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, 2002

                                       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 , Dallas, Texas                    75219
--------------------------------------------------                  ----------
(Address of principal executive offices)                            (Zip Code)

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-K 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 $117,719.

The aggregate market value of the voting stock held by non-affiliates as of
August 15, 2002 was $7,487.
<PAGE>
The number of shares outstanding of the issuer's Common Stock as of August 15,
2002 was 20,495,726.

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



                               TABLE OF CONTENTS
                               -----------------

                                                                         PAGE
PART I                                                                   ----

  ITEM 1.   DESCRIPTION OF BUSINESS                                       3

  ITEM 2.   PROPERTIES                                                    19

  ITEM 3.   LEGAL PROCEEDINGS                                             20

  ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS           20

PART II
                                                                          20
  ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
            MATTERS                                                       20

  ITEM 6.   SELECTED FINANCIAL DATA                                       21

  ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
            OPERATION                                                     21

  ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE                           40

PART III                                                                  40

  ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
            CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
            EXCHANGE ACT                                                  40

  ITEM 11.  EXECUTIVE COMPENSATION                                        41

  ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
            OWNERS AND MANAGEMENT                                         41

  ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                42

PART IV                                                                   42

  ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K                              42




<PAGE>

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, 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. 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. On March 30, 2001, the Company assigned
this asset lease agreement in lieu of cash to pay down a note payable,
including accrued interest, and issued a $150,000 promissory note, dated March
31, 2001 with respect to the repayment of the balance of the indebtedness.

During the year ended March 31, 2002, the Company was forced to terminate its
operations because of lack of cash flow, brought about by problems arising
from the changes in the power industry in the state of California.  The
Company was generating and selling electricity on a wholesale basis to the
Independent System Operator (The State of California), but, given the size of
the Company's present power plant, and the unpredictability of wholesale
prices in the ten minute decrimental market with the Independent System

<PAGE>
Operator, the Company is not able to operate on revenues generated solely from
wholesale sales of electricity.


                                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, which are located
adjacent to an oil and gas lease, and from which LAE receives its gas.

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 was Four Million Dollars ($4,000,000), which
was paid by a Promissory Note (the "Note") 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 Note are to be made monthly in arrears up to the maturity
date, which is the fifth anniversary of the Note. 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 none of the 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. In the event that Holders do elect to convert, 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, 2002, the holders have not yet exercised their right to convert
the note to common stock.

The indebtedness represented by the Note 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
<PAGE>
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 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, until recent adverse developments affecting the
electricity industry in California, was to expand its existing power plant to
<PAGE>
4 mW, and to further expand its power producing capacity by exploring
acquisition opportunities in the power market by exploring other opportunities
for growth and development.

The Company is seeking debt and equity financing to raise operating capital,
and is developing a new plan of operations whereby residents of the City of
Los Alamos would form a cooperative to purchase power from the Company at
retail prices.  Both of these measures are hoped to enable the Company to
being operating its power plant again.


                            DESCRIPTION OF FACILITIES

The Company procured the use of 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 an oil and gas Operator. 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 is 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 generator sets, the PG&E contract,
the FERC certification, and power purchase agreement with the oil and gas
Lease Operator, and brought the equipment into regulatory compliance.

When the generators 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 $2 million to $4 million.


                               RECENT DEVELOPMENTS

1. Regulatory Matters.

Los Alamos Energy has historically sold power to PG&E. Due to uncertainties
arising form PG&E's bankruptcy, Los Alamos Energy elected to terminate its
contract with PG&E, and instead entered into a Participating Generator
Agreement with the California Independent System Operator ("ISO"), and is
currently selling power to the CAISO through the Automated Power Exchange as
its Scheduling Agent.
<PAGE>
Since September 2000, the ISO settlement procedures have included a two-
payment process. An initial payment is made to the Scheduling Coordinators
based on Preliminary Settlement Statement Invoices and receipts received in
response to them, and final payment is made based on receipts received in
response to the Final Settlement Statement Invoice.

A group of California generators filed a Motion with the Federal Energy
Regulatory Commission to direct the ISO to enforce the creditworthiness
requirement of its open access transmission tariff (Tariff)and the
Commission's creditworthiness orders.

The ISO stated that because certain parties are in default on major payments
and because market "reruns" result in significant shifts in the payments
between the preliminary and final invoices, Scheduling Coordinators are
"netting" payments owed for one month's market transactions against amounts
due for transactions in a different month. Some Scheduling Coordinators have
also failed to make full payment on preliminary invoices on the belief that
they will not recover overpayments.

The ISO stated that these practices are contrary to payment obligations under
the ISO Tariff. The ISO indicated that it initiated several changes to its
billing and settlement procedures in response to the actions of market
participants. First, by Market Notice issued August 1, 2001, the ISO notified
market participants that it did not expect to make cash distributions based on
preliminary invoices for May, but would hold the payments and include them in
the cash distributions based on final invoices for May.

Second, by Market Notice issued August 30, 2001, the ISO notified market
participants that it would suspend, until further notice, cash distributions
based on preliminary invoices, effective September, 2001,until the ISO issues
a further market notice.

Third, by Market Notice issued September 4, 2001, the ISO notified market
participants that beginning with the July 2001 trade month, it would defer the
collection and disbursement of funds until the final invoices for each trade
month were prepared and distributed. According to the Market Notice, the ISO
would issue a single monthly invoice on the date that it issues the Final
Settlement Statement for the last trade day of the calendar month and
distributes payment received within five business days from the date the
single invoice was issued.

The ISO represented that it has modified the payment dates in the ISO Payments
Calendar to accommodate these changes. The ISO requested that its proposed
changes be made effective, on a temporary basis, beginning August1, 2001 (when
preliminary payments for the trade month May 2001 would have been disbursed),
until either the ISO notifies the Commission of its intent to revert, as of a
date specified, or until the Commission accepts and makes effective a
permanent change to the settlement process. The ISO requested waiver of the
prior notice requirement to permit the tariff revisions to be made effective
on August 1, 2001.

The Commission has repeatedly directed the ISO to enforce its credit worthy
standards under the Tariff and have specifically held that the ISO Tariff

<PAGE>
prevents the ISO from entering into transactions with third-party suppliers on
behalf of a non-creditworthy entity, absent credit support for such
transactions from a creditworthy counter party. As per the February 14 Order
and April 6 Order, and affirmed in the September 13 Order, the Tariff imposes
a duty on the ISO to enforce the Tariff's creditworthiness standards.

In the September 13 Order, it stated that "it would be unreasonable to limit
the ISO's creditworthiness enforcement duties to rejecting schedules from non-
creditworthy parties [and] conclude[d] that it would be reasonable to require
that the ISO obtain prior assurances of payment for all third-party power
supplied to [SoCal Edison] and PG&E, whether directly or through purchases by
DWR (or another creditworthy counter party) on their loads' behalf."

It has stated our reasons for this requirement several times. First, it found
that the credit-support arrangements are necessary to ensure adequate
assurance of payment for third-party suppliers; second, that such arrangements
are necessary to avoid the unilateral shifting of unacceptable financial risks
to third-party suppliers; and third, that a lowering of the financial
creditworthiness standard without some assurance of payment for third-party
sales would further increase prices paid by consumers.

