SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

                Annual Report Pursuant to Section 13 of 15(d) of
                     The Securities and Exchange Act of 1934
                     For the year ended: September 30, 2001

                         Commission File Number: 0005468

                          ANGELCITI ENTERTAINMENT, INC.
             (Exact name of registrant as specified in its charter)

                           ANGELCITI MULTIMEDIA, INC.
                           (Former Name of Registrant)

           Nevada                                               88-0427195
------------------------------                              -------------------
State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

               1680 N. Vine Street, Suite 721 Hollywood, CA 90028
           -----------------------------------------------------------
           (Address of Principal Executive Offices including zip code)

                                 (800) 230-2249
                         (Registrant's Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:   None

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

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this Form, and no disclosure will 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-KSB or any amendment to
this Form 10-KSB.

                                                      Yes [ ] No [x]

State issuer' revenues for its most recent fiscal year.   $301,979

Transition Small Business Disclosure Format:          Yes [ ] No [x]

As of December 31, 2001, there were 59,238,200 outstanding shares of common
stock, par value $0.01. There was no market value for these shares.

Documents incorporated by reference: Registration Statement on Form SB-2 filed
with the Securities and Exchange Commission on January 26, 2001 and all
amendments thereto, bearing File No. 333-54468 and being declared effective on
October 29, 2001.



<PAGE>



                                  GENERAL NOTE

     References in this document to "us," "we," or "the Company" refer to
AngelCiti Entertainment, Inc. This Report contains forward-looking statements
based upon current expectations, assumptions, estimates and projections about
AngelCiti Entertainment, Inc. and our industry. These forward- looking
statements involve risks and uncertainties.. Our actual results could differ
materially from those anticipated in such forward-looking statements as a result
of certain factors as more fully described in this Report.

                                     Part I.

Item 1. Business.

General-Organization and Prior Operations
-----------------------------------------

         AngelCiti Entertainment, Inc. is a Nevada corporation that was formed
under the name Los Angeles International Film and Music Market, Inc. in May of
1999. Our name was changed to AngelCiti.com Multimedia, Inc., was subsequently
changed to Angelciti Multimedia, Inc., and was then changed to our current name
in April of this year. We began day to day operations in Hollywood, California
on July 12, 1999 as a multi-dimensional entertainment company that produced and
promoted film and music festivals featuring independent artists and their works,
broadcasts the works of independent film and music artists, as well as other
content, over the Internet, and offered film and music production assistance to
independent film and music artists. The events of September 11, 2001 have forced
us to re-evaluate our operations and revise our business plan.

         We had originally been engaged as a producer and promoter of live film
and music festivals and provider of streaming media content over our Internet
web site. The content appearing on our web site had been based on the film and
music festivals that we had promoted and produced. Our live festivals had been
predominantly geared towards independent film producers and musical artists who
were not under contract with a record label or who had demonstrated a material
fan support base in their local markets or on the Internet.

         We produced film festivals in five cities, consisting of theater
screenings of films not available to the general public through traditional.
Festivals typically included 30-40 films, including shorts, documentaries and
full length features. We produced music concerts in Los Angeles, California and
in twelve other cities throughout the country. Revenues from film and music
festivals were generated from promotional fees paid by musical artists and film
makers, ticket sales for live events, event sponsorship, event program
advertising and live event advertising sales.

         The events of September 11, 2001 have seriously impacted our operations
as the perception of reduced attendance at our live events has caused
sponsorship of our events to be dramatically reduced. As a result, we have been
unable to produce live events, have abandoned our live event operations and have
developed a new business strategy. Our principal focus remains in the
entertainment industry. Rather than promoting film and music events, we intend
to operate and manage on-line gaming websites and have authorized the change our
corporate name to AngelCiti Entertainment, Inc. to reflect our expanded
business.

                                        2

<PAGE>




New Operations
--------------

         We have formed a wholly-owned subsidiary, Worldwide Management. SA, a
Costa Rica corporation ("WM"), to own and operate our on-line casino. Our casino
operations will be managed by another wholly-owned subsidiary, Worldwide
Entertainment, Inc., a Belize corporation ("WEI"). WEI will initially manage our
company owned on-line casino. However, it may manage other on-line casinos in
the future, should our board determine that such services can be offered
profitably and are otherwise in our best interest. We anticipate that out
on-line casino will be operational by mid-April 2002.

         Our on-line casino will be operated using software technology licensed
by others. Our current software license requires us to pay a set up fee that is
payable over several months as well a percentage of our revenues. Our software
provider provides us with updates and innovations to their technology, which
eliminates our need to fund ongoing research and development expenses.

         Our on-line casino software is operated on company-owned servers that
are housed in our Costa Rica office. The hosting of our casino site and
maintenance of our equipment are provided by third party vendors. The use of
third party vendors for such services helps us minimize our ongoing payroll
expense.

         Our on-line casino will operate games of chance including Blackjack,
Craps, Video Poker, Roulette, Mini-Baccarat and various forms of on-line slot
machines, as well as other games that are created by the licensor of our
operating software. Our on-line casino games use software technology that
provides enhanced sound and graphics and allows real time interactivity within a
user's own web browser. Access to our on line casino is provided through the use
of a customer's computer. A customer will have the option of loading and playing
casino games through their web browser with no downloading, or a customer will
be able to download either the entire website or individual games to achieve
faster play. Our online casino offers odds in each game as would be expected
from land based games of chance. Players have the opportunity to win or lose in
any given game, against any given player, on any given day, just as one does in
any land based casino.

         Players can play free of charge or open an account in our office, fund
the account and place their funds at risk by betting on the outcome of our
games. Wagering customers are required to provide certain personal and financial
information, including a user name and password, in order to open an account. In
order to make live wagers, a person must purchase electronic cash by making one
or more credit card deposits or other forms of cash payment into their account.
Our online casino is designed to be an entertaining and interactive real time
playing experience that provides maximum security to our customers. We do not
disclose any personal or wagering information regarding our customers and access
to all accounts is password protected.

         Many of our games have several variations and provide for minimum and
maximum betting ranges. Customer winnings (in U.S. Dollars) are automatically
credited to a customer's account. Withdrawals are effected by crediting the
customer's credit card up to the amount deposited with us, with the balance sent
to the customer by check or draft. Customer's are free to withdraw all or a part
of their winnings, review their account balances, or make additional deposits to
their accounts at any time.


                                        3

<PAGE>


         We do not require our customers to maintain a minimum account balance
or place restrictions on amounts accumulated through winnings. Nor do we expect
to grant credit to our customers. We do, however, place maximum bet limits for
new customers and reserve the right to grant custom wagering and account options
to our regular customers based upon their established profiles. We adhere to the
Code of Conduct of the Interactive Gaming Council, a gaming industry
organization. Among other things, this Code requires us to post loss limits and
to provide referrals and direct access to help and counseling organizations as a
means to identify and curtain compulsive gambling. We may suspend a customer's
account activity at any time if we suspect or observe compulsive gambling
behavior. Unfortunately, we cannot be certain that we will be able to
successfully identify or curtail such compulsive gambling by our customers.

         Intellectual Property Rights
         ----------------------------

         We have sought to protect and registered the use of the names AngelCiti
and AngelCiti.com by filing for trademark protection with the United States
Patent and Trademark Office. We have entered into a license agreement with a
third party vendor for the use of our on-line casino software.

         Competition
         -----------

         Our business is highly competitive. We face competition from large
numbers of large and small companies, both public and private. Many of these
companies have financial resources far greater than ours and have greater
leverage in attracting talent, product and personnel. A high degree of
competition is expected to continue and there are no significant barriers to
entry into our business. Our business may be adversely affected by these
factors.

         Internet gambling has grown from 30 sites in 1996 to approximately
1,400 sites in the year 2000 according to the Center for policy Initiatives
[what is this]. Bear Stearns estimates that there are approximately 1200 to 1400
e-gaming web sites. These sites offer all types of gambling from bingo and
lotto, to classic live games such as roulette, poker, blackjack, craps and slot
machines, to betting on amateur and professional sporting events.

         Given the popularity of the Internet in general and the relatively high
profit margins and low overhead associated with the Internet gaming business, we
face strong competition in what is expected to be a rapidly growing global
industry. Our competitors include CryptoLogic, Inc., Venturetech, Inc., GLC
Limited, GoCall, Inc., Cybergames, Inc., Youbet.com, Internet Casinos Ltd.,
Wager Net, Inc., Casinos of the South Pacific, World Wide Web Casinos and
Virtual Vegas, to name a few. Some of our competitors offer entrepreneurs full
software, accounting, marketing and other forms of support to enable them to
operate their own on-line casinos and Internet Web sites. As the barriers to
entry into this industry are low, access to this business is made to a wide
number of entities and individuals. Required technological and management
expertise can be licensed or purchased from existing vendors. Our industry's
technology, including hardware, software and the mode through which
communications flow are subject to rapid and significant change. Others may
develop technologies that render our operations obsolete.

                                        4

<PAGE>




         Employees
         ---------

         As of March 31, 2001, our president, Lawrence Hartman, remains our sole
full-time employee. Mr. Hartman is not employed pursuant to the terms of an
employment agreement and is not restricted from competing with us should he
sever his ties with us. Our employees are not covered by a collective bargaining
agreement. We believe that our relationship with our employees is satisfactory.

Item 2. Description of Property

         Our former president permits us to utilize his offices located at 1680
North Vine Street, Suite 721, Hollywood, California for as a mailing address and
an administrative office on an as- needed basis. We do not make any payment for
this space and this arrangement is subject to change at any time. One of our
investors permits us to utilize his office, which consists of approximately 800
square feet of office space at 1109 North Federal Highway, Ft. Lauderdale, FL,
as an additional stateside administrative office. We do not make any payment for
this space and this arrangement is subject to change at any time. We sublease
office space in Oficentro La Sabana, Edificio #1, Piso #3, San Jose, Costa Rica
for the monitoring of our on-line gaming subsidiaries on a month to month basis.
This sublease requires base rent payments of $502.00 per month. We believe that
each of the foregoing properties is suitable for our needs over the next 12
months, and further believe that additional space would be readily available
should we need it.

