UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

       (Mark one)

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2004

          [_] TRANSITION REPORT UNDER SECTION 13 OR 15 (d)
                          OF THE EXCHANGE ACT OF 1934

               For the transition period from ________ to ________

                        Commission file number: 005-79752


                             AGU Entertainment Corp.
      ---------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


                Delaware                              84-1557072
   ---------------------------------      -------------------------------
    (State or other jurisdiction of       (IRS Employer Identification No.)
     incorporation or organization)


                          3200 West Oakland Park Blvd.
                           Lauderdale Lakes, FL 33311
      ---------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (954) 714-8100
      ---------------------------------------------------------------------
                           (Issuer's telephone number)


 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 registrant was required to file such reports), and (2) has been
    subject to such filing requirements for the past 90 days. Yes [X] No [ ]


        The number of shares of the issuer's common stock, no par value,
               outstanding as of October 31, 2004 was 22,076,749.

   Transitional Small Business Disclosure Format (check one): Yes [ ]; No [X]

<PAGE>


                             AGU ENTERTAINMENT CORP.
                 (Formerly Lexington Barron Technologies, Inc.)
                          (A Development Stage Company)

                                   FORM 10-QSB

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                     Page
<S>          <C>                                                                                     <C>
    PART I.  UNAUDITED FINANCIAL INFORMATION
    Item 1.  Financial Statements:
             Condensed Consolidated Balance Sheet as of September 30,
             2004 (unaudited)                                                                         3
             Condensed Consolidated Statements of Operations for the Three
             Months Ended September 30, 2004 and 2003 (unaudited)                                     4
             Condensed Consolidated Statements of Operations for the Nine
             Months Ended September 30, 2004 and 2003 and Inception
             through September 30, 2004 (unaudited) ...............................                   5
             Condensed Consolidated Statement of Changes in Shareholders'
             Deficiency (unaudited) ...............................................                   6
             Condensed Consolidated Statements of Cash Flows for the Nine
             Months Ended September 30, 2004 and 2003 and Inception
             through September 30, 2004 (unaudited) ...............................                   7
             Notes to Condensed Consolidated Financial Statements
             (unaudited) ..........................................................
    Item 2.  Management's Discussion and Analysis of Financial                                        8
             Condition and Results of Operations                                                     14
    Item 3.  Controls and Procedures ..............................................                  17
    PART II. OTHER INFORMATION
    Item 1.  Legal Proceedings.....................................................                  17
    Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                             17
    Item 3.  Defaults Upon Senior Securities.......................................                  18
    Item 4.  Submission of Matters to a Vote of Security
             Holders...............................................................                  18
    Item 5.  Other Information.....................................................                  19
    Item 6.  Exhibits .............................................................                  19
    SIGNATURES.....................................................................                  20
</TABLE>

                           FORWARD LOOKING STATEMENTS

      This report includes a number of "forward-looking statements" as that term
is  defined in Section  27A of the  Securities  Act of 1933,  as  amended,  (the
"Securities  Act") and Section 21E of the  Securities  Exchange Act of 1934,  as
amended (the "Exchange Act").  These  statements  reflect  management's  current
views  with  respect to future  events and  financial  performance  and  include
statements  regarding  the  intent,  belief or  current  expectations  of us and
members  of our  management  team,  as well as the  assumptions  on  which  such
statements  are  based.  Prospective  investors  are  cautioned  that  any  such
forward-looking  statements  are not guarantees of future  performance,  involve
risk and uncertainties, and that actual results may differ materially from those
contemplated by such forward-looking statements.  Readers are urged to carefully
review and consider the various disclosures made by us in this report and in our
other  reports  filed with the  Securities  and Exchange  Commission.  Important
factors  currently  known to  management  could cause  actual  results to differ
materially  from  those  in   forward-looking   statements.   See  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" for a
discussion  of such  factors.  We  undertake no  obligation  to update or revise
forward-looking  statements to reflect  changed  assumptions,  the occurrence of
unanticipated  events or changes in the future  operating  results over time. We
believe that our  assumptions  are based upon  reasonable  data derived from and
known about our  business and  operations.  No  assurances  are made that actual
results of  operations or the results of our future  activities  will not differ
materially from our assumptions.

                                       2
<PAGE>


                     Part 1. Unaudited Financial Information

Item 1. Financial Statements

                    AGU Entertainment Corp. and Subsidiaries
                 (Formerly Lexington Barron Technologies, Inc.)
                          (A Development Stage Company)
                      Condensed Consolidated Balance Sheet
                              At September 30, 2004
                                   (unaudited)


<TABLE>
<CAPTION>
<S>                                                                      <C>
Assets
Current Assets:
    Cash                                                                 $       700
    Accounts receivable, net                                                  10,664
    Note receivable, related party                                            15,500
    Prepaid expenses                                                           5,037
                                                                         -----------
      Total current assets                                                    31,901

    Property and equipment, net of accumulated depreciation of $82,255       281,057
    Intangibles, net                                                         942,835
    Other assets                                                             126,604
                                                                         -----------
      Total Assets                                                       $ 1,382,397
                                                                         ===========

Liabilities and Shareholders' Deficiency
Current Liabilities:
    Accounts payable and accrued liabilities                             $ 1,471,084
    Subordinated convertible notes                                            50,000
    Notes payable, related parties                                           481,584
    Equipment note, current                                                   11,938
    Notes payable, other                                                   2,599,000
    Capital leases payable, current                                           13,358
    Other current liabilities                                                 30,000
                                                                         -----------
      Total current liabilities                                            4,656,964

    Capital leases payable, non current                                       15,549
    Equipment note, non current                                               39,780
    Convertible note payable, net of unamortized discount of $488,356         11,644
    Notes payable, related parties - non current                             224,632
                                                                         -----------
      Total liabilities                                                    4,948,569
                                                                         -----------

    Commitments and Contingencies                                               --

Shareholders' deficiency:
    Preferred stock, no par value; 10,000,000 shares
      authorized, 0 shares issued and outstanding                               --
    Common stock, no par value; 100,000,000 shares
      authorized, 22,076,749 shares issued and outstanding                 1,046,179
    Additional paid-in capital                                               500,000
    Deficit accumulated during development stage                          (5,112,351)
                                                                         -----------
      Total shareholders' deficiency                                      (3,566,172)
                                                                         -----------

      Total liabilities and shareholders' deficiency                     $ 1,382,397
                                                                         ===========
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                       3
<PAGE>


                    AGU Entertainment Corp. and Subsidiaries
                 (Formerly Lexington Barron Technologies, Inc.)
                          (A Development Stage Company)
                 Condensed Consolidated Statements of Operations
             For the Three Months Ended September 30, 2004 and 2003
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                   2004             2003
                                               ------------    ------------
<S>                                            <C>            <C>
Revenues                                       $          -    $          -
                                               ------------    ------------
Operating Expenses
    Promotion and advertising                       575,618           1,690
    Depreciation and amortization                    56,970               -
    Other general and administrative costs        1,168,610         197,030
                                               ------------    ------------

                   Total operating expenses       1,801,198         198,720
                                               ------------    ------------

                   Operating loss                (1,801,198)       (198,720)
    Interest expense                                 54,752             196
    Other income                                    (10,760)              -
                                               ------------    ------------
                   Loss before income taxes      (1,845,190)       (198,916)

Income tax provision                                      -               -
                                               ------------    ------------

                   Net loss                    $ (1,845,190)   $   (198,916)
                                               ============    ============

Basic and diluted loss per share               $      (0.09)   $      (0.01)
                                               ============    ============

Weighted average common shares outstanding -
    Basic and diluted                            21,509,819      14,628,324
                                               ============    ============
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                       4

<PAGE>

                    AGU Entertainment Corp. and Subsidiaries
                 (Formerly Lexington Barron Technologies, Inc.)
                          (A Development Stage Company)
                 Condensed Consolidated Statements of Operations
                  For the Nine Months Ended September 30, 2004
                    and 2003, and For the Period May 20, 2003
                     (Inception) Through September 30, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              Inception to          Inception to
                                                                              December 31,          September 30,
                                                            2004                  2003                  2004
                                                        ------------          ------------          ------------
<S>                                                     <C>                   <C>                   <C>
Revenues                                                $     15,000          $       --            $    108,209
                                                        ------------          ------------          ------------

