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

                          AMENDMENT NO. 1 TO FORM 10-K
(Mark One)
    |X|     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 [FEE REQUIRED] for the fiscal year ended
            March 31, 2000
                                       OR
    [__]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
               for the transition period from ____________to_________

                        Commission File Number: 0-21322

                                OUT-TAKES, INC.
                 (Name of small business issuer in its charter)

              Delaware                              95-4363944
  (State or other jurisdiction of        (I.R.S.  Employer Identification No.)
  incorporation or organization)

 3811 Turtle Creek Blvd., Suite 350                      75219
 Dallas, Texas                                         (Zip Code)
(Address of principal executive offices)

                   Issuer's telephone number: (214) 528-8200

             Securities registered under Section 12(b) of the Act:

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

                          Common Stock, $.01 par value
                                (Title of Class)


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes X
      No

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K. ___

The issuer's revenues for the most recent fiscal year were $637,450.

The aggregate market value of the voting stock held by non-affiliates as of
March 31, 2000 was $456,429.

The number of shares outstanding of the issuer's Common Stock as of March
31, 2000 was 20,788,122.

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


 ______________________________________________________________________________
                                Out-Takes, INC.

       FORM 10-K ANNUAL REPORT FOR FISCAL YEAR ENDING MARCH 31, 2000

                               TABLE OF CONTENTS

                                                                         Page
PART I                                                                    1

  ITEM 1.   DESCRIPTION OF BUSINESS                                       1

  ITEM 2.   DESCRIPTION OF PROPERTY                                       4

  ITEM 3.   LEGAL PROCEEDINGS                                             11

  ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS           12

PART II                                                                   12
  ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS                                                       12

  ITEM 6.   SELECTED FINANCIAL DATA                                       13
  ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
            OPERATION                                                     13

  ITEM 8.   FINANCIAL STATEMENTS                                          29
  ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE                           38

PART III                                                                  38

  ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
            CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
            EXCHANGE ACT                                                  38

  ITEM 11.  EXECUTIVE COMPENSATION                                        39

  ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
            OWNERS AND MANAGEMENT                                         39

  ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                39


PART IV                                                                   39

  ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K                              39

                                    PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Except for historical financial information contained herein, the matters
discussed in this annual report may be considered forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended and
subject to the safe harbor created by the Securities Litigation Reform Act
of 1995. Such statements include declarations regarding the intent, belief
or current expectations of the Company and its management. Prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve a number of risks and
uncertainties; actual results could differ materially from those indicated
by such forward-looking statements. Among the important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements are: that the information is of a preliminary
nature and may be subject to further adjustment, the possible unavailability
of financing, risks related to the development, acquisition and operation of
power plants, the impact of avoided cost pricing, energy price fluctuations
and gas price increases, the impact of curtailment, start_up risks, general
operating risks, the dependence on third parties, risks associated with the
power marketing business, changes in government regulation, the availability
of natural gas, the effects of competition, the dependence on senior
management, (xvii) volatility in the Company's stock price, fluctuations in
quarterly results and seasonality, and other risks identified from time to
time in the Company's reports and registration statements filed with the
Securities and Exchange Commission.

GENERAL


Out-Takes, Inc., a corporation incorporated in Delaware on March 18, 1992 ("the
Company"), up until October 26, 1998, was engaged in the sale of
photographic
portraits of children, adults and family groups. Until October 26, 1998, the
Company operated a retail photo studio, called Out_ Takes(R), which  opened
on May 24, 1993 and is located in MCA/ Universal's CityWalkSM project in Los
Angeles, California ("the CityWalk Studio"). The Company had a second
studio, which commenced operations on December 1, 1995, at the Entertainment
Center in the Bazaar at the Irvine Spectrum located in Irvine, Orange
County, California ("the Irvine Studio"). As a result of management's
continuing review of the poor performance of the Irvine Studio, management
decided to close the Irvine Studio. The Irvine Studio ceased operations on
April 22, 1998. The CityWalk studio employs proprietary hardware and
software developed by, or specifically for, the Company which includes
digital imaging technology and automated motion control equipment to
position the studio camera and set subject lighting to the proper levels for
each scene (collectively, the "Proprietary System"). Using the Proprietary
System, the Company is able to place pictures it takes of its clients "into"
still photographs prepared in advance from popular movie scenes and other
backgrounds licensed by the Company. On or about August 31, 1998, the
Company acquired all of the issued and outstanding units of equity of Los
Alamos Energy, LLC, which operates a 1 mega watt power plant in Los Alamos,
California, which produces electricity from "waste gas," and shifted its
business emphasis to that of electrical energy provider.

On or about October 26, 1998, the Company leased its photo studio assets to
Colorvision International, Inc., completing the shift of its business focus
to the providing of electrical energy.

LOS ALAMOS ENERGY

Los Alamos Energy was formed in June, 1996, for the purpose of becoming a
principal electricity provider in the State of California. With the
acquisition of Los Alamos Energy, the Company is engaged in a "niche" area
of electricity production from "waste gas," natural gas which is produced in
conjunction with oil production, but for which there is no market. Normally,
waste gas is flared, or burned. The procurement of waste gas provides an
inexpensive source of fuel for the Company's generators. The Company
currently provides all of the electrical energy to the unincorporated town
of Los Alamos, California, through Pacific Gas and Electric Company (PG&E),
which is mandated by current law to purchase all the electrical energy that
the Company can produce.

On August 31, 1998, the Company entered into a Share Purchase Agreement (the
"Acquisition Agreement") whereby the Company acquired (the "Acquisition")
all of the issued and outstanding equity interests in Los Alamos Energy,
LLC, a California limited liability company ("LAE"). The purchase price to
be paid for the equity interests of LAE is Four Million Dollars
($4,000,000), which was paid by Promissory Notes (the "Notes") to the
holders of LAE equity (the "Equity Holders") calling for interest on all
outstanding amounts to accrue at the rate of ten percent (10%) per annum.
Payments of principal and accrued interest under the Notes shall be made
monthly in arrears up to the maturity date, which is the fifth anniversary
of the Notes. The Notes may be prepaid at any time without premium or penalty.

The Acquisition Agreement provides that, in the event the Equity Holders
shall desire to do so, they may convert their indebtedness to common stock
of the Company representing in the aggregate ninety percent (90%) of the
issued and outstanding shares of such common stock as of the date of such
conversion. The Acquisition Agreement provides that it is a condition of the
conversion that the Company effect a reverse stock split of one (1) share
for every one hundred (100) shares issued and outstanding as of such date.
LAE contemplates that a significant number of persons currently holding
promissory notes and/or working interests in its electricity production
(collectively, "Interest Holders") will exercise their rights to convert
such interests into the equity of LAE, and subsequently to join in the
conversion of the Notes into common stock of the Company. Presently,
management of LAE anticipates that, prior to the conversion of the Notes and
after giving effect to the contemplated reverse stock split, the Company
will issue approximately three million (3,000,000) additional shares of
common stock, and that subsequent to completing the conversion, the Equity
Holders and Interest Holders will own, in the aggregate, approximately two
million eight hundred eighty thousand (2,880,000) shares of the Company's
common stock, representing ninety percent (90%) of the total amount of
common stock estimated to be issued and outstanding as of the date such
conversion rights are exercised. As of March 31, 2000, the holders have not
yet exercised their right to convert the note to common stock.

The indebtedness represented by the Notes is secured by (a) a Security
Agreement, granting a first lien and security interest upon all of the
assets of the Company; and (b) a pledge of the common stock of the Company
held by Photo Corporation Group Pty Limited, an Australian corporation,
which is the controlling stockholder of the Company. The stock pledge grants
the Holders specific rights under certain circumstances, including the right
to receive distributions made by the Company in respect of its common stock
and the right to vote the pledged shares, for so long as the Notes are in
force.
 The purchase price to be paid by the Company for all of the issued and
outstanding equity of LAE was negotiated based upon several factors,
including, without limitation, the asset value of LAE and its projected
income from operations based, in part, upon management's estimates of its
natural gas reserves and its current contracts.

The Company is engaged in the sale of photographic portraits of children,
adults and family groups. Prior to the acquisition, Out Takes derived
substantially all of its revenue from a retail photographic studio, called
Out-Takes , which opened on May 24, 1993 and is located in MCA/Universal's
City Walk project in Los Angeles, California. LAE is engaged in the
collection and distribution of natural gas from properties owned or leased
by it in the State of California, and management of LAE intends to position
LAE to become an important independent power producer, and to benefit as a
principal provider of electricity to consumers in California and elsewhere
as deregulation is implemented. LAE will be operated as a wholly-owned
subsidiary of the Company.

THE MARKET

The power industry represents the third largest industry in the United
States, with an estimated end_user market of over $250 billion of
electricity sales in 1998 produced by an aggregate base of power generation
facilities with a capacity of approximately 750,000 megawatts. In response
to increasing customer demand for access to low_cost electricity and
enhanced services, new regulatory initiatives have been and are continuing
to be adopted at both the state and federal level to increase competition in
the domestic power generation industry. Management believes that this
increase in competition will benefit rather than harm the Company, because
the Company will be free to sell its power to any customer, rather than to
just PG&E, who is now obligated to buy all the power the Company can
produce. Management expects that with the advent of deregulation, prices for
power will increase over and above what it the Company is being paid by
PG&E. The power generation industry historically has been largely
characterized by electric utility monopolies producing electricity from old,
inefficient, high-cost generating facilities selling to a captive customer
base. Industry trends and regulatory initiatives have transformed the
existing market into a more competitive market where end users purchase
electricity from a variety of suppliers, including non-utility generators,
power marketers, public utilities and others. There is a significant need
for additional power generating capacity throughout the United States, both
to satisfy increasing demand, as well as to replace old and inefficient
generating facilities. Due to environmental and economic considerations,
management believes this new capacity will be provided predominantly by
gas-fired facilities. Management believes that these market trends will
create substantial opportunities for efficient, low-cost power producers
that can produce and sell energy to customers at competitive rates.

In addition, as a result of a variety of factors, including deregulation of
the power generation market, utilities, independent power producers and
industrial companies are disposing of power generation facilities. To date,
numerous utilities have sold or announced their intentions to sell their
power generation facilities and have focused their resources on the
transmission and distribution segments. Many independent producers operating
a limited number of power plants are also seeking to dispose of their plants
in response to competitive pressures, and industrial companies are selling
their power plants to redeploy capital in their core businesses.

STRATEGY

The Company's strategy is to expand its existing power plant to 4 mW, and to
further expand its power producing capacity by exploring acquisition
opportunities in the power market, by exploring opportunities that exist to
merge with other similarly situated small electrical power production
companies which produce electrical energy from waste gas, in order to expand
its current power production capacity, and to capture more of a market share
of this growing industry, which the Company predicts will increase with the
advent of deregulation of the power industry.

DESCRIPTION OF FACILITIES

The Company has purchased all of the natural gas reserves on the Blair Oil
and Gas Field ("the field"), which is located adjacent to the unincorporated
town of Los Alamos, California, on Rancho El Roblar, approximately 60 miles
north of Santa Barbara along US 101, and which is operated by Texaco. The
field has 15 oil wells producing approximately 500 barrels of oil per day,
and from which approximately one million cubic feet (1073 BTU) of natural
gas was being flared. The gas recoverable reserve is estimated to be
sufficient to provide electrical production for the next several years.

During 1986, the Blairs entered into an agreement with American Cogenics of
California ("ACI") to convert the waste gas into electricity, and two gas
driven, CAT G398T generator sets ("Gensets"), each respectively 550
kilowatts and 600 kilowatts, were installed, from which electricity was
generated and sold to PG&E, pursuant to a power purchase agreement, dated
November 28, 1988 (the "PG&E contract"). In early 1995, the Santa Barbara
County Air Pollution Control District ("APCD") shut down the operation due
to emissions violations.

During October, 1996, Los Alamos Energy consummated the purchase and sale
agreement with American Cogenics of California ("ACI"), dated August 28,
1996, and acquired the rights to the gas, the two Gensets, the PG&E
contract, the FERC certification, and power purchase agreement with Texaco,
and brought the equipment into APCD compliance.

When the Gensets were initially installed, there were only a few wells
producing oil and gas on the field. Since that time, production has
increased from about 150 MCFD to about 1,000 MCFD currently, providing the
potential of adding more generators to increase the Company's current
capacity from 1 mega watt (1 mW) to 4mW, at an estimated cost of $1.2
million to $1.5 million.

RECENT DEVELOPMENTS

On June 15, 1999, the Company entered into a Letter of Intent to merge with
Coastal Resources Corporation, a company with a related operating business
of power generation from waste gas, in a share exchange agreement, the exact
terms of which are to yet to be determined. Pursuant to the Letter of
Intent, Coastal Resources Corporation has loaned the Company money for
operating capital, and the balance due on said loan is $377,130. If the
merger is consummated, the loan balance will be credited to Coastal
Resources Corp. as part of its proportionate equity interest in the Company.
If the merger is not consummated, then the principal and interest is due and
payable on the first anniversary date of each advance ranging from June 2000
through August 2000.

GOVERNMENT REGULATION

The Company is subject to complex and stringent energy, environmental and
other governmental laws and regulations at the federal, state and local
levels in connection with the development, ownership and operation of its
energy generation facilities. Federal laws and regulations govern
transactions by electrical and gas utility companies, the types of fuel
which may be utilized by an electric generating plant, the type of energy
which may be produced by such a plant and the ownership of a plant. State
utility regulatory commissions must approve the rates and, in some
instances, other terms and conditions under which public utilities purchase
electric power from independent producers and sell retail electric power.
Under certain circumstances where specific exemptions are otherwise
unavailable, state utility regulatory commissions may have broad
jurisdiction over non-utility electric power plants. Energy producing
projects also are subject to federal, state and local laws and
administrative regulations which govern the emissions and other substances
produced, discharged or disposed of by a plant and the geographical
location, zoning, land use and operation of a plant. Applicable federal
environmental laws typically have both state and local enforcement and
implementation provisions. These environmental laws and regulations
generally require that a wide variety of permits and other approvals be
obtained before the commencement of construction or operation of an
energy-producing facility and that the facility then operate in compliance
with such permits and approvals.

FEDERAL ENERGY REGULATION

As described below, the exemptions from extensive federal and state
regulation afforded by PURPA to Qualifying Facilities are important to the
Company and its competitors. The project that the Company currently owns
meet the requirements under PURPA to be a Qualifying Facilities and will be
maintained on that basis. Additionally, management expects regulatory
impositions on power marketing operations to be minimal under existing
regulatory standards.

PURPA

The enactment of the Public Utility Regulatory Policies Act of 1978, as
amended ("PURPA") and the adoption of regulations thereunder by the Federal
Energy Regulatory Commission ("FERC") provided incentives for the
development of small power facilities (those having a capacity of less than
80 megawatts.) A domestic electtricity generating project must be a
Qualifying Facility ("QF") under FERC regulations in order to take advantage
of certain rate and regulatory incentives provided by PURPA> PURPA exempts
QF's from most provisions of the Federal Power Act ("FPA") and, except under
certain limited cicrcumstances, state laws concerning rate or financial
regulation. In order to be a Qualifying Facility, a cogeneration facility
must (i) produce not only electricity but also a certain quantity of thermal
energy (such as steam) which is used for a purpose other than power
generation, (ii) meet certain energy operating and efficiency standards when
oil or natural gas is used as a fuel source and (iii) not be controlled or
more than 50% owned by an electric utility or electric utility holding
company, or any combination thereof.

PURPA provides two primary benefits to Qualifying Facilities owned and
operated by non_utility generators. First, Qualifying Facilities under PURPA
are exempt from certain provisions of PUHCA, the Federal Power Act (the
"FPA") and, except under certain limited circumstances, state laws
respecting rate and financial regulation. Second, PURPA requires that
electric utilities purchase electricity generated by Qualifying Facilities
at a price equal to the purchasing utility's full "avoided cost" and that
the utility sell back_up power to the Qualifying Facility on a
non_discriminatory basis. Avoided costs are defined by PURPA as the
"incremental costs to the electric utility of electric energy or capacity or
both which, but for the purchase from the Qualifying Facility or Qualifying
Facilities, such utility would generate itself or purchase from another
source." The FERC regulations also permit Qualifying Facilities and
utilities to negotiate agreements for utility purchases of power at rates
other than the purchasing utility's avoided cost. Although public utilities
are not required by PURPA to enter into long_term contracts, PURPA helped to
create a regulatory environment in which it has become more common for such
contracts to be negotiated or executed through selective procurement or
competitive bidding. If Congress amends PURPA, the statutory requirement
that an electric utility purchase electricity from a Qualifying Facility at
full avoided costs could be eliminated. Although current legislative
proposals specify the honoring of existing contracts, repeal of the
statutory purchase requirements of PURPA going forward could increase
pressure to renegotiate existing contracts. Any changes which result in
lower contract prices could have an adverse effect on the Company's
operations and financial position. See Competition.