Although DWR represented that it is the guarantor of transactions for then on-
creditworthy UDCs, DWR has yet to pay for these net short positions. The
Tariff requires a creditworthy party to back the transaction before the
transaction is scheduled. Therefore, if the ISO does not provide a
creditworthy party to back the transaction, including, specifically the net
short position of the currently non-creditworthy UDCs, i.e., PG&E and So Cal
Edison, the must-offer requirement will not apply. The must-offer requirement
assumes a matching must-pay requirement. Thus, sellers will not be required to
transact with the ISO and will be free to negotiate with other in-state and
out-of-state buyers of their choosing with mutually acceptable terms and
conditions.

The commission also disagreed with the ISO and DWR's representation that under
the Tariff the ISO must invoice the non-creditworthy UDCs, or that a new
contractual arrangement is necessary for DWR to assume financial
responsibility as the guarantor for the non-creditworthy UDCs. It noted that
DWR has already executed a Scheduling Coordinator Agreement with the ISO.

This agreement includes, among other things, an obligation by DWR to abide by
and perform all of the obligations under the ISO Tariff, without limitation.
This includes an obligation to pay for scheduled and unscheduled transactions
made on the Scheduling Coordinator's behalf by the ISO. Under the ISO Tariff
settlement and billing procedures, a Scheduling Coordinator shall discharge
its payment obligations and likewise, receive all payments owed to it under
the ISO Tariff only through the ISO. Although this agreement was entered into
prior to So Cal Edison and PG&E losing their creditworthy status, nothing in
the agreement limits the scope to DWR's scheduling of its own load, or
distinguishes DWR's functioning as the creditworthy party for the net short
position for the non-creditworthy UDCs.The ISO has acknowledged that DWR
assumed the obligations of Scheduling Coordinator for the net short load under
the Tariff. The ISO confirmed that: (1) both DWR and CERS have been assigned
Scheduling Coordinator identifications; (2) transactions backed by DWR and
CERS since January have been entered into using their Scheduling Coordinator
<PAGE>
identifications; and (3) the UDCs provide CERS with a calculation of the net
short for this purpose.

In addition, it noted that AB1X provides that: "Upon delivery of power to
them, the retail end use customers shall be deemed to have purchased that
power from [DWR]. Payment for any sale shall be a direct obligation of there
tail end use customer to [DWR]."

Therefore, because DWR has assumed responsibility for purchases by the ISO,
and because DWR functions as a Scheduling Coordinator for this net short
position of PG&E and So Cal Edison, DWR must abide by the requirements of the
ISO Tariff and the Scheduling Coordinator Agreement. Therefore, the Commission
disagreed with the ISO's argument that under the Tariff, it is required to
send invoices to PG&E and So Cal Edison - rather than DWR - for generation it
dispatches to serve their respective loads. The ISO is obligated under its
Tariff to invoice, collect payments from and distribute payments to DWR, as
the Scheduling Coordinator for all scheduled and unscheduled transactions made
on behalf of DWR, including transactions where DWR serves as the creditworthy
counterparty for the applicable portion of PG&E's and So Cal Edison's load.

The Commission rejected the ISO's and DWR's argument that the Agreement
Resolves the issues raised by the Generators in this proceeding. This
Agreement has never been filed with the Commission and, to the extent that
payment is negotiated for services under the Tariff, that Agreement is
jurisdictional and must be filed with and approved by the Commission under
section 205 of the Federal Power Act prior to implementation. The issue raised
by Generators regarding payment for providing minimum run energy is pending
before the Commission on rehearing in Docket Nos. EL00-95-001, et al., and
will be addressed in that proceeding.

The Commission believes that it is the ISO's obligation to enforce the
provisions of the Tariff uniformly and to ensure that all parties are treated
equitably and fairly. If the ISO enforced its Tariff provisions which require
all Scheduling Coordinators to pay each preliminary and final settlement
statement invoice in each settlement period, (thus enforcing no "netting"), it
would eliminate the need for the temporary suspension of the two-part
settlement process and render Amendment No. 40 unnecessary. It also believes
that under Amendment No. 40, Scheduling Coordinators will face a 75-day lag
between their market transactions and any receipt of payment for those
transactions and find this delay unacceptable. It found it imperative to the
marketplace that a prompt settlement process be in place that matches market
transactions and prompt payment for those transactions on a timely basis.

The Commission found that DWR does not have unilateral discretion to determine
the rates for purchases it makes on behalf of PG&E and So Cal Edison and
instead must accept and pay the rates set by the Commission. If DWR disagrees
with these rates, it may challenge the rates through an appropriate filing
with the Commission. Neither DWR nor any other party should be engaging in the
types of self-help described in this proceeding.

The ISO was on November 7, 2001 directed to comply with its Tariff and the
Commission's creditworthiness orders by: (1) enforcing its billing and
settlement procedures under its Tariff; (2) invoicing DWR for all ISO
transactions it entered into on behalf of So Cal Edison and PG&E within 15
<PAGE>
days from the date of the order; (3) filing a report with the Commission,
within 15 days from the date of the order, indicating overdue amounts from DWR
and a schedule for payment of those overdue amounts within 3 months of the
date of the order; and (4) reinstating the billing and settlement procedures
under the Commission-approved ISO Tariff. If the ISO fails to take these
steps, the Commission will consider it a violation of the Commissions'
creditworthiness orders and the ISO's Tariff warranting the Commission to seek
injunctive relief under section 314(a) of the Federal Power Act, 16 U.S.C.
825m(a) (1994).

b. Direct Access.

The Public Utilities Commission issued a restructuring order December 1995
(revised January 1996), providing for an independent system operator (ISO) and
a wholesale power exchange (PX) to be operational January 1, 1998. (The
opening of the ISO and PX were delayed until March 31, 1998). PUC rulings in
1997 established electric metering and billing as competitive services, and
provided that retail choice would be available to all consumers at once.

May 2000 marked the beginning of extreme price spikes at the PX and ISO, and
FERC attempted to address the market problems in a December 2000 order. The
order provided for a soft price cap of $150/mWh, a new governing board for the
ISO, elimination of the requirement for IOUs to buy and sell all power through
the PX, and a requirement for 95% of loads to be bid in the day-ahead market.

In January 2001 the PUC approved limited rate increases utilities, and in late
March approved large rate increases for consumers using more than 130% of a
baseline. The baseline is set regionally and is about half of average
consumption levels. The March order also requires the utilities to use the
rate increase to pay for power purchased from qualifying facilities and the
Department of Water Resources. In April 2001 FERC approved market mitigation
measures that set a rate formula once a stage 1 emergency is reached, and in
September broadened the order to apply to all times and to all western states.

In September 2001 the PUC ended the ability of customers' to choose their
power supplier; current retail choice customers can remain with their supplier
through the end of their contract.

In Spring 2001 the governor of California signed AB 29x approving funds for
energy conservation, SB 6x creating a state authority to build and upgrade
generation facilities, and SB 31x providing an additional $13.4billion in
bonding authority to the California Department of Water Resources. In October
2001 the governor said he would veto SB 18xx, which creates a separate charge
on customer bills to cover bond repayments. The governor objects to the bill
because it allows PUC oversight of the Department of Water Resources revenue
needs.

c.  Payments for electricity.

The Company was, during January 2002, informed by the APX to the effect that
payments for electricity delivered to the ISO was being indefinitely suspended
pending the ISO's review of possible over payments made to participants, and
possible resulting adjustments. As a result of not being paid in a timely
manner, and/or partially and sporadically having been paid, the Company has as
<PAGE>
of November 2001 shut its power plant down for fear of irreparable damage
absent routine and required maintenance, which the Company was not able to
perform absent payment for deliveries.

d.  Industry and business uncertainties.