Operating Expenses
    Promotion and advertising                              1,072,849                 4,858             1,103,151
    Depreciation and amortization                            123,958                  --                 140,455
    Other general and administrative costs                 3,030,132               220,104             3,883,845
                                                        ------------          ------------          ------------

                   Total operating expenses                4,226,939               224,962             5,127,451
                                                        ------------          ------------          ------------

                   Operating loss                         (4,211,939)             (224,962)           (5,019,242)
    Interest expense                                          99,905                   196               103,869
    Other income                                             (10,760)                 --                 (10,760)
                                                        ------------          ------------          ------------
                   Loss before income taxes               (4,301,084)             (225,158)           (5,112,351)

Income tax provision                                            --                    --                    --
                                                        ------------          ------------          ------------

                   Net loss                             $ (4,301,084)         $   (225,158)         $ (5,112,351)
                                                        ============          ============          ============

Basic and diluted loss per share                        $      (0.22)         $      (0.03)         $      (0.30)
                                                        ============          ============          ============

Weighted average common shares outstanding -
    Basic and diluted                                     19,244,705             7,126,619            17,163,171
                                                        ============          ============          ============
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                       5
<PAGE>

                    AGU Entertainment Corp. and Subsidiaries
                 (Formerly Lexington Barron Technologies, Inc.)
                          (A Development Stage Company)
     Condensed Consolidated Statement of Changes in Stockholders' Deficiency
       For the Period May 20, 2003 (Inception) Through September 30, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                    Accumulated
                                                        Common Stock                Additional     Deficit During
                                              -------------------------------        Paid-In         Development
                                                     Shares        Amount            Capital           Stage              Total
                                              ------------------------------------------------------------------------------------
<S>                                             <C>              <C>                <C>               <C>             <C>
Common stock issued in exchange for cash
   on May 20, 2003 (inception)                $     14,628,324  $        400      $        -       $           -      $        400
Common stock issued in exchange for services
   on March 22, 2004                                 2,294,140        28,677               -                   -            28,677
Recapitalization as a result of merger with
   Lexington Barron Technologies, Inc.
   on April 1, 2004                                  4,230,614             -               -                   -                 -
Debt and accrued interest converted into
   common stock on April 18, 2004                      203,482       610,445               -                   -           610,445
Debt and accrued interest converted into
   common stock on June 30, 2004                        39,231       130,257               -                   -           130,257
Issuance of common stock and warrants in
   connection with issuance of convertible
   debt on September 15, 2004                          500,000             -         500,000                   -           500,000
Common stock issued in exchange for cash
   on September 20, 2004                                15,000        60,000               -                   -            60,000
Common stock issued in exchange for services
   on September 20, 2004                               165,958       216,400               -                   -           216,400
Net loss                                                     -             -               -           (5,112,351)      (5,112,351)
                                              ------------------------------------------------------------------------------------
                                              $     22,076,749  $  1,046,179      $  500,000       $   (5,112,351)    $ (3,566,172)
                                              ====================================================================================
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                       6

<PAGE>
                    AGU Entertainment Corp. and Subsidiaries
                 (Formerly Lexington Barron Technologies, Inc.)
                          (A Development Stage Company)
                 Condensed Consolidated Statements of Cash Flows
           For the Nine Months Ended September 30, 2004 and 2003, and
 For the Period May 20, 2003 (Inception) Through September 30, 2004 (Unaudited)

<TABLE>
<CAPTION>
                                                                                  Inception to   Inception to
                                                                                  December 31,   September 30,
                                                                       2004           2003           2004
                                                                   -----------    -----------    -----------
<S>                                                                <C>            <C>            <C>
Cash flows from operating activities:
     Net loss                                                      $(4,301,084)   $  (225,158)   $(5,112,351)
     Adjustments to reconcile net loss to net cash
        used in operating activities:
           Depreciation and amortization                               123,958              -        140,455
           Common stock issued as payment for services                 245,077              -        245,077
           Amortization of discount on note payable                     11,644              -         11,644
           Decrease (increase) in accounts receivable                   30,007              -        (10,664)
           Increase in prepaid expenses                                 (5,037)             -         (5,037)
           Increase in other assets                                   (122,219)        (2,785)      (126,604)
           Increase in accounts payable and accrued liabilities        644,575         96,239        981,787
           Increase in other liabilities                                30,000              -         30,000
                                                                   -----------    -----------    -----------
                       Net cash used in operating activities        (3,343,079)      (131,704)    (3,845,693)
                                                                   -----------    -----------    -----------

Cash flows from investing activities:
     Disbursements for intangibles                                    (151,035)             -       (151,035)
     Increase in note receivable, related party                              -              -        (15,500)
     Disbursements for property and equipment                         (206,137)      (102,924)      (261,868)
                                                                   -----------    -----------    -----------
                       Net cash used in investing activities          (357,172)      (102,924)      (428,403)
                                                                   -----------    -----------    -----------

Cash flows from financing activities:
     Payment of notes payable                                           (8,439)        (1,063)       (11,161)
     Proceeds from notes payable to related parties                    281,910        191,516        396,310
     Payment on capital leases                                          (8,474)             -         (9,659)
     Payment of notes payable to related parties                       (40,094)       (20,000)       (40,094)
     Proceeds from the sale of common stock                             60,000            400         60,400
     Proceeds from other notes payable                               3,279,000         63,775      3,879,000
                                                                   -----------    -----------    -----------
                       Net cash provided by financing activities     3,563,903        234,628      4,274,796
                                                                   -----------    -----------    -----------

                       Net (decrease) increase in cash                (136,348)             -            700

Cash, beginning of period                                              137,048              -              -
                                                                   -----------    -----------    -----------
Cash, end of period                                                $       700            $ -    $       700
                                                                   ===========    ===========    ===========
Supplemental disclosure of cash flow information:
        Cash paid for income taxes                                         $ -            $ -            $ -
                                                                   ===========    ===========    ===========
        Cash paid for interest                                     $    16,404    $       196    $    16,404
                                                                   ===========    ===========    ===========
     Non-cash financing activities:
        Common stock issued as payment for services                $   245,077            $ -    $   245,077
                                                                   ===========    ===========    ===========
        Conversion of liabilities to common stock                  $   740,702            $ -    $   740,702
                                                                   ===========    ===========    ===========
        Equipment acquired through capital lease obligations       $    14,637    $    10,885    $    38,149
                                                                   ===========    ===========    ===========
        Equipment acquired through notes payable                   $         -    $    63,775    $    63,775
                                                                   ===========    ===========    ===========
</TABLE>

      See accompanying notes to condensed consolidated financial statements

                                       7
<PAGE>

                    AGU Entertainment Corp. and Subsidiaries
                 (Formerly Lexington Barron Technologies, Inc.)
                          (A Development Stage Company)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         September 30, 2004 (unaudited)

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Operations

    AGU Entertainment Corp. (formerly Lexington Barron  Technologies,  Inc.) was
incorporated on August 23, 2000 to engage in financial,  operational and systems
consulting  to  startup  and  small  businesses.  Prior to April  1,  2004,  AGU
Entertainment  Corp. ("AGU") was a development  stage,  public reporting company
and did not engage in any  significant  operations  or enter  into any  material
transactions.  Prior  services  have  included  market  research,  business plan
development,  strategy  development,  financial  modeling and  forecasting,  and
pre-IPO and IPO consulting.

    Effective  April 1, 2004, AGU entered into a Share  Exchange  Agreement with
Pyramid Music Corp.  ("PMC"), a Florida  corporation having an inception date of
May 20, 2003,  whereby AGU acquired 100% of the outstanding  common stock of PMC
in exchange for issuing  16,922,464  shares of its common (see note 2). PMC is a
development  stage company and was formed for the purpose of  developing  market
share in the recording and broadcast media industries  through the establishment
of a  media  distribution  channel  and  archived  video  and  music  collection
libraries.