PUHCA

Under the Public Utility Holding Company Regulation ("PUHCA"), any person
(defined by PUHCA to include corporations and partnerships and other legal
entities) which owns or controls ten percent or more of the outstanding
voting securities of a "public utility company" or a company which is a
"holding company" of a "public utility company" is subject to registration
with the Securities and Exchange Commission (the "Commission") and
regulation under PUHCA, unless such person is eligible for an exemption,
such as is available to Qualifying Facilities under PURPA, or as established
elsewhere under PUHCA. A registered holding company is required by PUHCA to
limit its operation to a single integrated utility system and to divest any
other operations not functionally related to the operation of that utility
system.

THE ENERGY ACT

Congress passed the Energy Act to promote further competition in the
development of new wholesale power generation sources. Through amendments to
PUHCA, the Energy Act encourages the development of independent power
projects which will be certified by the FERC as exempt wholesale generators
("EWGs"). The owners or operators of these facilities are exempt from the
provisions of PUHCA. The Energy Act also provides the FERC with extensive
new authority to order electric utilities to provide other electric
utilities, Qualifying Facilities and independent power projects with access
to their transmission systems. However, the Energy Act does preclude the
FERC from ordering transmission services to retail customers and prohibits
sham wholesale energy transactions which appear to provide wholesale
service, but actually are providing service to retail customers.

A company engaged in the ownership or operation of electric power generation
and transmission facilities faces certain types of regulation for its
international activities. The principal regulatory consideration for
international projects is PUHCA, since it is broadly applicable to the
ownership and operation of power facilities (including generation and
transmission facilities) both inside and outside of the United States. For
international projects, the principal basis for exemption from PUHCA is by
obtaining EWG status from the FERC. EWG status is even more beneficial for
international projects because, although EWGs are not permitted to make
retail sales in the United States, retail sales by EWGs are generally
allowed in international markets. Another way to obtain an exemption from
PUHCA for foreign ownership and operation activities is by filing a foreign
utility company determination ("FUCO") with the Commission. However, FUCO
filings are less frequently used, because unlike EWGs, no formal regulatory
order is issued confirming the status of a FUCO, and more rigorous state
commission scrutiny is entailed.

Structuring the Company's activities to ensure that it is not a "holding
company" of a "public utility company" under PUHCA is also important in
providing financing and financial reporting flexibility to the Company. The
cogeneration facilities owned by the Company, or in which the Company has
investments, are Qualifying Facilities under PURPA. The Company has also
pursued the development of independent power projects which will not qualify
for the benefits provided by PURPA, which could subject these projects to
PUHCA jurisdiction. To avoid such a consequence, the Company will structure
its participation in independent power projects in a manner to qualify for
exemptions under PUHCA provided by the Energy Act. Such structures will
permit the Company to take ownership positions in a number of independent
power project projects.

FPA

The Federal Power Act ("FPA") grants the FERC exclusive rate-making
jurisdiction over wholesale sales of electricity in interstate commerce. The
FPA provides the FERC with ongoing as well as initial jurisdiction, enabling
the FERC to revoke or modify previously approved rates. Such rates may be
based on a cost-of-service approach or on rates that are determined through
competitive bidding or negotiation on a market basis.

Although Qualifying Facilities under PURPA are exempt from rate_making and
certain other provisions of the FPA, independent power projects and certain
power marketing activities are subject to the FPA and to the FERC's
rate-making jurisdiction.

Utilities are not obligated to purchase power from projects subject to
regulation by the FERC under the FPA because they do not meet the
requirements of PURPA. However, because such projects would not be bound by
PURPA's thermal energy use requirement, they may have greater latitude in
site selection and facility size. The project currently owned or operated by
the Company as a Qualifying Facility under PURPA is exempt from the FPA.
FERC has significantly relaxed the rules under which power marketers and
independent power producers can sell or market power. With approval from
FERC, such entities, with certain exceptions, are exempted from cost_based
rates and can make all sales at market-based rates set through negotiations.
The independent power project in which the Company currently participates
have been granted market based rate authority and comply with the FPA
requirements governing approval of wholesale rates and subsequent transfers
of ownership interest in such projects.

CHANGES IN FEDERAL REGULATIONS

Historically in the United States, regulated and government-owned utilities
have been the only significant producers of electric power for sale to third
parties. The energy crisis of the 1970s led to the enactment of the federal
Public Utility Regulatory Policies Act of 1978 ("PURPA"), which encouraged
companies other than utilities to enter the electric power business by
reducing regulatory constraints. In addition, PURPA and its implementing
regulations created unique opportunities for the development of cogeneration
facilities by requiring utilities to purchase electric power generated in
cogeneration plants meeting certain requirements (referred to as "Qualifying
Facilities"). See "Regulatory Matters -- Energy Regulation."

As a result of PURPA, a significant market for electric power produced by
independent power producers such as the Company developed in the United
States. In 1992, Congress enacted the Energy Policy Act of 1992 ("Energy
Act"), which amended the Public Utility Holding Company Act of 1935
("PUHCA") to create new exemptions from PUHCA for independent power
producers selling electric energy at wholesale, to increase electricity
transmission access for independent power producers and to reduce the
burdens of complying with PUHCA's restrictions on corporate structures for
owning or operating generating or transmission facilities in the United
States or abroad. The Energy Act has enhanced the development of independent
power projects and has further accelerated the changes in the electric
utility industry that were initiated by PURPA. Implementation of federal and
state policies resulting in increased availability of transmission access
for wholesale and retail transactions could create additional markets and
competition for electricity power sales.

The Company believes it is possible that changes in PURPA, PUHCA and other
related federal statutes may occur in the next several years. The nature and
impact of such changes on the Company's projects operations and contracts is
unknown at this time. The Company is actively monitoring these developments
directly and through industry trade groups to determine such impacts as well
as to evaluate new business opportunities created by restructuring of the
electric power industry. Depending on the outcome of these legislative
matters, changes in legislation could have an adverse effect on current
contract prices.

STATE REGULATION

State public utility commissions, pursuant to state legislative authority,
have jurisdiction over how any new federal initiatives are implemented in
each state and have broad jurisdiction over regulated independent power
projects which are not Qualifying Facilities under PURPA, and which are
considered public utilities in many states. Such jurisdiction would include
the issuance of certificates of public convenience and necessity to
construct a facility as well as regulation of organizational, accounting,
financial and other corporate matters on an ongoing basis. Although the FERC
generally has exclusive jurisdiction over the rates charged by an
independent power project to its wholesale customers, state public utility
commissions have the practical ability to influence the establishment of
such rates by asserting jurisdiction over the purchasing utility's ability
to pass through the resulting cost of purchased power to its retail
customers. In addition, states may assert jurisdiction over the siting and
construction of independent power projects and, among other things, issuance
of securities, related party transactions and sale and transfer of assets.
The actual scope of jurisdiction over independent power projects by state
public utility regulatory commissions varies from state to state.

In the State of California, restructuring legislation was enacted in
September 1996 and was implemented in 1998. This legislation established an
Independent Systems Operator ("ISO") responsible for centralized control and
efficient and reliable operation of the state-wide electric transmission
grid, and a Power Exchange responsible for an efficient competitive electric
energy auction open on a non-discriminatory basis to all electric services
providers. Other provisions include the quantification and qualification of
utility stranded costs to be eligible for recovery through competitive
transition charges ("CTC"), market power mitigation through utility
divestiture of fossil generation plants, the unbundling and establishment of
rate structure for historical utility functions, the continuation of public
purpose programs and issues related to issuance of rate reduction bonds.

The California Energy Commission ("CEC") and Legislature have responsibility
for development of a competitive market mechanism for allocation and
distribution of funds made available by the legislation for enhancement of
in- state renewable resource technologies and public interest research and
development programs. Funds are to be available through the four-year
transition period to a fully competitive electric services industry.

In addition to the significant opportunity provided for power producers such
as the Company through implementation of customer choice (direct access),
the California restructuring legislation both recognizes the sanctity of
existing contracts, provides for mitigation of utility horizontal market
power through divestiture of fossil generation and provides funds for
continuation of public services programs including fuel diversity through
enhancement for in_state renewable technologies (includes geothermal) for
the four-year transition period to a fully competitive electric services
industry.


TRANSMISSION AND WHEELING

Energy-producing projects that sell power to customers which are not
geographically located near the project require that the project have the
capability of transmitting its power over utility power transmission grids
to the purchaser ("wheeling"). The FERC and state utility regulatory
commissions have jurisdiction over the wheeling of power to remote users;
the prices and related terms and conditions of wheeling in interstate
commerce are regulated by the FERC. At the moment, the Company's customers
being serviced by Los Alamos Energy are in the same geographical area as the
Company's power plant.

The PUCT has promulgated rules that require affected utilities to provide
wheeling service. These rules are in effect in the Electrical Reliability
Counsel of Texas system and the new transmission access provisions of the
Energy Act do not alter that federal and state jurisdictional balance.

Rules adopted at the FERC and a number of state utility regulatory
commissions require utilities to grant power producers increased access to
transmission and wheeling. The provisions of the Energy Act increase such
access. The Energy Act supports increased transmission access, and in April
1996 the FERC adopted rules (Order 888) to expand significantly transmission
service and access and provide alternative methods of pricing for
transmission services. Upon promulgation of the final rule by the FERC (and
the PUCT for ERCOT), the interstate transmission grid in the continental
United States was opened to all qualified persons that seek transmission
services to wheel wholesale power. Utilities are required to provide
transmission customers non_discriminatory open access to their transmission
grids with rates, terms, and conditions comparable to that which the utility
imposes on itself. This provides the Company with increased opportunities to
sell and market the power produced by its independent power projects. It
also increases competition on a nationwide basis between traditional and
non_traditional power generators, such as the Company.

ENVIRONMENTAL REGULATION

The construction and operation of domestic and international energy and fuel
producing projects and the exploitation of natural resource properties are
subject to extensive federal, state and local laws and regulations adopted
for the protection of the environment and to regulate land use. The laws and
regulations applicable to the Company and projects in which it participates
primarily involve the discharge of emissions into the water and air, but can
also include wetlands preservation, noise regulation and a comprehensive
Environmental Impact Assessment which includes evaluation of the facility's
impact on air, water, ecology, human health and socioeconomic factors. These
laws and regulations in many cases require a lengthy and complex process of
obtaining licenses, permits and approvals from federal, state and local
agencies. Obtaining necessary approvals regarding the discharge of emissions
into the air is critical to the development of a project and can be time_
consuming and difficult. Each energy_producing project requires technology
and facilities which comply with federal, state and local requirements and
sometimes extensive negotiations with administrative agencies. Meeting the
requirements of each jurisdiction with authority over a project can delay or
sometimes prevent the completion of a proposed project, as well as require
extensive modifications to existing projects.

The Company monitors environmental standards and evaluates its selection of
technology to ensure that applicable standards are being met. Based on
current trends, the Company expects that environmental and land use
regulation will become more stringent. Accordingly, the Company plans to
continue to place a strong emphasis on the development and use of
state-of-the-art technology to minimize potential impacts on the
environment. In addition, the Company has developed expertise and experience
in obtaining necessary licenses, permits and approvals.

In November 1990, comprehensive amendments to the Clean Air Act were enacted
(the "1990 Amendments"). The first major revisions to the Clean Air Act since
1977, the 1990 Amendments vastly expand the scope of federal regulations and

enforcement in several significant respects. In particular, provisions relating
to non_attainment, air toxics, permitting, enforcement and acid deposition
may affect the Company's domestic projects. The Clean Air Act and the 1990
Amendments contain provisions that regulate the amount of sulfur dioxide and
nitrogen oxides that may be emitted by a project. These emissions may be a
cause of "acid rain." The project the Company owns, operates or plan's to
investment in are, or will be fueled by natural gas and are not expected to
be significantly affected by the acid rain provisions of the 1990
Amendments.

One of the key elements of the 1990 Amendments is the inclusion of an
operating permit program in Title V. This program is intended to establish a
central point in tracking all applicable air quality requirements for every
source required to obtain a permit under the Clean Air Act. Final
regulations implementing these provisions were issued by the EPA in 1992.
These regulations created minimum requirements for the operating permit
program. Each state was required to submit a program for its implementation
of the regulations for approval to the EPA. The Company is required to
submit complete operating permit applications to those states in which it
has operating projects which meet the applicability standards under the 1990
Amendments.


COMPETITION

The power generation industry is characterized by intense competition, and
the Company encounters competition from utilities, industrial companies and
other power producers. The independent power industry has grown rapidly over
the past twenty years. The demand for power may be met by generation
capacity based on several competing technologies, such as gas-fired or
coal-fired cogeneration and power generating facilities fueled by
alternative energy sources including hydro power, synthetic fuels, solar,
wind, wood, geothermal, waste heat, solid waste and nuclear sources. The
Company competes with other non-utility generators, regulated utilities,
unregulated subsidiaries of regulated utilities and other energy service
companies in the development and operation of energy-producing projects and
the marketing of electric power. In recent years, there has been increasing
competition in an effort to obtain power sales agreements, and this
competition has contributed to a reduction in electricity prices. In
addition, many states are implementing or considering regulatory initiatives
designed to increase competition in the domestic power industry. In
California, the CPUC issued decisions which provide for direct access for
all customers as of April 1, 1998. This competition has put pressure on
electric utilities to lower their costs, including the cost of purchased
electricity, and increasing competition in the future will increase this
pressure. However, management believes that the deregulation of the
electrical power industry in California will enable it to achieve higher
revenues from the sale of power. Power sales are currently limited to PG&E,
who must purchase all of the power the Company can produce at regulated rates.

At the Federal level, the Energy Act reduces certain restrictions currently
applicable to certain projects which are not Qualifying Facilities (as
further defined below) under PURPA and provides for the removal of certain
impediments to competition in the power generation industry. Although the
provisions of the Energy Act apply only to wholesale transactions, actions
by many state authorities are also increasing competition for industrial,
commercial and other larger scale customers in the provision of services by
Qualifying Facilities ("QF's"), and independent power projects, as well as
power marketers and other unregulated suppliers. The development rights of
Qualifying Facilities, which were facilitated by certain provisions of
PURPA, have not been affected, nor amended, by the Energy Act. However,
proposed legislation has been introduced in Congress to repeal all or part
of PURPA. These federal legislative proposals would not abrogate or amend
existing contracts with electric utilities and would only be effective
prospectively for new contracts.

Legislation to repeal PUHCA is also currently pending in Congress. Although
passage of stand alone legislation repealing PUHCA is not expected during
the current session, eventual repeal or modification of PUHCA is being
considered. Congressional repeal or modification of PUHCA will loosen the
strictures currently placed on utilities and others from acquiring
generation and transmission assets outside of their service territories.
This will significantly increase the competition the Company faces.

The industry is presently characterized by rapid change in the regulatory
and commercial aspects of competition. Although the timing and ultimate
effect of these changes cannot be predicted, management of the Company
believes that the overall effect of the current changes will be to increase
competition in the generation, transmission and sale of electric power.

EMPLOYEES

As of March 31, 2000, the Company employed 2 people. None of the Company's
employees are covered by collective bargaining agreements, and the Company
has never experienced a work stoppage, strike or labor dispute. The Company
considers relations with the Company's employees to be good.

ITEM 2. PROPERTIES

The Company rents offices from its President, James C. Harvey, at the rate
of $850 per month, on a month to month basis, and also rents offices from a
former member of LAE at a nominal rental on a month to month basis at 466
Bell Street, Los Alamos, California. The Company owns two internal
combustion engine/generator sets located on the Blair Ranch. The Company
owns all right, title and interest in and to the power purchase agreement
between ACI and PG&E, dated November 28, 1988, and the power purchase
agreement with Texaco, consisting of correspondence between Texaco and ACI.

PATENTS, SERVICE MARKS, COPYRIGHTS AND OTHER PROPRIETARY TECHNOLOGY

The Company has registered the marks Out-Takes(R), So You Want to be in
Pictures(R), Photomation(R) and Create the Moment(R) with the U.S. Patent
and Trademark Office and has registered the Out-Takes(R) service mark in
Japan, in both Japanese and English. The Company actively manages the
protection of its trademarks, know-how, trade secrets and other intellectual
property by requiring all its employees and those contractors where
applicable, to execute confidentiality agreements in relation to the
Company's intellectual property. The Company is not aware of any instance
where there has been a breach of such confidentiality obligations.

The Company has no patents, copyrights or trademarks with respect to its power
plant operations.


ITEM 3. LEGAL PROCEEDINGS

  None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.
                                   PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock began trading on the Nasdaq Small Cap MarketSM
("NASDAQ") on March 9, 1993 under the symbol OUTT (also OUTTC during the
period from October 28, 1994 through December 30, 1994). On January 3, 1995,
the Company's securities were delisted from NASDAQ as a consequence of the
Company's not fulfilling the minimum bid price requirements set forth in
Paragraph 1(c)(4) of Schedule D of the NASDAQ By-Laws. On January 4, 1995,
the Company's Common Stock began to be quoted on the OTC-Bulletin BoardSM
under the symbol OUTT.