The California energy market, and the Company's participation therein remains
uncertain. The Company is working on a new plan of operations to cope with the
drastic changes that have occurred in the market and their effect on the
Company.  The outcome of the current crisis and the potential success of the
Company's new plan of operations cannot be predicted. It is possible that any
such outcome will include changes in government regulations, business and
contractual relationships or other factors that could materially affect the
Company.


e.  Subsequent Events

In view of the matters described in the preceding section, the recommencement
of operations of the power plant is dependent upon the Company's ability to
procure capital and generate positive cash flows from operations.  If the
Company is unable to obtain such financing, the Company will be forced to
scale back operations, which could have an adverse effect on its financial
condition and results of operation.  These factors raise substantial doubt
about the Company's ability to continue as a going concern.  The consolidated
financial statements do not include any adjustments relating to the
reclassification of recorded asset amounts or amounts and classifications of
liabilities that might be necessary should the Company be unable to continue
its existence.

Management plans to take steps that it believes will be sufficient to provide
the Company with the ability to continue in existence, and the Company is
seeking additional equity or debt financing. There can be no assurances that
sufficient financing will be available on terms acceptable to the Company. The
Company is also actively seeking out compatible acquisition opportunities that
would be complimentary to its business and that will provide common synergies
for the future.


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,
<PAGE>
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 electricity 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
circumstances, 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
<PAGE>
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
<PAGE>
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").

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.


<PAGE>
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
<PAGE>
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.

<PAGE>

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.

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.

<PAGE>

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, 2002, the Company employed 1 unsalaried person. 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 Director, James C. Harvey, at the rate of
$750 per month, on a month to month basis, and also rents offices from a
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 with Lease
Operator, consisting of correspondence between the Operator and ACI and Mr. W.
P. Blair, as well as all right, title and interest in and to the Participating
Generator Agreement between LAE and the ISO.

       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.




<PAGE>

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any legal proceedings at the present time.  However, LAE
and its Operator have in the past borrowed moneys from different individuals
from time to time, and in connection with such borrowings, has issued notes,
which notes provide for the conversion of such notes into equity of LAE, and
subsequently convertible into shares of common stock of the Company upon the
final consolidation of, and merger between LAE and the Company. Substantially
all of these notes together with interest accrued thereon have matured, and
are past due.  Due to the recent adverse developments described elsewhere
herein, the final merger between, or consolidation of, LAE and the Company has
not occurred, and is unlikely to occur, and hence, no shares of the Company
will be issued to such note holders.

LAE and the Operator have received demands for repayment of certain notes, and
we are currently in negotiation for the settlement of such demands. While the
outcome of ongoing negotiations is uncertain, management does not expect
litigation to commence in connection with the said demands, or if commenced,
does not constitute a materially adverse condition for the Company.


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 over-the-counter Bulletin
Board under the symbol OUTT'.  Effective July 17, 2002, the over-the-counter
Bulletin board added an E' to its trading symbol, making the symbol, OUTTE,'
signaling the Company's failure to timely file this report.  If this report is
filed by August 15, 2002, and if the Company is able to file its quarterly
report due for the quarter ended June 30, 2002, it may be able to retain its
quotation on the Bulletin Board with no further delay or application.

The following table sets forth, for the periods indicated, the high and low
closing prices for the Common Stock as reported by the over-the-counter
Bulletin Board.

                       Fiscal 2002            Fiscal 2001
                      High      Low          High      Low
                      ----      ----         ----      ----
First Quarter         .06       .03          .06        .03
Second Quarter        .06       .03          .06        .03
Third Quarter         .06       .03          .06        .03
Fourth Quarter        .03       .01          .06        .03
<PAGE>
There were approximately 83 holders of record of the Company's Common Stock as
of March 31, 2002.

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, 1998
through March 31, 2002. Refer to "Item 7. Management's Discussion and Analysis
or Plan of Operation" for discussion of operations.

<TABLE>
<S>                               <C>           <C>         <C>          <C>         <C>
                                 2002          2001        2000         1999        1998

                               ---------      -------    --------     --------    ---------
Income Statement Data
Revenue from operations        $117,719      $541,755    $216,623     $637,450    $1,187,638

Gross profit (Loss)              42,830      $ 73,048      $4,300    ($445,076)    ($524,646)

Income (loss) from
 operations                 ($4,335,048)   ($ 346,178)  ($369,365)   ($289,726)  ($1,186,601)

Net (Loss) Income           ($4,835,665)      $17,273   ($884,110)   ($403,774)  ($1,082,306)

Net loss per share               ($0.24)       ($0.00)     ($0.04)     ($0.019)       ($0.05)
Balance Sheet Data

Total Assets                   $187,526    $4,454,044  $4,550,824    $ 312,503      $285,840

Total Liabilities          $  7,007,883    $6,438,736  $6,552,789   $1,667,725   $ 1,020,943

Stockholders' Equity
 (Deficit)                  ($6,820,357)  ($1,984,692)($1,893,559) ($1,355,672)    ($735,103)
</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

Through Los Alamos Energy, LLC, the Company operates a 1 mW waste gas
electricity plant in Los Alamos, California, which was acquired from American
Cogenics during 1996.  Up until the bankruptcy filing of Pacific Gas &
Electric and the recent power crisis in California, the Company  has
historically sold power to PG&E. Due to uncertainties arising from PG&E's
bankruptcy, Los Alamos Energy elected to terminate its contract with PG&E, and
instead entered into a Participating Generator Agreement with the California
Independent System Operator ("ISO"), and is currently selling power to the
CAISO through the Automated Power Exchange as its Scheduling Agent.  The
Company was, during January 2002, informed by the APX to the effect that
<PAGE>
payments for electricity delivered to the ISO was being indefinitely suspended
pending the ISO's review of possible over payments made to participants, and
possible resulting adjustments. As a result of not being paid in a timely
manner, and/or partially and sporadically having been paid, the Company has as
of November 2001 shut its power plant down for fear of irreparable damage
absent routine and required maintenance, which the Company was not able to
perform absent payment for deliveries.

The Company is still not able to recommence its operations because of lack of
capital and cash flow, brought about by problems arising from the changes in
the power industry in the state of California.  Given the size of the
Company's present power plant, and the unpredictability of wholesale prices in
the ten minute decrimental market with the ISO, the Company is not able to
operate on revenues generated solely from wholesale sales of electricity.

Changes in Plan of Operations

The California energy market, and the Company's participation therein remains
uncertain.
In view of these matters, the operation of the power plant is dependent upon
the Company's ability to procure capital and generate positive cash flows from
operations.  If the Company is unable to obtain such financing, the Company
will be forced to scale back operations, which could have an adverse effect on
its financial condition and results of operation.  The Company has is taking
steps it believes will be sufficient to provide the Company with the ability
to continue in existence, and the Company is seeking additional equity or debt
financing. There can be no assurances that sufficient financing will be
available on terms acceptable to the Company. The Company is also actively
seeking out potential merger candidates that would be complimentary to its
business and help expand the Company's capital base and income potential.

In addition to seeking a suitable merger or reverse acquisition candidate, the
Company is also in the process of developing a plan of operations whereby the
residents of the City of Los Alamos would form a cooperative to buy
electricity from the Company at retail prices.


Results of Operations

Year Ended March 31, 2002 Compared to Year Ended March 31, 2001.