    PMC has two  wholly-owned  operating  subsidiaries  that are or will  become
engaged  in the  following  services:  (i)  the  formation  and  operation  of a
television  network,  The Tube  Music  Network,  Inc.,  ("The  Tube")  that airs
traditional  music videos and live concerts of contemporary  music material that
is  derived  from  archived  video and music  collection  libraries,  and (ii) a
production,   marketing  and  distribution   record  company,   Pyramid  Records
International,  Inc. ("PRI"), that has merged audio, visual and Internet content
into one corporate concept.

    On March 26, 2004, in  anticipation of the completion of the share exchange,
Lexington Barron Technologies, Inc. changed its name to AGU Entertainment Corp.

    On October 20, 2004 the Company's  shareholders approved the reincorporation
of the Company in the state of Delaware  through a merger of the Company  into a
wholly owned subsidiary  corporation  incorporated in the State of Delaware. The
reincorporation   resulted  in  the  Company  becoming  a  Delaware  corporation
effective  as of  October  21,  2004 and did not  result  in any  change  in the
Company's name, headquarters, business, jobs, management, location of any of the
Company's offices or facilities, number of employees, taxes payable to the State
of Colorado, assets, liabilities or net worth. A summary of the most significant
differences  between the rights of the  shareholders  of the Company  before and
after  the  reincorporation  merger  as a result  of the  differences  among the
Colorado (the original state of incorporation)  Business Corporation Act and the
Delaware General Corporation Law and the Articles of Incorporation and Bylaws of
the  Company  prior  to  the  Reincorporation  Merger  and  the  Certificate  of
Incorporation  and the Bylaws of AGU  Delaware  is  contained  in the  Company's
Definitive  Proxy  Statement  on  Schedule  14A filed  with the  Securities  and
Exchange Commission on October 7, 2004.

Basis of Presentation

    The unaudited  condensed  consolidated  financial  statements of AGU and its
subsidiaries  (the  "Company")  have been prepared in accordance with accounting
principles  generally  accepted  in the  United  States of America  for  interim
financial   reporting  and  the  regulations  of  the  Securities  and  Exchange
Commission  ("SEC") for quarterly  reporting.  The interim  unaudited  condensed
consolidated  financial  statements  should  be read  in  conjunction  with  the

                                       8

<PAGE>

financial  statements and notes thereto  included in AGU's annual report on Form
10-KSB as filed with the SEC for the year ended  December 31, 2003,  as amended,
and  with  the  audited  consolidated   financial  statements  of  PMC  and  its
subsidiaries included in the Company's Form 8-K/A filed with the SEC on June 15,
2004.  Management  acknowledges  its  responsibility  for the preparation of the
accompanying interim condensed  consolidated  financial statements which reflect
all adjustments considered necessary,  in the opinion of management,  for a fair
statement  of  the  results  of  interim  periods  presented.  The  accompanying
financial   statements  reflect  the  results  of  operations  of  PMC  and  its
subsidiaries  for all  periods  presented  (see note 2) and the  results  of AGU
beginning  April 1, 2004.  Because PMC was not formed  until May 20,  2003,  the
financial  statements for 2004 are not comparable to those of the prior year. In
addition,  the results of operations for the interim periods are not necessarily
indicative of the results of operations for the entire year.

Principles of Consolidation

      The accompanying consolidated financial statements include the accounts of
AGU  Entertainment  Corp., and its subsidiaries;  the Tube Music Network,  Inc.,
Pyramid  Records  International,  Inc. and Pyramid Music Corp.  All  significant
intercompany transactions have been eliminated.

Use of Estimates

      The  preparation  of financial  statements  in accordance  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure  of  contingent  assets  and  liabilities  at the  date of  financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

2. SHARE EXCHANGE AGREEMENT

    On April 1, 2004, under the terms of the Share Exchange  Agreement,  AGU (an
inactive public reporting company) acquired 100% of the stock of PMC in exchange
for 16,922,464  newly issued shares of common stock of AGU. The number of shares
of AGU exchanged in this transaction represented approximately 80% of the issued
and outstanding common stock of AGU. As a result of this transaction, the former
shareholders  of PMC own, on a fully  diluted  basis,  approximately  80% of the
outstanding common stock of the Company, resulting in a change in control.

    The transaction  was accounted for as a reverse merger and  recapitalization
whereby PMC is deemed to be the acquirer for accounting purposes. Because PMC is
deemed  to  be  the  surviving  accounting  and  reporting  entity,  only  PMC's
historical  balances and results of operations are reflected in the accompanying
financial  statements  for all periods  presented.  At April 1, 2004, AGU had no
identifiable  assets or  liabilities,  therefore the  transaction did not have a
material effect on PMC's financial condition or results of operations.

3. PREPAID EXPENSES

    On March 25, 2004, PRI committed to a marketing and promotional  expenditure
in the amount of  $400,000  in  connection  with a record  and DVD  distribution
project.  Of this amount,  $200,000 was deposited into an escrow account with an
independent trustee by one of the Company's promissory note holders, pursuant to
the terms of a trust  agreement.  As of September  30, 2004 the entire  escrowed
amount had been spent in  accordance  with the trust  agreement.  The balance in
prepaid  expenses as of September  30, 2004 pertains to a payment in advance for
production services in connection with PRI's operations.

                                       9

<PAGE>

4. INTANGIBLES

      Intangible assets at September 30, 2004 are as follows:

<TABLE>
<CAPTION>
                                                                 Balance at
                                   Value at     Accumulated     September 30,
                                  acquisition  amortization        2004
                                  ----------   -------------    ----------
<S>                                      <C>   <C>                     <C>
Distribution agreement
(see note 5)                      $  350,000   $     (58,200)   $  291,800
Other intangibles                    651,035               -       651,035
                                  ----------   -------------    ----------
Total intangibles                 $1,001,035   $     (58,200)   $  942,835
                                  ==========   =============    ==========
</TABLE>


      The  distribution  agreement is being  amortized on a straight  line basis
over a period of three  years.  Other  intangibles  pertain  to costs to develop
network logos, graphic templates and on-air intersticials for The Tube (see Note
8),  whose  national  launch is expected to take place in the fourth  quarter of
2004. The Company will begin amortizing these assets over their estimated useful
lives upon the national launch of The Tube. Aggregate  amortization expense over
the next three  years,  assuming an  estimated  useful life of two years for the
other intangibles, is expected to be as follows:


         For the year ending December 31:
         --------------------------------
         Remainder of 2004                                         $  29,300
         2005                                                        442,184
         2006                                                        442,184
         2007                                                         29,167


5. DEBT

      On March 3, 2004, PRI entered into an Assignment and Assumption  Agreement
with  Pyramid  Media  Group,  Inc.  ("PMG")  (of  which a  related  party  and a
shareholder  of the Company own a controlling  interest),  whereby PRI agreed to
assume all of the covenants and obligations of a Distribution  Agreement between
PMG and ARK 21 Records, LP ("ARK21").  The Distribution  Agreement provides that
ARK21 be the manufacturer and distributor of certain recorded music projects for
PRI through normal retail channels throughout the United States. In exchange for
the rights to the Distribution  Agreement and certain assets of PMG, PRI assumed
the obligation to repay $350,000 of notes payable to certain  principals of PMG.
PMC has  guaranteed  the payment of these notes,  which have an annual  interest
rate of 8%, and mature on May 1, 2007.  Approximately $25,000 of these notes was
paid  in  2004  and  the  outstanding  balance  as  of  September  30,  2004  is
approximately  $325,000.  The terms of these notes require  monthly  payments of
principal and interest.  The Company has not made the required monthly principal
and interest payments since June of 2004, and is currently  negotiating with the
holders to amend the payment terms of the notes,  which would include waivers of
default for the required payments that were not made.

      At March 31, 2004, the Company had outstanding  $650,000 of 5% Convertible
Subordinated  Notes due November 30, 2004.  On April 18, 2004  $600,000 of these
notes, plus $10,445 of accrued  interest,  were converted into 203,482 shares of
the  Company's  common  stock at a price of $3.00  per  share,  and  $50,000  of
Convertible  Subordinated  Notes  remained  outstanding as of September 30, 2004
(see note 12).