On March 9, 2000, the Company's quotation of its securities on the Bulletin
Board was deleted, due to the Company's failure to maintain current
financial reports with the SEC. The Company's securities are now quoted on
the National Quotation Bureau's pink sheets under the symbol "OUTT". The
Company is now current in its reports to the SEC, and has applied to the
NASD for a quotation on the Bulletin Board. There can be no assurance that
the NASD will approve the Company's securities for a quotation on the
Bulletin Board.

The following table sets forth, for the periods indicated, the high and low
closing prices for the Common Stock as reported by Nasdaq Trading, Market
Services Inc., and Freerealtime.com.


                       Fiscal 1998           Fiscal 1999
                      High      Low          High      Low

First Quarter       10/100     7/100         5/64      1/32
Second Quarter     7.5/100     7/100         1/16      1/32
Third Quarter        7/100     4/100         3/32      1/32
Fourth Quarter   3.125/100   1.5/100          .06       .03

There were approximately 83 holders of record of the Company's Common Stock
as of March 31, 2000.

The Company has not paid any dividends on its Common Stock since
incorporation in March 1992 and does not anticipate paying dividends in the
foreseeable future. There are no restrictions on the Company's present
ability to pay dividends on its Common Stock, other than those prescribed by
Delaware law.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain data for the years ended March 31, 1997
through March 31, 2000. Refer to "Item 7. Management's Discussion and
Analysis or Plan of Operation" for discussion of operations.

<TABLE>
 <S>                                <C>             <C>          <C>
    <C>
                                   2000            1999         1998
    1997
                                 -------          ------       --------
  ---------
Income Statement Data

Revenue from operations          216,623          637,450     $1,187,638
  $2,014,788

Gross Income (Loss)             (369,365)        (541,246)        88,858
    (635,416)

Net Loss                        (884,110)        (403,774)    (1,082,306)
    (753,346)
Net loss per share                    (0.04)           (0.019)       ($0.05)
          ($0.05)

Balance Sheet Data


Total Assets                  $4,550,824         $312,503       $285,840
  $1,011,463

Total Liabilities              6,552,789        1,667,725      1,020,943
     698,710

Stockholders' Equity
 (Deficit)                    (1,893,559)      (1,355,672)      (735,103)
     312,753

</TABLE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with the historical
financial statements of Out-Takes, Inc. ("the Company") and notes thereto
included elsewhere in this Form 10-K.

Overview

The Company currently leases to a third party, Colorvision, an operating
photographic portrait studio, which was opened on May 24, 1993 at
MCA/Universal's CityWalkSM project in Los Angeles, California ("the CityWalk
Studio"). The Company opened a second studio on December 1, 1995 at the
Entertainment Center in the Bazaar at the Irvine Spectrum located in Irvine,
Orange County, California ("the Irvine Studio"). The Irvine Studio closed on
April 22, 1998.

The Company currently operates a 1 mW waste gas electricity plant in Los
Alamos, California, which was acquired from Los Alamos Energy, LLC on August
31, 1998.

The following table summarizes the Company's fiscal quarter results:

On or about August 31, 1998, the Company acquired all of the issued and
outstanding units of equity of Los Alamos Energy, LLC, which operates a 1
mega watt power plant in Los Alamos, California, which produces electricity
from "waste gas," and shifted its business emphasis to that of electrical
energy provider.

On or about October 26, 1998, the Company leased its photo studio assets to
Colorvision International, Inc., completing the shift of its business focus
to the providing of electrical energy.

Results of Operations

Year Ended March 31, 2000 Compared to Year Ended March 31, 1999

The net loss for the year ended March 31, 2000 was $884,110 compared with
$403,774 for the year ended March 31, 1999. The primary reasons for the
increase in the net loss were the loss of revenues from the operation of the
photo studio. The Company overall generated $216,623 in revenues in the
fiscal year ended March 31, 2000, compared to revenues of $637,450 in the
fiscal year ended March 31, 1999. Management attributes this decline to the
change in business focus from a photography studio to power plant operation.

Year Ended March 31, 1999 Compared to Year Ended March 31, 1998

The net loss for the year ended March 31, 1998 was $1,082,306 compared with
$403,774 for the year ended March 31, 1999. The primary reasons for the
decrease in the net loss were the elimination of expenses of the photo studio.

The Company overall generated $1,187,638 in revenues in the fiscal year ended
March 31, 1998, compared to revenues of $637,450 in the fiscal year ended
March 31, 1999. Management attributes this decline to the change in
business focus from a photography studio to power plant operations.

Liquidity and Capital Resources

At March 31, 2000, the Company had a working capital deficit of $2,421,343
as compared to a working capital deficit on March 31, 1999 of $719,567. The
increase of $1,701,776 is primarily attributable to an increase in short
term debt and debt to related parties.

Net cash used in operating activities was $164,635 for the fiscal year ended
on March 31, 2000, compared to the utilization of $346,687 of cash for the
same period March 31, 1999.

The Company does not anticipate that it will have any problems in meeting
its obligations for continuing fixed expenses, materials procurement or
operating labor.

ITEM 8. FINANCIAL STATEMENTS

[CAPTION]
                           Report of Independent Auditor
                           -----------------------------

Board of Directors
Out-Takes, Inc.
Dallas, Texas

We have audited the accompanying consolidated balance sheets of Out-Takes,
Inc., and subsidiary as of March 31, 2000, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the year
then ended. 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 did not audit the financial
statements of Out-Takes, Inc. which reflected a total revenues of $1,204,238
for the year ended March 31, 1998. Other auditors whose report dated May 20,
1998, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Out-Takes, Inc. and its subsidiary as of March 31, 2000 and the
consolidated results of its operations and their cash flows for the year
then ended in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company has suffered recurring losses from
operations and has a net working capital deficiency that raise substantial
doubt about its ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 9. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.

Rogelio G. Castro
Certified Public Accountant
Oxnard, California
June 28, 2000
                                      F-1

[CAPTION]
Out-Takes, Inc.
Consolidated Balance Sheets

                                                March 31,     March 31,
                                                  2000          1999
                                               ---------      --------
Assets
Current Assets
Cash and cash equivalents                       $ 77,265     $   1,356
Accounts receivable                               42,722
Advances to related party                             -0-      217,414
                                                 --------      --------
Total Current Assets                             119,987       218,770

Property, Plant and Equipment-net                236,798       248,965

Other Non-Current Assets
Goodwill                                       4,170,891     4,279,455
Deposits and advances                             23,148        24,692
                                               ----------    ----------
Total Assets                                  $4,550,824     $4,771,882
                                               ==========    ==========
Liabilities and Stockholders' Equity

Current Liabilities
Accounts payable                               $  95,067      $   4,600
Accrued expenses                                  25,159             -0-
Compensation payable-related parties             211,390        202,341
Accrued interest                                 422,931             -0-
Accrued interest-related parties                 173,001         93,008
Deferred income                                    6,971         30,604
Short-term notes                                 832,966        250,278
Due to related parties                           773,845        357,506
                                               ---------       --------
Total Current Liabilities                      2,541,330        938,337
                                               ---------       --------
Long-Term Debt
Notes payable                                  4,011,459      4,951,400
                                               ----------    ----------
Stockholders' Equity
Common stock, par value $0.01 per share,
35,000,000 shares authorized; 20,788,122
shares issued of which 292,396 are in
Treasury                                         207,882        207,882
Preferred stock, par value $0.01 per
share, 5,000,00 shares authorized;
none issued                                           -0-           -0-
Capital in excess of par                       9,913,230      9,913,230
Accumulated deficit                          (12,014,671)   (11,130,561)
                                              ----------    ----------
                                              (1,893,559)    (1,009,449)
                                              ----------    ----------
Treasury stock, at cost                         (108,406)      (108,406)
                                              ----------    ----------
Total Liabilities and
Stockholders' Equity                          $4,550,824     $4,771,882
                                              ==========     ==========


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








                                        F-2
[CAPTION]
Out-Takes, Inc.
Consolidated Statements of Operations


                                                Years Ended March 31,
                                           2000          1999       1998
                                         --------     --------     -----------
 Revenues                                $216,623     $637,450     $1,204,238

Cost of Revenues                          212,323      192,374      1,728,884
                                         --------     --------     -----------
Gross Margin                                4,300      445,076       (524,646)

General and administrative                373,665      734,802        661,955
                                         --------     --------     -----------
Income (loss) from operations            (369,365)    (289,726)    (1,186,601)
                                         --------     --------     -----------
Other Income (Expense)
Interest income                              -              35            224
Interest expense                         (429,952)     (36,559)       (52,409)
Interest expense-related parties          (79,993)           -              -
Discontinued operations                      -         (55,934)             -
Start-up costs                               -               -        (37,214)
                                         --------     --------     -----------
Total Other Income (Expenses)            (509,945)     (92,458)       (89,399)
                                         --------     --------     -----------
Provision (benefit) for income taxes        4,800          -              -
                                         --------     --------     -----------
Net Income (Loss)                       ($884,110)   ($382,184)   ($1,276,000)
                                         ========     ========
===========

Net income (Loss) Per Share                ($0.04)       ($0.02)        ($0.06)
                                         ========     ========
===========
Weighted average common

shares outstanding                      20,788,122    20,788,122     20,788,122
                                         ========     ========
===========

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

                                        F-3
[CAPTION]
Out-Takes, Inc.
Consolidated Statements of Stockholders' Equity
<TABLE>

                                  Common Stock                      Additional
                                  Number of      Common Stock       Paid-In
         Accumulated
                                  Shares         Amount             Capital
         Deficit
                                  ------------   ------------
-----------        ------------
 <S>                              <C>          <C>              <C>
     <C>
Balance, March 31, 1997           20,788,122      $  207,882
$10,015,980        $(9,815,161)

Management fee-related party         -               -
30,200               -
Adjustment for cancellation
of escrow shares                     -               -                (
144,000)              -
Options issuance costs               -               -
3,250               -
Net income (loss)                    -               -                    -
          (1,276,000)
                                  ------------   ------------
------------        ------------
Balance, March 31, 1998            20,788,122       $207,882
$9,905,430     $(11,091,161)
                                  ============     ===========
============     =============

                                       Treasury          Deferred
                                       Stock             Compensation
Total
                                       ------------      ------------
----------
Balance, March 31, 1997                $(108,406)        $(144,000)
$156,295

Management fee-related party                -                   -
  30,200
Adjustment for cancellation
of escrow shares                            -               144,000
       -
Options issuance costs                      -                   -
   3,250
Net income (loss)                           -                   -
(1,276,000)
                                       ------------      ------------
----------
Balance, March 31, 1998                 $(108,406)        $     -
$(1,086,255)
                                       ============       ===========
===========
Acquisition of subsidiary                   -                   -
 342,784
Capital adjustment                          -                   -
   7,800
Net income (loss)                           -                   -
(382,184)
                                       ------------      ------------
----------
Balance, March 31, 1999                 $(108,406)        $     -
$(1,117,855)
                                       ============       ===========
===========

Balance, March 31, 1999             20,788,122         $ 207,882       $
9,913,230        $(11,130,561)

Net income (loss)                           -                   -
       -            (884,110)
                               ------------       ------------
----------      ------------
<F/N>           The accompanying notes are an integral part of these
financial statements.

                                                        F-4
</TABLE>

[CAPTION]
Out-Takes, Inc.
Consolidated Statements of Cash Flows
<TABLE>

                                                           For the Years
Ended March 31,
                                                 2000               1999
             1998
                                               ---------          ----------
         ------------
 <S>                                        <C>               <C>
    <C>
Cash Flows From
Operating Activities
Net Income (Loss)                             ($884,110)         ($382,184)
        ($1,276,000)
Noncash items included
 In net income (loss)
  Depreciation and amortization                 163,659            116,585
            540,185
  Loss on closure of Irvine Studio                 -                   -
            154,157
  Management fee-related party                     -                80,887
            110,062
  Changes in:
   Accounts receivable                         (42,722)                -
               -
   Royalty advance                               1,543                 -
               -
   Inventory                                       -                10,082
            12,797
   Prepaid expenses                                -                11,954
             9,921
   Other current assets                            -                 9,564
               -
   Deposits and advances                        (4,600)            (25,504)
            11,330
   Due from related party                          -              (120,854)
             3,847
   Accounts payable                             42,726            (162,039)
          (127,413)
   Accrued expenses                             20,359                 -
               -
   Accrued interest                            422,931              36,556
            48,581
   Accrued interest-related party               79,993                 -
               -
   Accrued taxes payable                         4,800                 -
               -
   Provision for studio closure                    -               (31,878)
            31,878
   Prepaid asset lease                         (30,604)             30,604
               -
   Compensation payable-related party           61,390              79,540
          (119,990)
                                                ---------         ----------
         ------------
Net cash provided (used)
by operating activities                      (164,635)            (346,687)
          (604,492)
                                                ---------         ----------
         ------------
Cash Flows From
Investing Activities
  Purchase of property, plant
   and equipment                               (53,213)            (33,522)
          (218,893)
  Disposal of property, plant
   and equipment                                 5,500                 -
                10
                                                ---------         ----------
         ------------
Net cash provided (used)
by investing activities                        (47,713)            (33,522)
          (218,883)

Cash Flows From
Financing Activities
Advances from related parties                     6,570            272,887
           703,783
Payments to related parties                    (116,903)                -
               -
Capital contribution                                -                7,800
               -
Proceeds from short-term debt                   405,131             74,000
            65,834
Principal payments on capital lease              (6,541)                -
               -
                                                ---------         ----------
         ------------
Net cash provided (used)
By financing activities                         288,257            354,687
           769,617
                                                ---------         ----------
         ------------
Net increase in cash and
  cash equivalents                               75,909            (25,522)
           (53,758)
Cash and cash equivalents-
  beginning of period                             1,356             26,878
            80,636
                                                ---------         ----------
         ------------
Cash and cash equivalents-
  end of year                                   $77,265           $  1,356
          $ 26,878
                                               ==========         ==========
         ============

<F/N>          The accompanying notes are an integral parts of these
financial statements.

                                                 F-5
</TABLE>

[CAPTION]
Out-Takes, Inc.
Consolidated Notes to Financial Statements

1. Summary of Significant Accounting Policies

Nature of Business   The Company's principal business activity is the
collection and distribution of waste natural gas in the State of California,
and the conversion of such natural gas into electricity, which is then sold
to retail providers of consumer electricity.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates that
affect the reported amounts of assets, liabilities, revenues, expenses and
the disclosure of contingent assets and liabilities. Actual results could
differ from these estimates.

Basis of Presentation   The accompanying financial statements include the
accounts of Out-Takes, Inc. and its wholly owned subsidiaries. All
significant inter-company accounts and transactions have been eliminated.

Property, Plant and Equipment - Plant and equipment are recorded at cost.
Depreciation is provided over the estimated useful asset lives using the
straight-line method over 5-7 years.

Cash and cash equivalents - The Company classifies all highly liquid debt
instruments, readily convertible to cash and purchased with a maturity of
three months or less at date of purchase, as cash equivalents. The Company
had no cash equivalents at March 31, 2000.

Goodwill and acquisition related intangibles   Goodwill is recorded when the
consideration paid for acquisitions exceeds the fair value of net tangible
and intangible assets acquired. Goodwill is amortized on a straight-line
basis over 40 years. Net goodwill at the reporting dates is as follows:

                                      March 31, 2000        March 31, 1999
                                      --------------        --------------
Goodwill                              $ 4,342,874            $ 4,342,784
Accumulated amortization                 (171,983)               (63,419)
                                      --------------        --------------
Net Goodwill                           $4,170,891            $ 4,279,365
                                      ==============        ==============

Amortization expense                   $  108,564            $    63,419
                                      ==============        ==============

Earnings per share - Earnings per share data in the financial statements
have been calculated in accordance with SFAS No. 128. Earnings per share
reflects the amount of earnings for the period available to each share of
common stock outstanding during the reporting period, while giving effect to
all dilutive potential common shares that were outstanding during the
period, such as common shares that could result from the potential exercise
or conversion of securities into common stock. As of March 31, 2000 and
1999, no contingently issuable shares qualified as dilutive to be included
in the earnings per share calculation.

Reclassifications   Certain amounts reported in previous years have been
reclassified to conform to the March 31, 2000 presentation.

2. Mergers and Acquisitions

On August 31, 1998, Out-Takes, Inc. acquired all of the issued and
outstanding equity interests of Los Alamos Energy, LLC, a California limited
liability company (LAE). This acquisition has been accounted for as an
exchange between companies under common control. The investment has been
recorded at historical cost in a manner similar to a pooling of interest,
and the face value of the note given has been adjusted down to the net
equity value of LAE at the date of the exchange.