The net loss for the year ended March 31, 2001 was $4,835,665 compared with a
net income of $17,273 for the year ended March 31, 2002. The primary reasons
for the change was the impairment of the goodwill totaling $4,062,321 during
the year ended March 31, 2002 and the asset agreement income totaling $874,231
during the year ended March 31, 2001. The Company overall generated $541,755
in revenues in the fiscal year ended March 31, 2001, compared to revenues of
$117,719 in the fiscal year ended March 31, 2002. Management attributes this
decrease to low energy prices, and the shut down of the power plant.

Year Ended March 31, 2001 Compared to Year Ended March 31, 2000.

The net loss for the year ended March 31, 2000 was $884,110 compared with net
income of $17,273 for the year ended March 31, 2001. The primary reasons for
<PAGE>
the increase in the net income was asset lease agreement income of $874,231.

The Company overall generated $541,755 in revenues in the fiscal year ended
March 31, 2001, compared to revenues of $216,623 in the fiscal year ended
March 31, 2000. Management attributes this increase to increase of power
sales.

Liquidity and Capital Resources

At March 31, 2001, the Company had a working capital deficit of $2,253,414 as
compared to a working capital deficit on March 31, 2002 of $2,994,250.

Net cash provided by operating activities was $379,435 for the fiscal year
ended on March 31, 2001, compared to the utilization of $62,495 of cash for
the year ended March 31, 2002.

In view of the shut down of the power plant, which is the Company's only
source of income, the Company's ability to meet its obligations for continuing
fixed expenses, materials procurement or operating labor is seriously in
question, unless the Company is successful in raising capital through sales of
its common stock, which is doubtful under the current market conditions and
the status of the Company's quotation on the over-the-counter Bulletin  Board,
or the successful completion of a merger or reverse-acquisition of a suitable
company with adequate operating capital.



                          INDEPENDENT AUDITORS' REPORT

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


We have audited the accompanying consolidated balance sheet of Out-Takes, Inc.
and subsidiary as of March 31, 2002, and the related consolidated statements
of operations, stockholders' deficit, and cash flows for the year then ended.
These consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on the
consolidated financial statements based on our audit. The accompanying
consolidated financial statements for Out-Takes, Inc. and subsidiary as of
March 31, 2001 and 2000 were audited by other auditors whose report dated June
27, 2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America.  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 consolidated financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

<PAGE>

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Out-Takes,
Inc. and subsidiary as of March 31, 2002, and the results of their operations
and their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in Note 1 to
the accompanying consolidated financial statements, the Company is
restructuring its business, has incurred significant operating losses and has
an accumulated deficit, which raises substantial doubt about its ability to
continue as a going concern.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

STONEFIELD JOSEPHSON, INC.
----------------------------
CERTIFIED PUBLIC ACCOUNTANTS

Irvine, California
August 12, 2002



                        OUT-TAKES, INC. AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
ASSETS
                                                     March 31
                                                 2002       2001
                                               ---------  ---------
Current assets:
 Cash and cash equivalents                   $       -    $  52,745
 Accounts receivable, net                            -      132,118
 Other current assets                            13,633           -
                                               ---------  ---------
 Total current assets                            13,633     184,863
 Property and equipment, net of accumulated
  depreciation and amortization                 147,147     183,712
  Intangible assets, net                              -   4,062,321
 Other assets                                    26,746      23,148
                                               ---------  ---------
                                             $  187,526  $4,454,044
                                               =========  =========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
 Bank overdraft                              $      530           -
 Accounts payable and accrued expenses          160,373     179,622
 Accrued interest                             1,374,604     858,843
 Due to related party                           220,521     178,985
 Notes payable                                1,251,855   1,194,856
 Capital lease obligation                             -      19,000
 Deferred revenue                                     -       6,971

<PAGE>
                                               ---------  ---------
 Total current liabilities                    3,007,883   2,438,277
  Long term debt                              4,000,000   4,000,459

Stockholders' deficit:

Preferred stock, par value at $0.01,
 5,000,000 shares authorized,
 none issued and outstanding                          -           -
Common stock, par value at $0.01,
 35,000,000 shares authorized,
 20,788,122 shares issued for
 both (2002) and (2001) and 20,495,726
 shares outstanding for
  both (2002) and (2001)                        207,882     207,882
 Additional paid-in capital                   9,913,230   9,913,230
 Accumulated deficit                        (16,833,063)(11,997,398)

 Treasury stock, 292,396 shares at cost        (108,406)   (108,406)
                                               ---------  ---------
 Total stockholders' deficit                 (6,820,357) (1,984,692)
                                               ---------  ---------
                                           $    187,526 $ 4,454,044
                                               =========  =========

     See accompanying report and notes to consolidated financial statements


                        OUT-TAKES, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS

                                  Year ended     Year ended     Year ended
                                  March 31,      March 31,      March 31,
                                  2002           2001           2000
                                  ----------     ----------     ----------

Revenues                         $   117,719     $  541,755     $  216,623
Cost of revenues                      74,889        468,707        212,323
                                  ----------     ----------     ----------
Gross profit                          42,830         73,048          4,300

Operating expenses
Selling, general and administrative  315,557        419,226        378,465
Impairment Expense                 4,062,321              -              -
                                  ----------     ----------     ----------
Loss from operations             (4,335,048)       (346,178)      (374,165)
                                  ----------     ----------     ----------
Other income (expense):
Interest expense                   (515,759)       (510,780)      (509,945)

Asset lease agreement assignment          -         874,231              -
Loss on disposal of fixed assets       (600)              -              -
Miscellaneous                        15,742               -              -
                                  ----------     ----------     ----------
Total other income (expense)       (500,617)        363,451       (509,945)
Income (loss) before
 income taxes                    (4,835,665)         17,273       (884,110)
Income taxes                              -               -              -
                                  ----------     ----------     ----------
<PAGE>
Net income (loss)              $ (4,835,665)    $    17,273     $(884,110)
                                  ==========     ==========     ==========
Net income (loss) per share
 - basic and diluted              ($0.24)       $      0.00        ($0.04)
                                  ==========     ==========     ==========
Number of weighted average share
 - basic and diluted             20,495,726      20,495,726     20,495,726
                                  ==========     ==========     ==========


     See accompanying report and notes to consolidated financial statements




                        OUT-TAKES, INC. AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
               FOR THE YEARS ENDED MARCH 31, 2002, 2001 AND 2000

<TABLE>
<S>                             <C>        <C>        <C>          <C>          <C>          <C>
                                                    Additional                             Total
                                 Common stock       paid-in      Retained     Treasury  Stockholders'
                              Shares      Amount    capital       deficit      Stock      deficit
                              ---------   --------  ----------    --------    ---------   -----------
Balance at March 31, 1999    20,788,122  $207,882  $9,913,230  $(11,130,561) $ (108,406) $(1,117,855)
Net loss                              -         -           -      (884,110)          -     (884,110)
                              ---------   --------  ----------    --------    ---------   -----------
Balance at March 31, 2000    20,788,122   207,882   9,913,230   (12,014,671)   (108,406)  (2,001,965)
Net income                            -         -           -        17,273           -       17,273
                              ---------   --------  ----------    --------    ---------   -----------
Balance at March 31, 2001    20,788,122   207,882   9,913,230   (11,997,398)   (108,406)  (1,984,692)
Net loss                              -         -           -    (4,835,665)          -   (4,835,665)
                              ---------   --------  ----------    --------    ---------   -----------
Balance at March 31, 2002    20,788,122  $207,882 $ 9,913,230  $(16,833,063) $ (108,406) $(6,820,357)
                             ==========   ========  ==========    =========   =========   ===========