Item 3. Legal Proceedings

         We are not a party to any legal proceedings that we believe would,
individually or in the aggregate, have a material adverse effect on our
business, our financial condition or our results of operations.

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

         None




                                     PART II

Item 5 Market For Common Equity and Related Stockholder Matters

Trading Market
--------------

         There is no public trading market for our common stock, nor can we be
certain that a trading market for our securities will ever develop.


                                        5

<PAGE>


Holders
-------

         As of the date of this Report, there are 53 shareholders of our common
stock.

Dividends

         We have not paid any dividends since our inception and presently
anticipate that all earnings, if any, will be retained for development of our
business, and that no dividends on the shares of common stock will be declared
in the foreseeable future.

Recent Sales of Unregistered Securities

         The following table describes the identity of purchasers or holders of
our unregistered shares, along with the date of issuance and amount of shares
purchased:

<TABLE>
<CAPTION>

          OWNER                     DATE OF ISSUANCE                            AMOUNT(1)
---------------------------------------------------------------------------------------------------
<S>                                 <C>                              <C>                     <C>
Lawrence S. Hartman                 July 15, 1999                      22,400,000 common shares(2)
Lawrence S. Hartman                 March 31, 2000                          4,000 common shares(11)
Adam Zoblotsky                      July 15, 1999                      22,400,000 common shares(2)
Carl R. Ceragno                     July 30, 1999                         200,000 common shares(3)
                                    November 1, 2000                       40,000 common shares(3)
Lawrence H. Fox                     July 30, 1999                         280,000 common shares(3)(4)
                                    November 1, 2000                       40,000 common shares(3)
Sherry Rosenblum                    July 30, 1999                         820,000 common shares(5)
Stacey Rosenblum                    July 30, 1999                         760,000 common shares(5)
Almajean O'Connor                   October 18, 1999                       80,000 common shares
Glenn Preslier                      October 20, 1999                       80,000 common shares
Edward G. Brown                     October 26, 1999                       40,000 common shares
Aaron Geller                        October 26, 1999                       40,000 common shares
MAP Family Trust                    October 26, 1999                      200,000 common shares
Mark Fox                            November 1, 1999                       80,000 common shares
Houston Ma                          November 1, 1999                      112,000 common shares
Eugene Fox                          November 3, 1999                       40,000 common shares
Adam Epstein                        December 1, 1999                      800,000 common shares(6)
Tahnee Mckellar                     December 1, 1999                       40,000 common shares(5)
Payem Golespany                     January 10, 2000                       29,400 common shares(7)
Mark Fox                            January 20, 2000                       40,000 common shares
Lee Nailon                          January 20,2000                        80,000 common shares
Barbara Horenstein                  January 26, 2000                       16,000 common shares
Wye & Whalsay                       January 27, 2000                    2,000,000 common shares(16)
Cornelius Considene                 January 28, 2000                       80,000 common shares
Edward G. Brown                     February 5, 2000                       40,000 common shares
Joe Penner                          February 27, 2000                     162,400 common shares(14)
</TABLE>

                                                        6

<PAGE>

<TABLE>
<CAPTION>

<S>                                 <C>                                <C>                    <C>
Kailuamana Corp.                    February 27, 2000                   2,000,000 common shares(8)
Dewayne Barron                      March 10, 2000                        480,000 common shares(12)
Jason Bruzick                       March 10, 2000                         80,000 common shares (15)
Jacqui Knapp                        March 10, 2000                         60,000 common shares(9)
Arnie Malenenko                     October 6, 2000                     2,800,000 common shares(10)
Andrew Farber                       March 28, 2001                        150,000 common shares (13)
Jeffrey Klein                       March 28, 2001                        150,000 common shares(13)
----------------
</TABLE>


(1) Reflects an 8:1 forward stock split effective for shareholders of record as
of November 10, 2000. These shares had been issued to our founders, employees,
officers, directors, consultants and certain accredited investors. Unless
otherwise noted, these shares have been issued for cash at a sale price of
$0.125 per share.
(2) Issued to our founders for services rendered in connection with our
formation and initial development.
(3) Issued in consideration for serving on our board of directors.
(4)80,000 of said shares issued in consideration for legal services rendered.
(5) Issued in connection for consultation services that introduced our founders
and established certain trade contacts and valued at $.125 per share.
(6) Issued in connection with consulting services that established our
relationship with tickets.com and MP3.com and valued at $.125 per share. (7)
Issued in consideration for the sale of computer equipment valued at $3,675. (8)
Issued to a foreign entity in connection with consulting services regarding
general business advisory services pursuant to Regulation S valued at $.125 per
share.
(9) Issued in partial consideration for three months employment services valued
at $7,500. Ms. Knapp had been employed by us as our press specialist.
(10) These shares were issued to Mr. Malenenko upon conversion of $500,000 face
value of our convertible promissory notes that were purchased in September 2000.
Mr. Malenenko still holds of $150,000 of our promissory note due September 7,
2003. This indebtedness is convertible into our shares at Mr. Malenenko's option
at the rate of $0.125 per Share. Should Mr. Malenenko convert the entire balance
of his promissory note to our shares, he would be entitled to receive an
additional 1,200,000 shares.
(11) Issued to one of our directors at a price of $125 per share, partially in
lieu of the payment of interest on a loan payable by us to said director.
(12) Issued to a consultant at a price of $.125 per share in connection with web
site services rendered.
(13) Issued in partial consideration for legal services rendered to us, valued
at $7,500.
(14) Issued in consideration for the sales of a sport utility vehicle used by us
that was valued at $20,300.
(15) Issued in consideration for developing database software that we use to
track musicians, film makers and event attendees, valued at $.125 per share.
(16) Sold to a foreign investor for cash at a price of $.125 per share pursuant
to Regulation S.

We raised net proceeds of $364,750 upon the sale of our shares to those
individuals and entities listed above who purchased their shares for cash. Of
these individuals and entities, one is a foreign entity whose purchase was made
pursuant to Regulation S promulgated under the Securities Act of 1933, as
amended. These sales were made at a price of $.125 per share. The remaining
sales were made in reliance upon the exemption from the registration provisions
of the Securities Act afforded by Section 3(b) of the Securities Act of 1933, as
amended, and Rule 504 promulgated thereunder.

All but one of the aforementioned issuances and sales for services rendered were
made in

                                        7

<PAGE>


reliance on Section 4(2) of the Securities Act, as amended, as transactions by
an issuer not involving a public offering. One of these sales was made to a
foreign entity, which was exempt from registration under the provisions of
Regulation S, promulgated under the Securities Act of 1933, as amended.

The purchasers of all of the securities described above acquired them for their
own account and not with a view to any distribution of said shares to the
public, with the exception of a portion of the shares issued to Messrs. Farber
and Klein, which were issued with registration rights in anticipation of this
offering. All of said shares bear legends stating that the securities may not be
offered, sold or transferred other than pursuant to an effective registration
statement under the 1933 Act, the provisions contained in Regulation S (if
appropriate), or an exemption from such registration requirements. No
underwriter was utilized in connection with the offer or sale of such securities
and no underwriting discounts were paid.

         We raised net proceeds of $500,000 upon the issuance of a convertible
promissory note in an isolated private offering to one accredited individual
listed above, which was exempt pursuant to Sections 4(2) and 4(6) of the
Securities Act of 1933, as amended, and Rules 506 promulgated thereunder, of
which $350,000 was converted into 2,800,000 of our shares. No underwriter was
utilized in connection with the offer or sale of such securities and no
underwriting discounts were paid.

         During the first quarter of 2002, we raised $122,000 upon the sale of
244,000 of our common shares at a price of $0.50 per share pursuant to the terms
of Regulation S. No underwriter was utilized in connection with the offer or
sale of such securities and no underwriting discounts were paid.

Use of Proceeds from Registered Securities
------------------------------------------

         On January 26, 2001 we filed a registration statement with the U.S.
Securities and Exchange Commission bearing file number 333-54468. This
registration statement sought to register a total of 7,500,000 of our common
shares, 3,053,100 of which were to be sold on our behalf and 4,446,900 of which
were to be sold on behalf of our selling shareholders. This registration
statement was declared effective by the Securities and Exchange Commission on
October 29, 2001 and our offering commenced at that time. No underwriter was
utilized in connection with the offer or sale of such securities and no
underwriting discounts were paid. We terminated this offering with respect to
438,100 common shares that remained unsold by us and 4,446,900 shares that
remained unsold by our selling shareholders on February 6, 2002. From October 1,
2001 to the date that our public offering terminated, we sold 2,615,000 shares
of common stock at a price of $1.00 per share, raising total proceeds of
$2,615,000. The proceeds were raised in the form of $15,000 in cash, which was
used for general working capital purposes, as well as $1,300,000 in a
combination of: (i) $1,236,667 face value of promissory notes, full payment for
which is due in November of 2003; and (ii) restricted shares in Accesspoint
Corp., a publicly traded microcap company which the Company values at $63,333.
The remaining $1,300,000 was raised in the form of services by contractors who
were neither officers, directors nor shareholders owning 10% or more of our
shares. We did not incur any expenses in



                                        8

<PAGE>




connection with the sale of these shares. The foregoing application of proceeds
represents a significant change from the use of proceeds listed in our
registration statement as we have discontinued the operation described in our
registration statement and have employed a new business strategy.

Item 6 Management's Discussion and Analysis or Plan of Operations

         The following discussion of the results of our operations and financial
condition should be read in conjunction with our financial statements and
attached footnotes that are included elsewhere in this Report. Except for the
historical information contained in this Report, the discussion contained in
this Report contains "forward-looking statements" that involve risk and
uncertainties. These statements may be identified by the use of forward-looking
terminology such as "believes", "expects", "may", "will", "should" or
"anticipates" or the negative of these words or similar expressions or by
discussions of strategy. Our actual results could differ materially from those
discussed in this Report.

         We report based upon the consolidated operations of all of our business
segments due to the fact that at present only the film festivals have provided a
material source of income and expense for our operations.