In March 2000, the Company executed a letter of intent with Merger
Solutions, LTD.(MSL), which among other things, provides for a merger to be
effected pursuant to the provisions of a Merger Agreement. As of March 31,
2000, the merger is in process but had not yet been completed.

In June 1999, the Company executed a letter of intent with Coastal Resources
Corporation, which, among other things, provides for a merger to be effected
pursuant to the provisions of a Share Exchange Agreement. As of March 31,
2000, the merger is in process but had not yet been completed.

The Company has also executed a letter of intent with Atlas Engineering, LLC
to the effect that the Company shall acquire Atlas Engineering, LLC pursuant
to the provisions of a Purchase Agreement. As of March 31, 2000, the merger
is in process but had not yet been completed.

3. Property, Plant and Equipment

The components of property, plant and equipment are as follows:


                                          March 31, 2000     March 31, 1999
                                              ----------------
---------------

Computers and software                                 4,793              1,300

Equipment and furniture                              350,633            337,912
Leased asset                                          19,000                 -

Motor vehicle                                              -              5,500
                                               -------------
-------------

Total - At Cost                                      374,426            344,712
Less: Accumulated depreciation                      (137,628)
(95,747)

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

Net                                            $     236,798      $     248,965

                                               =============      =============
4. Notes Payable

Note Payable - Consultant
This is an unsecured note payable to a former financial consultant to the
Company pursuant to a settlement agreement dated August 17, 1994. The note
is non-interest bearing and payment is subject to availability of future
cash flows from the Company's operations. The note holder has threatened to
commence legal action, however management has advised the note holder that
no amount is due at the present time as the Company has not generated
positive cash flow. Counsel has advised the Company that no litigation has
commenced and counsel is unable to assess a possible outcome, should
litigation be commenced. The payable amount as of March 31, 2000 is $48,000.

Note Payable   Radovich
This is an unsecured promissory note dated September 27, 1996. The note's
original maturity dated was thirty (30) days, no interest. The note's
maturity date has been extended indefinitely without interest. The payable
amount as of March 31, 2000 is $30,557.

Note Payable   De Simone
This is an unsecured promissory note dated March 30, 1998. The note's
original maturity date was sixty (60) days, 10% per annum simple interest.
The notes maturity had been extended to December 31, 1999 with interest and
is being negotiated for another extension. The payable amount as of March
31, 2000 is $24,000.

Note Payable   Reeves
This is an unsecured promissory note dated March 30, 1998. The note's
original maturity date was sixty days with interest at 10% per annum and is
convertible into Out-Takes, Inc. common stock at a rate to be negotiated
between the parties. The payable amount as of March 31, 2000 is $25,000.

Note Payable   Boyd
This is an unsecured promissory note dated August 14, 1998. The note's
original maturity date was sixty (60) days, 10% annum simple interest. The
note's maturity date was extended to December 31, 1999 with interest and the
parties are in negotiation for an additional extension. The payable amount
as of March 31, 2000 is $45,000.

Note Payable   Atlas Engineering
This is an unsecured promissory note dated March 19, 1999. The note is
convertible into Out-Takes, Inc. common stock pursuant to a non-binding
share purchase agreement executed between the parties. The note includes
interest at 10% per annum until paid or converted. The payable amount as of
March 31, 2000 is $15,000.

Note Payable - Coastal Resources Corp.
This note, dated June 15, 1999 is secured by the property, plant and
equipment of Los Alamos Energy, LLC and includes interest at 8% per annum
beginning October 1, 1999. The master loan agreement specifies a $300,000
maximum financing amount and was entered into pursuant to a non-binding
merger agreement between the parties. If the merger is consummated, then the
loan balance at that date shall be credited to Coastal Resources Corp. as
part of its proportionate equity interest in Out-Takes, Inc. If the merger
is not consummated, then the principal and interest is due and payable on
the first anniversary date of each advance ranging from June 2000 through
August 2000. The payable amount as of March 31, 2000 is $377,130.

Note Payable   Los Alamos Energy, LLC Equity Holders
This note, dated August 31, 1998, is pursuant to a share Purchase Agreement
executed between Los Alamos Energy, LLC (LAE) and Out-Takes, Inc. The note
specifies interest at 10% per annum and is convertible into a aggregate
ninety percent of the issued and outstanding shares of common stock of
Out-Takes, Inc. as of the date of conversion. The agreement also requires as
a condition of the conversion that Out-Takes, Inc. effect a reverse stock
split of one share for every one-hundred issued and outstanding shares at
the conversion date. As of March 31, 2000, this conversion and reverse stock
split has not been completed. The payable amount as of March 31, 2000 is
$4,000,000.

Note Payable   Joint Venture Working Interest
These notes are pursuant to a Joint Venture Agreement executed between Los
Alamos Energy, LLC and the participants in development and generation of
electricity from waste natural gas activities. The agreement specifies that
participants may be required to convert their working interest into an
equity position when the Company merges with a publicly traded entity. Those
participants electing not to convert would be repaid their original
consideration plus a non-compounded annual yield of 12%. As of March 31,
2000, this conversion or repayment has not been completed. The payable
amount as of March 31, 2000 is $250,279.

Note Payable   Hall
This is an unsecured promissory note dated January 4, 2000. The note's
maturity date is January 4, 2001 without interest. The payable amount as of
March 31, 2000 is $18,000.

4. Notes Payable (concluded)

Lease Payable   Fairfield Energy Corp.
The company is the lessee of a transformer under a capital lease expiring
July 2003. The asset and liability under the capital lease is recorded at
the present value of the minimum lease payments. The asset is depreciated
over the lease term of 50 months. Depreciation of the asset under the
capital lease is included in depreciation expense for the year ended March
31, 2000. The equipment held under capital lease at March 31, 2000 is valued
at $19,000 less accumulated depreciation of $2,488.

5. Due to Related Party

The amount due to related party of $773,845 is unsecured and payable upon
demand.  Interest is charged at a rate of 10% per annum and for the twelve
months ended March 31, 2000, was $79,993. As of March 31, 2000 and 1999
interest of $173,001 and $93,008 respectively was accrued.

6. Commitments and Contingencies

The Company has an extended 12 month non-cancelable operating lease
agreement for an office facility.

Future minimum lease obligations are as follows:

         Year ended March 31
         -------------------
              2001                                 $  10,200
                                                    --------
              Total                                $  10,200
                                                   =========

In the twelve months to March 31, 2000, 1999, and 1998 total rent expense
under this lease was $10,200, $10,200 and $10,200 respectively

The Company's facilities are subject to federal, state and local provisions
relating to the discharge of materials into the environment. Compliance with
these provisions has not had, nor does the Company expect such compliance to
have, any material effect on the capital expenditures, revenues or expenses,
or financial condition of the Company. Management believes that its current
practices and procedures for the control and disposition of materials comply
with all applicable federal, state and local requirements.

Los Alamos Energy, LLC (LAE) participates in certain agreements with respect
to the generation of electricity from waste natural gas whereby its managing
member also acts as the operator of the electrical power plant's development
and production activities. As its managing member and operator, LAE is
contingently liable for the activities of this venture.

7. Income Taxes

As of March 31, 2000, the Company has a net operating loss (NOL) carry
forward of approximately $11,250,000. The net operating loss carry forwards
expire between 2007 and 2015. No deferred tax asset has been recorded for
these losses since a valuation allowance has been recorded for the portion
of the NOL that is not expected to be realized.

8. New Authoritative Pronouncements

The Company intends to adopt Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as of the beginning of its fiscal year 2001. The standard will
require the Company to recognize all derivatives on the balance sheet at
fair value. The effect of adopting the standard is not expected to have a
material effect on the Company's financial position or overall results in
operations.

9. Going Concern

The Company has been unsuccessful in generating net cash from operations.
The net cash used by the Company in operating activities in the year ended
March 31, 2000 was $164,635. The Company incurred a net loss of $884,110 for
the year ended March 31, 2000 and has a working capital deficit as of March
31, 2000 of $2,421,343.

The accompanying financial statements have been prepared on a going concern
basis which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. The
continuation of the Company as a going concern is dependent upon its ability
to generate net cash from operations. The Company's recurring operating
losses and net working capital deficiency raises substantial doubt about the
entity's ability to continue as a going concern.

Management plans to expand its existing power plant to a four or five mega
watt facility, reduce expenses, expand operations to include direct service
of consumer electricity, and convert $4,250,279 of existing debt to equity
which will substantially reduce interest expense.


10. Concentrations of Credit Risk

All of the consolidated revenue of Out-Takes, Inc. is generated from the
leasing of photographic equipment to one customer and the sale of
electricity to Pacific Gas and Electric Company and Texaco.


11. Supplemental Cash Flow Disclosures

Cash flows from operating activities include the following cash payments:

                     March 31,        March 31,        March 31,
                       2000              1999            1998
                    ---------        ---------        ---------
Income taxes        $     -         $      -          $       -
Interest            $ 2,516         $   7,650         $   66,501

Noncash investing and financing activities include the following amounts:

                                March 31,        March 31,        March 31,
                                  2000             1999             1998
                                ---------        ---------        ---------
Capital lease of equipment       $ 19,000        $    -           $    -

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

The former accountant, Moore Stephens, P.C., did not resign or decline to
stand for reelection. It was dismissed by the Company in February, 2000. The
decision
to change accountants was approved by the Board of Directors. There were no
disagreements with the former accountant on any matter of accounting
principle or practice, financial statements disclosure or auditing scope or
procedure. The former accountant has indicated his agreement with the
statements made by the Company regarding the change in the Company's
independent accountant. The Company has fully authorized the former
accountant to respond fully to the inquiries of the successor accountant
concerning all of the Company's financial reports and audits. The new
accountant, Roger G. Castro, was engaged in February, 2000.

                                  PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Name                        Age                        Position

James. C. Harvey             51                 Chairman, President, CEO
                                                Chief Financial Officer,
                                                Secretary, Director

James C. Harvey. Mr. Harvey is the current Chairman, President, Chief
Executive Officer, Secretary and sole Director of the Company, and has acted
in that capacity since 1998. He is a practicing attorney at law with
emphasis on business, real estate, banking and finance. Mr. Harvey
previously was of Counsel to Ludwick & Anderson providing legal services for
the Resolution Trust Corporation in connection with the receivership of
seven thrifts, and prior thereto was the Managing Partner of Simpson, Dowd,
Kaplan & Moon, where he managed all business affairs for the firm. He
received his B.B.A., Accounting  Banking & Finance in 1963, and J. D. in
1966, both from Southern Methodist University.

ITEM 11. EXECUTIVE COMPENSATION

No executive salaries were paid to officers or directors in the last fiscal
year, and to date in the present fiscal year. No salaries will be paid until
such time as there is available cash flow from operations to pay salaries.
There were no grants of options or SAR grants given to any executive
officers during the last fiscal year. The President and sole director of the
Company, James Harvey, is paid $850 per month for rent of the Company's
offices, and is reimbursed monthly for company telephone expenses.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
     MANAGEMENT

The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the date of this
disclosure(1), by (I) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and outstanding
shares of common stock, (ii) each of the Company's directors and executive
officers, and (iii) all directors and executive officers as a group.

Name and Address                Number of Shares          Percentage Owned
----------------                ----------------          ----------------
James C. Harvey                         0                        0%
3811 Turtle Creek Blvd.
Suite 350
Dallas, Texas 75219

All Officers and Directors              0                        0
as a Group

No officers and directors hold any stock in the Company.  However, the
acquisition agreement providing for the acquisition of Los Alamos Energy
provides that, in the event the Equity Holders shall desire to do so, they
may convert their indebtedness to common stock of the Company representing
in the aggregate ninety percent (90%) of the issued and outstanding shares
of such common stock as of the date of such conversion. The Acquisition
Agreement provides that it is a condition of the conversion that the Company
effect a reverse stock split of one (1) share for every one hundred (100)
shares issued and outstanding as of such date. LAE contemplates that a
significant number of persons currently holding promissory notes and/or
working interests in its electricity production (collectively, "Interest
Holders") will exercise their rights to convert such interests into the
equity of LAE, and subsequently to join in the conversion of the Notes into
common stock of the Company. Presently, management of LAE anticipates that,
prior to the conversion of the Notes and after giving effect to the
contemplated reverse stock split, the Company will issue approximately three
million (3,000,000) additional shares of common stock, and that subsequent
to completing the conversion, the Equity Holders and Interest Holders will
own, in the aggregate, approximately two million eight hundred eighty
thousand (2,880,000) shares of the Company's common stock, representing
ninety percent (90%) of the total amount of common stock estimated to be
issued and outstanding as of the date such conversion rights are exercised.
This means that, if James Harvey, who is the beneficial owner of 790,059
units of LAE (including those in the name of the Inwood 1991 Trust, of which
he is Trustee, converted his indebtedness to common stock of the Company,
giving effect to the contemplated reverse split, he would be the owner of
approximately 26% of the Company's common stock. In addition, there are two
other members of LAE who would own more than 5% of the Company's outstanding
common stock should they decide to convert their indebtedness to common
stock; Hannes Faul, who would own 25% of the outstanding common stock, and
Lance Hall & Co., who would own 25% of the outstanding common stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company rents offices from its President and sole shareholder, James C.
Harvey, on a month to month basis at a monthly rental of $850 per month. The
Company's acquisition agreement to acquire Los Alamos Energy gives Mr.
Harvey and other members of LAE the right to convert the debt the Company
owes under the acquisition agreement to Company common stock, which means
that, if the members of LAE decided to convert the debt owed them to common
stock, they would become the owners of 90% of the outstanding common stock
of the Company.

There have been no other transactions since the beginning of the fiscal
year, or any current transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount involved
exceeds $60,000, and in which any of the officers, or directors, or holders
of over 5% of the Company's stock have or will have any direct or indirect
material interest. The Company does not currently have any policy toward
entering into any future transactions with related parties.

                                   PART IV

ITEM 14.   EXHIBITS AND REPORTS ON FORM 8-K


(a)  The  following  exhibits  are filed as part of this  report as required by
     Item 601 of Regulation S-B:

     3.1   Certificate of Incorporation of the Company. (ii)

     3.2   Certificate of Amendment of Certificate of Incorporation. (ix)

     3.3   Bylaws of the Company. (I)

     4.1   Form of Unit Purchase Option. (I)

     4.2   Form of Warrant Agreement. (I)

     4.3   Form of Escrow Agreement. (iv)

     4.4   Section 203 of the Delaware General Corporation Law. (ix)

     10.1  Form of Registration Rights Agreement. (I)


     10.5  Form of Standard Employment Agreement for hourly wage employee. (vi)


     10.6  Form of  Standard  Employment  Agreement  for hourly  wage  employee
           eligible to earn commissions. (vi)

     10.7  Form of Standard Employment Agreement for salaried employee. (vi)


     10.8  Form of Standard Employment Agreement for salaried employee eligible
           to earn commissions. (vi)


     10.9  Form of Standard Employment Agreement for salaried employee eligible
           for bonus in the form of incentive compensation. (vi)

     10.10 Agreement dated March 16, 1992 between the Placement Agent and
                 Shelton on behalf of "Founders" specified therein, as
amended. (I) +

     10.11 Founders Agreement dated March 25, 1992 among Robert H. Shelton
           ("Shelton"), Ellen Korval ("Korval"), Robert A. Small ("Small"),
Leah
           R.  Shelton  ("Shelton")and  John L. Sigalos  ("Sigalos"),  as
           supplemented by letter agreement dated as of March 25, 1992 among
           Shelton, Shelton, Sigalos, Korval and Small. (I) +


     10.12 Merchandising  License  Agreement  dated  February  25, 1992 between
           MCA/Universal Merchandising, Inc. and the Company. (I)


     10.13 Merchandising  License Agreement dated April 24, 1992 between Turner
           Home Entertainment, Inc. and the Company. (I)

     10.14 Merchandising License Agreement dated as of April 16, 1992 between
           Paramount Pictures Corporation and the Company. (I)

     10.15 Letter Agreement between the Image Bank West and the Company dated
           as of August 5, 1992. (I)

     10.16 Letter Agreement between the Company and Tony Stone Worldwide dated
           as of August 31, 1992. (I)

     10.17 1992 Employee Stock Option Plan. (iii) +

     10.18 1992 Non_Employee Directors Stock Option Plan. (iii)


     10.19 Metrum  Imaging  Products VAR  Agreement  dated  September  11, 1992
           between Metrum Information Storage and the Company. (I)


     10.20 Lease  dated   November   13,  1992  between  the  Company  and  MCA
           Development Company. (ii)


     10.21 Lease  dated   October  13,  1992  between  the  Company  and  Midis
           Properties, Ltd. (ii)


     10.22 Lease dated March 28, 1993 between the Company and Midis Properties,
           Ltd. (vi)


     10.23 Letter Agreement  between the Company and Jay P. Morgan  Photography
           dated September 28, 1992. (iii)

     10.24 Settlement  Agreement and Mutual  Release dated as of August 11,
1994
           between the Company,  on the one hand, and Richard T. Eckhouse, B&E
           Financial Express,  Business & Executives Financial Group,
Innovative

           Business  Management Inc., and R. T. Eckhouse & Assoc., on the other
           hand. (vii)

     10.25 Promissory  Note in favor  of Photo  Corporation  of  Australia Pty
           Limited, dated March 23, 1995. (viii)


     10.26 Security  Agreement  between the Company  and Photo  Corporation  of
           Australia Pty Limited, dated as of March 23, 1995. (viii)


     10.27 Subscription  Agreement between the Company and Oakrusk Pty Limited,
           dated May 26, 1995. (viii)


     10.28 Stock Option Agreement  between the Company and Oakrusk Pty Limited,
           dated May 26, 1995. (viii)

     10.29 Form of Subscription Agreement. (ix)


     10.30 Settlement  and  Mutual  Release   Agreement  between  the  Company,

           Shelton,  Shelton and Photo  Corporation  Group Pty  Limited,  dated
           August 31, 1996. (x)

    10.31  Purchase and Sale Agreement between the Company and Los Alamos
           Energy, LLC, Dated August 31, 1998

    10.32 Asset Lease Agreement dated October 26, 1998


(b)  Reports on Form 8-K

     Current Report on Form  8-K dated April 27, 1998.