                                       10

<PAGE>

      On  September  15,  2004,  the  Company  issued  a  $500,000   Convertible
Promissory  Note payable to Galt Financial  Corporation  (the "Galt Note").  The
Galt Note pays  interest  quarterly  at an annual  rate of 10%,  and  matures on
September 13, 2006. In  accordance  with the terms of the Galt Note,  the lender
may convert all or any portion of the outstanding principal into common stock of
the  Company  at a  conversion  price of $1.00 per  share,  subject  to  certain
adjustments.  In connection with this  transaction,  the Company issued warrants
with a  five-year  term to purchase a total of 500,000  shares of the  Company's
common stock at a price of $1.00 per share, subject to certain adjustments.  The
Company  also issued  500,000  shares of its common  stock to a principal of the
lender as part of this transaction.

      The  issuance of the stock and  warrants,  as well as the  existence of an
embedded beneficial  conversion feature of the Galt Note resulted in the Company
recording a discount  on the Galt Note of  $500,000 as of the date of  issuance.
This discount is being accreted as interest expense from the date of issuance to
the Galt Note's maturity date. In the event of early conversion or default,  the
remaining  discount would be recognized as interest expense during the period in
which such early conversion or default occurs.

      The  carrying  value of the Galt Note at  September  30, 2004 was $11,644.
Notwithstanding the financial statement  presentation  required under accounting
principles  generally  accepted  in the United  States of  America,  the Company
remains legally obligated to repay the $500,000 principal amount on the maturity
date of the Galt Note, plus all accrued  interest thereon in accordance with the
terms of the note.

      In  addition  to the  aforementioned  convertible  notes,  the Company has
issued,  since its  inception,  5% promissory  notes in the aggregate  amount of
$3,125,000 to fund its operations. On June 30, 2004 $130,000 of these notes were
converted  into 39,231  shares of the Company's  common  stock.  In July of 2004
$15,000 of these notes were  repaid.  The  outstanding  balance on these  notes,
including  those payable to related  parties,  was  approximately  $2,980,310 at
September  30,  2004.  On  October  30,  2004,  the  Company  and the  holder of
$2,599,000  of these notes agreed to convert the notes,  plus accrued  interest,
into common stock of the Company at a  conversion  price of $3.00 per share (see
note 12).

6. STOCKHOLDERS' EQUITY

      On April 18,  2004  $600,000  of the  Company's  Convertible  Subordinated
Notes, plus $10,445 of accrued  interest,  were converted into 203,482 shares of
the  Company's  common  stock at a price of $3.00 per  share.  On June 30,  2004
$130,000  of notes  payable and $257 of accrued  interest  were  converted  into
39,231  shares of the  Company's  common stock at an average  price of $3.30 per
share.

      During the nine months ended  September 30, 2004,  the Company  recognized
expense  of  $245,077  based on the  estimated  fair  value of shares  issued in
connection  with services  rendered to the Company.  In addition,  on August 19,
2004 the Company  issued  15,000  shares of common stock in exchange for cash of
$60,000.

7. EARNINGS PER SHARE

      Basic  income or loss per share is computed by dividing net income or loss
attributable  to common  shareholders  by the weighted  average number of shares
outstanding  during the year.  Diluted income or loss per share  attributable to
common  shareholders  further  considers  the impact of  dilutive  common  stock
equivalents.  Diluted loss per share has not been  presented  separately for the
three and nine months  ended  September  30, 2004 and 2003 because the effect of
the  additional  shares  which  would  be  issued,  assuming  conversion  of the
convertible  note  and  debentures,  are  anti-dilutive  for the  aforementioned
periods.

8. COMMITMENTS AND CONTINGENCIES

      In June of 2004 the Company  entered into an agreement  with Radical Media
Inc.  ("Radical") whereby Radical will design and develop network logos, graphic
templates,  and on-air  intersticials for The Tube. In accordance with the terms
of the  agreement,  the Company is required to pay  $200,000  and is required to
issue 112,500 shares of its common stock, which the contract values at $450,000,
to Radical prior to August 31, 2004.  The Company  recorded the entire  $650,000
commitment as an  intangible  asset.  The  remaining  $50,000 of cash and 84,375
shares of stock  consideration  that has yet to be paid as of September 30, 2004
are reflected in Other Current  Liabilities on the Company's  balance sheet. The
Company  expects to settle this  liability  with  Radical  prior to December 31,
2004.

                                       11

<PAGE>

      On September 14, 2004 the Company entered into an agreement,  subsequently
amended on October 25, 2004,  to purchase  certain real  property in  Lauderdale
Lakes,  Florida (the  "Lauderdale  Property").  The Company  anticipates  that a
significant portion of its future operations, as well as its principal executive
offices,  will be located  at the  Lauderdale  Property.  Under the terms of the
agreement,  as amended,  the Company  issued 275,000 shares its common stock and
paid  $150,000  cash to the seller  during  October  and  November  of 2004 as a
non-refundable  deposit.  The purchase price of the Lauderdale  Property will be
comprised of (i) 275,000  shares of the Company's  common stock (ii) $822,500 in
cash and (iii) a 6.5% promissory note in the principal amount of $7,000,000 made
by the Company in favor of the seller, paying interest monthly and maturing upon
the first anniversary of the date of closing.  A $250,000 principal payment will
be due on this  promissory  note on the six  month  anniversary  of the  date of
closing.  The  seller  will  be  able  to  convert  all or any  portion  of this
promissory  note into  shares  of the  Company's  common  stock at any time at a
conversion  price of $3.50  per  share,  subject  to  certain  adjustments.  The
transaction is expected to close on November 30, 2004.

      In accordance with the terms of the purchase  agreement,  the Company will
also  obtain a right of first  offer to purchase  from the seller  certain  real
property located directly adjacent to the property being purchased.  The Company
also issued  25,000  shares of common stock as a  commission  to an entity which
facilitated the transaction between the buyer and seller.

      Although the Company,  as of September 30, 2004, had no legal proceedings,
on October 13, 2004, the Company's  subsidiary,  the Tube Music  Network,  Inc.,
received   notification  from  a  television  channel  featuring  music  related
programming  that the circle logo used by The Tube is  "confusingly  similar" to
the circle logo used by that television channel,  supporting claims of trademark
infringement and unfair competition.  On November 3, 2004, the Company responded
to the  October  13  letter  stating  that it does not  believe  the  logos  are
confusingly similar or that any trademark infringement has occurred. The Company
intends to vigorously  defend any challenge to its use of its logo. From time to
time,  the Company may be involved as plaintiff  or  defendant in various  legal
proceedings arising in the usual course of business.


9. RECENT ACCOUNTING PRONOUNCEMENTS

      In January 2003, the FASB issued  Interpretation Number 46, "Consolidation
of Variable Interest Entities" ("FIN No. 46"). This Interpretation of Accounting
Research Bulletin ("ARB") No. 51, "Consolidated  Financial Statements," provides
guidance for  identifying a controlling  interest in a variable  interest entity
("VIE")  established  by means  other  than  voting  interests.  FIN No. 46 also
requires  consolidation  of a VIE by an enterprise that holds such a controlling
interest.  In December  2003,  FASB  completed its  deliberations  regarding the
proposed  modification  to FIN No. 46 and issued  Interpretation  Numbers 46 (R)
"Consolidation  of Variable Interest Entities - an Interpretation of ARB No. 51"
("FIN No. 46 (R)").  The decisions  reached included a deferral of the effective
date and  provisions  for  additional  scope  exceptions  for  certain  types of
variable  interests.  Application  of FIN No. 46 (R) is  required  in  financial
statements  of public  entities  that have  interests in VIEs or potential  VIEs
commonly  referred  to as special  purpose  entities  for periods  ending  after
December  15,  2004.  The  adoption of FIN No. 46 (R) is not expected to have an
impact on the Company's consolidated  financial position,  results of operations
or cash flows.

      In March 2004, the U.S. Securities and Exchange Commission's Office of the
Chief Accountant and the Division of Corporate Finance released Staff Accounting
bulletin  ("SAB")  No.  105,  "Loan  Commitments  Accounted  for  as  Derivative
Instruments".  This  bulletin  contains  specific  guidance  on the  inputs to a
valuation-recognition  model to measure loan  commitments  accounted for at fair
value, and requires that fair-value measurement include only differences between
the guaranteed  interest rate in the loan  commitment and market  interest rate,
excluding any expected future cash flows related to the customer relationship or
loan  servicing.  In addition,  SAB105 requires the disclosure of the accounting
policy for loan commitments,  including methods and assumptions used to estimate
the fair value of loan commitments,  and any associated hedging strategies.  SAB
105 is effective for derivative instruments entered into subsequent to March 31,
2004 and should also be applied to existing instruments as appropriate.