Results of Operations.

         We have suffered operating losses of $385,925 for the year ending
December 31, 2000 and $652,412 for the year ending December 31, 2000. Total
revenues of $301,979 for the year ending December 31, 2001 succeeded revenues of
$331,851 for the year ended December 31, 2000 as a result of a decrease in our
business following the tragedy of September 11, 2001 and our subsequent change
in our business focus.

         Our event costs decreased from $228,421 for the year ended December 31,
2000 to $115,969 reflecting fewer live events produced for the year. Our
Selling, general and administrative expenses decreased from $755,842 for the
year ended December 31, 2000 to 571,935 for the year ended December 31, 2001 in
line with our decreasing operations.

         From December 31, 1999 to December 31, 2000, the most significant
increases in our general and administrative expenses were wages and salaries,
which increased from $68,501 to $151,740, rent expense, which increased from
$6,698 to $46,480, travel and entertainment expenses, which increased from
$5,266 to $25,045, and supplies expense, which increased from $5,185 to $47,910.
The increased expenses resulted from the significantly greater number of events
that we produced during the year 2000 as opposed to the prior year as well as
our need to physically expand the premises within which we operate to
accommodate our growth. The increase in our wages and salaries reflected
salaries of a webmaster, sponsorship director and public relations director who
were hired during the year.

         Our revenues decreased approximately 25% from the period ending June
30, 2000. This decrease was primarily due to a one-time sponsorship fee of
$70,000 received from a single sponsor during the second quarter of the year
2000 to promote the AngelCiti Presents the MP3.Com Artist Tour. Material changes
in our expenses from the six months ending June 30, 2000 to June 30, 2001

                                        9

<PAGE>

include a decrease in wages and salaries from $64,510 to $57,005, a decrease in
advertising expense from $31,989 to $1,365, a decrease in outside consulting
charges from $178,054 to $67,282, a decrease in film festival expense from
$89,072 to $81,622, a decrease in web-related fees from $62,910 to $598, a
decrease in supplies expense from $18,259 to $1,404, and a decrease in insurance
expense from $6,240 to $850. These changes also reflect a greater number of
events that we have produced as well as our efforts to pare down our costs.

         For non-monetary barter transactions, we recognized revenues of $7,210
and $39,639 for the periods ending December 31, 1999 and December 31, 2000,
respectively and corresponding expenses of $7,210 and $39,639 for the same
periods. For non-monetary barter transactions, we recognized revenues of $37,935
and $38,700 for the six month periods ending June 30, 2000 and June 30, 2001,
respectively and corresponding expenses of $37,935 and $38,700 for the same
periods.

         Our Other Expense for the year ended December 31, 2000 was $43,867 as
compared to $827 for the year ended December 31, 1999 and was $25,311 for the
six months ended June 30, 2001 as compared to $3,431 for the six months ended
June 30, 2000. This increase is primarily due to losses on short term
investments net of realized gains. The $25,311 of other expense for the six
months ended June 30, 2001 was comprised of income from dividends, interest, and
gains on the sale of marketable securities, less margin expense and unrealized
losses of $34,103 in our marketable securities portfolio.

         We have revised our business plan to operate an on-line casino. We
anticipate that our on- line casino will be operational during the second
quarter of 2002. Events beyond our control may delay the commencement of these
operations. We will not earn revenues until we our on-line casino has commenced
operations and we cannot be certain that we will be able to operate profitably.
Until that time, we remain dependent upon funds that we have raised and
additional financing to remain in business. If the funds that we have raised
have been exhausted and we are not able to secure additional financing, we would
be forced to curtail or cease our operations.

Liquidity and Capital Resources

         Total cash and cash equivalents as of December 31, 2001 were $563 as
compared to $321,092 as of December 31, 2000. The significant decrease resulted
from our ongoing operating losses. Total working capital as of December 31, 2001
decreased to $49,051 from $297,359 as at December 31, 2000, as a result of our
ongoing losses. Given, our history of significant ongoing losses, working
capital deficits and limited financial resources, our auditor has raised
substantial doubts about our ability to continue as a going concern. As a result
of our ongoing losses and working capital deficits, we have been forced to raise
additional capital. Towards this end, we are seeking to raise up to $2,500,000
in a private offering made pursuant to Regulation S under the Securities Act of
1933. To date, we have sold 234,000 of our common shares pursuant to this
offering at a price of $0.50 per share and have raised net proceeds of $117,000.

         While we believe that we will have sufficient reserves to finance our
ongoing business

                                       10

<PAGE>

activities for the next twelve months, we cannot guaranty that this will be the
case and we may require additional financing to continue our operations during
this period. Unless we achieve significantly greater revenues, we will require
additional financing to continue our operations.

Future Expenditures
-------------------

         Our future capital expenditures will depend upon our ability to
generate revenues or additional investment capital if our revenues are not
sufficient. If, and to the extent that we are successful in generating net
revenues or raising investment capital, our future expenditures will be applied
towards salaries for additional administrative and executive employees, upgrades
to our operating software and for general working capital purposes.

Item 7 Financial Statements

         Attached hereto and filed as a part of this Form 10-KSB are the
financial statements required by Regulation SB. Please refer to pages F-1
through F-__.

Item 8 Changes In and Disagreements With Accountants on Accounting and Financial
       Disclosure.

         In November 13, 2001, we changed our auditors from Hein & Associates to
Chisholm and Associates, LLP. Notice of this change was filed with the
Securities and Exchange Commission on Form 8-K/A on December 4, 2001. There were
no disagreements with our prior auditors on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope procedure,
which, if not resolved to the former accountant's satisfaction, would have
caused it to make reference to the subject matter of the disagreement(s) in
connection with its report. Our prior auditors confirmed that there were no such
disagreements in a letter that was made an exhibit to our 8-K filing.





                                    Part III

Item 9 Directors, Executive Officers, Promoters and Control Persons;
       Compliance with Section 16(a)

Directors, Executive Officers, Promoters and Control Persons
------------------------------------------------------------

         The following table sets forth the ages and positions held by our
executive officers, directors and control persons:

<TABLE>
<CAPTION>
NAME                                AGE              POSITIONS HELD
-----------------------------------------------------------------------------------------------------
<S>                                <C>               <C>
Larry S. Hartman(1)                  35              Director and Chief Executive Officer, President,
                                                     Treasurer (CFO) and Secretary
Carl R. Ceragno(1)                   55              Director
Lawrence H. Fox(1)                   36              Director
</TABLE>



                                       11

<PAGE>




(1) The directors named above will serve until the next annual meeting of our
shareholders to be held within six months of the close of our fiscal year or
until their successors shall have been elected and accepted their positions.
Directors are elected for one-year terms.

         Lawrence S. Hartman. Lawrence S. Hartman has served as our Chief
Executive Officer, Chairman of the Board of Directors and Secretary since May
14, 1999. Mr. Hartman expanded his duties to serve as our president, treasurer
and chief financial officer as well, upon the resignation of Adam Zoblotsky from
those offices on December 1, 2001. Mr. Hartman's daily activities include
supervising development of our on-line casino, meeting and speaking with
potential business affiliates, working with our legal counsel, accountants, and
auditors, and general corporate administration. Mr. Hartman currently devotes
approximately 30 hours per week towards our operations. Since May of 1999, Mr.
Hartman has served as a director and Vice President-Corporate Counsel of
Communications Research, Inc., a New Jersey based systems integration and video
conferencing design company ("CRI"). Mr. Hartman does not devote his full time
efforts to the affairs of CRI. Rather, he provides his time to CRI on an "as
needed" basis, which has historically represented approximately 5% of his time.
Mr. Hartman devotes the remainder of his time offering consulting services to
development stage companies. From May of 1998 to June of 1999, Mr. Hartman had
served as a senior manager, investment banking, for the Olwen Federal Bank,
where his responsibilities were devoted towards real estate asset management.
From January 1996 to May of 1998, Mr. Hartman served as Vice President,
secretary and general counsel with Tarragon Realty Advisors, a real estate
investment trust. From January of 1994 until January of 1996, Mr. Hartman was
employed as an associate attorney with the law firm of Cedarwood Brothers, where
his area of practice was limited to real estate and corporate law.

         Mr. Hartman earned a Bachelor of Arts degree from Albany University in
May of 1987. He earned his Juri Doctor degree from Columbia Law School in May of
1990. Mr. Hartman is currently licensed to practice law in the State of New
York.

         Carl R. Ceragno. Mr. Ceragno has served as our director since July 30,
1999. He has been president and chief executive officer of CRI since 1989. His
responsibilities include system design engineering, project management, sales
and technical proposal preparation. From May 1997 through May 1999, Mr. Ceragno
also served as president of Visual Telephone International, Inc., a publicly
traded company that had been the parent company of CRI. From July 1969 through
June of 1992, Mr. Ceragno served as a studio engineer, project engineer, chief
engineer, and ultimately vice president of engineering for Tele-Measurements,
Inc., an A/V systems integration business located in Clifton, New Jersey.

         Mr. Ceragno received a bachelor of sciences degree in May of 1969 from
Emerson College, Boston, MA. At graduation, he was honored by receiving the
departmental award for excellence and service to the Emerson College
broadcasting department.



                                       12

<PAGE>


         Mr. Ceragno has given numerous network design and video conferencing
lectures, has taught technical classes at Emerson College and has authored
numerous lectures regarding telecommunications technology and integration.

         Lawrence H. Fox. Lawrence H. Fox has served as our director since July
30, 1999. Mr. Fox has served of counsel to the law firm of Mister, Silage & Fein
since August 1, 1999. His practice is currently concentrated in the areas of
corporate and securities law. From September 1990 to May 1999, Mr. Fox was an
associate attorney with the law firm of Rogers & Wells in their New York City
office, where he practiced corporate and securities law. Since September 1994,
Mr. Fox has served as an NBA player's agent.

         Mr. Fox earned a Juris Doctor Degree from the Boston University Law
School in May 1990. He is currently licensed to practice law in the State of New
York. He earned a Bachelor of Arts degree from the State University of New York
at Albany in May 1987.