     Current Report on Form  8-K dated May 13, 1998

     Current Report on Form  8-K dated October 28, 1998

     (I)  Incorporated by reference to the Company's  Registration  Statement
on Form  S_1   (Registration   No.  33_  52904)  filed  on  October  5,
1992
(the "Registration Statement").

     (ii)  Incorporated  by reference to  Pre-Effective  Amendment  No. 1 to
the
Registration Statement filed on December 21, 1992.

     (iii)  Incorporated  by reference to  Pre-Effective  Amendment No. 2 to
the
Registration Statement filed on January 15, 1993.

     (iv)  Incorporated  by reference to  Pre-Effective  Amendment  No. 3 to
the
Registration Statement filed on February 3, 1993.

     (v)  Incorporated by reference to the Company's  Registration
Statement on
Form 8_A (No. 0_21322) filed on March 5, 1993 and effective on March 19, 1993.

     (vi)  Incorporated  by reference  to the  Company's  Annual  Report on
Form
10-KSB for the fiscal year ended March 31, 1993.


     (vii)  Incorporated by reference to the Company's Quarterly Report on Form
10_QSB for the quarterly period ended June 30, 1994.
     (viii)  Incorporated  by reference to the  Company's  Annual Report on
Form
10-KSB for the fiscal year ended March 31, 1995.

     (ix)  Incorporated  by reference  to the  Company's  Annual  Report on
Form
10-KSB for the fiscal year ended March 31, 1995.

     (x) Incorporated by reference to the Company's Report on Form 10_QA for
the
period ended September 30, 1996.

Management contract or compensatory plan.


                                   SIGNATURES

In  accordance  with  Section  13 or  15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the
undersigned,
thereunto duly authorized.

                                 Out-Takes, Inc.


Dated: June 30, 2000             By:  James Harvey, President
                                      ___________________________
                                      James Harvey, President



In  accordance  with the Exchange Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.

         Signature                       Title                     Date


       James Harvey         Chairman of the Board, President,   June 30, 2000
   _________________        Chief Executive Officer, Chief
       James Harvey         Financial Officer and Secretary,
       And Sole Director


[CAPTION]
EXHIBIT 10.31 PURCHASE AND SALE AGREEMENT BETWEEN COMPANY AND LOS
ALAMOS ENERGY, LLC, DATED AUGUST 31, 1998
PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered into
as
of the 31st day of August, 1998, by and between Out-Takes, INC., a
corporation duly organized and validly existing under the laws of the state of
Delaware (the "Purchaser") and the several individuals named on the signature
page of this Agreement (collectively, the "Seller").

WHEREAS, the Purchaser is a publicly-traded corporation on the OTC-Bulletin
Board under the symbol OUTT; and

WHEREAS, the Seller collectively owns all of the issued and outstanding
units of
equity interest (the "Equity") in LOS ALAMOS ENERGY, LLC, a limited liability
company organized and existing under the laws of the State of California (the
"Company"); and

WHEREAS, the Purchaser desires to purchase from the Seller, and the Seller
desires to sell and convey to the Purchaser, all of the Equity in the Company,
subject to and in accordance with the terms and conditions set forth in this
Agreement;

NOW, THEREFORE, in consideration of the foregoing premises and the covenants
and

agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

PURCHASE AND SALE OF THE EQUITY. Upon execution of this Agreement by both

parties, and subject to the fulfillment of all Closing Conditions (as such term
is defined below) contained in Section 7 below, the Purchaser hereby
irrevocably
agrees to purchase, and the Seller agrees to sell, transfer and convey to the
Purchaser, all of the Equity in the Company outstanding as of the Closing (as
defined below). Such units of Equity, once delivered to the Purchaser as set
forth herein, shall be validly issued, fully paid and non_assessable. The
Seller
may elect, in its sole discretion at any time prior to the Closing, to convert
its form of organization from a limited liability company to a corporation, in
which case each reference to the Company shall be deemed to refer to the new
corporation, and each reference to units of Equity in this Agreement shall be
deemed to refer to shares of capital of the new corporation.

CONSIDERATION TO BE PAID FOR THE EQUITY. As consideration for the Equity to be
purchased hereunder, the Purchaser shall deliver to the Seller promissory
notes,
substantially in the form of Exhibit A attached hereto, totaling four million
dollars ($4,000,000) in the aggregate (collectively, the "Promissory Note").
The
Promissory Note shall have a maturity of five (5) years, and shall bear
interest
at the rate of ten percent (10%) per annum until paid in full. As security for
the Note, at the Closing, the Purchaser shall deliver to the Seller a security
agreement (the "Security Agreement") substantially in the form of Exhibit B
attached hereto, and a stock pledge agreement (the "Stock Pledge")
substantially

in the form of Exhibit C attached hereto. The security interests granted in the
Security Agreement and the Stock Pledge shall remain in full force and effect
until the Note has been repaid in its entirety, or converted as set forth in
Section 3 below.

3.  CONVERSION OPTION IN THE NOTE. The Note shall contain an option (the
"Conversion Option") to convert the indebtedness represented thereby into such
number of shares of voting common stock of the Purchaser as shall represent
ninety percent (90%) of the shares of such voting stock issued and outstanding
as of the date of conversion, on a fully_diluted basis (the "Conversion
Shares"). In the event that the Seller desires to exercise the Conversion
Option, it shall notify the Purchaser of such fact, and commence such actions
not later than ninety days from the date of the Note. Within thirty (30) days
after the Purchaser determines that the Conversion may be lawfully completed
(or
such other time as is mutually agreed between the parties), there shall be a

closing of the Conversion Option (the "Conversion Closing"). At such Conversion
Closing, the Seller shall deliver to the Purchaser the Note marked Paid in
Full,
and the Purchaser shall deliver to the Seller, or its nominees, a
certificate or
certificates evidencing the issuance to the Seller of the Conversion Shares,
which Conversion Shares when so delivered shall be validly issued, fully paid,
and non_assessable. The Conversion Closing shall be subject to the condition
that the Purchaser shall have effected a reverse stock split of one (1) share
for every one hundred (100) shares of the Purchaser outstanding as of such
date.
The Conversion Closing shall only occur if the foregoing condition has been
fully satisfied or waived prior to or simultaneously with such Conversion
Closing as set forth herein.

4.   REPRESENTATIONS AND WARRANTIES OF THE SELLER. Each Seller hereby
represents and warrants to the Purchaser, as to himself only and not
jointly, as
of the date hereof, the following:

(a)  each Seller is an adult individual, and has full power and capacity to
enter into, execute, deliver and perform this Agreement in accordance with its

terms, which Agreement, once so executed and delivered by such Seller, shall be

the valid and binding obligation of such Seller, enforceable against him by any
court of competent jurisdiction in accordance with its terms;

(b)   no Seller, is bound by or subject to any contract, agreement, court

order, judgment, administrative ruling, law, regulation or any other item which
prohibits or restricts such party from entering into and performing this
Agreement, or which requires the consent of any third party prior to the entry
into or performance of this Agreement, in accordance with its terms.

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to the Seller, as of the date hereof, the following:

the Purchaser is a corporation duly organized and validly existing under the
laws of the State of Delaware, and has full power and authority to enter into
and perform this Agreement in accordance with its terms;

the individuals signing this Agreement on behalf the Purchaser are the duly
elected executive officers of the Purchaser so indicated, and have full power
and authority to execute and deliver this Agreement for and on behalf of the
Purchaser, which Agreement, once so executed and delivered, shall be the valid

and binding obligation of the Purchaser, enforceable against it by any court of
competent jurisdiction in accordance with its terms;

the Purchaser is not bound by or subject to any contract, agreement, court

order, judgment, administrative ruling, law, regulation or any other item which
prohibits or restricts such party from entering into and performing this
Agreement, or which requires the consent of any third party prior to the entry
into or performance of this Agreement, in accordance with its terms;

(d)   a majority of the Purchaser's voting stock is owned by PCG, which
controls, beneficially and of record, fourteen million four hundred ten
thousand
(14,410,000) shares of the Company's common stock and a beneficial interest in
another approximately eight hundred eighty five thousand (885,000) shares of
the
Company's common stock (common stock being the only voting securities of the
Company outstanding as of the date hereof), on a fully_diluted basis,
representing approximately seventy_five percent (75%) of the total number of
shares of common stock issued and outstanding as of the date hereof;

(e)  the Purchaser has been given every opportunity to review all documents,
and ask all questions of the Seller and the executive officers of the Company,
as it shall have requested prior to executing and delivering this Agreement to

the Seller; and the Purchaser has been advised to consult with its attorney and
tax advisor regarding the consequences of purchasing the Equity.

INDEMNIFICATION. The parties each hereby agree that they shall be responsible
for, and shall hold harmless and indemnify the other party from and against,
any
and all obligations, liabilities, losses, costs, charges, damages or expenses
(including, but not limited to, reasonable attorneys fees and court costs
incurred in defense thereof) of whatever type or nature to the extent that any
such Claim shall result from or arise out of the breach by such party of any
agreement, undertaking, representation or warranty contained in this Agreement
(including, without limitation, all exhibits and other documents entered into
pursuant hereto).

7.   CLOSING. The transactions contemplated by this Agreement shall be
consummated at such location, at such time and on such date as the parties
shall
mutually agree (the "Closing"). At the Closing, each Seller shall deliver to
the
Purchaser a certificate evidencing his respective portion of the Equity being
acquired hereunder, and the Purchaser shall deliver to each such Seller an
originally_signed Note, evidencing such Seller's pro rata portion of the
Purchase Price, together with originally_signed copies of the Security
Agreement
and the Stock Pledge, and each party shall further deliver such documents and
instruments as the other party may reasonably  request to further the

transactions to be consummated at the Closing (all of such delivery items being
referred to herein as the "Closing
Conditions").

8.   MISCELLANEOUS PROVISIONS.

(A)  NOTICES. All notices, requests, demands and other communications to be

given hereunder shall be in writing and shall be deemed to have been duly given
on the date of personal service or transmission by fax if such transmission is
received during the normal business hours of the addressee, or on the first
business day after sending the same by overnight courier service or by
telegram,
or on the third business day after mailing the same by first class mail, or on
the day of receipt if sent by certified or registered mail, addressed as set
forth below, or at such other address as any party may hereafter indicate by
notice delivered as set forth in this Section 8(a):

      If to the Seller:   Sellers of Equity in the Company
                   c/o Los Alamos Energy, LLC
                   466 Bell Street
                   Los Alamos, CA  93440
                   Attn: Mr. Hannes Faul
                   Managing Member

      (with a copy) to:   Feldhake, August & Roquemore
                   600 Anton Boulevard, Suite 1730
                   Costa Mesa, CA  92626
                   Attn: Kenneth S. August, Esquire
                   Partner

      If to the Purchaser: Out-Takes, Inc.
                   1419 Peerless Place
                   Suite 116
                   Los Angeles, California  90035
                   Attn: Mr. Peter C. Watt
                   President


      (with a copy) to:   Photo Corporation Group Pty. Limited
                   P.O. Box 415
                   Chester Hill, N.S.W. Australia 2162
                   Attn: Mr. Michael C. Roubicek
                   Group Commercial Manager

(B)     BINDING AGREEMENT; ASSIGNMENT. This Agreement shall constitute the
binding agreement of the parties hereto, enforceable against each of them in

accordance with its terms. This Agreement shall inure to the benefit of each of
the parties hereto, and their respective successors and permitted assigns;

provided, however, that this Agreement may not be assigned (whether by contract
or by operation of law) by either party without the prior written consent of
the
other party.

(C)   ENTIRE AGREEMENT. This Agreement constitutes the entire and final
agreement and understanding between the parties with respect to the subject
matter hereof and the transactions contemplated hereby, and supersedes any and
all prior oral or written agreements, statements, representations,
warranties or
understandings between the parties, all of which are merged herein and
superseded hereby.


(D)  WAIVER. No waiver of any provision of this Agreement shall be deemed to be
or shall constitute a waiver of any other provision, whether or not similar,
nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.

(E)   HEADINGS. The headings provided herein are for convenience only and
shall have no force or effect upon the construction or interpretation of any
provision hereof.

(F)   COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


FURTHER DOCUMENTS AND ACTS. Each party agrees to execute such other and further
documents and to perform such other and further acts as may be reasonably
necessary to carry out the purposes and provisions of this Agreement.

GOVERNING LAW; VENUE. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without giving
effect to the principles of conflicts of laws applied thereby.

(I)  INJUNCTIVE RELIEF. Each party hereby agrees that should either party
materially breach any of its respective obligations under this Agreement,

including without limitation any exhibit or other document entered into between
the parties pursuant hereto, the non_breaching party would have no adequate
remedy at law, since the harm caused by such a breach may not be easily
measured

and compensated for in damages. Accordingly, the parties agree that in addition
to such other remedies as may be available to the non_breaching party at law,
such party may also obtain injunctive or other equitable relief including, but

not limited to, specific performance, to compel the breaching party to meet its
obligations under this Agreement. All of such remedies available to any party
hereunder shall be cumulative and non_exclusive.

(J)   CONFIDENTIALITY. By their execution hereof, each party hereby

acknowledges to the other that certain information furnished to it by the other

party is proprietary to such disclosing party, and neither the receiving party,
nor any affiliate, employee, officer, director, shareholder, agent or
representative of such receiving party shall have any rights to distribute or
divulge any of such Confidential Information to any third party without the
disclosing party's prior, written consent, or to use any such Confidential
Information in any way detrimental to the disclosing party or its
affiliates, or
which would otherwise destroy, injure or impair any of the disclosing party's

rights in or in respect of any such Confidential Information including, without
limitation, by using of such Confidential Information to establish or assist
any
person or entity which is, or will be, directly or indirectly in competition
with the disclosing party. For purposes of this Agreement, the term
"Confidential Information" shall mean any and all proprietary information
belonging to the disclosing party, whether tangible or intangible, written or
oral, including, without limitation, any non_public intellectual property

rights, trade secrets, designs, books and records, computer software and files,
and lists of (and/or information concerning) such disclosing party's financial
condition, customers, suppliers, vendors, sources, methods, techniques and
other
business relationships or information.

(K)  SEVERABLE PROVISIONS. The provisions of this Agreement are severable, and
if any one or more provisions is determined to be illegal, indefinite, invalid
or otherwise unenforceable, in whole or in part, by any court of competent

jurisdiction, then the remaining provisions of this Agreement and any partially
unenforceable provisions to the extent enforceable in the pertinent
jurisdiction, shall continue in full force and effect and shall be binding and
enforceable on the parties.

(L)   EXHIBITS. All Schedules and Exhibits attached hereto are hereby
incorporated by reference herein as an integral part of this Agreement, with
the

same force and effect as if the same had been written herein in their entirety.

SURVIVAL. The provisions of Sections 4, 5, 6 and 8(j) shall expressly survive
any expiration, termination or revocation of this Agreement by either party.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the
date and year first above written.

THE PURCHASER:

 Out-Takes, INC.                    ATTEST:


 By: /s/                        By: /s/
   Peter C. Watt                    Michael C. Roubicek
   President                        Secretary


 THE SELLER:

 HANNES FAUL                         WITNESS:


 /s/                              /s/


 LANCE HALL                         WITNESS:


 /s/                             /s/



 THE INWOOD 1991 TRUST                  WITNESS:


 By:  /s/                          /s/
    James C. Harvey
    Trustee





EXHIBIT A TO
PURCHASE AND SALE AGREEMENT

THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER THE LAWS OF ANY STATE, AND MAY
NOT BE RESOLD, ASSIGNED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
THE MAKER THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.

                  Out-Takes, INC.