      The Company has not yet completed its  evaluation of SAB 105, but does not
anticipate a material impact on the financial statements.

                                       12

<PAGE>

10. GOING CONCERN

      The  accompanying  consolidated  financial  statements  have been prepared
assuming  that the Company  will  continue  as a going  concern.  The  Company's
financial  condition  and  operating  results,  specifically  a working  capital
deficiency  of  approximately  $4.6  million,  a  shareholders'   deficiency  of
approximately  $3.6  million,  a net loss from  operations  since  inception  of
approximately  $5.1 million and net cash used in operations  since  inception of
approximately  $3.8  million,  raise  substantial  doubt  about its  ability  to
continue  as  a  going  concern.   The  Company's   existence  is  dependent  on
Management's ability to develop profitable  operations and resolve the Company's
liquidity  problems.   Management  anticipates  that  the  Company  will  attain
profitable status and improve its liquidity through the continued development of
market  share in the  recording  and  broadcast  media  industries  through  the
development  of a media  distribution  channel  and  archived  video  and  music
collection libraries.

     The Company is attempting to complete a substantial  equity  offering prior
to  December  31,  2004  in  order  to  provide  for  working  capital,  capital
expenditures and business expansion. There can be no assurances that the Company
will be  successful  in  completing  such an  offering.  If the  Company  is not
successful in raising additional  capital,  its financial condition and business
operations will be adversely affected. Moreover, if the Company is successful in
implementing  its initial  business plan, it will need to raise additional funds
in order to finance more rapid expansion,  develop new and enhanced services and
products, and respond to competitive pressures.

      These  financial  statements  do not  include any  adjustments  that might
result from the outcome of this uncertainty.


11.   RELATED PARTY TRANSACTIONS

      On July 25, 2003 the Company  executed three  promissory  notes with three
shareholders,  totaling  $114,400.  The notes are due November 30, 2004 and bear
interest at 5% annually.  During June 2004, the Company  received loans from two
shareholders  totaling $235,000 and executed 5% promissory notes,  which are due
June 30, 2005.  In July and August of 2004 the Company  received  loans from two
shareholders  totaling  $46,910 and executed 5%  promissory  notes which are due
October 30, 2004, and repaid $15,000 to a shareholder  (see note 12 of extension
of related party note due dates).

      On March 3,  2004,  in  connection  with the  Distribution  Agreement  and
assignment  of  certain  assets of PMG (see Note 5),  the  Company  assumed  the
obligation  to  repay  $350,000  of notes  payable  to two  shareholders  of the
Company.  The notes have an annual  interest rate of 8%.  Payments  commenced in
March of 2004,  and the balance due as of September  30, 2004 was  approximately
$325,000.  The terms of these notes  require  monthly  payments of principal and
interest.  The Company has not made the required monthly  principal and interest
payments  since June of 2004, and is currently  negotiating  with the holders to
amend the payment terms of the notes, which would include waivers of default for
the required payments that were not made.

      Accounts  payable  to  related  parties  at  September  30,  2004  totaled
approximately  $158,000.  Included  in this  amount was  $28,000  in  consulting
services and expenses provided by another shareholder, and $13,000 in consulting
services provided by a director.

      An officer,  shareholder  and  director  of the Company  agreed to defer a
portion of salary,  payable  under an employment  agreement,  until such time as
adequate funds become  available.  The amount deferred at September 30, 2004 was
$89,000.  Additionally,  there was also a note  receivable  from this officer at
September 30, 2004 of $15,500.

                                       13

<PAGE>

12. SUBSEQUENT EVENTS

      On October 1, 2004, the maturity dates of promissory  notes due to related
parties in the amount of $256,810 were extended from October 30, and November 1,
2004 to June 30, 2005.

      In October of 2004, the Company issued  additional 5% promissory  notes in
the  aggregate   principal  amount  of  $225,000  due  November  15,  2004,  and
convertible  subordinated  debentures in the principal amount of $228,000 with a
conversion  price of $3.00  per  share,  subject  to  certain  adjustments.  The
debentures become due at various dates in October and November of 2006.

      On October 30, 2004, $2,599,000 of the Company's 5% promissory notes, plus
accrued interest of $70,480,  was converted into 889,827 shares of the Company's
common stock. On November 3, 2004, the $50,000 convertible subordinated that had
been  outstanding  as of September 30, 2004 was converted  into 41,000 shares of
the Company's common stock.


Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

Overview

      AGU Entertainment Corp. (formerly Lexington Barron Technologies, Inc.) was
incorporated on August 23, 2000 to engage in financial,  operational and systems
consulting  to  startup  and  small  businesses.  Prior to April  1,  2004,  AGU
Entertainment  Corp. ("AGU") was a development  stage,  public reporting company
and did not engage in any  significant  operations  or enter  into any  material
transactions.  Prior  services  have  included  market  research,  business plan
development,  strategy  development,  financial  modeling and  forecasting,  and
pre-IPO and IPO consulting.

      Effective April 1, 2004, AGU entered into a Share Exchange  Agreement with
Pyramid Music Corp.  ("PMC"),  a corporation having an inception date of May 20,
2003,  whereby  AGU  acquired  100% of the  outstanding  common  stock of PMC in
exchange  for  issuing  16,922,464  shares  of  its  common  (see  Note 2 to the
consolidated financial  statements).  PMC is a development stage company and was
formed for the purpose of developing market share in the recording and broadcast
media industries through the establishment of a media  distribution  channel and
archived  video  and  music  collection   libraries.   On  March  26,  2004,  in
anticipation  of  the  completion  of  the  share  exchange,   Lexington  Barron
Technologies, Inc. changed its name to AGU Entertainment Corp.

      As a result of the share  exchange,  AGU is the parent company of PMC. PMC
has two wholly-owned  operating  subsidiaries that are or will become engaged in
the following services: (i) the formation and operation of a television network,
The Tube Music Network,  Inc., ("The Tube") that airs  traditional  music videos
and live concerts of  contemporary  music material that is derived from archived
video and music  collection  libraries,  and (ii) a  production,  marketing  and
distribution record company,  Pyramid Records International,  Inc. ("PRI"), that
has merged audio, visual and Internet content into one corporate concept.

      The Tube is a 24-hour per day broadcast  digital  television  network that
will deliver high quality music video, audio,  pay-per-view options and commerce
to digital viewers nationally.  Its national launch is expected to take place in
the fourth  quarter of 2004 or early in the first quarter of 2005.  The Tube can
currently  be seen in a limited  number of  households  in various  parts of the
United States.

      In the late  1990's,  broadcasters  throughout  the country  were  granted
portions  of the  airwaves  at no cost with the  understanding  that they  would
provide free digital  signals as part of the U.S.  government's  desire for high
definition   television.   However  due  to   improvements   in  digital  signal
compression,   the  bandwidth  required  to  broadcast  digital  television  was
substantially  reduced,  leaving  broadcasters  with excess  bandwidth to use at
their discretion.  As a result,  there are currently a number of media companies
that have the ability to offer a digital quality picture over the air directly

                                       14

<PAGE>

to consumers and indirectly  through the cable and satellite  operators' digital
box using surplus  bandwidth  from local  broadcasters.  These media outlets can
offer  additional  channels to broadcast  local news,  sports,  weather or other
specialty services like The Tube. We expect to gain significant distribution for
the Tube by reaching  agreements with these service  providers to air the Tube's
digital signal.  We are currently in negotiations  with several of these service
providers,  and expect to  eventually  leverage  this  market  penetration  into
households served by larger cable and satellite systems.

      PRI will produce  both studio  albums and DVD  concerts,  and has recently
entered into several agreements for distribution.

      The growth and  development  of our business  will  require a  significant
amount of  additional  working  capital.  We currently  have  limited  financial
resources  and  based  on our  current  operating  plan,  we will  need to raise
additional capital in order to continue as a going concern.  We currently do not
have  adequate  cash to meet our  short or long  term  objectives.  In the event
additional  capital is raised,  it may have a  dilutive  effect on the  existing
shareholders of the Company.