See accompanying auditors' report and notes to consolidated financial statements

</TABLE>



                        OUT-TAKES, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS


                                          March 31,    March 31,     March 31,
                                           2002         2001          2000
                                          ---------    ---------     ---------
Cash flows provided by (used for)
 operating activities:
Net income (loss)                      $ (4,835,665)  $ 17,273     $ (884,110)
                                          ---------    ---------     ---------
Adjustments to reconcile net
income (loss) to net cash provided
by (used for) operating
 activities:
Depreciation and amortization                36,755    164,952        163,659
Loss on sale of fixed assets                    600          -              -
Bad debt                                    (20,136)         -              -
<PAGE>
Impairment Expense                        4,062,321          -              -
Interest Expense on Note Payable             27,000          -              -
Changes in assets and liabilities:
(Increase) decrease in assets
Accounts receivable, net                    152,254    (89,396)       (42,722)
Due from related party                            -   (308,616)             -
Prepaid asset lease                               -    (30,604)        30,604
Other current assets                        (13,633)         -          1,543
Other assets                                 (3,598)         -         (4,600)

Increase (decrease) in liabilities
Accounts payable and accrued expenses       (19,249)   620,327        461,486
Accrued interest                            515,761   (173,001)        79,993
Provision for studio closure                      -                   (31,878)
 Due to related party                        41,536    178,500         61,390
Deferred revenue                             (6,971)         -              -
                                          ---------    ---------     ---------
Total adjustments                         4,772,640    362,162        719,475
                                          ---------    ---------     ---------
Net cash provided by (used for)
 operating activities                       (62,025)   379,435       (164,635)
                                          ---------    ---------     ---------
Cash flows provided by
(used for) investing activities:
Purchases of fixed assets                    (2,290)         -        (53,213)
Proceeds from sales of fixed assets           1,500          -          5,500
                                          ---------    ---------     ---------
Net cash used for investing activities         (790)         -        (47,713)
                                          ---------    ---------     ---------
Cash flows provided by
 (used for) financing activities:
Advances from related parties                     -          -         (1,230)
Bank overdraft                                  530          -              -
Payments to related parties                       -   (773,845)      (116,903)
Capital contribution                              -          -          7,800
Proceeds from short term debt                     -    380,890        405,131
Notes and contracts payable                       -    (11,000)        (6,541)
Principal proceeds from notes payable        29,540          -              -
Payments on capital lease obligation        (19,000)         -              -
                                          ---------    ---------     ---------
Net cash provided by (used for)
 financing activities                        11,070   (403,955)       288,257
                                          ---------    ---------     ---------

Net increase (decrease) in cash             (52,745)   (24,520)        75,909
Cash, and cash equivalents
 beginning of year                           52,745     77,265          1,356
                                          ---------    ---------     ---------
Cash, and cash equivalents,
 end of year                          $           -  $  52,745      $  77,265
                                          =========    =========     =========

      See accompanying report and notes to Consolidated financial statements


<PAGE>

                         OUT-TAKES, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                          March 31,    March 31,     March 31,
                                          2002         2001          2000
                                          ---------    ---------     ---------
Cash paid for interest expense          $        -    $   2,516     $        -
Cash paid for income taxes              $        -    $       -     $        -

Non Cash Activities:
Asset acquired through capital
 lease obligation                       $        -    $       -     $   19,000


      See accompanying report and notes to consolidated financial statements



                         OUT-TAKES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


                             Basis of Presentation
                             ---------------------
The accompanying consolidated financial statements include the accounts of Out-
Takes, Inc. (the Company') incorporated under the laws of the state of Delaware
on March 18, 1992 and its wholly owned subsidiary, Los Alamos Energy, LLC
(LAE') formed under the laws of the state of California as a Limited Liability
Company during June 1996. All significant inter-company accounts and
transactions have been eliminated.

The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States
of America, which contemplate continuation of the Company as a going concern.
As of March 31, 2002, the Company has a working capital deficit of $2,994,250
and has incurred a substantial loss from operations for the year ended March
31, 2002 totaling $4,835,665. The Company has also wound down its operations
and is currently redeveloping its business plan.

In view of the matters described in the preceding paragraph, recoverability of
a major portion of the recorded asset amounts shown in the accompanying
consolidated balance sheet is dependent upon continued operations of the
Company, which, in turn, is dependent upon the Company's ability to continue to
raise capital and generate positive cash flows from operations.  If the Company
is unable to obtain such financing, the Company will not be able to formulate a
new business plan, which could have an adverse effect on the Company's
financial condition and results of operation. These factors raise substantial
doubt about the Company's ability to continue as a going concern.  The
consolidated financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or amounts and

<PAGE>
classifications of liabilities that might be necessary should the Company be
unable to continue its existence.

Management plans to take, or has taken, the following steps that it believes
will be sufficient to provide the Company with the ability to continue in
existence:

* The Company is seeking additional equity or debt financing.  There can be no
assurances that sufficient financing will be available on terms acceptable to
the Company;

* The Company is also seeking out leverage able acquisition opportunities that
would be complimentary to its existing business and that will provide common
synergies for the future; and

* The Company is reformulating its current business plan and as of March 31,
2002 there are no definitive plans in place.

Management believes that actions presently being taken to revise the Company's
operating and financial requirements provide the opportunity for the Company to
continue as a going concern.


                               Nature of Business
                               ------------------
The Company's principal business activity was the conversion of such natural
gas into electricity, which is then sold to retail providers of consumer
electricity. The Company wound down its operations during the year ended March
31, 2002, and is in the process of reformulating its current business plan.  No
formal plans are in place.


                                Use of Estimates
                                ----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and
expenses during the periods presented.  Actual results could differ from those
estimates.


                              Revenue Recognition
                              -------------------
Revenues are recorded when electrical energy is drawn by its customers (retail
energy providers). Provisions for discounts to customers, estimated returns and
allowances, and other adjustments are provided for in the same period the
related revenues are recorded.

                           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,
2002 and 2001.



<PAGE>


                              Accounts Receivable
                              -------------------
Accounts receivable are shown net of the allowance for bad debts of $21,313 and
$117,239 at March 31, 2002 and 2001.


                         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.

The estimated service lives of property, plant and equipment are as follows:

          Automobile                5 years
          Office equipment          7 years
          Computer                  5 years
          Generators                7 years


                                Intangible Asset
                               ------------------
Intangible asset consisted of goodwill relating to the acquisition of LAE.
Goodwill was recognized for the excess of purchase price over the net assets
acquired and was being amortized on a straight-line basis over 40 years. Should
events or circumstances occur subsequent to the acquisition of a business which
bring into question the realizable value or impairment of the related Goodwill,
the Company will evaluate the remaining useful life and balance of Goodwill and
make adjustments, if required.  The Company's principal consideration in
determining impairment includes the strategic benefit to the Company of the
particular assets as measured by undiscounted current and expected future
operating income of that specified groups of assets and expected undiscounted
future cash flows.  As of April 1, 2001, the Company determined an impairment
of the Goodwill had occurred and has recognized an impairment expense of
$4,062,321 in the accompanying consolidated statement of operations (see note
3).