 CONVERTIBLE PROMISSORY NOTE
 _____________________________

  $_________                      August __, 1998



FOR VALUE RECEIVED, Out-Takes, INC., a corporation organized and existing under
the laws of the State of Delaware (hereinafter referred to as the "Maker"),
hereby promises to pay to the order of _______________________________, an
adult

individual residing in the County of ________, State of California (hereinafter
referred to as the "Payee"), at Payee's principal address located at
________________________, _______ California, 9____, or such other place or
places as the Payee may hereafter direct from time to time, in lawful money of
the United States and in immediately available funds, the principal sum of
_____________________ DOLLARS ($_________).  This Convertible Promissory Note
(hereinafter referred to as the "Note") shall accrue simple interest at the
rate
of ten percent (10%) per annum. Amounts of principal and accrued interest due
and payable in respect of this Promissory Note shall be paid out of gross
operating revenues, as available, with payments to be made monthly in
arrears up
to ninety_nine percent (99%) of gross revenues from operations, being applied

first to accrued interest and then to principal, with the balance due on August
__, 2003 (the "Maturity Date"), unless this Note is earlier converted in
accordance with the provisions set forth below (the "Conversion Date"). The
principal amount of this Promissory Note shall be due and payable on the
Maturity Date, unless earlier converted in accordance with the provisions set
forth herein.


This Promissory Note may be converted into shares of common stock of the Maker,

having a par value of One Cent ($0.01) per share, (the "Common Stock") in whole
or in part, in the manner set forth below. Each Promissory Note shall be
convertible into such number of shares of Common Stock of the Maker as are
obtained by (a) calculating the total outstanding amount of principal and
accrued interest owed by Maker to all sellers of Los Alamos Energy, LLC
(pursuant to that certain Purchase and Sale Agreement dated as of August 31,

1998, by and between Maker and the several sellers named therein (the "Purchase
Agreement") as of the effective date of such conversion (the "Conversion
Date");
(b) determining what percentage of such total amount is represented by the

indebtedness evidenced by this Note; and (c) multiplying such percentage by the
total number of Conversion Shares available (as such term is defined in the
Purchase Agreement).


The indebtedness represented by this Promissory Note constitutes senior secured

indebtedness of the Maker, and shall be senior in right of payment to all other
indebtedness of the Maker. By its execution of this Note, the Maker represents
and warrants that it is not subject to any indebtedness which would be senior
to, or pari passu with, the indebtedness to the Payee evidenced by this Note,
other than in accordance with the Purchase Agreement.

The Maker hereby agrees and covenants with the Payee that, in the event that
the
Maker shall hereafter become in default under this Promissory Note, the Maker
shall not make or authorize any dividend or other distribution to shareholders
of the Maker prior to the repayment in full of any amounts outstanding
hereunder.

Upon the occurrence of either of the following specified Events of Default
(each
herein called an "Event of Default"):

(i)   Breach of Agreements. The Maker shall be in breach or violation, for a
period of three (3) days, of any material agreement, undertaking, obligation,
representation, warranty or statement contained in this Promissory Note, the
Purchase Agreement, or any other Exhibit or document entered into by the Maker
pursuant thereto; or

(ii)    Insolvency. The Maker shall suspend or discontinue its business, or
make
an assignment for the benefit of creditors or a composition with creditors,
shall file a petition in bankruptcy, shall be adjudicated insolvent or
bankrupt,
shall petition or apply to any tribunal for the appointment of any custodian,
receiver, liquidator or trustee of or for it or any substantial part of its
property or assets, shall commence any proceedings relating to it under any
applicable bankruptcy, reorganization, arrangement, readjustment of debt,
receivership, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or there shall be commenced against the
Maker any such proceeding which shall remain undismissed or unstayed for a
period of forty_five (45) days or more, or any such order, judgment or decree
shall be entered, or the Maker shall by any act or failure to act indicate its
consent to, approval of or acquiescence in any such proceeding or in the
appointment of any such custodian, receiver, liquidator or trustee; or the
Maker
shall take any action for the purpose of effecting any of the foregoing;


then, and in any such event, and at any time thereafter if any Event of Default

shall be continuing, the Payee may, by written notice to the Maker, declare the
entire principal of this Promissory Note, and any accrued but unpaid
interest in
respect thereof, to be forthwith due and payable. The Maker hereby expressly
waives presentment, demand, protest or other notice of any kind.


This Promissory Note shall inure to the benefit of the Payee, his or her heirs,
executors, successors and permitted assigns. The obligations of the Maker
arising hereunder shall become the obligations of any successor in interest or
permitted assignee thereof, whether by contract or by operation of law.

This Promissory Note shall be governed by and construed in accordance with
the
internal laws of the State of California applicable to the enforcement and
operation of such instruments in the State, and without giving effect to the
principles of conflicts of laws which may be applied thereby. Any action
brought

under or in respect of this Promissory Note shall be brought only in a court of
competent jurisdiction sitting in the County of Los Angeles, State of

California. If any suit or other proceeding shall be instituted with respect to
this Promissory Note, the prevailing party shall, in addition to such other
relief as the court may award, be entitled to recover reasonable attorneys'
fees, expenses and costs of investigation.

IN WITNESS WHEREOF, the Maker hereby sets its hand and seal in the County of
Los Angeles, State of California, as of the date and year first above written.

THE MAKER:


Out-Takes, INC.                    ATTEST:

                                   [SEAL]
By: _________________________             By: ____________________
     Peter C. Watt                              Michael C.Roubicek
     President                                  Secretary


                     EXHIBIT B TO PURCHASE AND SALE AGREEMENT

                              SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the "Agreement") is made and entered into as of this
___th day of August, 1998 by and between Out-Takes, INC., a corporation
organized and existing under the laws of the State of California (the
"Grantor")
and the several individuals named on the signature page of this Agreement
(collectively, the "Secured Party").

WHEREAS, the Grantor and the Secured Party have entered into that certain
Purchase and Sale Agreement, dated as of August ___, 1998 (the "Purchase

Agreement"), pursuant to which Grantor has purchased (the "Acquisition") all of
the equity securities issued and outstanding of LOS ALAMOS ENERGY, LLC, a
California limited liability company (the "Subsidiary"); and

WHEREAS, the Grantor has delivered to the Secured Party, as the Purchase Price
for the Acquisition, a Secured Promissory Note in the amount of Four Million
Dollars ($4,000,000) dated as of even date herewith (the "Note"); and

WHEREAS, in order to induce the Secured Party to accept the Note as
consideration for the Acquisition, the Grantor has agreed to provide the
Secured

Party with a security interest in and first lien upon all of its assets and the
assets of the Subsidiary, and the parties now desire to enter into this
Agreement to evidence the same;

NOW, THEREFORE, in consideration of the foregoing premises and the promises
and
covenants herein contained, and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending
to be legally bound, hereby agree as follows:
1.    Grant
of Security Interest. Grantor hereby assigns, conveys and grants to Secured
Party a continuing security interest in and first lien upon all of Grantor's
right, title and interest in and to all of the assets and properties owned or
used by the Grantor in the conduct of its business, or the business of the
Subsidiary, now owned or hereafter acquired at any time during the term

hereof, whether tangible or intangible, fixed, movable or fixtures, of whatever
kind or nature and wherever located, including, without limitation, all cash
and
cash equivalents, securities, accounts receivable, plant and equipment,
inventory, rolling stock, materials, supplies, intellectual property rights,
contract rights, choses in action, and any proceeds from the sale, lease,
transfer or other disposition of any of such assets, whether for cash or
property (all of the foregoing being herein referred to collectively as the
"Collateral").  The security interest granted herein is intended to secure the

prompt payment, when due, of all amounts due and payable to Secured Party under
the Note including, without limitation, all principal amounts due thereunder,

all interest accrued thereon, and all applicable late charges or other fees due
under the Note, as well as the performance in full of all of Grantor's
obligations under the Purchase Agreement (collectively, the "Secured
Obligations").

2.    Transfers and Other Liens. Grantor hereby acknowledges to, and agrees
with, Secured Party that for so long as this Agreement shall be in effect,
Grantor, without the prior written consent of the Secured Party, shall not:

(a)     sell, assign or otherwise dispose of, any or all of the Collateral
(except in the ordinary course of business); or

(b)     create or permit to exist or be created any lien, mortgage, security
interest, or other charge or encumbrance upon or with respect to the
Collateral,
other than the Secured Obligations; or

(c)   move the Collateral from any location other than the Grantor's principal
place of business located at the address set forth in Section 6(b) below.

Remedies Upon an Event of Default.
_______________________________________
In the event that the Grantor shall fail to perform fully any Secured
Obligation
on the date such performance is due, or if the Grantor should breach or be in
default of any other provision of the Note, the Purchase Agreement or this
Agreement (any of such occurrences being hereinafter referred to as an
"Event of
Default"), to the extent that such Event of Default is not cured or waived
within ten (10) days after the occurrence of such Event of Default, then the
Secured Party shall be entitled to foreclose upon and take possession of the
Collateral, in satisfaction (full or partial as the case may be) of the
indebtedness owed by Grantor.  Promptly after retaking possession of the
Collateral upon any such foreclosure, the Secured Party shall, after deducting
therefrom any amounts expended by the Secured Party in enforcing the Note, the
Purchase Agreement or this Agreement and/or repossessing the Collateral
(including, without limitation, the cost of reasonable attorneys' fees), remit
to the Grantor the difference between the liquidation value of the
Collateral on

the date of repossession thereof and the sum of any amounts paid to the Secured
Party to purchase the Collateral in a liquidating sale. The parties hereby
agree that any such payment to Grantor upon such foreclosure may be made in

stock of the Grantor or a five (5)_year promissory note bearing interest at the

rate of ten percent (10%) per annum, or some combination thereof, as determined
in the sole discretion of the Secured Party.

The Secured Party hereby agrees with the Grantor that, in the event it shall
exercise any or all of its remedies upon an event of default set forth in
Clause
3(a) above, it shall look first to satisfy all of the Secured Obligations
out of
the assets of the Subsidiary, which it shall exhaust as fully as reasonably

possible prior to looking to the assets of the Grantor to satisfy any remaining
Secured Obligations.


4.     Continuing Security Interest; Termination of Same.
      ______________________________________________________

(a)     This Agreement shall create a continuing security interest in the
Collateral, and shall (i) remain in full force and effect until all of the
Secured Obligations of Grantor shall have been paid or performed in full; (ii)
be binding upon the Grantor, its successors and permitted assigns; and (iii)
inure to the benefit of the Secured Party and their respective successors,
heirs, executors, administrators, transferees and assigns.

(b)   Upon the payment or performance in full of all Secured Obligations, and
any fees, costs and penalties owing thereon, the security interest granted
hereby shall automatically terminate. Upon any such termination, the Secured
Party shall execute and deliver to the Grantor such documents as the Grantor

shall reasonably request to evidence such termination and to effect the release
of the Collateral.

5.   Amendments and Waivers. No amendment or waiver of any provision of this
Agreement, the Purchase Agreement or the Note, and no consent to any departure
by the Grantor herefrom or therefrom, shall in any event be effective unless
the
same shall be in writing and signed by the Secured Party, and then such waiver

or consent shall be effective only in the specific instance and for the express
written purpose for which given.

6.    Notices. In the event that any notice or other communication is to be

sent pursuant to this Agreement, such notice shall be in writing, sent by telex

or by certified mail, return receipt requested, or by delivery in person, or by
overnight courier, addressed as follows, or to such other address as either
party may notify the other of in accordance with the provisions hereof:

      if to Secured Party, to: c/o Mr. Hannes Faul
                     466 Bell Street
                     Los Alamos, CA  93440

      (with a copy) to:     Feldhake, August & Roquemore
                     600 Anton Boulevard, Suite 1730
                     Costa Mesa, CA  92626
                     Attn: Kenneth S. August, Esquire
                        Partner


      if to Grantor, to:     Out-Takes, INC.
                     1419 Peerless Place
                     Suite 116
                     Los Angeles, CA  90035
                     Attn: Mr. Peter C. Watt
                     President

      (with a copy) to:     Photo Corporation Group
                     Pty. Limited
                     P.O. Box 415
                     Chester Hill, N.S.W.
                     Australia 2162
                     Attn: Mr. Michael C. Roubicek
                     Group Commercial Manager

All notices and other communications hereunder shall be deemed given
when telexed or delivered, or upon receipt if mailed, in accordance
with this paragraph.

7.    Further Assurances. Grantor agrees to execute and deliver immediately
upon request, financing statements on Form UCC_1 for recordation with the

California Secretary of State; and (b) such other documents as may be necessary
to perfect the Secured Parties' security interests in the Collateral.

8.    Entire Agreement. This Agreement, together with the Note, constitutes
the entire agreement between Grantor and Secured Party, with respect to the
subjects contained herein, and supersedes any prior agreements or
understandings, whether written or oral, express or implied.

9.   Governing Law; Venue. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without reference to
principles of conflicts of law. Any action brought by any party to enforce any
of the terms or provisions of this Agreement or the note, or otherwise in
connection with or relating to this Agreement, shall be brought only in the

courts of the State of California in the county of Los Angeles, and the parties
hereby accept the exclusive jurisdiction of such courts for all disputes
arising
under this Agreement, the Purchase Agreement or the Note.

10.     Miscellaneous. All other provisions of the Purchase Agreement,

including, without limitation, the specific clauses setting forth the governing

law and venue of this Agreement, the right of further assurances, severability,

specific performance and other injunctive relief, and every other aspect of the
performance, interpretation relationship between the parties and other
miscellaneous provisions, are hereby incorporated herein by reference from the
Purchase Agreement, and are of force and effect as fully as if the same had
been
repeated herein in their entirety.

IN WITNESS WHEREOF, Grantor has caused this Agreement to be duly executed
and
delivered as of the date first above written.

THE GRANTOR:

 Out-Takes, INC.               ATTEST:


 By: _____________________           By: _____________________
      Peter C. Watt                         Michael Roubicek
      President                             Secretary



THE SECURED PARTY:

 LOS ALAMOS ENERGY, LLC           WITNESS:


    By:  ____________________________   By: ________________________
          Hannes Faul
          Managing Member



 THE INDIVIDUALS:                WITNESS:


 _____________________              ___________________

 _____________________              ___________________


EXHIBIT 10.33
ASSET LEASE AGREEMENT BETWEEN COMPANY AND COLORVISION,
INC. DATED OCTOBER 26, 1998

               ASSET LEASE AGREEMENT

This is an Asset Lease Agreement ("Agreement"), effective as of October __,
1998, by and between Colorvision International, Inc., a Florida
corporation, located at 8250 Exchange Drive, Suite 132, Orlando, Florida 32809
(hereinafter referred to as "Lessee") and Out-Takes, Inc., a Delaware
corporation located at 1419 Peerless Place, Suite 116, Los Angeles, California
90035 (hereinafter referred to as "Lessor").

                  BACKGROUND

Lessor owns and operates the Out Takes photo store (the "Business") located
at
Universal Studios California City Walk (the "Location"). Lessee seeks to

lease from Lessor, and Lessor seeks to lease to Lessee certain of the assets of

the Business for use at the Location as set forth in this Agreement, subject to
the terms and conditions set forth below. Accordingly, in consideration of the

mutual covenants and agree_ments set forth below, the parties agree as follows:

                   TERMS

1.    LEASE OF ASSETS. The parties hereby agree that, at Closing (as defined
below), Lessor shall lease the assets of the Business set forth on Schedule
1 to
this Agreement (collectively the "Assets") provided, however, that within
thirty

(30) days from the date of this Agreement they shall jointly prepare an item by
item list of the Assets being leased hereunder, and the agreed-upon value
thereof, which list will then be attached to this Agreement as a revised
Schedule 1.  Lessor further agrees that the Assets shall be used only at the
Location during the Lease Term, as hereafter defined. Upon the expiration of

the Lease Term, or its earlier termination, all of the Assets shall be returned

to Lessor hereunder in the same condition as they are being delivered to Lessee
at the Closing, normal wear and tear excepted, and free and clear of any lien,
charge, security interest, claim or other encumbrance. The Assets are being
leased to Lessee on an "as is_where is" basis, and Lessor makes no
representation or warranty to Lessee, express or implied, as to the
condition of
any Asset or suitability to the Business or the contemplated use thereof by
Lessee.

Throughout the entire Lease Term, Lessee hereby agrees with and covenants to
Lessor that it shall not do any of the following, nor suffer or permit any of

the following to occur to the extent the same shall be within its discretion or
control, without having obtained the prior written consent of Lessor:

   (a)    sell, lease, sublease, exchange, transfer or otherwise dispose of
any of the Assets;

   (b)    subject any of the Assets to any lien, security interest or
encumbrance;

   (c)    take any action which would materially destroy, injure, alter or
modify any Asset, or the right of Lessor to use any Asset, or which would
render

defective or otherwise encumber good and marketable title to any such Asset, to
the extent such title exists in respect of such Asset at the Closing.