Compliance with Section 16(a)
-----------------------------

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires our officers, directors and persons who own more than 10% of our equity
securities, to file reports of ownership and changes in ownership of our equity
securities with the Securities and Exchange Commission. Officers, directors and
persons owning more than 10% of our equity securities are required to furnish us
with copies of all Section 16(a) filings.

         We believe that all of our officers directors and persons owning more
than 10% of our equity securities have been in compliance with Section 16(a) of
the Securities Exchange Act of 1934 during the year ended December 31, 2001.

Item 10 Executive Compensation

         Our Board has authorized payment of an annual salary of $50,000 to Mr.
Hartman. In addition, Mr. Hartman is entitled to receive a non-accountable
expense allowance to reimburse his reasonable out-of-pocket expenses incurred on
behalf of the Company. Mr. Hartman is not employed pursuant to the terms of an
employment agreement and is free to compete with us once his employment with us
is terminated. We do not currently have any employee incentive stock option
plan.

         The following table sets forth the compensation of our sole officer for
the last two (2) fiscal years:

<TABLE>
<CAPTION>

NAME AND                            ANNUAL COMPENSATION          LONG TERM COMPENSATION
PRINCIPAL POSITION       YEAR   SALARY(1)    BONUS   OTHER(2) STOCK    SAR's   LTIP  OTHER
------------------       ----   ---------    -----   -------  -----    -----   ----  -----

<S>                      <C>    <C>         <C>       <C>     <C>     <C>    <C>    <C>
Lawrence S. Hartman      2000   $57,000      $0.00    $0.00   $0.00    $0.00  $0.00  $0.00
CEO, CFO and secretary   2001   $50,000      $0.00    $0.00   $0.00    $0.00  $0.00  $0.00
</TABLE>

            -------------------------------------------------------------------

                                             13

<PAGE>


(1) Mr. Hartman had deferred a portion of his salary during the years ended
December 31, 2000 and December 31, 2001. As of December 31, 2001, Mr. Hartman
forgave all accrued deferred compensation due him.

(2) Does not include loans made to Mr. Hartman or a non-accountable expense
allowance payable to Mr. Hartman. The non-accountable expense allowance serves
as reimbursement of personal funds expended for business purposes.

Terms of Office
---------------

         Our directors hold office until the next annual meeting of our
stockholders or until their successors are elected and duly qualified. All
officers serve at the discretion of the directors.

Directors' Compensation

         No compensation has been paid to inside directors for service in such
capacity in the past. Each independent director receives 200,000 shares of stock
upon appointment to the board (after reflecting an 8:1 forward stock split
effective as of November 10, 2000), receives annual compensation in the form of
40,000 shares (post split), and may be reimbursed for expenses incurred in
connection with attendance at Board and committee meetings. At such time as the
Board of Directors deems appropriate, we intend to adopt an appropriate policy
to compensate non-employee directors, in order to attract and retain the
services of qualified non-employee directors.

Item 11 Security Ownership of Certain Beneficial Owners and Management

         As of December 31, 2001, we had 59, 238,200 common shares issued and
outstanding. The following table sets forth the ownership, as of December 31,
2001, of our common stock by each person known by us to be the beneficial owner
of more than 5% of our outstanding common stock, our officers and directors, and
all of our executive officers and our directors as a group. All persons named
have sole voting and investment power with respect to such shares, subject to
community property laws, and except as otherwise noted.


TITLE OF                                         NO. OF          PERCENTAGE OF
CLASS              NAME & ADDRESS                SHARES       OUTSTANDING SHARES
--------------------------------------------------------------------------------
Common stock       Lawrence S. Hartman         22,400,000           37.8%
                   1680 N. Vine St., #721
                   Hollywood, CA 90028

Common stock       Adam Zoblotsky              22,400,000           37.8%
                   1680 N. Vine St., #904
                   Hollywood, CA 90028

Common stock       Carl R. Ceragno                240,000            0.4%
                   69 Wesley Street
                   S. Hackensack, NJ 07665

Common stock       Lawrence H. Fox                320,000            0.5%
                   708 Third Ave.
                   New York, NY 10017

All Officers and Directors as a Group
(3 Individuals)                                22,960,000           38.8%

                                       14

<PAGE>



Changes in Control.
-------------------

There are currently no arrangements which would result in a change in control of
our management.

Item 12 Certain Relationships and Related Transactions.

         Our founders, Lawrence S. Hartman and Adam Zoblotsky, had each been
issued 22,400,000 of our post-split shares on July 15, 1999 in connection with
our formation. Messrs. Hartman and Zoblotsky were each granted options to
purchase an additional 12,000,000 of our shares at prices ranging from $.125 and
$.25 per share. Messrs. Hartman and Zoblotsky have surrendered these options to
us at the time that we offered our shares to investors pursuant to a private
offering last year. Mr. Hartman is also our director, president, secretary,
chief executive and chief financial officer.

         Carl R. Ceragno, one of our directors, was issued 200,000 of our
post-split shares when he had been appointed to our board of directors and was
issued an additional 40,000 of our post-split shares when he agreed to serve on
our board for an additional year. Lawrence H. Fox, one of our directors, was
issued 200,000 of our post-split shares when he had been appointed to our board
of directors, was issued an additional 80,000 shares in exchange for legal
consulting services, and was issued an additional 40,000 of our post-split
shares when he agreed to serve on our board for an additional year.

         The following table indicates the number of our shares issued to our
directors, promoters and officers, the date of issuance thereof and the
consideration paid for the shares:

<TABLE>
<CAPTION>

Name                  Number and Class of Shares(1)           Consideration                 Date
----                  -----------------------------           -------------                 ----

<S>                    <C>                                   <C>       <C>                  <C> <C>
Lawrence S. Hartman    22,400,000 Common shares              $        -0-(2)           July 15, 1999
                            4,000 Common shares              $     500.00              March 31, 2000

Adam Zoblotsky         22,400,000 Common shares              $        -0-(2)           July 15, 1999

Carl R. Ceragno           200,000 Common shares              $   2,500.00(3)           July 30, 1999
                           40,000 Common shares              $   5,000.00(3)           November 1, 2000

Lawrence H. Fox           200,000 Common shares              $   2,500.00(3)           July 30, 1999
                           80,000 Common shares              $  10,000.00(4)           July 30, 1999
                           40,000 Common shares              $   5,000.00(3)           November 1, 2000
                          -----------------------------------------------------
</TABLE>

(1) Reflects a 8:1 forward stock split effective for shareholders of record as
of November 10, 2000.
(2) These shares were issued for organizational services rendered to us.
(3) These shares were issued in consideration for serving on our Board of
Directors and were valued at $5,000.
(4) These shares were issued in consideration for legal services rendered.


                                       15

<PAGE>
         From the time of our formation to date, Mr. Hartman loaned us $17,736.
This loan was not supported by a promissory note but accrued interest at the
rate of 10%. Interest in the amount of $839 ($339 in cash and $500 in the form
of 4,000 shares of our common stock) and the outstanding principal of $17,736
had been repaid in March 2000.

         From our inception through September 30, 2000, we paid Messrs. Hartman
and Zoblotsky an annual salary of $60,000 per year. However, to save cash,
Messrs. Hartman and Zoblotsky each agreed to defer $18,270 of their salary
during 1999. Actual salary payments to Messrs. Hartman and Zoblotsky commenced
on January 1, 2000. Messrs Hartman and Zoblotsky deferred $30,990 and $27,168 of
their respective salary during the year 2000. Additionally, Mr. Hartman had
deferred $25,000 of his salary during the six months ended June 30, 2001. As of
December 31, 2001, Mr. Hartman had forgiven all deferred salary. From October 1,
2000, we paid Messrs. Hartman and Zoblotsky an annual salary of $50,000 each
plus a non- accountable expense allowance of $2,000 per month, each, to allow
them to continue to market our business and our brand name. The non-accountable
expenses are not considered salary for Messrs. Hartman and Zoblotsky, but are
reimbursement for personal funds expended for business purposes. From February
2000 to October, 2000, Mr. Zoblotsky was using a company owned vehicle and Mr.
Hartman received an automobile allowance of $500 per month.

         We have loaned Messrs. Hartman and Zoblotsky $25,000 each, as of
October 20, 2000. These loans are not supported by a promissory note, are not
interest bearing and have a five year term. In exchange for this loan, they have
each forgiven $40,000 of deferred compensation and applied the same to the
capital of our company.

         Our operating lease, as amended, is entered into between our landlord
and Messrs. Hartman and Zoblotsky. Messrs. Hartman and Zoblotsky have assigned
this lease to us at the same terms that are contained in the lease.



                                       16

<PAGE>




         As of September 15, 2000, we loaned CRI, a company controlled by Mr.
Carl R. Ceragno, one of our directors, $6,500 pursuant to the terms of a
promissory note that bears interest at the rate of eight percent per annum.
Principal and interest is due on September 15, 2002. As additional consideration
for making this loan, Communications Research, Inc. issued 50,000 shares of
their common stock to us. These shares are subject to registration rights. CRI
has filed a registration statement with the SEC to register these and other
shares. There is currently no publicly traded market for these shares and we
cannot offer any assurance that a publicly traded market for these shares will
ever develop even following the effectiveness of the CRI registration statement.

Subsequent Events
-----------------

         Following the end of our most recent calendar year the following
transactions transpired with respect to our officers, directors, promoters
and/or shareholders owning 10% or more of our shares:

         On January 14, 2002, we sold all rights that we possessed to the
Beverly Hills Film Festival to an entity controlled by our former President,
Adam Zoblotsky. In exchange for these rights and the forgiveness of a $25,000
loan made by the Company to Mr. Zoblotsky, Mr. Zoblotsky surrendered 20,000,000
shares of our common stock that he owned to our treasury, leaving him with
2,400,000 of our common shares.