                            Earnings (loss) per share
                           -------------------------
In accordance with SFAS No. 128, Earnings Per Share,' the basic loss per common
share is computed by dividing net loss available to common stockholders by the
weighted average number of common shares outstanding.  Diluted loss per common
share is computed similarly to basic loss per common share, except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive.  At March 31, 2002, 2001 and
2000, the Company did not have any dilutive common stock equivalents.

                               Long-Lived Assets
                               -----------------
In accordance with SFAS 121 Accounting For The Impairment of Long-Lived Assets
and For Long-Lived Assets to Be Disposed Of,' long-lived assets to be held and
used are analyzed for impairment whenever events or changes in circumstances
<PAGE>
indicate that the related carrying amounts may not be recoverable.   The
Company evaluates at each balance sheet date whether events and circumstances
have occurred that indicate possible impairment.   If there are indications of
impairment, the Company uses future undiscounted cash flows of the related
asset or asset grouping over the remaining life in measuring whether the assets
are recoverable.   In the event such cash flows are not expected to be
sufficient to recover the recorded asset values, the assets are written down to
their estimated fair value.   Long-lived assets to be disposed of are reported
at the lower of carrying amount or fair value of the asset less cost to sell.


                                  Income Taxes
                                  ------------
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases.  Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.  Deferred income tax expense represents the change during the
period in the deferred tax assets and deferred tax liabilities.  The components
of the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics.  Realization of the
deferred tax asset is dependent on generating sufficient taxable income in
future years.  Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized.


                            Stock-Based Compensation
                      ------------------------------------
SFAS No. 123, Accounting for Stock-Based Compensation,' encourages, but does
not require, companies to record compensation cost for stock-based employee
compensation plans at fair value.  The Company has chosen to continue to
account for stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related Interpretations.  Accordingly, compensation
cost for stock options is measured as the excess, if any, of the quoted market
price of the Company's stock at the date of the grant over the amount an
employee must pay to acquire the stock.  For stock options issued to non-
employees, the issuance of stock options is accounted for based on the fair
value of the consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable.  Compensation expense is
recognized in the consolidated financial statements for stock options granted
to non-employees in the period in which the consideration is obtained from the
non-employee.

                      Fair Value of Financial Instruments
                      -----------------------------------
The carrying amount of the Company's accounts receivable, other current assets,
notes payable, accounts payable and accrued expenses, none of which is held for
trading, approximates their estimated fair values due to the short-term
<PAGE>
maturities of those financial instruments. The carrying value of long-term debt
approximates fair value as the related interest rate approximates current
market rates.


                              Comprehensive Income
                              --------------------
SFAS No. 130, Reporting Comprehensive Income,' establishes standards for the
reporting and display of comprehensive income and its components in the
financial statements.  As of March 31, 2002 and 2001, the Company has no items
that represent other comprehensive income and, therefore, has not included a
schedule of comprehensive income in the financial statements.


                               Segment Reporting
                               -----------------
Based on the Company's integration and management strategies, the Company
operated in a single business segment.  For the period ended December 31, 2002
and 2001, all revenues have been derived from domestic operations.


                                  Advertising
                                  -----------
The Company expenses advertising costs when incurred.  The Company did not
incur any advertising costs during the years ended March 31, 2002, 2001 and
2000.


                         New Accounting Pronouncements
                         -----------------------------
In July 2001, the FASB issued SFAS No. 141 Business Combinations.'  SFAS No.
141 supersedes Accounting Principles Board (APB') No. 16 and requires that any
business combinations initiated after June 30, 2001 be accounted for as a
purchase, therefore, eliminating the pooling-of-interest method defined in APB
16.  The statement is effective for any business combination initiated after
June 30, 2001, and shall apply to all business combinations accounted for by
the purchase method for which the date of acquisition is July 1, 2001 or later.
The adoption of this statement will not have a material impact to the Company's
financial position or results of operations since the Company has not
participated in such activities covered under this pronouncement.

In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangibles.'
SFAS No. 142 addresses the initial recognition, measurement and amortization of
intangible assets acquired individually or with a group of other assets (but
not those acquired in a business combination), and addresses the amortization
provisions for excess cost over fair value of net assets acquired or
intangibles acquired in a business combination.  The statement is effective for
fiscal years beginning after December 15, 2001, and is effective July 1, 2001
for any intangibles acquired in a business combination initiated after June 30,
2001.  The Company does not expect the adoption to have a material impact on
the Company's financial position or results of operations.



<PAGE>

In October 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations,' which requires companies to record the fair value of a liability
for asset retirement obligations in the period in which they are incurred.  The
statement applies to a company's legal obligations associated with the
retirement of a tangible long-lived asset that results from the acquisition,
construction, and development or through the normal operation of a long-lived
asset.  When a liability is initially recorded, the company would capitalize
the cost, thereby increasing the carrying amount of the related asset.  The
capitalized asset retirement cost is depreciated over the life of the
respective asset while the liability is accreted to its present value.  Upon
settlement of the liability, the obligation is settled at its recorded amount
or the company incurs a gain or loss.  The statement is effective for fiscal
years beginning after June 30, 2002.  The Company does not expect the adoption
to have a material impact to the Company's financial position or results of
operations.

In October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets.'  Statement 144 addresses the accounting and
reporting for the impairment or disposal of long-lived assets.  The statement
provides a single accounting model for long-lived assets to be disposed of.
New criteria must be met to classify the asset as an asset held-for-sale.  This
statement also focuses on reporting the effects of a disposal of a segment of a
business.  This statement is effective for fiscal years beginning after
December 15, 2001.  The Company does not expect the adoption to have a material
impact to the Company's financial position or results of operations.

In April 2002, the FASB issued Statement NO. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains
and Losses from Extinguishment of Debt" and amendment of that Statement, FASB
Statement No. 64, "Extinguishment of Debt Made to Satisfy Sinking-Fund
Requirements" and FASB Statement No. 44, "Accounting for Intangible Assets of
Motor Carriers". This Statement amends FASB Statement No. 13, "Accounting for
Leases", to eliminate an inconsistency between the required accounting for
sale-lease back transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. The Company does not expect the adoption to have a material
impact to the Company's financial position or results of operations.

                               Reclassifications
                               -----------------
Certain amounts reported in previous years have been reclassified to conform to
the March 31, 2002 presentation.


NOTE 2  PROPERTY AND EQUIPMENT

A summary of property and equipment are as follows:

                                       March 31, 2002     March 31, 2001
                                     ----------------   ---------------
Computers and software                $        5,589      $     5,589
Equipment and furniture                      371,923          350,633
Leased asset                                      -            19,000
Motor vehicle                                     -             2,500
                                       --------------       -------------
                                             377,512          377,722
Less: Accumulated depreciation              (230,365)        (194,010)
                                         -------------       -------------
                                      $      147,147      $   183,712
                                        =============        =============

Depreciation expense for property and equipment amounted to $36,755, $56,382,
and $55,095 respectively, for the years ended March 31, 2002, 2001 and 2000.

<PAGE>


NOTE 3  INTANGIBLE ASSET

Intangible asset consisted of the goodwill recognized relating to the excess of
purchase price over the fair value of the net assets acquired of LAE on August
31, 1998.  Goodwill was being amortized on a straight-line basis over 40 years.