2.   ASSIGNMENT OF LEASE. At Closing (as defined below), Lessor shall assign
and transfer to Lessee all of its right, title and interest in and to that
certain Business Lease executed as of November 13, 1992 ("Lease") between
Lessor

and MCA Development Company, a division of MCA Inc. ("Landlord") pursuant to an
Assignment of Lease substantially in the form attached to this Agreement as
Exhibit "A" ("Assignment"), which Assignment requires the written consent of
the
Landlord.

3.    LEASE PRICE. The rental price for the Assets (the "Lease Price") shall
be a monthly amount equal to seven percent (7%) of the gross revenues (less
applicable sales taxes due on goods sold at the Location) ("Gross Revenues")

derived by Lessee from the Business, or any other business conducted or engaged

in by Lessee at the Location during each month, or portion thereof, that Lessee
shall be in possession of the Assets, for the duration of the Lease, as

currently extended through May 30, 2005 (the "Lease Term"). In the event Lessee
ceases to conduct any business at the Location: (i) for reasons of
bankruptcy or
insolvency, (ii) acts of God, emergencies, strikes or other causes out of
Lessee's control; (iii) any loss of the right of Lessor to lease the Assets to
Lessee prior to the conclusion of the Lease Term; or (iv) any termination of
Lease by Landlord if through no fault of the Lessee, then no further payments
shall be due Lessor hereunder from the date Lessee ceases to operate at the

Location until Lessee resumes business at the Location, if such a resumption of
business occurs.  Lessee acknowledges to Lessor by its execution of this
Agreement that it intends in good faith to operate at the Location
profitably in
accordance with the Lease, and shall use its best efforts throughout the Lease
term to do so, and Lessor acknowledges to Lessee that it understands such
profitable operation cannot be guaranteed.

4.    PAYMENT OF LEASE PRICE. Subject to the terms of this Agreement and in
reliance on the representations and warranties of Lessor set forth below,
Lessee

shall lease, at Closing, the Assets and, in full consideration therefor, shall:

   (a)     pay $50,000.00 as a deposit ("Deposit") to Lessor at Closing.
Lessee shall have the option of making the payment by cashier's check or bank
wire.  Lessor shall provide bank wire instructions to Lessee if requested by
Lessee; and

   (b)   pay the entire amount of the Lease Price due and payable to Lessor
(together with the applicable amount of any taxes as may be required in
connection with payments of the Lease Price) on or before the fifteenth day of
the month following each month of the Lease Term; provided, however, that
Lessee
may deduct up to $4,166.67 each month from any sum otherwise payable to Lessee
pursuant to this subsection 4(b) until the entire amount of the Deposit has
been
repaid to Lessee; further provided that the amount of any security deposits
shown on Schedule 2 to this Agreement which are transferred to, or credited to
the account of, Lessee by the holders of such deposits shall be deemed
repayments of the Deposit to Lessee and shall thereby reduce, by a
corresponding
amount, any deductions from the Gross Revenues otherwise payable to Lessor
which
Lessee may make pursuant to this Subsection 4(b).

5.    LICENSE TO USE TRADE NAME. In further consideration of the payment
of the Lease Price to Lessor as set forth above, the Lessor hereby grants to
Lessee a license (the "License") to use the trade name "Out-Takes" (the "Trade
Name") only in connection with the Business at the Location and for so long as
Lessee operates the Business at the Location. Lessee shall have no right to

use the Trade Name in connection with any other present or future operations of
Lessee. Lessee recognizes and acknowledges Lessor's ownership of and prior
rights in the Trade Name and shall not take any action inconsistent with
Lessor's ownership of and prior rights in the Trade Name or which would
otherwise destroy or impair Lessor's interest in such rights.

Notwithstanding any other provisions contained in this Agreement concerning
the
rights of Lessor to indemnification hereunder, and without limiting or
excluding any of such rights, Lessee hereby expressly agrees with Lessor
that in
the event Lessor shall be named in any lawsuit or other proceeding solely by
virtue of Lessee's use of the Trade Name hereunder (and not in connection with
any actual liability or specific claim against Lessor in such lawsuit or
proceeding), then Lessee shall provide to the Lessor directly, and promptly
upon
its request therefor, the full amount of any fees or expenses (including,

without limitation, reasonable attorneys' fees and expenses) incurred by Lessor
in having itself dismissed from any such action.

The license to use the Trade Name granted hereunder shall be co_ terminous

with the Lease Term or such shorter period as Lessee shall actually operate the
Business at the Location. Lessor agrees that, for so long as this Agreement
shall be in effect, it shall not take any action, or omit to take any action
which would have the effect of impairing any of Lessor's rights in the Trade
Name, or the value thereof to Lessor. Lessor covenants that it shall not enter

into any agreement, arrangement or undertaking, the effect of which would be to
result in the transfer, assignment, mortgage, hypothecation, dilution or
extinguishment of the Trade Name or any rights of Lessor therein.

6.    CLOSING. The closing of the transaction contemplated by this Agreement
(the "Closing") shall take place in Los Angeles, California on October ___,
1998, or such other date and/or place as the parties mutually agree in writing
(the "Closing Date").

7.     DELIVERIES BY LESSOR. At Closing, Lessor shall deliver to Lessee:

   (a)     an originally executed copy of this Agreement;

   (b)     the Assignment, duly executed by Lessor;

   (c)     a certificate of actions by Board of Directors of Lessor
authorizing the transaction contemplated by this Agreement to be undertaken by
Lessor.

8.   DELIVERIES BY LESSEE. At Closing, Lessee shall deliver to Lessor (1) an
originally executed copy of this Agreement; (2) the Deposit in accordance with
subsection 4(a) hereof; (3) the Assignment, duly executed by Lessee; and (4) a
certificate of action by the Board of Directors of Lessee authorizing the
transactions contemplated by the Agreement to be undertaken by Lessee.

9.   LIABILITIES OF LESSOR. Except with respect to the Assignment and except
as provided in Schedule 3 to this Agreement, Lessee will not assume any trade

and accounts payable that are, or have become due for payment as of the Closing
date or any other liabilities not incurred by Lessor in the ordinary course of
business through the Closing Date.  Without limiting the generality of the
foregoing, Lessee will not assume intercompany liabilities, payables or
obligations of Lessor, nor will it assume any of Lessor's liabilities or
obligations arising out of employment agreements between Lessor and any of
Lessor's employees or Lessor's liabilities or obligations relating to the
negotiation and/or closing of the transaction contemplated herein including,
but
not limited to, any broker commission payable in connection with the
transaction. Lessee shall be solely and exclusively liable for, and Lessor
expressly does not agree to assume any of the obligations created or
liabilities
imposed upon Lessee by virtue of its use of the Assets after the Closing.
Lessee further covenants to and agrees with Lessor that in the use of the
Assets

as contemplated herein, it shall not disturb any agreement to which such Assets

are subject nor by which they are bound, nor create, nor suffer or permitted to
be created or imposed, any lien, charge or other liability to, upon or for the
account of, Lessor.

10.     INDEMNIFICATION.

   (a)   Except as otherwise contemplated herein, Lessor shall indemnify and
hold Lessee harmless from, against, and in respect of the following:

     (i)   any and all liabilities, obligations, debts, contracts or
other commitments of Lessor of any kind, known or unknown, whether fixed or
contingent, and whether arising in contract, in tort, or otherwise from the
operation of the Business at the Location prior to Closing including, but not
limited to, any liability of Lessor for sales and use taxes;

   (ii)  any damage or deficiency resulting from any misrepresentation
in or omission from any certificate or other instrument furnished or to be
furnished to Lessee by Lessor pursuant to this Agreement;

   (iii)   any and all losses, liabilities, claims, damages and
expenses, including court costs and reasonable attorney's fees, arising out of
any claim for brokerage or other commissions relative to this Agreement or the
transactions contemplated hereby insofar as any such claim arises by reason of
services alleged to have been rendered to or at the instance of Lessor;

   (iv)   any material breach by Lessor of this Agreement;
and
   (v)   all actions, suits, proceedings, claims, demands, assessments,
judgments, legal fees, costs and expenses incident to any of the foregoing or
arising out of any act or omission of Lessor in the conduct of the Business
before the Closing.
  (b)  Lessee shall indemnify and hold Lessor harmless from, against, and
in respect of the following:

   (i)   any and all liabilities, obligations, debts, contracts or other
commitments of Lessee of any kind, known or unknown, whether fixed or
contingent, and whether arising in contract, in tort, or otherwise from the
operation of the Business (or any other business or activity conducted) at the
Location after the Closing including, but not limited to, any liability of

Lessee for sales and use taxes and any use of the Trade Name at any location by
Lessee in breach of Section 5 hereof; and

   (ii)   any material breach by Lessee of this Agreement.

   (iii)  any liability or obligation arising out of the inclusion in the
list of Assets of the license agreements set forth on Schedule 1 hereto,

including without limitation for the failure of Lessor to obtain the consent of
any licensor thereunder prior to leasing such licenses to Lessee, or any

liability or obligation which may be agreed upon between Lessee and any of such
licensors subsequent to the date of the Closing.

  (c)   Each party agrees to give notice to the other party of the assertion

of any claim or demand or the institution of any action, suit, or proceeding in
respect of which indemnification may be claimed hereunder and the party
receiving such notice shall have the right to undertake the defense or
settlement of such action, suit or proceeding ("Litigation") at it's own
expense. If the party receiving such notice does not undertake (or, within ten
(10) days thereafter, express its intention to so undertake) the defense or
settlement of the Litigation, the party giving such notice may control the
defense or settlement of the Litigation, provided, that if at any time during
the pendency of such Litigation it shall be deemed in good faith by either
party, or its respective counsel, that the interests of the respective parties
in respect of such Litigation are or may become adverse, or otherwise conflict
in any material way, then each party shall be entitled to separate counsel
thereafter, and, provided, further, that in no event shall either party be
entitled to make any offer or agreement of settlement in respect of any such
Litigation which is or will or could become binding upon the other party
hereto,
without having obtained such other party's prior written consent to be bound
thereby. In the event Lessee is controlling the defense or settlement of
Litigation pursuant to this Subsection 10(c), and provided that Lessor is not
entitled to indemnification in respect of such Litigation pursuant to Section
10(b) above, Lessor hereby authorizes Lessee to deduct the costs of such
defense
or settlement from any sums due Lessor pursuant to subsection 4(b) hereof. In
the event such costs exceed any sums due Lessor pursuant to subsection 4(b)
hereof, Lessor shall remit the amount of such costs directly to Lessee.

(d)  Notwithstanding anything else contained in this Section 10, Lessee shall
promptly notify Lessor in the manner set forth in Section 16(d) below in the
event it becomes aware of any threatened or pending litigation involving or
relating to the Business, any other business or activity conducted at the
Location, the Assets (or any part thereof) or the Lease.

11.   REPRESENTATIONS AND WARRANTIES OF LESSOR. Lessor represents and warrants
to Lessee as follows:

  (a)  Organization and Standing. Lessor is a corporation organized under the
laws of the State of Delaware and its status is active.

  (b)  Power and Authority. Lessor has the requisite corporate authority to
enter into this Agreement and to incur and perform its obligations under this
Agreement. Lessor has all necessary corporate power to own, lease, hold, and
operate all of its properties and assets and to carry on the Business as it is
now being conducted. The execution, delivery and performance by Lessor of this
Agreement has been authorized by all necessary corporate action. Upon the
execution and delivery of this Agreement, this Agreement shall constitute a

valid and binding agreement of Lessor, enforceable against Lessor in accordance
with its terms, subject only to applicable bankruptcy, moratorium and similar
laws.
  (c)   Title to Assets. Except for any licenses listed on Schedule 7 hereto
with respect to which Lessor makes no representation or warranty as to title,

quality or validity thereof, Lessor has good and marketable title to all of the
Assets, free and clear from all liens, encumbrances, security interests or
claims of any kind or nature, other than liens incurred in the ordinary course
of the Business for trade or in connection with the purchase of assets, or for
services rendered to Lessor by materialmen or other similar persons, or for
taxes not yet due and payable, or which otherwise do not have a material
adverse
impact upon the financial condition of the Business. With respect to any
security interests by a third party in the Assets, Lessor shall deliver to
Lessee at closing (or as soon thereafter as Lessor may become aware thereof) a
copy of a duly filed UCC Form 3 terminating the security interest of any third
party in the Assets.

  (d)  Approvals and Consents. The execution, delivery and performance of this

Agreement (and the transactions contemplated by this Agreement) do not and will

not: (i) contravene any provision of the articles of incorporation or bylaws of
Lessor; (ii) result in a material breach of, constitute a material default

under, result in the modification or cancellation of, or give rise to any right
of termination, modification or acceleration in respect of any indenture, loan
agreement, mortgage, lease or any other contract, or agreement to which Lessor
or any of the Assets are bound (other than in respect of the Lease); (iii)
other
than as may apply to Lessee, result in the creation of any security interest,

pledge, lien, charge, claim, option, right to acquire, encumbrance, restriction
on transfer, or adverse claim of any nature whatsoever upon any of the Assets;

(iv) violate any writ, order, injunction or decree of any court or any federal,
state, municipal or other domestic or foreign governmental department,
commission, board, bureau, agency or instrumentality, which violation or
default
in any such case would have a material adverse effect on the Business; (v)
require approval of the shareholders of Lessor; or (vi) require any
authorization, consent or approval of, or filing with or notice to, any
governmental or judicial body or agency, or any other entity or person,
including, without limitation, any filing with the Securities and Exchange
Commission ("SEC") other than any obligation Lessor may have to file a Form
8_ K
as contemplated by Section 15 of this Agreement.

  (d)  Litigation. There are no actions or suits at law or in equity now
pending or, to the actual knowledge of Lessor, threatened which could have a
material adverse effect on the Business or any of the Assets, or the ability
of Lessor to consummate the transactions contemplated by this Agreement.

  (e)   Collective Bargaining Agreements. There are no collective
_______________ bargaining agreements to which Lessor is a party or by which
Lessor is bound, and there is no pending or threatened labor dispute, labor
union organizing attempt, strike, or work stoppage affecting either Lessor
or the Business.

  (f)  Benefit Plans. There are no benefit plans applicable to any of the
employees of the Business that are currently in effect or which, with
respect to

the Business, Lessor has committed to implement prior to the Closing, except as
shown on Schedule 4 to this Agreement.

  (g)   Contracts. Schedule 5 to this Agreement lists all material contracts
(including contracts with consultants), leases (where Lessor is lessor or
lessee) except the Lease, licenses, agreements, and undertakings of Lessor to
which it is or at the Closing Date will be a party and bound, or to which
any of
its properties or Assets are or will be subject, and, if written, Lessor shall

have supplied Lessee with copies of such documents. Except as shown on Schedule

6 to this Agreement, each such contract, undertaking or other commitment listed
in Schedule 5 is, and upon the Closing will be (except as completed or expired
by its terms), valid and enforce-able in accordance with its terms, and no
party
is in default under any material provision thereof.

  (h)   Trade Name. Lessor has adopted and uses the Trade Name in connection
with the Business. Lessor has not been notified that Lessor's use of the trade

name or logo infringes the rights of a third party. No proceedings have been or
will at the Closing Date have been instituted or threatened which assert

infringement of rights of any third party against Lessor pursuant to its use of
the Trade Name.

  (i)   Compliance with Laws. As of the date of this Agreement, to the actual
knowledge of Lessor, (i) there is no violation of any applicable laws,
regulations or orders relating to the conduct of the Business, and (ii)
there is
no use of the Assets by Lessor in the Business which violates any applicable
laws, codes, ordinances and regulations, whether federal, state or local,
which,
in either case, would have a material adverse effect on the Business.

  (j)   Conditions Affecting the Business. Other than as applicable to Gerry
Wersh, who is deemed to be essential to the technical aspects of the
Business as
currently being conducted, Lessor is not aware of any extraordinary or unusual
conditions in existence on the date hereof with respect to the markets,
services, facili_ties, personnel, or supplies of Lessor that is not public
information or known generally in Lessor's industry or which has not been
disclosed in writing to Lessee and which Lessor believes will result in a
material and adverse effect on the Business not experienced by others in
similar
businesses.

  (k)  No Misrepresentations. None of the representations and warranties of
Lessor set forth in this Agreement or in the attached exhibits and schedules
nor
any information or statements contained in the lists or documents provided
or to
be provided by Lessor to Lessee, notwithstanding any investigation thereof by
Lessee, contains or will contain any untrue statement of a material fact, or
omits or will omit the statement of any material fact necessary to render the
same not misleading.

  (l)  Conveyance Not Fraudulent. Lessor is not making the transactions
contemplated by this Agreement with the intent to hinder, delay, or defraud
either its present or future creditors.

  (m)  Discontinuance of Business. Upon consummation of the transactions

contemplated hereby, Lessor will discontinue its operation of the Business, but
not of any other business owned or operated by Lessor.