         On January 14, 2002, Mr. Hartman returned 13,360,000 shares of our
common stock to our treasury in exchange for the forgiveness of a $25,000 loan
made by the Company to Mr. Hartman and the issuance to Mr. Hartman of an option
to purchase 3,000,000 of our common shares at a price of $0.10 per share. This
left Mr. Hartman with 9,040,000 of our common shares without taking into account
the 3,000,000 shares that Mr. Hartman may purchase in the future pursuant to the
aforementioned option.






                                     Part IV


Item 13 Exhibits and Reports on Form 8-K

         (a)      The following exhibits and financial statement schedules are
                  filed as exhibits to this Report:

                  1.       Financial Statements of the Registrant are included
                           under Item 7 hereof.

                  2.       Financial Statement Schedules - None

                  3.       Exhibits:



                                       17

<PAGE>



Exhibit No.       Description
   3.1            Articles of Incorporation, as amended*
   3.2            Bylaws, as amended*
  16.1            Letter on Change in Certifying Accountant**
  17.1            Letter on Director Resignation***
  21.1            Names of Subsidiaries
  23.1            Consent of Farber& Klein
                  (included in the opinion of Farber & Klein)*

              ----------------------------------------------------

*        Included in Amendment No. 1 to Registration Statement bearing file
         number 333-54468 filed on January 26, 2001

**       Included in Form 8-K/A filed on December 4, 2001.

***      Included in Form 8-K filed on December 7, 2001.

Reports on Form 8-K
-------------------

         Incorporated by reference.

                  8-K/A filed on December 4, 2001.
                  8-K filed on December 7, 2001.




                                       18

<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       ANGELCITI ENTERTAINMENT, INC.

                                       /s/ Lawrence Hartman
Dated: May 3, 2002              By:    -----------------------------------------
                                       Lawrence Hartman, Chief Executive Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed by the following persons in the capacities and on
the dates indicated.

         Signature                     Title                       Date
         ---------                     -----                       ----

/s/ Lawrence Hartman
------------------------               Director                    May 3, 2002
    Lawrence Hartman

/s/ Lawrence Fox
------------------------               Director                    May 3, 2002
    Lawrence Fox

/s/ Carl Ceragno
------------------------               Director                    May 3, 2002
    Carl Ceragno




                                       19

<PAGE>



                           ANGELCITI MULTIMEDIA, INC.

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2001





<PAGE>








                                TABLE OF CONTENTS


Independent Auditors' Report............................................... 3

 Balance Sheet............................................................. 4

 Statements of Operations.................................................. 5

 Statements of Stockholders' Equity (Deficit).............................. 6

 Statements of Cash Flows.................................................. 7

Notes to the  Financial Statements......................................... 9






                                      F-1
<PAGE>



                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


The Board of Directors



We have audited the accompanying balance sheet of Angelciti Multimedia, Inc. as
of December 31, 2001, and the related statements of operations, stockholders'
equity (deficit), and cash flows for the years ended December 31, 2001 and 2000.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AngelCiti Multimedia, Inc. as
of December 31, 2001, and the results of their operations and cash flows for the
years ended December 31, 2001 and 2000, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 11 to the
financial statements, the Company has minimal assets and has suffered recurring
losses to date, which raises substantial doubt about its ability to continue as
a going concern. Management's plans with regard to these matters are also
described in Note 11. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.




Chisholm & Associates, PC
North Salt Lake, Utah
March 12, 2002



                                      F-2
<PAGE>


                           ANGELCITI MULTIMEDIA, INC.
                                  Balance Sheet


                                     ASSETS
                                     ------

                                                                    December 31,
                                                                        2001
                                                                      ---------
CURRENT ASSETS

   Cash and cash equivalents                                          $     563
   Trading securities                                                    52,582
   Prepaid expenses                                                       6,065
                                                                      ---------

     Total Current Assets                                                59,210
                                                                      ---------

PROPERTY AND EQUIPMENT

   Furniture and fixtures                                                   902
   Equipment                                                             30,007
   Accumulated depreciation                                             (20,193)
                                                                      ---------

     Total Property and Equipment                                        10,716
                                                                      ---------

OTHER ASSETS

   Available for sale securities                                        187,500
   Intangible assets                                                        522
   Accumulated amortization                                                (522)
   Notes receivable-related party                                         6,500
   Security deposit                                                       4,886
                                                                      ---------

     Total Other Assets                                                 198,886
                                                                      ---------

     TOTAL ASSETS                                                     $ 268,812
                                                                      =========

   The accompanying notes are an integral part of these financial statements.


                                      F-3
<PAGE>




                           ANGELCITI MULTIMEDIA, INC.
                                  Balance Sheet


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                    December 31,
                                                                        2001
                                                                     ----------
CURRENT LIABILITIES

   Accounts payable                                                  $    3,343
   Accrued liabilities                                                    6,818
                                                                     ----------

       Total Current Liabilities                                         10,161
                                                                     ----------

LONG-TERM LIABILITIES

   Notes Payable                                                        146,000
                                                                     ----------

       Total Long-Term Liabilities                                      146,000
                                                                     ----------

       TOTAL LIABILITIES                                                156,161
                                                                     ----------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock, par value $0.01 per share; authorized 60,000,000
    shares; issued and outstanding 59,238,200 shares                    592,382
   Additional paid-in capital                                         3,290,736
   Prepaid consulting fees                                           (1,300,000)
   Notes receivable - officers                                          (55,442)
   Subscription receivable                                           (1,248,864)
   Accumulated comprehensive income                                      73,650
   Accumulated deficit                                               (1,239,811)
                                                                     ----------

     Total Stockholders' Equity (Deficit)                               112,651
                                                                     ----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)            $  268,812
                                                                     ==========

   The accompanying notes are an integral part of these financial statements.


                                      F-4
<PAGE>


                           ANGELCITI MULTIMEDIA, INC.
                            Statements of Operations


                                                             For the
                                                            Year Ended
                                                            December 31,
                                                  -----------------------------
                                                      2001             2000
                                                  ------------     ------------

NET SALES                                         $    301,979     $    331,851
                                                  ------------     ------------

COST & EXPENSES:

   Event costs                                         115,969          228,421
   Selling, general and administrative                 571,935          755,842
                                                  ------------     ------------

     Total costs and expenses                          687,904          984,263
                                                  ------------     ------------

LOSS FROM OPERATIONS                                  (385,925)        (652,412)
                                                  ------------     ------------

OTHER INCOME (EXPENSES):

   Interest income                                      16,197            9,993
   Interest expense                                     (2,955)          (1,331)
   Gain on sale of property and equipment                 --                670
   Gain (loss) on sale of marketable securities         (7,777)          14,327
   Holding gain (loss)                                    --            (69,161)
   Other (expenses), net of other income                  (989)           1,635
                                                  ------------     ------------

     Total Other Income (Expenses)                       4,476          (43,867)
                                                  ------------     ------------

(LOSS) BEFORE INCOME TAXES                            (381,449)        (696,279)

INCOME TAXES                                              (800)            (800)
                                                  ------------     ------------

NET (LOSS)                                        $   (382,249)    $   (697,079)
                                                  ============     ------------

BASIC (LOSS) PER COMMON SHARE                     $       (.01)    $      (0.01)
                                                  ============     ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING          56,766,166       53,550,436
                                                  ============     ============


   The accompanying notes are an integral part of these financial statements.



                                      F-5
<PAGE>


<TABLE>
<CAPTION>

                                                     ANGELCITI MULTIMEDIA, INC.
                                             Statements of Stockholders' Equity (Deficit)


                                            Common Stock              Additional      Common
                                     ---------------------------       Paid-In         Stock         Accumulated
                                       Shares           Amount         Capital       Subscribed        Deficit
                                     -----------     -----------     -----------     -----------     -----------



<S>                                   <C>                <C>            <C>               <C>           <C>
Balance. December 31, 1999            48,432,000         484,320        (349,070)         17,000        (160,483)

Issuance of common stock
 pursuant to private placement
 memorandum, net of expenses           2,256,000          22,560         259,440         (17,000)           --

Issuance of common stock for
 future services to be provided        1,916,664          19,167         220,416            --              --

Issuance of common stock for
 services provided for the
 development of the Company's
 web site                                480,000           4,800          55,200            --              --

Issuance of common stock to
 an outside director for services
 provided                                 80,000             800           9,200            --              --

Issuance of common stock for
 equipment                               271,800           2,718          31,257            --              --

Issuance of common stock for
 payment of liabilities                   87,336             873          10,044            --              --

Conversion of note payable
 to common stock                       2,800,000          28,000         322,000            --              --

Contribution of officer salaries            --              --            90,346            --              --

Net loss for the year ended
 December 31, 2000                          --              --              --              --          (697,079
                                     -----------     -----------     -----------     -----------     -----------

Balance, December 31, 2000            56,323,800         563,238         648,833            --          (857,562)

Fractional shares from stock
 split                                      (600)             (6)              6            --              --
                                                                                                     -----------

Balance Forward                       56,323,200     $   563,232     $   648,839     $      --       $  (857,562)
                                     -----------     -----------     -----------     -----------     -----------


                    The accompanying notes are an integral part of these financial statements.
</TABLE>

                                                       F-6
<PAGE>



<TABLE>
<CAPTION>
                                                     ANGELCITI MULTIMEDIA, INC.
                                       Statements of Stockholders' Equity (Deficit) (Continued)


                                            Common Stock           Additional         Common
                                     --------------------------      Paid-In            Stock           Accumulated
                                        Shares         Amount        Capital         Subscribed           Deficit
                                     -----------    -----------    -----------    ------------------    -----------

<S>                                   <C>           <C>            <C>            <C>                   <C>
Balance Forward                       56,323,200    $   563,232    $   648,839    $             --      $  (857,562)

Issuance of common issued for
 legal services provided at $.025
 per share                               300,000          3,000          4,499                  --             --

Issuance of common for prepaid
 consulting agreements at $1.00
 per share                             1,300,000         13,000      1,287,000                  --             --

Issuance of common stock for
 notes and securities at $1.00
 per share                             1,300,000         13,000      1,287,000                  --             --

Issuance of common stock for
 for cash at $1.00 per share              15,000            150         14,850                  --             --