Should events or circumstances occur subsequent to the acquisition of a
business which bring into question the realizable value or impairment of the
related Goodwill, the Company will evaluate the remaining useful life and
balance of Goodwill and make adjustments, if required. The Company's principal
consideration in determining impairment includes the strategic benefit to the
Company of the particular assets as measured by undiscounted current and
expected future operating income of that specified group of assets and expected
undiscounted future cash flows. As discussed in Note 1 to the consolidated
financial statements, the Company has wound down its operations during the year
ended March 31, 2002 and is in the process of reformulating its current
business plan. As of April 1, 2001, the Company determined an impairment of the
Goodwill had occurred as a result of the uncertainty of future cash flows from
operations relating to its energy business, the Company recognized an
impairment expense of $4,062,321 in the accompanying consolidated statement of
operations for the year ending March 31, 2002.

A summary of intangible assets is as follows:

                                    March 31, 2002        March 31, 2001
                                    --------------        --------------
 Goodwill                           $  4,342,784           $ 4,342,784
 Accumulated amortization               (280,553)             (280,553)
                                    --------------        --------------
                                       4,062,321             4,062,321
Impairment expense                    (4,062,321)                    -
                                    --------------        --------------
 Net Goodwill                       $           -          $ 4,062,321
                                    ==============        ==============
Amortization expense                $           -          $   108,570
                                    ==============        ==============


NOTE 4  RELATED PARTY TRANSACTIONS

The Company has related party transactions with its director and other related
parties.  The following summarizes these related party transactions:

The Company incurred and paid management fees totaling $150,000 and $105,000,
respectively, to a related party for the years ended March 31, 2002 and 2001,
respectively.

As of March 31, 2002 and 2001, the Company has accrued payables to a related
party totaling $220,521 and $178,985, respectively, for unpaid advances and
operator fees.

The Company has a month to month lease with its director totaling $750 per
month for office space.

NOTE 5  NOTES PAYABLE

A summary of outstanding notes payable is as follows:
<PAGE>
                                         March 31, 2002        March 31, 2001
                                        --------------        --------------
a.     Note Payable-Consultant           $    75,000        $    48,000
b.     Note Payable-Radovich                  30,557             30,557
c.     Notes Payable-Reeves                   40,000             25,000
d.     Note Payable-Boyd                      50,000             45,000
e.     Note Payable-Atlas                     72,983             62,984
f.     Note Payable-Coastal Resources        219,036            219,036
g.     Note Payable-Working Interest         250,279            250,279
h.     Note Payable-Hall                       4,000              4,000
i.     Note Payable-Gormley                   50,000             50,000
j.     Notes Payable-Bower                   310,000            310,000
k.     Note Payable-PCW Holdings             150,000            150,000
                                        --------------        --------------
                                         $ 1,251,855        $ 1,194,856
                                        ==============        ==============


a.     Note Payable - Consultant
       -------------------------
This is an unsecured note payable to a former financial consultant of 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.  During the year ended March 31, 2002,
this note holder filed a lawsuit against the Company.  On March 11, 2002, the
Court ordered the Company to increase the note amount to $75,000 from $48,000
as of March 31, 2002 and the Company recorded the increase in general and
administrative expenses.

b.     Note Payable - Radovich
       -----------------------
This is an unsecured promissory note that originated on September 27, 1996.
The note's original maturity date was October 27, 1996 and bears no interest.
The note is currently in default and is due on demand.  As of March 31, 2002
and 2001, the outstanding balance was $30,557.

c.     Note Payable - Reeves
       ---------------------
This is an unsecured promissory note that originated on March 30, 1998.  The
note's original maturity date was May 30, 1998 and bears interest at the rate
of 10% per annum. The note was convertible into shares of the Company's common
stock at a rate to be negotiated between the parties before the maturity.  The
note is currently in default and due on demand.  As of March 31, 2002 and 2001,
the outstanding balance was $25,000.

On December 10, 2001, the Reeves advanced the Company an additional $15,000,
due upon demand, bearing no interest.  As of March 31, 2002, the outstanding
balance of this advance was $15,000.

d.     Note Payable -  Boyd
       -------------------
This is an unsecured promissory note that originated on August 13, 1998.  This
note matured on February 13, 1999 and bears interest rate at the rate of 10%

<PAGE>
per annum.  As of March 31, 2002 and 2001, this note was in default and totaled
$45,000.

e.     Note Payable - Atlas Engineering
       --------------------------------
This is an unsecured promissory note that originated on September 15, 2000.
Monthly payments of $8,249 were due commencing October 2000.  The note bears
interest at the rate of 10% per annum.  The Company did not remit any payments
relating to this note.  Therefore, the note is currently in default and payable
on demand.  As of March 31, 2002 and 2001, the outstanding balances amounted to
$72,983 and $62,984, respectively.

f.     Note Payable - Coastal Resources Corp.
       --------------------------------------
This note was originated on June 15, 1999 and was secured by tangible and
intangible assets of the Company.  The note bears interest at the rate of 10%
per annum.  The master loan agreement specified a $300,000 maximum financing
amount and was entered into pursuant to a non-binding merger agreement between
the parties. If the merger was consummated, then the loan balance at that date
would have been credited to Coastal Resources Corp. as part of its
proportionate equity interest in the Company.  If the merger was not
consummated, then the principal balance and interest was due and payable on the
first anniversary date of each advance ranging from June 2000 through August
2000. The Company did not execute the merger agreement with this party and was
not able to make the repayments.  The note, therefore became due on demand and
is currently in due.  As of March 31, 2002 and 2001, the outstanding balance
amounted to $219,036.


g.     Note Payable - Joint Venture Working Interest
       ---------------------------------------------
These notes are pursuant to a Joint Venture Agreement executed between LAE and
the participants in development and generation of electricity from waste
natural gas activities.  The agreement specified that the 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, 2002 and 2001, the outstanding balance
amounted to $250,279.

h.     Note Payable - Hall
       -------------------
This is an unsecured promissory note that originated on January 4, 2000.  The
note's maturity date was January 4, 2001 and bears no interest.  The Company
was unable to repay this note as it became due and it is currently in default
and due on demand.  As of March 31, 2002 and 2001, the outstanding balance
amounted to $4,000.

i.     Note Payable - Gormley
       ---------------------
This is unsecured promissory note that originated on March 30, 2001.  The note
matured on September 29, 2001 and bears interest at the rate of 10% per annum.
The Company was unable to repay this note as it became due and it is currently

<PAGE>
in default and due on demand.  As of March 31, 2002 and 2001, the outstanding
balance amounted to $50,000.

j.     Notes Payable - Bower
       --------------------
These are secured promissory notes that originated during the period from
November 2000 through February 2001.  Certain of these notes are subordinated
notes are secured by certain tangible and intangible assets of the Company, and
junior in rank to senior and other certain indebtedness  and are subrogated.
and  These notes bear interest at a rate between 10% and 12%.  The Company was
unable to repay these notes as they became due and are currently in default and
due on demand.  As of March 31, 2002 and 2001, the outstanding balance amounted
to $310,000.

k.     Note Payable - PCW Holdings
       ---------------------------
These are unsecured promissory notes that originated on March 31, 2001.  The
note matured on September 30, 2001 and beared interest at the rate of 10% per
annum.  The Company was unable to repay this note as it became due and it is
currently in default and due on demand.  As of March 31, 2002 and 2001, the
outstanding balance amounted to $150,000.

NOTE 6 - LONG-TERM DEBT
This note, dated August 31, 1998, is pursuant to a share Purchase Agreement
executed between the former members' of LAE and Out-Takes, Inc.  The note bears
interest at the rate of 10% per annum and matures on August 31, 2003.  This
note is convertible into an aggregate of 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, 2002 and
2001, this conversion and reverse stock split has not been completed and the
balance of the note amounted to $4,000,000.