      On   October   20,   2004  the   Company's   shareholders   approved   the
reincorporation  of the Company in the state of Delaware through a merger of the
Company into a wholly owned subsidiary corporation  incorporated in the State of
Delaware.  The  reincorporation  resulted  in the  Company  becoming  a Delaware
corporation effective as of October 21, 2004 and did not result in any change in
the Company's name, headquarters, business, jobs, management, location of any of
the Company's offices or facilities,  number of employees,  taxes payable to the
State of  Colorado,  assets,  liabilities  or net  worth.  A summary of the most
significant  differences  between the rights of the  shareholders of the Company
before and after the reincorporation merger as a result of the differences among
the Colorado Business  Corporation Act and the Delaware General  Corporation Law
and the  Articles  of  Incorporation  and  Bylaws  of the  Company  prior to the
Reincorporation  Merger and the Certificate of  Incorporation  and the Bylaws of
AGU  Delaware is  contained  in the  Company's  Definitive  Proxy  Statement  on
Schedule 14A filed with the  Securities  and Exchange  Commission  on October 7,
2004.

Liquidity and Capital Resources

      As a development stage company with no operating  history,  we are subject
to all the  substantial  risks  inherent in the  development  of a new  business
enterprise within an extremely  competitive  industry. We cannot assure you that
the business will continue as a going concern or ever achieve profitability. Due
to the absence of an operating  history and the emerging nature of the market in
which we  compete,  we  anticipate  operating  losses  until such time as we can
develop a substantial  and stable  revenue  base.  From our inception on May 20,
2003 through  September 30, 2004, we had revenues of $108,000 and incurred a net
loss  of  $5.1  million.   Our  financial   condition  and  operating   results,
specifically  a working  capital  deficiency of  approximately  $4.6 million,  a
shareholders'  deficit  of  approximately  $3.6  million,  and net cash  used in
operations of approximately $3.3 million in the first nine months of 2004, raise
substantial doubt about our ability to continue as a going concern.

      Since our inception, we have financed our operations through numerous debt
issuances. We issued $650,000 of 5% Convertible  Subordinated Notes, $600,000 of
which were  subsequently  converted  into 203,482  shares of common stock of the
Company at a price of $3.00 per share. We also issued approximately  $3,125,000,
of 5% promissory  notes since our  inception,  $130,000 of which were  converted
into common stock on June 30, 2004 and  $2,599,000 of which were  converted into
common stock on October 30, 2004.  Our remaining  outstanding  promissory  notes
mature on November 15, 2004 and June 30, 2005.

      On September 15, 2004, we issued a $500,000  Convertible  Promissory  Note
payable to Galt  Financial  Corporation  (the "Galt  Note").  The Galt Note pays
interest  quarterly at an annual rate of 10%, and matures on September 13, 2006.
In accordance with the terms of the Galt Note, the lender may convert all or any
portion of the  outstanding  principal  into  common  stock of the  Company at a
conversion  price of $1.00 per share.  In connection with this  transaction,  we
issued  warrants  to the lender  with a  five-year  term to  purchase a total of
500,000  shares of the  Company's  common  stock at a price of $1.00 per  share,
subject to certain  adjustments.  We also  issued  500,000  shares of our common
stock to a principal of the lender as part of this transaction.

      On March 3, 2004 PRI entered into an Assignment and  Assumption  Agreement
with Pyramid Media Group,  Inc.  ("PMG") whereby PRI agreed to assume all of the
covenants and obligations of a Distribution Agreement between PMG and ARK 21

                                       15

<PAGE>


Records, LP ("ARK21").  In exchange for the rights to the Distribution Agreement
and certain assets of PMG, PRI assumed the obligation to repay $350,000 of notes
payable to certain  principals of PMG. PMC has  guaranteed  the payment of these
notes,  which have an annual interest rate of 8% and mature on May 1, 2007. Alan
Jacobi,  President  of PRI,  is an owner  and  controlling  shareholder  of PMG.
Approximately  $25,000  of these  notes  was  paid in 2004  and the  outstanding
balance as of June 30, 2004 is approximately  $325,000. The terms of these notes
require  monthly  payments  of  principal  and  interest.  We have  not made the
required  monthly  principal and interest  payments  since June of 2004, and are
currently  negotiating with the holders to amend the payment terms of the notes,
which would include  waivers of default for the required  payments that were not
made.

      In June of 2004 we  entered  into an  agreement  with  Radical  Media Inc.
("Radical")  whereby  Radical  will design and develop  network  logos,  graphic
templates,  and on-air  intersticials for The Tube. In accordance with the terms
of the  agreement,  we are  required to pay  $200,000  and are required to issue
112,500  shares of our common stock.  The  remaining  $50,000 of cash and 84,375
shares of stock  consideration  that has yet to be paid as of September 30, 2004
are reflected in Other Current  Liabilities on the our balance sheet.  We expect
to settle this liability with Radical prior to December 31, 2004.

      On September 14, 2004 we entered into an agreement,  subsequently  amended
on October 25, 2004,  to purchase  certain real  property in  Lauderdale  Lakes,
Florida (the "Lauderdale Property"). We anticipate that a significant portion of
our future  operations,  as well as our  principal  executive  offices,  will be
located  at the  Lauderdale  Property.  Under  the  terms of the  agreement,  as
amended, we issued 275,000 shares our common stock and paid $150,000 cash to the
seller in October and November of 2004 as a non-refundable deposit. The purchase
price of the Lauderdale  Property will be comprised of (i) 275,000 shares of our
common  stock  (ii)  $822,500  in cash and (iii) a 6.5%  promissory  note in the
principal  amount of  $7,000,000  made by the  Company  in favor of the  seller,
paying interest  monthly and maturing upon the first  anniversary of the date of
closing. A $250,000 principal payment will be due on this promissory note on the
six month anniversary of the date of closing. The seller will be able to convert
all or any portion of this  promissory  note into shares of our common  stock at
any  time  at a  conversion  price  of  $3.50  per  share,  subject  to  certain
adjustments. The transaction is expected to close on November 30, 2004.

      On October 30, 2004,  $2,599,000 of our 5% promissory  notes, plus accrued
interest of $70,480,  was converted into 889,827 shares of our common stock.  On
November 3, 2004 the $50,000 convertible  subordinated that had been outstanding
as of September 30, 2004 was converted into 41,000 shares of our common stock.

      The growth and  development  of our business  will  require a  significant
amount of  additional  working  capital.  We currently  have  limited  financial
resources  and  based  on our  current  operating  plan,  we will  need to raise
additional capital in order to continue as a going concern.  We currently do not
have  adequate  cash to meet our  short or long  term  objectives.  In the event
additional  capital is raised,  it may have a  dilutive  effect on the  existing
shareholders of the Company.

      We are attempting to complete a substantial  debt or equity offering prior
to  December  31,  2004  in  order  to  provide  for  working  capital,  capital
expenditures  and  business  expansion.  We  cannot  assure  you that we will be
successful  in  completing  such an offering,  in executing the business plan or
achieving profitability. If we are not successful in raising additional capital,
our financial  condition  and business  operations  will be adversely  affected.
Moreover,  if we are successful in  implementing  our initial  business plan, we
will need to raise  additional  funds in order to finance more rapid  expansion,
develop new and  enhanced  services  and  products,  and respond to  competitive
pressures.

      Cash used in operations  for the nine months ended  September 30, 2004 was
$3,343,000,  as we did not generate any significant  revenues to offset our cash
operating  expenses,  which  consisted  primarily  of  payroll,   promotion  and
advertising expenses and fees for professional services. We expect this trend to
continue  until such time as we can  complete  a  substantial  equity  offering,
launch The Tube nationally and emerge from the development stage.

                                       16

<PAGE>

      Cash  used in  investing  activities  amounted  to  $357,000,  as we spent
$150,000 in cash under the  agreement  with  Radical and  $206,000 on  property,
plant and equipment. We received cash from financing activities in the amount of
$3,564,000 as a result of the issuance of notes payable, including $282,000 from
two of our  shareholders,  and the issuance of common  stock.  Additionally,  in
October we  received,  from an existing  noteholder  an  additional  $225,000 in
exchange for promissory  notes due November 15, 2004, and we issued  $228,000 in
convertible subordinated debentures which become due on various dates in October
and November of 2006.