Contribution by shareholder
 of wages payable                           --             --           48,548                  --             --

Net loss for the year ended
 December 31, 2001                          --             --             --                    --         (382,249)
                                     -----------    -----------    -----------    ------------------    -----------

Balance, December 31, 2001            59,238,200    $   592,382    $ 3,290,736    $             --      $(1,239,811)
                                     ===========    ===========    ===========    ==================    ===========

                    The accompanying notes are an integral part of these financial statements.
</TABLE>



                                                         F-7
<PAGE>



                             ANGELCITI MULTIMEDIA, INC.
                              Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                     For the
                                                                   Year Ended
                                                                   December 31,
                                                           ------------------------
                                                              2001          2000
                                                           ----------    ----------
CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                        <C>           <C>
   Net (loss)                                              $ (382,249)   $ (697,079)
   Adjustments to reconcile net (loss) to net cash
    (used in) operating activities:
     Depreciation and amortization                             15,984         9,861
     Amortization of prepaid expenses                            --         121,883
     Stock issued for services                                  7,499        75,000
     (Loss)gain on sale of securities                           7,777       (14,327)
     Holding (gains)losses on trading securities              (58,372)       69,161
     Gains on sale of property and equipment                     --             670
     Contribution of officer salaries                            --          47,806
   Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                  --           1,925
     (Increase) decrease in prepaid expenses                  112,993        14,601
     (Increase) decrease in other receivables                   1,270          --
     (Increase) decrease in security deposits                    --            --
     (Increase) decrease in marketable securities              10,949      (255,030)
     (Increase) from sale of marketable securities               --          98,764
     (Increase) in other assets                                  --          (2,638)
     (Increase) in notes receivable                              --            --
     (Increase) in accrued interest receivable                (16,197)         --
     Increase (decrease) in accounts payable                    3,343          (275)
     Increase (decrease) accrued compensation & payroll
       taxes                                                   32,575        15,973
     Increase (decrease) in deferred revenue                  (57,528)       14,658
     Increase (decrease) in accrued liabilities                (9,573)        9,413
                                                           ----------    ----------

       Net Cash (Used in) Operating Activities               (331,529)     (489,634)
                                                           ----------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES

   Payments for investments                                      --            --
   Borrowings against investment                                 --            --
   Payments for property and equipment                           --         (51,331)
   Proceeds from sale of property and equipment                  --          49,500
   Amounts (loaned to) repaid by related parties                 --         (52,712)
   (Decrease) on notes receivable to officers                    --            --
                                                           ----------    ----------

       Net Cash (Used in) Investing Activities             $     --      $  (54,543)
                                                           ----------    ----------


           The accompanying notes are an integral part of these financial statements.
</TABLE>





                                      F-9
<PAGE>


                             ANGELCITI MULTIMEDIA, INC.
                        Statements of Cash Flows (Continued)

<TABLE>
<CAPTION>

                                                               For the
                                                             Year Ended
                                                             December 31,
                                                    ---------------------------
                                                        2001            2000
                                                    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES

<S>                                                 <C>             <C>
   Payments for note payable to stockholder         $    (4,000)    $   (17,730)
   Proceeds from convertible note payable                  --           500,000
   Proceeds from sale of stock                           15,000         265,000
   Payments on borrowings on investment account            --            37,901
   Borrowings from common stock subscribed                 --            17,000
                                                    -----------     -----------

       Net Cash Provided by Financing Activities         11,000         802,171
                                                    -----------     -----------

NET (DECREASE) IN CASH                                 (320,529)        251,988

CASH AT BEGINNING OF YEAR                               321,092          63,104
                                                    -----------     -----------

CASH AT END OF YEAR                                 $       563     $   321,092
                                                    ===========     ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION

Cash paid for:

   Interest                                         $     2,955     $       727
   Income Taxes                                     $       800     $       800

NON-CASH INVESTING AND FINANCING ACTIVITIES

   Contribution of officers salaries                $    48,548     $    42,540
   Issuance of stock for future services            $ 1,300,000     $   239,583
   Issuance of stock for property and equipment     $      --       $    33,975
   Issuance of stock for payment of liabilities     $      --       $    10,917
   Conversion of note payable                       $      --       $   350,000
</TABLE>

     The accompanying notes are an integral part of these financial statements.


                                      F-10
<PAGE>



                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000

NOTE 1 -      SUMMARY OF ACCOUNTING POLICIES

              a.  Organization

              AngelCiti Multimedia, Inc. (the "Company") is a multi-faceted
              Internet based multimedia company that produces, organizes, and
              operates film and music festivals in the Western United States.
              The Company also broadcasts film, music, and related promotional
              material over the Internet. Activities to date for Internet
              services have been immaterial and therefore, the Company has only
              one reportable business segment. The Company was incorporated in
              the state of Nevada on May 14, 1999 with its primary operations
              located in Southern California through the end of 2001, at such
              time the Company moved its offices to San Jose, Costa Rica and is
              in the process of changing the focus of the Company. The Board
              voted to change the name of the Company to AngelCiti
              Entertainment, Inc. In January 2002, which was approved by a vote
              of the shareholders in January 2002. The name change was
              effectively recorded in the State o f Nevada in April 2002.

              Subsequent to the audit date, the Board of Directors accepted the
              resignation of Adam Zoblotsky and accepted stock to be returned as
              payment on both officer loans. Larry Hartman was placed as the
              Company's president and the assets and operations related to the
              Beverly Hills Film Festival were given to Mr Zoblotsky for the
              return of his common shares.

              The Company has redefined their operations, and will begin
              operating as a holding company which will own interests in
              companies that own and or operate online gambling casinos.

              b.  Accounting Methods

              The Company's financial statements are prepared using the accrual
              method of accounting. The Company has elected a December 31 year
              end.

              c.  Cash and Cash Equivalents

              Cash equivalents include short-term, highly liquid investments
              with maturities of three months or less at the time of
              acquisition.

              d.  Estimates

              The preparation of financial statements in conformity with
              generally accepted accounting principles requires management to
              make estimates and assumptions that affect the amounts reported in
              the financial statements and accompanying notes. Actual results
              could differ from those estimates.

              e.  Basic (Loss) Per Share

              The computations of basic (loss) per share of common stock are
              based on the weighted average number of common shares outstanding
              during the period of the financial statements. Common stock
              equivalents, consisting of stock options and warrants, have



                                      F-11
<PAGE>


                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000

e.  Basic (Loss) Per Share (Continued)

              not been included in the calculation as their effect is
              antidilutive for the periods presented.
<TABLE>
<CAPTION>

                                                                  December 31,
                                                          ------------     ------------
                                                              2001              2000
                                                          ------------     ------------

<S>                                                       <C>              <C>
              Numerator - loss                            $   (382,249)    $   (697,079)

              Denominator - weighted average number of
               shares outstanding                           56,766,166       53,550,436
                                                          ------------     ------------

              Loss per share                              $       (.01)    $       (.01)
                                                          ============     ============
</TABLE>


NOTE 1 -      SUMMARY OF ACCOUNTING POLICIES (Continued)

              f.  Property and Equipment

              Property and equipment is recorded at cost. Major additions and
              improvement are capitalized. The cost and related accumulated
              depreciation of equipment retired or sold are removed from the
              accounts and any differences between the undepreciated amount and
              the proceeds from the sale are recorded as gain or loss on sale.
              Depreciation is computed using the straight-line method over the
              estimated useful life of the assets as follows:

                          Description                   Estimated Useful Life
                          -----------                   ---------------------

                          Leasehold improvements              40 years
                          Furniture and fixtures              5 to 7 years
                          Equipment                           3 to 5 years

              Depreciation expense for the years ended December 31, 2001 and
              2000 was $15,462 and $9,861, respectively.

              g.  Impairment of Long-Lived Assets

              In the event that facts and circumstances indicate that the cost
              of long-lived assets may be impaired, an evaluation of
              recoverability would be performed. If an evaluation were required,
              the estimated future undiscounted cash flows associated with the
              asset would be compared to the asset's carrying amount to
              determine if a write-down to market value or discounted cash flow
              value is required.

              h.  Revenue Recognition

              Revenues are recognized upon completion of a film or music
festival.


                                      F-12
<PAGE>


                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000

NOTE 1 -      SUMMARY OF ACCOUNTING POLICIES (Continued)

i.  Non-Monetary Transactions

              A portion of the revenues recorded by the Company include
              nonmonetary or barter transactions. In accordance with APB Opinion
              No. 29, "Accounting for Nonmonetary Transactions", the Company
              recognizes revenue based on the fair market value of the
              transaction with an equal amount recorded to the related expense
              account. The Company engaged in barter transactions for expenses
              such as advertising, supplies, copying and printing, festival
              giveaways and hotel rooms in exchange for promotional material
              included in festival brochures or on the Company's website. The
              Company recognized revenues and expenses of $38,700 and $39,639
              for the years ended December 31, 2001 and 2000, respectively.

              The Company has adopted EITF 99-17, "Accounting for Advertising
              Barter Transactions" to account for ad for ad transactions. The
              Company recognized ad revenues and expenses of $2,500 and $3,900
              for the years ended December 31, 2001 and 2000, respectively.

              j.  Advertising

              The Company expenses advertising costs as incurred. The Company
              incurred advertising expense of $8,714 and $40,250 for the years
              ended December 31, 2001 and 2000, respectively.

              k.  Web Site Development Costs

              The Company has adopted EITF 00-2, "Accounting for Web Site
              Development Costs" to account for costs incurred in relation to
              website development. Costs incurred to develop customized database
              software have been capitalized and are being amortized on a
              straight-line basis over the expected benefit period of 5 years.
              Expenses related to operating the website are charged to
              operations as incurred.

              l.  Fair Value of Financial Instruments

              The estimated fair values for financial instruments under FASB No.
              107, "Disclosures About Fair Value of Financial Instruments", are
              determined at discrete points in time based on relevant market
              information. These estimates involve uncertainties and cannot be
              determined with precision. The estimated fair value of the
              Company's financial instruments which includes cash, investments,
              and borrowings against the investment account approximates the
              carrying value in the financial statements at December 31, 2001
              due to their short-term nature.