A summary of long-term debt maturities follows:

                              Year ended March 31,
                              --------------------
          2003                             -
          2004                     4,000,000
                                   ---------
                                   4,000,000
                                   =========


NOTE 7  COMMITMENTS AND CONTINGENCIES

                                  Office lease
                               -----------------
The Company's office lease agreement was terminated during May 2002.  Rent
expense totaled $10,200 for the years ended March 31, 2002, 2001 and 1999.



<PAGE>

                                 Capital lease
                               -----------------
The Company was the lessee of a transformer under a lease agreement expiring
July 2003.  The Company paid off this lease early during the year ended March
31, 2002.  As of March 31, 2002 and 2001, the cost of equipment held under
capital lease was $0 and $19,000, respectively, and the related accumulated
depreciation was $- and $5,202, respectively.

                             Asset lease assignment
                          ---------------------------
The Company held an asset lease agreement that generated annual income for the
Company. On March 30, 2001, the Company assigned this asset lease agreement in
lieu of cash to pay down a note payable, including accrued interest.  In
addition, the Company entered into a $150,000 promissory note, dated March 31,
2001 (See note 5k).

                            Environmental Disclosure
                        -------------------------------
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.

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.

                          Letter of intent termination
                  --------------------------------------------
In November 2000, the Company entered into a letter of intent with Atlas Power,
Inc. (Atlas') to exchange its shares for Atlas's shares.  During the year ended
March 31, 2002, the letter of intent was terminated.

NOTE 8 - INCOME TAXES

The components of the provision for income taxes are as follows:

                                    For The Years March  31,
                                                 2002       2001
                                               -------    --------
                         Current Tax Expense
                              U.S. Federal     $    -     $      -
                              State and Local       -            -
                         Total Current              -            -
                         Deferred Tax Expense
                             U.S. Federal           -            -
                              State and Local       -            -
                         Total Deferred             -            -

<PAGE>
                         Total Tax Provision
                         (Benefit) Continuing
                          Operations           $    -     $      -

The reconciliation of the effective income tax rate to the Federal statutory
rate is as follows for the years ended March 31, 2002 and 2001:

                         Federal Income Tax Rate          (34.0)%
                         Effect of Valuation Allowance     34.0 %
                         Effective Income Tax Rate          0.0 %

At March 31, 2002 and 2001, the Company had net carryforward losses of
approximately $6,100,000 and $1,270,000, respectively given effect to its
reverse merger with LAE.  Because of the current uncertainty of realizing the
benefit of the tax carryforwards, a valuation allowance equal to the tax
benefit for deferred taxes has been established.  The full realization of the
tax benefit associated with the carryforwards depends predominantly upon the
Company's ability to generate taxable income during the carryforward period.

Deferred tax assets and liabilities reflect the net tax effect of temporary
differences between the carrying amount of assets and liabilities for financial
reporting purposes and amounts used for income tax purposes.  Significant
components of the Company's deferred tax assets and liabilities are as follows:


                                                  For The Years March  31,
                                                      2002        2001
                                                    --------    --------
                  Deferred Tax Assets
                       Loss Carryforward            $2,074,000   $ 431,800
                       Less:  Valuation Allowance   (2,074,000)   (431,800)
                                                    ----------   ----------
                         Net Deferred Tax Assets   $         -   $       -
                                                   ===========    ========

The valuation allowance increased by $1,642,200 during the year ending March
31, 2002.

Net operating loss carryforwards expire starting in 2007 through 2020.  Per
year availability is subject to change of ownership limitations under Internal
Revenue Code Section 382.

NOTE 9 - CONCENTRATIONS OF CREDIT RISK
Substantially all of the consolidated revenue of the Company was generated from
the lease of it photographic studio to one entity and the sale of electricity
to Pacific Gas and Electric Company (PG&E') and the lease operator until PG&E
filed for bankruptcy in April 2001.  Beginning in May 2001, the Company sold
its energy to the California Independent System Operator through the Automatic
Power Exchange.

The summarized quarterly financial data presented below reflects all
adjustments which, in the opinion of management, are of a normal and recurring
nature necessary to present fairly the results of operations for the periods
presented:




<PAGE>
<TABLE>
<S>                           <C>              <C>          <C>           <C>          <C>
                            Total            Fourth         Third       Second        First
                        -----------      ------------     ----------   ---------    ---------
Year Ended 3/31/2002
Total net sales         $    117,719      $   (79,507)     $   1,891    $  73,429    $ 121,906
Gross profit (loss)     $     42,830      $   (70,966)     $     777    $  45,749    $  67,270
Income (loss) before
 income taxes           $ (4,835,665)     $(4,408,239)     $(163,894)   $(117,079)   $(146,453)
Net income (loss)       $ (4,835,665)     $(4,408,239)     $ (163,894)  $(117,079)   $(146,453)
Net income (loss) per share:
  Basis and diluted           ($0.24)          ($0.22)          (0.01)     ($0.01)      ($0.01)

Year Ended 3/31/2001
Total net sales          $   541,755     $   267,947      $  167,292   $   53,258   $   53,258
Gross profit (loss)      $    73,048     $   (11,459)     $  131,581   $  (23,537)  $  (23,537)
Income (loss) before
 income taxes            $    17,273     $   855,045      $   68,139   $ (197,983)  $ (707,928)

Net income (loss)        $    17,273     $   855,045      $   68,139   $ (197,983)  $ (707,928)
Net income (loss) per share:
  Basis and diluted      $      0.00     $      0.04          ($0.01)      ($0.01)      ($0.03)

Year Ended 3/31/2000
Total net sales          $   216,623     $   103,240      $   54,270   $   13,875   $   45,238
Gross profit (loss)      $     4,300     $   (12,559)     $    9,843   $   (7,655)  $   14,671
Income (loss) before
 income taxes            $  (884,110)    $  (601,605)     $  (66,848)  $  (99,484)  $ (116,173)

Net income (loss)        $  (884,110)    $  (601,605)     $  (66,848)  $  (99,484)  $ (116,173)
Net income (loss)
per share:
  Basis and diluted           ($0.04)         ($0.03)     $     0.00       ($0.01)     ($0.01)

</TABLE>

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

On August 5, 2002, the Company engaged Stonefield Josephson, Inc., Certified
Public Accountants, as the new independent accountant for the Company, to
replace Rogelio G. Castro who had been engaged to audit the company's financial
statements for the fiscal years ended March 31, 2001, 2000 and 1999. There were
no disagreements between the Company and its former independent accountants
regarding the presentation of the Company's financial statements.

                                  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                  60               Chairman, Chief Executive
                                                   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

<PAGE>
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. There were no grants of options or SAR grants given to any executive
officers during the last fiscal year. The director of the Company, James
Harvey, is reimbursed $750 per month for rent of the Company's offices and
monthly for the Company's telephone expenses.

Mr. Harvey does not receive compensation for his services.


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 few, if any, of the
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.




<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company rents offices from its President and shareholder, James C. Harvey,
on a month to month basis at a monthly rental of $750 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)



<PAGE>

     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)
<PAGE>
     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: August 14, 2002            By: James Harvey
                                      -------------------------------------
                                      James Harvey, Chief Executive Officer,
                                                 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,   August 14, 2002
       -----------------   Chief Executive Officer, Chief
       James Harvey        Financial Officer and Secretary,
                           And Sole Director