        
|------- | -- | ---------------------- |  | -----------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|Number  |    | Description of Exhibit
|        |    |                       
|        | 31 | .1                     |  | Certification of Chief Executive Officer pursuant
    to Securities Exchange Act Rule 13a-14(a).                       
|        | 31 | .2                     |  | Certification of Chief Financial Officer pursuant
    to Securities Exchange Act Rule 13a-14(a).                       
|        | 32 |                        |  | Certification pursuant to
    18 U.S.C. 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.

13



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused amendment no. 1 to this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of San Jose, State of California, on October 27,
2003.



| |                         
| | ------------------------
| | BAM! ENTERTAINMENT, INC.



| |     |                                                                                        
| | --- | ---------------------------------------------------------------------------------------
| | By: | /s/ RAYMOND C. MUSCI 
     _____________________________________ 
     Raymond C. Musci

| |                        
| | -----------------------
| | Chief Executive Officer

Pursuant to the requirements of the Securities
Exchange Act of 1934, amendment no. 1 to this report has
been signed below by the following persons in the capacities and
on the dates indicated.

|                                           |  |                                                                                                                |  |                  |  | 
|------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------- |  | ---------------- |  | 
|                                           |  |                                                                                                                |  |                 
|Signature                                  |  | Title                                                                                                          |  | Date            
|                                           |  |                                                                                                                |  |                 
|                                          
|/s/ RAYMOND C. MUSCIRaymond C. Musci       |  | Chief Executive Officer, and Director
    (Principal Executive Officer)                                        |  | October 27, 2003
|                                          
|/s/ ANTHONY R. WILLIAMSAnthony R. Williams |  | Vice Chairman of the Board                                                                                     |  | October 27, 2003
|                                          
|/s/ STEPHEN M. AMBLERStephen M. Ambler     |  | Chief Financial Officer and
    Vice President of Finance
    (Principal Financial and
    Accounting Officer) |  | October 27, 2003
|                                          
|/s/ ROBERT E. LLOYDRobert E. Lloyd         |  | Director                                                                                                       |  | October 27, 2003
|                                          
|Mark Dyne                                  |  | Director                                                                                                       |  |                 
|                                          
|/s/ DAVID E. TOBINDavid E. Tobin           |  | Director                                                                                                       |  | October 27, 2003
|                                          
|/s/ ANTHONY G. WILLIAMSAnthony G. Williams |  | Director                                                                                                       |  | October 27, 2003
|                                          
|/s/ ROBERT T. SLEZAKRobert T. Slezak       |  | Director                                                                                                       |  | October 27, 2003

14