Results of Operations

      For the three  months  ended  September  30,  2004 we  incurred  operating
expenses of $1,801,000 and a net loss of $1,845,000.  Our business activities to
date have been primarily to develop the  infrastructure  necessary to market and
launch  The Tube,  and to explore  potential  musical  projects  as we build our
recorded music distribution business.

      For the nine months ended  September  30, 2004 we had revenues of $15,000,
operating  expenses  of  $4,227,000  and a net  loss of  $4,301,000.  We  expect
revenues and direct expenses to increase in the fourth quarter as record and DVD
shipments pertaining to several of our recorded music projects have commenced.

Quantitative and Qualitative Disclosures About Market Risk

We do not have any major market risk  exposure to changing  interest  rates.  We
currently  do not engage in any  hedging  activities  to manage  this  risk.  At
September  30,  2004,  we had no  outstanding  indebtedness  that was subject to
changes in interest rates.

Recently Issued Accounting Pronouncements

      In January 2003, the FASB issued  Interpretation Number 46, "Consolidation
of Variable Interest Entities" ("FIN No. 46"). This Interpretation of Accounting
Research Bulletin ("ARB") No. 51, "Consolidated  Financial Statements," provides
guidance for  identifying a controlling  interest in a variable  interest entity
("VIE")  established  by means  other  than  voting  interests.  FIN No. 46 also
requires  consolidation  of a VIE by an enterprise that holds such a controlling
interest.  In December  2003,  FASB  completed its  deliberations  regarding the
proposed  modification  to FIN No. 46 and issued  Interpretation  Numbers 46 (R)
"Consolidation  of Variable Interest Entities - an Interpretation of ARB No. 51"
("FIN No. 46 (R)").  The decisions  reached included a deferral of the effective
date and  provisions  for  additional  scope  exceptions  for  certain  types of
variable  interests.  Application  of FIN No. 46 (R) is  required  in  financial
statements  of public  entities  that have  interests in VIEs or potential  VIEs
commonly  referred  to as special  purpose  entities  for periods  ending  after
December  15,  2004.  The  adoption of FIN No. 46 (R) is not expected to have an
impact on the Company's consolidated  financial position,  results of operations
or cash flows.

      In March 2004, the U.S. Securities and Exchange Commission's Office of the
Chief Accountant and the Division of Corporate Finance released Staff Accounting
Bulletin  ("SAB")  No.  105,  "Loan  Commitments  Accounted  for  as  Derivative
Instruments."  This  bulletin  contains  specific  guidance  on the  inputs to a
valuation-recognition  model to measure loan  commitments  accounted for at fair
value, and requires that fair-value measurement include only differences between
the guaranteed  interest rate in the loan  commitment and market  interest rate,
excluding any expected future cash flows related to the customer relationship or
loan servicing.  In addition,  SAB 105 requires the disclosure of the accounting
policy for loan commitments,  including methods and assumptions used to estimate
the fair value of loan commitments,  and any associated hedging strategies.  SAB
105 is effective for derivative instruments entered into subsequent to March 31,
2004 and should  also be applied to existing  instruments  as  appropriate.  The
Company has not yet completed its evaluation of SAB 105, but does not anticipate
a material impact on the financial statements.

Item 3. CONTROLS AND PROCEDURES

      As of September 30, 2004, the Company  performed an evaluation,  under the
supervision of its chief executive officer and chief financial  officer,  of the
effectiveness of the company's disclosure controls and procedures (as defined in
Exchange Act Rule  13a-15(e).  Based upon that  evaluation,  the chief executive
officer and chief  financial  officer  concluded  that the Company's  disclosure
controls  and  procedures  are  effective  in timely  alerting  them to material
information relating to the Company and its consolidated  subsidiaries  required
to be included in the Company's  reports  filed or submitted  under the Exchange
Act. Due to the inherent  limitations of the  effectiveness  of any  established
disclosure controls and procedures, management cannot provide absolute assurance
that the objectives of its disclosure controls and procedures will be met.

                                       17

<PAGE>

      There were no  significant  changes  in the  Company's  internal  controls
during the  quarter  covered by this report that have  materially  affected,  or
which are  reasonably  likely  to  affect  materially,  the  Company's  internal
controls.


                           PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.

      Although the Company,  as of September 30, 2004, had no legal proceedings,
on October 13, 2004, the Company's  subsidiary,  the Tube Music  Network,  Inc.,
received   notification  from  a  television  channel  featuring  music  related
programming  that the circle logo used by The Tube is  "confusingly  similar" to
the circle logo used by that television channel,  supporting claims of trademark
infringement and unfair competition.  On November 3, 2004, the Company responded
to the  October  13  letter  stating  that it does not  believe  the  logos  are
confusingly similar or that any trademark infringement has occurred. The Company
intends to vigorously  defend any challenge to its use of its logo. From time to
time,  the Company may be involved as plaintiff  or  defendant in various  legal
proceedings arising in the usual course of business.

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

      During the three months ended  September 30, 2004,  the Company issued (i)
an  aggregate  of  165,958  shares of common  stock to certain  individuals  and
entities in consideration for the performance of services for the Company,  (ii)
an  aggregate  of 15,000  shares  of  common  stock to  certain  individuals  in
consideration  for cash in the aggregate amount of $60,000,  (iii) a convertible
promissory note in the principal  amount of $500,000,  payable to Galt Financial
Corporation  ("Galt"),  which note accrues  interest at an annual rate of 10.0%,
matures on September 13, 2006 and is convertible  into shares of common stock at
a conversion price of $1.00 per share,  subject to certain  adjustments,  (iv) a
warrant to Galt to purchase up to 500,000  shares of common stock at an exercise
price of $1.00 per share in  connection  with the  above-referenced  convertible
promissory  note,  and (v) 500,000 shares of common stock to a principal of Galt
in connection with the above-referenced convertible promissory note.

      In October  and  November  of 2004,  the  Company  issued (i)  convertible
promissory   notes  in  aggregate   principal  amount  of  $228,000  to  certain
individuals,  which notes  accrue  interest  at an annual rate of 5%,  mature in
October or November of 2006, and are convertible  into shares of common stock at
a conversion price of $3.00 per share, subject to certain  adjustments,  (ii) an
aggregate of 889,827 shares of common stock to an individual  upon conversion of
certain  promissory  notes in aggregate  principal  amount of  $2,599,000,  plus
accrued  interest of $70,480,  at a conversion  price of $3.00 per share,  (iii)
275,000  shares of common  stock to the  seller of the  Lauderdale  Property  in
partial satisfaction of the purchase price for Lauderdale Property,  (iv) 25,000
shares of common stock to an entity that assisted the Company in the purchase of
the Lauderdale Property,  and (v) 41,000 shares of common stock to an individual
upon conversion of a convertible  promissory note in aggregate  principal amount
of $50,000 plus accrued interest.

      The Company  maintains that the above  issuances of securities were exempt
from registration  under the Securities Act in reliance upon Section 4(2) of the
Securities Act and/or  Regulation D promulgated  hereunder as transactions by an
issuer not involving a public  offering.  No  underwriters  were employed in the
transactions.  The securities will be deemed restricted  securities for purposes
of the Securities Act.

      See  "Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations."

                                       18
<PAGE>

Item 3.  DEFAULTS UPON SENIOR SECURITIES

      In March of 2004 the Company  assumed the  obligation to repay $350,000 in
notes  payable in exchange for the rights under a  distribution  agreement.  The
Company has not made the required monthly  principal and interest payments since
June of 2004, and is currently negotiating with the holders to amend the payment
terms of the notes,  which would include waivers for the required  payments that
were not made.