12.   REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and warrants
to Lessor as follows:

  (a)  Organization and Standing. Lessee is a corporation organized and
existing under the laws of the State of Florida and its status is active.

  (b)  Power and Authority. Lessee has the requisite corporate authority to
enter into this Agreement and to incur and perform its obligations under this
Agreement. Lessee has all necessary corporate power to own, lease, hold, and

2operate the Assets and carry on the Business as it is now being conducted. The
execution, delivery, and performance by Lessee of this Agreement has been
authorized by all necessary corporate action. Upon the execution and
delivery of
this Agreement, this Agreement shall constitute a valid and binding
agreement of
Lessee, enforceable against Lessee in accordance with its terms, subject
only to
applicable bankruptcy, moratorium, and similar laws.

  (c)  Approvals and Consents. The execution, delivery and performance of this

Agreement (and the transactions contemplated by this Agreement) do not and will

not: (i) contravene any provision of the articles of incorporation or bylaws of
Lessee; (ii) result in a breach of, constitute a default under, result in the
modification or cancellation of, or give rise to any right of termination,
modification, or acceleration in respect of any indenture, loan agreement,
mortgage, lease or any other contract, or agreement to which Lessee is bound;
(iii) require any authorization, consent or approval of, or filing with or
notice to, any governmental or judicial body or agency, or any other entity or
person.

  (d)  No Misrepresentations. None of the representations and warranties of
Lessee set forth in this Agreement or in the attached exhibits and schedules,
nor any information or statements included in the lists or documents to be
provided by Lessee to Lessor, notwithstanding any investigation thereof by
Lessor, contains or will contain any untrue statement of a material fact, or
omits or will omit the statement of any material fact necessary to render the
same not misleading.

(e)  Brokers' Fees. Lessee has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.

13. SURVIVAL OF PROVISIONS. All representations, warranties, agreements,
covenants, assignments and licenses made or granted herein by Lessor or Lessee
in connection with the transactions contemplated by or set forth in this

Agreement or contained in any certificate, schedule, exhibit, or other document
delivered pursuant to this Agreement shall survive the Closing.

14.   DISCLOSURE AND NON-INTERFERENCE. The parties agree not to make any

independent press releases or to disclose the terms of this Agreement except to
their attorneys and other necessary parties. The parties further agree to
prepare and issue a mutually agreeable press release upon Closing of this
transaction, provided that Lessee understands that Lessor may be obligated to

file with the SEC on Form  8-K within five days following the Closing. Further,
the parties agree not to interfere in each other's businesses, nor to make any
statements which would adversely impact the other's business interests.

15.   RELATIONSHIP CREATED; INDEPENDENT CONTRACTOR. No provision of this
Agreement is intended to make Lessee an employee or agent of Lessor for any
purpose whatsoever, nor shall the execution of this Agreement be deemed to
create any partnership, joint venture or other form of business association
between the parties other than that of independent contractors. Lessor
acknowledges that it shall not have the right to require Lessee to make any

specific amount or number of sales, to attend sales meetings, to conform to any
fixed or minimum number of hours devoted to selling effort, to follow
prescribed
itineraries, or do anything else which would jeopardize the relationship being
created between the parties. Notwithstanding the foregoing, Lessor shall have
the right to request Lessee to, and Lessee shall, provide Lessor with such
reports or information regarding the Assets as Lessor may reasonably request
from time to time during the Lease Term.

16.   GENERAL PROVISIONS.

  (a)   Further Assurances. The parties agree that, from time to time
hereafter and upon request, each of them will execute, acknowledge and deliver

such other instruments as may be reasonably required to carry out the terms and
conditions of this Agreement.

  (b)  Benefit and Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. The rights of Lessee hereunder may not be assigned without the prior
written consent of Lessor which shall not unreasonably be withheld. The rights

of Lessor hereunder may be assigned, provided that any such assignment shall in
no way relieve Lessor of its obligations and responsibilities to Lessee under
this Agreement.

  (c)   Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, excluding
those laws of California relating to conflicts of laws of different
jurisdictions. The parties hereby expressly submit to the jurisdiction of any
court of competent jurisdiction sitting in and for the County of Los Angeles,
State of California.

(d)   Notices. All notices, requests, demands and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered by overnight delivery service or hand delivered, addressed as
follows:

   If to Lessor:

        Out-Takes, Inc.
        1419 Peerless Place, Suite 116
        Los Angeles, California  90035

     With a copy (which shall not constitute notice) to:

        Feldhake, August & Roquemore
        600 Anton Boulevard, Suite 1730
        Costa Mesa, California 92626
        Attention:  Kenneth S. August, Esquire

     If to Lessee:

        Colorvision International, Inc.
        8250 Exchange Drive, Suite 132
        Orlando, Florida 32809

     With a copy (which shall not constitute notice) to:

        Holland & Knight LLP
        Post Office Box 1526
        Orlando, Florida  32802
        Attention:  John R. Dierking, Esquire

   (e)    Expenses. Any expenses in connection with this Agreement or the
transactions contemplated herein shall be paid for by the party incurring such
expenses following the Closing. Lessee shall not assume any obligations of
Lessor, nor Lessor assume any obligations of Lessee, in connection with any
such
expenses.

  (f)  Sales and Other Taxes. Any sales and other applicable taxes with
respect to the lease of the Assets hereunder shall be borne by Lessee, and
shall
be paid by Lessee as and when such taxes become due consistent with the
lease of
the Assets set forth on Schedule 1 attached hereto.

  (g)   Headings. All paragraph headings herein are inserted for convenience
only and shall not modify or affect the construction or interpretation of any
provision of this Agreement.

  (h)  Counterparts; Faxes. This Agreement may be signed in one or more
counterparts, each of which shall be considered an original copy but all of
which together shall be deemed to be but one and the same instrument. Wherever
in this Agreement an original signature shall be required, a facsimile of an
original signature shall be deemed an original signature for all purposes.

  (i)   Schedules and Exhibits. The schedules and exhibits attached to this

Agreement are hereby incorporated herein as an integral part hereof as fully as
if they had been written into the body of this Agreement in their entirety.

  (j)   Amendment, Modification and Waiver. This Agreement may be modified,
amended and supplemented only by the mutual written agreement of both of the
parties hereto. Each party may waive in writing any condition intended to be
for
its benefit.

  (k)  Validity. The invalidity or unenforceability of any provision or

provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement which shall remain in full force and
effect, nor shall the invalidity or unenforceability of a portion of any
provision of this Agreement affect the validity or enforceability of the
balance
of such provision.

  (l)  Entire Agreement. This Agreement and the Schedules and Exhibits
delivered herewith represent the entire Agreement of the parties and supersede
all prior negotiations and discussions by and among the parties hereto with
respect to the subject matter hereof. No provision or document of any kind
shall

be included in or form a part of this Agreement unless in writing and delivered
to the other party by the party to be charged. This agreement supersedes and
replaces the Letter which shall terminate upon the execution of this Agreement
by the parties.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year set forth above.

LESSOR:

Out-Takes, INC.                        ATTEST:

By:                      By:
__________________________
   James C. Harvey                      James C. Harvey
   President                             Secretary

LESSEE:

COLORVISION INTERNATIONAL, INC.          ATTEST:



By:     _____________________________          By: __________________________
             President                                Secretary

EXHIBIT "A"

     ASSIGNMENT, ASSUMPTION OF LEASE AND LANDLORD CONSENT AGREEMENT

THIS AGREEMENT is made and entered into as of this ___ day of October, 1998 by
and between Out-Takes, Inc. ("Assignor"), Colorvision International, Inc.
("Assignee") and Universal CityWalk Hollywood, a Unit of Universal Studios,
Inc., as successor in interest to MCA Development, a division of MCA Inc.
("Landlord").
               R E C I T A L S

A. Landlord and Assignor, as Tenant, entered into that certain written Lease

dated as of November 12, 1992 (" 1992 Lease") pursuant to which Landlord leased

to Assignor certain premises located in Universal City, California as described
in such 1992 Lease (the "Premises"), which was subsequently amended by that
certain First Amendment to Lease dated March, 1993. The 1992 Lease and the
First
Amendment to Lease are collectively referred to herein as the "Lease".

  B. Simultaneously as of November 13, 1992 Guarantor executed and delivered a
Guarantee of Lease (the "Guarantee") with respect to Assignor's obligations
under the 1992 Lease, which Guarantee remains in full force and effect.

  C. Effective as of the date first written above, Assignor wishes to assign
and Assignee wishes to accept such assignment and assume all of Assignor's
rights and obligations under the Lease.

  NOW, THEREFORE, in consideration of the above and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:

1. Assignor hereby assigns, conveys and transfers all of its right, title and
interest in the Lease, a copy of which is attached and incorporated herein
by
reference.

  2. Assignee hereby assumes, agrees to be bound by and undertakes to perform
each and every one of the terms, covenants and conditions contained in the
Lease. The Assignee further assumes all obligations and liabilities of the

Assignor under the Lease in all respects as if Assignee were the original party
to the Lease.

3.  Assignee shall be liable for all amounts due under the Lease on or after
the date hereof. In the event of a default under the Lease, Lessor shall have
the right to proceed directly and immediately against the Assignee without
first
proceeding against the property and such proceeding is not deemed to be an
irrevocable election of remedies.

4.   Subject to the terms and conditions herein, Lessor consents to the
assignment of the Lease from Assignor to Assignee. Assignor acknowledges that

this consent by Lessor is given without releasing Assignor from its obligations
under the Lease. This consent by Lessor shall not be deemed to be or construed
as a consent to any subsequent assignment of the Lease.

5. Assignee and Lessor agree that Assignee shall replace Robert Shelton as
Guarantor under said Lease, and shall assume all obligations of Guarantor
consistent with the terms of the Lease.

 6.  Assignee shall deposit with Lessor a Security Deposit of two months
Minimum Rent (as defined in the Lease) in the amount of Twenty Thousand Seven
Hundred Forty Five Dollars and Seventy Cents ($20,745.70). Landlord hereby
agrees that, notwithstanding the foregoing, Assignor shall transfer its
Security
Deposit currently held by Landlord in the amount of Eighteen Thousand Seven
Hundred Twenty Two Thousand Dollars Sixty Six Cents ($18,722.66), less any
amounts owed to Landlord prior to the Effective Date, to Assignee's Security
Deposit account, and Assignee shall remit to Landlord on or before the
Effective

Date any balance remaining in order to satisfy the Security Deposit requirement
of Assignee.

7.  Assignor represents, warrants and agrees that all furniture, fixtures and
equipment which are the property of Assignor (including but not limited to
property which Assignor leases to Assignee as part of the assignment

transaction) and used in the Premises will be owned by Assignor, free and clear
of any lien or encumbrance, and further that in the event of a default by
Assignee which results in the loss of the right of Assignee to occupy the
Premises and the re_entry by Assignor, all of Assignor's furniture, fixtures
and
equipment located in the Premises will be left in the Premises for Assignor's
use without compensation until the obligations of Assignor to Landlord under
the
Lease have been satisfied.

8.  Except as modified hereby, all terms and conditions of the Lease shall
remain in full force and effect.

  9. All of the terms and provisions of this Agreement shall be binding and
shall insure to the benefit of the parties, their respective successors and
assigns.

  IN WITNESS WHEREOF, the parties have caused this instrument to be executed
as of the date first written above.

ASSIGNOR:    Out-Takes, INC.


By  ________________________________
Name: ______________________________
Title: _______________________________





ASSIGNEE:  Colorvision International, Inc.


By:  ________________________________
Name: ______________________________
Title: _______________________________



LANDLORD: Universal CityWalk Hollywood,
a Unit of Universal Studios, Inc.



By:___________________________________
   Larry Kurzweil
   Senior Vice President & General Manager



   SCHEDULE 1

   ASSETS OF BUSINESS


1.    All items remaining in the Out Takes store at Universal City Walk as of
October ___ , 1998, excluding the Sticker Machine belonging to paradise
Creations.

2.     All items remaining in the Panorama City storage facility including
equipment previously used by Lessor in operating its Irvine, California
location.

3.     The licenses listed on Schedule 7 hereof.

   [The parties shall prepare a definitive list of the above_referenced Assets
being leased hereunder within thirty (30) days from the date of this Agreement
in accordance with the provisions of Section 1 hereof.]

    SCHEDULE 2

   SECURITY DEPOSITS


     City Walk premises deposit        $18,722.66     Board
of Equalization deposit                $ 1,000.00
     City Walk electricity deposit     $   700.00
   SCHEDULE 3

   LIABILITIES OF LESSOR TO BE ASSUMED BY LESSEE

Lessee assumes all liabilities in connection with royalties on the below
named contracts, as of October ___, 1998. Lessee will assume financial
responsibility and liability for any and all existing or future guarantees or
other commitments in respect of the below named contracts:

 1.     MTV Networks
 2.     King Features
 3.     Stan Gorman
 4.     Young Kwon
 5.     Simon Kornblit
 6.     Gerry Wersh/Watkins
 7.     20th Century Fox
 8.     Curtis Archives
 9.     CMC
10.     Universal Studios
11.     Tony Stone Images
12.     Paramount
13.     JP Morgan
14.     Queen B
15.     Saban
16.     Baywatch
17.     Warner Brothers

   SCHEDULE 4

   BENEFIT PLANS OF LESSOR

1.   Group health insurance plan in effect as of September 30, 1998

   SCHEDULE 5

   SCHEDULE OF CONTRACTS

1.     License Agreements listed on Schedule 3

   SCHEDULE 6

   CONTRACT DEFAULTS

License agreements with:

1.     JP Morgan
2.     20th Century Fox
3.     Curtis Archives
4.     CMC
4.     Universal Studios
6.     Warner Brothers



   SCHEDULE 7

   LICENSE AGREEMENTS

 1.     MTV Networks
 2.     King Features
 3.     Stan Gorman
 4.     Young Kwon
 5.     Simon Kornblit
 6.     Gerry Wersh/Watkins
 7.     20th Century Fox
 8.     Curtis Archives
 9.     CMC
10.     Universal Studios
11.     Tony Stone Images
12.     Paramount
13.     JP Morgan
14.     Queen B
15.     Saban
16.     Baywatch
17.     Warner Brothers


                              OUT TAKES, INC.


                             WRITTEN CONSENT
                                 of the
                              SOLE DIRECTOR


                             October 26, 1998

This Written Consent of the Sole Director of Out Takes, Inc., a Delaware
Corporation (the "Corporation") is made as of the date set forth above in
accordance with the Bylaws of the Corporation. The Sole Director hereby
consents, pursuant to the provisions of Section 141(f) of the Delaware
Corporations Code, to the adoption of the following Resolutions, effective
as of
5:00 p.m. on October 26, 1998, which are to be filed with the Minutes of the
Board of Directors:

WHEREAS, it is in the best interests of the Corporation to lease to others
certain of its assets; and

WHEREAS, it is in the best interests of the Corporation to divest itself of
certain of its liabilities:

RESOLVED, that the Corporation enter into an Asset Lease Agreement with
Colorvision International, Inc.

FURTHER RESOLVED, that all of the actions taken by the executive officers of
the Corporation since the last meeting of the Board of Directors are hereby
specifically authorized, ratified and approved by the Sole Director.

APPROVED:



____________________
James C. Harvey
Sole Director
[TYPE]EX-27

[DESCRIPTION]FDS __
[ARTICLE]                     5
[LEGEND]
This schedule contains summary financial information extracted from the
consolidated balance sheet and the consolidated statement of operations and is
qualified in its entirety by reference to such information.



[PERIOD-TYPE]                                                   Year
[FISCAL-YEAR-END]                              Mar_31_2000
[PERIOD-END]                                   Mar_31_2000
[CASH]                                         77,265
[SECURITIES]                                   42,722
[RECEIVABLES]                                  0
[ALLOWANCES]                                   0
[INVENTORY]                                    0
[CURRENT-ASSETS]                               119,987
[PP&E]                                         236,798
[DEPRECIATION]                                 0
[TOTAL-ASSETS]                               4,550,891
[CURRENT-LIABILITIES]                        2,541,330
[BONDS]                                        0
[PREFERRED-MANDATORY]                          0
[PREFERRED]                                    0
[COMMON]                                    20,788,122
[OTHER-SE]                                     0
[TOTAL-LIABILITY-AND-EQUITY]                 4,550,824
[SALES]                                        216,623
[TOTAL-REVENUES]                               216,623
[CGS]                                          212,323
[TOTAL-COSTS]                                  212,323
[OTHER-EXPENSES]                               373,665
[LOSS-PROVISION]                              (369,365)
[INTEREST-EXPENSE]                             509,905
[INCOME-PRETAX]                               (884,110)
[INCOME-TAX]                                   0
[INCOME-CONTINUING]                           (884,110)
[DISCONTINUED]                                 0
[EXTRAORDINARY]                                0
[CHANGES]                                      0
[NET-INCOME]                                  (884,110)
[EPS-BASIC]                                    (0.04)
[EPS-DILUTED]                                  (0.04)