              The estimated fair value of the Company's long-term convertible
              note payable and note receivable from a director approximates the
              carrying value in the financial statements at December 31, 2001
              due to the interest rate and note terms.

              The carrying value of the Company's notes receivable from the
              President and CEO do not approximate fair value due to the terms
              and related party nature of the transactions.


                                      F-13
<PAGE>


                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 1 -      SUMMARY OF ACCOUNTING POLICIES (Continued)

              l.  Fair Value of Financial Instruments (Continued)

              The fair value fo the notes total approximately $25,000 using
              current market interest rates.

              m.  Deferred Revenues

              Deferred revenues primarily represent deposits from filmmakers and
              sponsors which are deferred initially and recognized as income
              ratably over the term of the service period or festival as earned.

              n.  Income Taxes

              The Company accounts for income taxes under the liability method,
              which requires recognition of deferred tax assets and liabilities
              for the expected future tax consequences of events that have been
              included in the financial statements or tax returns. Under this
              method, deferred tax assets and liabilities are determined based
              on the difference between the financial statement and tax basis of
              assets and liabilities using enacted tax rates in effect for the
              year in which the differences are expected to reverse.

              o.  Stock-Based Compensation

              The Company has elected to follow Accounting Principles Board
              Opinion No. 25, "Accounting for Stock Issued to Employees" (APB25)
              and related interpretations in accounting for its employee stock
              options. In accordance with FASB Statement No. 123, "Accounting
              for Stock-Based Compensation" (FASB123), the Company will disclose
              the impact of adopting the fair value accounting of employee stock
              options. Transactions in equity instruments with non-employees for
              goods or services have been accounted for using the fair value
              method as prescribed by FASB 123.

              p.  Concentrations of Credit Risk

              Credit risk represents the accounting loss that would be
              recognized at the reporting date if counterparties failed to
              perform as contracted. Concentration of credit risk (whether on or
              off balance sheet) that arise from financial instruments exist for
              groups of customers or groups of counterparties when they have
              similar economic characteristics that would cause their ability to
              meet contractual obligations to be similarly effected by changes
              in economic or other conditions. In accordance with FASB Statement
              No. 105, "Disclosure of Information about Financial Instruments
              with Off-Balance-Sheet Risk and Financial Instruments with
              Concentration of Credit Risk," financial instruments that subject
              the Company to credit risk are primarily investment accounts and
              notes due from parties. The credit risk amounts shown do not take
              into account the value of any collateral or security.



                                      F-14
<PAGE>


                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 1 -      SUMMARY OF ACCOUNTING POLICIES (Continued)

               q.  Impact of Recently Issued Standards

               In June 2001, the Financial Accounting Standards Board (FASB)
               issued Statements of Financial Accounting Standards No. 141 (SFAS
               141), "Business Combinations" and No. 142 (SFAS 142), "Goodwill
               and Other Intangible Assets", which establishes new standards for
               the treatment of goodwill and other intangible assets. SFAS 142
               is effective for fiscal years beginning after December 31, 2001.
               SFAS 142 prescribes that amortization of goodwill will cease as
               of the adoption date.

               Additionally, the Company will be required to perform an
               impairment test on goodwill and other intangible assets as of the
               adoption date, annually thereafter, and whenever events and
               circumstances occur that might affect the carrying value of such
               assets. The Company estimates that the effect of ceasing the
               amortization of goodwill related to SFAS 142 will be material to
               the company's financial statements subsequent to the adoption
               date. The Company amortizes approximately $906,000 annually of
               goodwill for its Intellipay subsidiary. The Company has not yet
               determined what effect, if any, the impairment test of goodwill
               and other intangible assets will have on the Company's results of
               operations and financial position. The Company does not believe
               that SFAS 141 will have a material impact on its financial
               position and results of operations.

               In October 2001, the FASB issued Statement of Financial
               Accounting Standard No. 144 (SFAS 144), "Accounting for the
               Impairment or Disposal of Long-Lived Assets". SFAS replaces
               Statement No. 121, "Accounting for the Impairment of Long-Lived
               Assets and for Long-Lived Assets to be Disposed Of". SFAS 144
               prescribes, among other things, an accounting model for
               long-lived assets to be disposed of including sales and
               discontinued operations. The Company is evaluating the impact of
               this pronouncement on its financial position and results of
               operations in future filings.

NOTE 2 - GOING CONCERN

               The Company's consolidated financial statements are prepared
               using generally accepted accounting principles applicable to a
               going concern which contemplates the realization of assets and
               liquidation of liabilities in the normal course of business. The
               Company has historically incurred significant losses which have
               resulted in an accumulated deficit of $1,239,810 at December 31,
               2001, a working capital deficit and limited internal financial
               resources. These factors combined, raise substantial doubt about
               the Company's ability to continue as a going concern. Management
               has raised $122,000 from the issuance of commons stock pursuant
               to a Reg S offering to assist with the needed cash-flow
               requirements of the business. With the change in the Company's
               business line, expenses have also been decreased such that the
               Company will have sufficient cash to support operations.



                                      F-15
<PAGE>



                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 3 - MARKETABLE SECURITIES

               Trading Securities:
               ------------------

               Marketable securities consist of equity securities considered by
               Company management to be trading.

               In accordance with FASB115, "Accounting for Certain Investments
               in debt and Equity Securities", the Company records unrealized
               holding gains and losses for trading securities into current
               period income and offsets the cost basis of the marketable
               securities. The marketable securities are shown on the balance
               sheet based on the fair market value as of December 31, 2001 and
               2000. During the year ended December 31, 2001 and 2000, the
               company purchased $117,076 and $255,030, respectively, in
               marketable securities and sold $182,701 and $98,764,
               respectively. The Company recorded gains/(losses) on sales of
               investments of $(7,777) and $14,327, respectively, for the year
               ended December 31, 2001 and 2000. Unrealized holding losses of $0
               and $69,161, respectively, were recorded in earnings for the year
               ended December 31, 2001 and 2000.

               The Company executes trades in conjunction with a margin account
               maintained with a broker. As of December 31, 2001 and 2000, the
               Company owed $0 and $37,901, respectively, to the broker for
               trades on margin. The Company's investment in marketable
               securities is used as collateral for the margin account. The
               margin account is subject to call requirements which vary by the
               security issuer. Generally, when the value of investments held by
               the Company fall below. 50%, the Company will be required to fund
               the trade or sell securities to cover the margin call. The
               Company is charged interest on outstanding balances which vary by
               the amount borrowed and are tied to the clearinghouse rate
               received by the broker.

               Investments Available for Sale
               ------------------------------

               Management determines the appropriate classification of
               marketable equity security investments at the time of purchase
               and reevaluates such designation as of as of each balance sheet
               date. Unrestricted marketable equity securities have been
               classified as available for sale. Available for sale securities
               are carried at fair market value, with unrealized gains and
               losses, net of tax, reported as a net amount in accumulated
               comprehensive income. Realized


                                      F-16
<PAGE>

                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


               gains and losses and declines in value judged to be other than
               temporary on available for sale securities are included in
               investment income. The cost of securities sold is based on the
               specific identification method. Interest and dividends on
               securities classified as available for sale are included in
               investment income.

NOTE 3 -       MARKETABLE SECURITIES (continued)

               At December 31, 2001, the Company owns restricted shares of
               common stock of a public company. The restriction can be removed
               during the current year. Investments in securities are summarized
               as follows at December 31, 2001:

<TABLE>
<CAPTION>
                                                               Unrealized        Realized           Fair
                                                 Cost          Gain/(Loss)      Gain/(Loss)         Value
                                             ------------     -----------        ----------      ----------
<S>                                          <C>               <C>              <C>              <C>
               Available-for-sale
                securities
               December 31, 2001             $    114,000      $   73,650       $       -0-      $  187,650
                                             ============      ==========       ===========      ==========
</TABLE>

               Accumulated Comphrehensive Income

               The Company has adopted SFAS No. 130, Reporting Comprehensive
               Income. SFAS No. 130 establishes standards of reporting and
               displaying comprehensive income and its purpose financial
               statements. "Accumulated Comprehensive Income" refers to
               revenues, expenses, gains and losses that are not included in net
               income, but rather are recorded directly in stockholders' equity.
               The adoption of this statement required the Company to record
               $73,650, in stockholders' equity for unrealized gains on
               investments available for sale.

NOTE 4 -       RELATED PARTY TRANSACTIONS

               In September 2000, Communications Research, Inc. ("CRI") issued a
               $6,500 promissory note to the Company in exchange for the
               Company's payment of legal services in the name of CRI. A
               director of the Company and the Company's chairman and CEO and
               one of the major stockholders are officers, directors and
               shareholders of CRI. The note bears interest of 8% per annum with
               outstanding principal and interest due September 15, 2002. In
               connection with the issuance of this promissory note, CRI will
               also issue 50,000 shares of stock to the Company. There is not a
               market for CRI's stock, and in management's opinion, the stock
               has a nominal value.





                                      F-17
<PAGE>


                           Angelciti Multimedia, Inc.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 4-        RELATED PARTY TRANSACTIONS (Continued)

               In October 2000, the Company loaned $25,000 each to its CEO and
               its President. As of December 31, 2000 and June 30, 2001, the CEO
               and President owed $25,532 and $25,910, respectively. The loans
               are for 5 years at 9% interest. The increase in the amount due
               from the officers is from the Company's payment of certain
               expenses in the name of the officers for which the Company is to
               be repaid. As of December 31, 2000 and June 30, 2001, the total
               receivable from the officers is $51,442 and is reflected as a
               deduction from stockholders' equity.

               During 1999, the Company entered into a promissory note agreement
               with an individual who is the Company's chairman and CEO and one
               of the major stockholders. The note bears interest of 10% per
               annum with outstanding principal and interest due August 31,
               2000. At December 31, 1999, the principal balance was $17,736
               with accrued interest of $839 outstanding. In March 2000, the
               Company paid in full the outstanding principal balance and
               accrued interest.