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

      On October 20, 2004, the Company held its Annual  Meeting of  Shareholders
at which the following proposals were approved by the shareholders  necessary to
approve such matters in accordance  with the Colorado  Business  Corporation Act
and its charter documents:  (i) the  reincorporation of the Company in the state
of  Delaware  through a merger of the  Company  into a wholly  owned  subsidiary
corporation incorporated in the State of Delaware, (ii) the adoption of its 2004
Stock Option and Stock  Incentive  Plan,  and (iii) the  re-election  of Messrs.
Garland, Poling, Solomon, Catinella and Levy to the Board of Directors.

      At  the  Annual  Meeting  of  Shareholders,  the  following  matters  were
submitted to a vote of shareholders:

      1. Election of the following persons to serve as directors of AGU
         Entertainment, Inc. for a term of one year and until their successor
         are duly elected and qualified:

                                  Total Vote for Each       Total Vote Withheld
                                       Director             From Each Director
                                  ---------------------- ---------------------
             Les Garland               24,242,876                 0
             John W. Poling            11,685,966                 0
             Michael Jay Solomon       15,685,966                 0
             Gregory R. Catinella      11,685,966                 0
             David C. Levy             11,685,966                 0

      2. Approval of AGU Entertainment, Inc.'s 2004 Stock Option and Stock
         Incentive Plan:

        For              Against          Abstain      Broker Non-Votes
------------------ ------------------- --------------- ------------------
     11,685,966             0            3,311,382             0

            See the Company's Definitive Proxy Statement on Schedule 14A
            for the 2004 Annual Meeting, including Appendix C thereto,
            filed with the Securities and Exchange Commission on October
            7, 2004 for a description and copy of the 2004 Stock Option
            and Stock Incentive Plan.

      3. Approval of the reincorporation of the Company in the state of Delaware
         through a merger of the Company into a wholly owned subsidiary
         corporation incorporated in the State of Delaware.

        For               Against          Abstain      Broker Non-Votes
--------------------- --------------------------------- ------------------
     11,685,966              0            3,311,382             0

            See the Company's Definitive Proxy Statement on Schedule 14A
            for the 2004 Annual Meeting, including Appendix D thereto,
            filed with the Securities and Exchange Commission on October
            7, 2004 for a description of the reincorporation merger and a
            copy of the merger agreement.

      The   reincorporation   resulted  in  the  Company   becoming  a  Delaware
corporation effective as of October 21, 2004 and did not result in any change in
the Company's name, headquarters, business, jobs, management, location of any of
the Company's offices or facilities,  number of employees,  taxes payable to the
State of  Colorado,  assets,  liabilities  or net  worth.  A summary of the most
significant  differences  between the rights of the  shareholders of the Company
before and after the reincorporation merger as a result of the differences among
the Colorado Business  Corporation Act and the Delaware General  Corporation Law
and the  Articles  of  Incorporation  and  Bylaws  of the  Company  prior to the
Reincorporation  Merger and the Certificate of  Incorporation  and the Bylaws of
AGU  Delaware is  contained  in the  Company's  Definitive  Proxy  Statement  on
Schedule 14A filed with the  Securities  and Exchange  Commission  on October 7,
2004.

                                       19

<PAGE>

Item 5.  OTHER INFORMATION.

      On November 3, 2004, the Company appointed John W. Poling as its Executive
Vice  President and Chief  Financial  Officer,  to serve in  accordance  with an
employment agreement,  dated as of November 1, 2004, between the Company and Mr.
Poling. In connection with his appointment as Executive Vice President and Chief
Financial Officer, John W. Poling resigned as Chairperson of the Audit Committee
of the Board of Directors  and, as of such date, no longer serves as a member of
the Audit  Committee.  Mr. Poling was first elected to the Board of Directors in
April 2004 and was appointed  Chairperson  of the Audit  Committee in July 2004.
See the  Company's  Current  Report on Form 8-K filed  with the  Securities  and
Exchange  Commission on November 9, 2004 for a description of the material terms
of the employment agreement with Mr. Poling.

      On November 3, 2004, in connection with Mr. Poling's  resignation from the
Audit  Committee,  the majority of the directors  then in office,  in accordance
with Article FIFTH, paragraph (d) of the Company's Articles of Incorporation and
Section 2.04 of the Bylaws and upon the  recommendation  of the  Nominating  and
Corporate  Governance  Committee,  increased the size of the Company's  Board of
Directors to six (6) directors  and appointed  Marc Gelberg as a director and as
Chairperson of the Audit Committee, to hold office until the 2005 Annual Meeting
of  Shareholders  and until his  successor  shall  have  been duly  elected  and
qualified.


Item 6.  EXHIBITS

   The following exhibits are attached to this report:

         2.1(1)           Agreement and Plan of Merger, dated as of September
                          30, 2004, by and between AGU Entertainment Corp., a
                          Colorado corporation, and AGU Entertainment Corp.,
                          a Delaware corporation.

         3.1(1)           Articles of Incorporation of AGU Entertainment
                          Corp., a Delaware corporation

         3.2(1)           Bylaws of AGU Entertainment Corp., a Delaware
                          corporation

         10.1(2)          Convertible Promissory Note, dated September 13,
                          2004, made by AGU Entertainment Corp. in favor of
                          Galt Financial Corporation

         10.2(2)          Warrant to Subscribe for 500,000 Shares of Common
                          Stock of AGU Entertainment Corp. issued to Galt
                          Financial Corporation

         10.3(2)          Agreement for Purchase and Sale, dated as of
                          September 10, 2004, by and between AGU Entertainment
                          Corp. and Charley Zeches, in her capacity as
                          Trustee of Lakes Holding Trust U/A dated July 27, 2001

        10.4(2)+          Consulting Agreement, dated as of September 13, 2004,
                          by and between AGU Entertainment Corp. and Kevin
                          Waltzer

         10.5             Stock Purchase Agree ment by and between AGU
                          Entertainment Corp. and Charley Zeches, in her
                          capacity as Trustee of Lakes Holding Trust U/A
                          dated July 27, 2001

         10.6             Stock Purchase Agreement between AGU Entertainment
                          Corp. and AUW, Inc.

         10.7(1)+         2004 Stock Option and Stock Incentive Plan


                                       20

<PAGE>

         10.8             Amendment to Agreement for Purchase and Sale, dated
                          as of October 25, 2004, by and between AGU
                          Entertainment Corp. and Charley Zeches, in her
                          capacity as Trustee of Lakes Holding Trust U/A dated
                          July 27, 2001

         10.9(3)+         Employment Agreement, dated as of November 1, 2004,
                          between AGU Entertainment Corp. and John W. Poling

         31.1             Certification of David C. Levy, Chief Executive
                          Officer of the Company, dated November 15, 2004,
                          pursuant to Rule 13a - 14(a)/15d - 14(a) of the
                          Securities Exchange Act of 1934, as amended, as
                          adopted pursuant to Sections 302 and 404 of the
                          Sarbanes-Oxley Act of 2002.

         31.2             Certification of John W. Poling, Chief Financial
                          Officer of the Company, dated November 15, 2004,
                          pursuant to Rule 13a - 14(a)/15d - 14(a) of the
                          Securities Exchange Act of 1934, as amended, as
                          adopted pursuant to Sections 302 and 404 of the
                          Sarbanes-Oxley Act of 2002.

         32.1             Certification of David C. Levy, Chief Executive
                          Officer of the Company, and John W. Poling, Chief
                          Financial Officer of the Company, dated November 15,
                          2004 pursuant to 18 U.S.C. Section 1350, as adopted
                          pursuant to Section 906 of the Sarbanes-Oxley Act
                          of 2002.

         +        Management contract or compensation plan.
         (1)      Incorporated by reference to AGU Entertainment Corp.'s
                  Definitive Proxy Statement on Schedule 14A for the 2004
                  Annual Meeting filed with the Securities and Exchange
                  Commission on October 7, 2004.
         (2)      Incorporated by reference to AGU Entertainment Corp.'s
                  Current Report on Form 8-K filed with the Securities and
                  Exchange Commission on September 20, 2004.
         (3)      Incorporated by reference to AGU Entertainment Corp.'s Current
                  Report on Form 8-K filed with the Securities and Exchange
                  Commission on November 9, 2004.




                                   SIGNATURES

      In accordance  with the  requirements  of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Date: November 12, 2004                      /s/ David C. Levy
                                             -----------------------
                                             David C. Levy
                                             Chief Executive Officer


                                       21