NOTE 5 - PROPERTY AND EQUIPMENT

               Property and equipment consists of the following:

                                                       December 31,
                                                -----------------------
                                                   2001          2000
                                                ----------   ----------
               Furniture                        $      902   $      902
               Office equipment                     20,006       20,006
               Software                             10,000       10,000
                                                    30,908       30,908
               Less accumulated depreciation       (20,193)      (4,731)
                                                ----------   ----------

                           Total                $   10,715   $   26,177
                                                ==========   ==========

              The Company recorded depreciation expense of $15,462 and $9,861
              for the years ended December 31,2001 and 2000, respectively.

              During the year ended December 31, 2000, the Company sold video
              duplication equipment recognizing a gain on sale of $3,095 and a
              vehicle recognizing a loss on sale of $2,425




                                      F-18
<PAGE>



                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 6 - ACCRUED LIABILITIES

         Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                  December 31,
                                                             ---------------------
                                                               2001         2000
                                                             -------     ---------
<S>                                                          <C>         <C>
              Accrued interest on convertible note           $  3,886    $     943
              Accrued amounts owed to outside contractors           -        4,195
              Accrued credit card payable                       2,932        3,987
              Accrued income taxes                                  -          800
              Accrued professional fees                             -        6,466
                                                             -------     ---------

                                                             $  6,818    $  16,391
                                                             ========    =========
</TABLE>


NOTE 7 - CONVERTIBLE NOTE PAYABLE

              In September 2000, the Company entered into a promissory note
              agreement with an individual. The face value of the note is
              $500,000 and bears interest of 2% per annum with outstanding
              principal and interest due September 7, 2003. At the option of the
              note holder, any portion of the loan may be converted into common
              stock of the Company at $0.125 per share.

              In October 2000,the note holder converted the principal amount of
              $350,000 into 2,800,000 shares of common stock valued at $0.125
              per share.

              During 2001, the Company provided services for the noteholder and
              decreased the note amount by $4,000 to a balance of $146,000 at
              December 31, 2001.

NOTE 8 - STOCKHOLDERS' EQUITY

              In November 2000, the Board of Directors authorized an increase in
              the number of shares authorized form 40,000,000 shares to
              60,000,000 shares of common stock. In addition, the Board of
              directors authorized an 8 to 1 common stock split. All references
              in the financial statements and notes to financial statements have
              been restated to reflect the increased number of shares authorized
              and outstanding.

              In September 1999, the Company began a private placement offering
              of a maximum of 8,000,000 post split shares of common stock at an
              offering price of $0.125 per share. At December 31, 1999, the
              Company had issued 692,000 shares with net proceeds totaling
              $82,750. In addition, as of December 31, 1999, the Company
              accepted subscription agreements for the

                                      F-19
<PAGE>



                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 8 - STOCKHOLDERS' EQUITY (continued)

              purchase of an additional 136,000 shares. During 2000, the Company
              issued an additional 2,120,000 shares with net proceeds totaling
              $265,000.

              During the first six months of 2000, the Company issued 2,3986,664
              common shares valued at $0.125 per share in return for services
              received and services to be provided in the future. Of the
              2,396,664 common shares issued, 480,000 common shares were issued
              to an outside contractor for web site services. The Company
              recognized compensation expense of $60,000 during 2000 in
              connection with the services received. The remaining 1,916,664
              common shares were issued to an outside contractor for investment
              services to be provided over a two-year period. The Company
              recognized compensation expense of $117,700 and $121,883 for 2001
              and 2000, respectively.

              In November 2000, the Company issued 40,000 common shares to each
              of two outside directors. The shares were valued at $0.125 per
              share. The Company recognized compensation expense of $10,000 for
              the year ended December 31, 2000 for director compensation
              expense.

              During the year ended December 31, 2000, the Company issued
              271,800 common shares in exchange for equipment at $0.125 per
              share for a total value of $33,975. Of these 271,800 shares,
              80,000 were for services performed for the Company for a custom
              database system. The Company assigned a $10,000 value to these
              services and capitalized the amount in accordance with EITF00- 2,
              "Accounting for Website Development Costs".

              During the year ended December 31, 2000, the Company issued 87,336
              common shares at $0.125 per share to settle liabilities in the
              amount of $10,917. Of the 87,336 shares issued, 4,000 were issued
              in connection with the interest payable on a note to a related
              party (see Note 8). The remaining 83,336 were issued in connection
              with services rendered by an outside contractor.

              During the year ended December 31, 2000, the CEO and President
              each forgave $40,000 owed to them for deferred salary plus accrued
              payroll taxes of $10,346. The Company recorded these transactions
              as capital contributions.

              For services provided in connection with the preparation of the
              SB-2 Registration Statement, during March 2001, the Company's
              attorneys received 300,000 shares of common stock valued at $0.025
              per share based on the value of the legal services provided.




                                      F-20
<PAGE>


                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 8 - STOCKHOLDERS' EQUITY (continued)

              In December 2001, the Company issued 1,300,000 shares of common
              stock at $1.00 per share to three companies for consulting
              services to be performed in 2002 . These prepaid consulting fees
              have been recorded as a contra equity account and will be
              amortized during 2002.

              Also, in November 2001, the Company issued 1,300,000 shares of
              common stock valued at $1.00 per share to three corporations for
              notes receivable of $1,236,667 bearing interest at 8% per annum
              with principal and ieterest due in November 2003. In addition to
              the notes, the Company received shares in Accesspoint Corp. valued
              at $63,333 (See Investments Available for Sale).

              In November 2001, the Company issued 15,000 shares for $15,000 in
              cash pursuant to the private placement at a price of $1 per share.


NOTE 9 - INCOME TAXES

              Income tax expense is comprised of the following:

                                                            December 31,
                                              -----------------------------
                                                  2001             2000
                                              --------------    -------------

              Current:
                        Federal               $            -    $           -
                        State                            800              800
                                              --------------    -------------

                                                         800              800
                                              --------------    -------------

                        Deferred:
                        Federal                            -                -
                        State                              -                -
                                              --------------    -------------

                                                           -                -
                                              --------------    -------------

                        Income Tax Expense    $          800    $         800
                                              ==============    =============





                                      F-21
<PAGE>



                           ANGELCITI MULTIMEDIA, INC.
                        Notes to the Financial Statements
                           December 31, 2001 and 2000


NOTE 9 - INCOME TAXES (Continued)

              Deferred income tax assets (liabilities) are comprised of the
              following at December 31, 2001 and 2000: Current deferred income
              tax assets (liabilities):
<TABLE>
<CAPTION>
                                                                            December 31,
                                                                   ------------------------
                                                                      2001          2000
                                                                   ----------    ----------

<S>                                                                <C>           <C>
                          Accrued payroll                          $     --      $    6,338
                          Deferred revenue                               --          22,827
                          Unrealized loss on trading securities          --          27,443
                                                                   ----------    ----------
                                                                         --          56,608
                          Valuation allowance                            --         (56,608)
                                                                   ----------    ----------

                          Net current deferred tax asset           $     --      $     --
                                                                   ==========    ==========

              Long-term deferred tax assets (liabilities):

                          Property and equipment                   $        2    $   21,664
                          Start-up expenses                             5,820         5,820
                          Net operating loss carryforward             384,341       239,671
                                                                   ----------    ----------
                                                                      390,163       267,155
                          Valuation allowance                        (390,163)     (267,155)
                                                                   ----------    ----------

                          Net long-term deferred tax asset         $     --      $     --
                                                                   ==========    ==========

              Total income tax expense (benefit) differed from the amounts
              computed by applying the U.S. federal statutory tax rates to
              pre-tax income as follows:

                                                                          December 31,
                                                                   ------------------------
                                                                       2001         2000
                                                                   ----------    ----------
              Total expense (benefit) computed by applying
               the U.S. statutory rate
                          Amount of expected tax benefit           $ (144,670)   $ (236,735)
                          Nondeductible expenses                         --          31,448
                          State income taxes                              800           800
                          Change in beginning balance of
                               valuation allowance                    144,670       205,287
                                                                   ----------    ----------

                                                                   $      800    $      800
                                                                   ==========    ==========
</TABLE>





                                      F-22
<PAGE>


                                            ANGELCITI MULTIMEDIA, INC.
                                         Notes to the Financial Statements
                                            December 31, 2001 and 2000


NOTE 9 - INCOME TAXES (Continued)

              As of December 31, 2001, the Company has available net operating
              loss carryforwards for income taxes of approximately $942,000 and
              $940,000 for federal and California, respectively that begin to
              expire in the years 2019 and 2007, respectively. Future changes in
              ownership, as defined by section 382 of the Internal Revenue Code,
              could limit the amount of net operating loss carryforwards used in
              any one year.

              The Company will continue to assess the realizability of the
              deferred tax assets in future periods. The valuation allowance
              increased by $144,670 during the year ended December 31, 2001.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

              Leases

              The Company leases office space under a noncancellable operating
              lease. Total rental expense was $41,578 and $46,480 for the year
              ended December 31,2001 and 2000, respectively. The lease expired
              in 2001 and the Company moved its operations to San Jose, Costa
              Rica in early 2002. No operating lease was in effect at December
              31, 2001.

NOTE 11 - SUBSEQUENT EVENTS

              On January 14, 2002, the Company all rights that they possessed to
              the Beverly Hills Film Festival to an entity controlled by the
              former President, Adam Zoblotsky. Mr. Zoblotsky surrendered
              20,000,000 shares of common, leaving him with 2,400,000 of common
              shares.

              On January 14, 2002, Mr. Hartman returned 13,360,000 shares of
              common stock to treasury in exchange for the forgiveness of a
              $25,000 loan made by the Company to Mr. Hartman and the issuance
              to Mr. Hartman of an option to purchase 3,000,000 of our common
              shares at a price of $0.10 per share. This left Mr. Hartman with
              9,040,000 of common shares without taking into account the
              3,000,000 shares that Mr. Hartman may purchase in the future
              pursuant to the aforementioned option.



                                      F-23